FF301 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 華富建業國際金融有限公司 (於百慕達註冊成立之有限公司) 呈交日期: 2025年8月4日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 00952 | 說明 | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | 法定/註冊股本 | | | 上月底結存 | | | 30,000,000,000 | HKD | 0.003333333333 | HKD | | 100,000,000 | | 增加 / 減少 (-) | | | 0 | | | HKD | | 0 | | 本月底結存 | | | 30,000,000,000 | HKD | 0.003333333333 ...

退市锦B 盘中临时停牌 退市锦B (900952)今日上午交易触及盘中临时停牌。根据《上海证券交易所交易规则》的有关规定，本 所决定，自2025年06月30日09时30分开始暂停退市锦B(900952)交易，自2025年06月30日09时40分起恢 复交易。 ...

Financial Performance - For the year ended December 31, 2024, total revenue increased to HKD 413,551,000, up 19.6% from HKD 345,654,000 in 2023[3] - Net investment income for 2024 was HKD 118,808,000, a significant recovery from a loss of HKD 218,384,000 in 2023[3] - The company reported a net loss attributable to equity holders of HKD 73,367,000 for 2024, compared to a profit of HKD 119,537,000 in 2023, reflecting a decline of 161.4%[4] - Basic and diluted loss per share for 2024 was HKD (1.2), compared to earnings of HKD 1.9 per share in 2023[4] - The reported segment revenue for the year 2024 is HKD 417,738,000, an increase from HKD 353,271,000 in 2023, representing a growth of approximately 18.3%[19] - The reported segment performance for 2024 showed a loss of HKD 86,283,000, compared to a profit of HKD 121,535,000 in 2023, reflecting a decline in profitability[19] - The company’s pre-tax loss for 2024 was HKD 66,049,000, compared to a pre-tax profit of HKD 117,871,000 in 2023, indicating a significant decrease in financial performance[19] - Total tax expense for 2024 amounted to HKD 7,318,000, compared to a tax credit of HKD 1,666,000 in 2023[28] - The company did not declare a final dividend for 2024, while a special dividend of HKD 68,168,000 was paid in 2023[30] Assets and Liabilities - Total assets increased to HKD 4,189,276,000 as of December 31, 2024, compared to HKD 4,064,012,000 in 2023, representing a growth of 3.1%[6] - The company’s liabilities totaled HKD 2,195,917,000 in 2024, a slight increase from HKD 2,002,597,000 in 2023, reflecting a growth of 9.7%[6] - The company’s equity attributable to equity holders decreased to HKD 1,993,359,000 in 2024 from HKD 2,061,415,000 in 2023, a decline of 3.3%[6] - The total accounts payable increased to HKD 1,220,571,000 in 2024 from HKD 1,076,880,000 in 2023, reflecting an increase of approximately 13.3%[42] - The group’s net assets as of the end of 2024 were HKD 1.993 billion, down from HKD 2.061 billion in 2023, resulting in a debt-to-equity ratio of 34% compared to 33% in the previous year[81] Cash Flow and Investments - Cash and cash equivalents rose to HKD 156,675,000 in 2024, up from HKD 122,380,000 in 2023, indicating a 28.0% increase[6] - The company recorded a net expected credit loss reversal of HKD 21,247,000 in 2024, down from HKD 61,954,000 in 2023[4] - The fair value change of investment properties resulted in a gain of HKD 8,580,000 in 2024, compared to a loss of HKD 42,120,000 in 2023[4] - The company completed the sale of 11,739,128 shares of a non-listed equity investment for USD 8,827,000 (approximately HKD 68,848,000) on January 23, 2025[42] - The company’s investment properties are all held in the United States, with a total value of HKD 851,760,000 as of December 31, 2024[39] Revenue Streams - Commission income from corporate finance business decreased significantly to HKD 9,133,000, down 70.9% from HKD 31,322,000 in 2023[21] - Interest income for the year 2024 reached HKD 204,834,000, compared to HKD 433,963,000 in 2023, indicating a decline of about 52.8%[18] - Interest income from credit loans and bonds dropped to HKD 55,094,000, a decline of 80.7% from HKD 285,931,000 in the previous year[21] - The corporate finance business revenue plummeted by approximately 71% from HKD 31 million in 2023 to HKD 9 million in 2024, attributed to delays in clients' IPO timelines[53] - The asset management business revenue decreased from HKD 11 million in 2023 to HKD 9 million in 2024, reflecting a decline in performance[54] - Brokerage business revenue fell by 20% from HKD 81 million in 2023 to HKD 65 million in 2024, while brokerage interest income slightly increased by 1% to HKD 147 million[52] Operational Efficiency - Total operating expenses decreased to HKD 51,301,000 from HKD 57,999,000 in 2023, reflecting a reduction of 11.9%[24] - Direct costs decreased by 22% from HKD 94 million in 2023 to HKD 73 million in 2024, mainly due to reduced commission expenses from lower total commission income[62] - Employee costs reduced by 9% from HKD 174 million in 2023 to HKD 159 million in 2024, attributed to resource streamlining and team optimization[62] Credit and Risk Management - The company has adopted a credit risk policy to manage its lending operations, which includes compliance with applicable laws and regulations, credit assessments of potential borrowers, and evaluation of collateral[68] - The expected credit loss is calculated using the formula: Expected Credit Loss = Default Risk Exposure × Default Probability × (1 - (Recovery Rate × Forward-Looking Factors) Present Value)[67] - The company applies strict procedures for credit approval, including due diligence and credit assessments of potential borrowers[75] - The risk management department reviews loan risk levels daily and submits monthly reports to the executive committee[77] - The group has established a three-tier risk management system to mitigate unexpected market fluctuations[89] Market Outlook - The company remains optimistic about opportunities in 2025 despite facing challenges in 2024, including a decrease in transaction volume and delays in IPO schedules[50] - The company reported a significant improvement in the Hong Kong stock market atmosphere, with the Hang Seng Index and daily trading volume showing positive trends[96] - The company's securities business performance in the second half of 2024 is expected to surpass that of the first half, indicating a recovery from previous lows[96] Compliance and Governance - The company has adopted a standard code of conduct for securities trading by directors, ensuring compliance with the latest listing rules[100] - The company’s audit committee has reviewed the audited annual performance for the year ending December 31, 2024, discussing accounting principles and internal controls[101]

[Condensed Consolidated Statement of Profit or Loss](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2024, the Group's profit before tax significantly decreased to **HKD 11.76 million**, primarily due to a substantial reduction in total revenue and a shift from investment gains to losses, despite a net reversal of expected credit losses Key Figures from Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Metric | 2024 (HKD thousands) | 2023 (HKD thousands) (Restated) | | :--- | :--- | :--- | | Total Revenue | 138,942 | 368,700 | | Net (Loss)/Gain from Investments | (1,799) | 47,484 | | Net Reversal/(Expense) of Expected Credit Losses | 45,453 | (47,794) | | Profit Before Tax | 11,760 | 115,201 | | Net Profit Attributable to Owners of the Company | 11,162 | 111,269 | | Basic Earnings Per Share (HK cents) | 0.2 | 1.8 | | Diluted Earnings Per Share (HK cents) | 0.2 | 1.8 | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=5&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2024, the Group's total comprehensive income attributable to owners significantly decreased, primarily due to a substantial reduction in net profit, partially offset by smaller foreign currency translation losses Key Figures from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Net Profit Attributable to Owners of the Company | 11,162 | 111,269 | | Exchange Loss on Translation of Financial Statements of Foreign Operations | (755) | (1,237) | | Total Comprehensive Income Attributable to Owners of the Company | 10,407 | 110,032 | [Condensed Consolidated Statement of Financial Position](index=6&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's total assets increased, primarily driven by growth in bank balances held on behalf of clients, while net current assets decreased, and total equity recorded a modest increase Key Figures from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2024 (HKD thousands) | December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | Total Assets | 4,293,599 | 4,064,012 | | Total Liabilities | 2,218,148 | 2,002,597 | | Total Equity | 2,075,451 | 2,061,415 | | Net Current Assets | 903,556 | 1,015,868 | | Cash and Cash Equivalents | 164,475 | 122,380 | | Bank Balances Held on Behalf of Clients | 905,221 | 823,120 | [Condensed Consolidated Statement of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) For the six months ended June 30, 2024, the Group generated net cash outflow from operating activities, a minor net cash outflow from investing activities, and a significant net cash inflow from financing activities, resulting in an overall net increase in cash and cash equivalents Key Figures from Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Metric | 2024 (HKD thousands) | 2023 (HKD thousands) (Restated) | | :--- | :--- | :--- | | Net Cash (Used in)/Generated from Operating Activities | (70,846) | 48,435 | | Net Cash Used in Investing Activities | (1,203) | (1,434) | | Net Cash Generated from/(Used in) Financing Activities | 114,866 | (80,889) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 42,817 | (33,888) | | Cash and Cash Equivalents at End of Period | 164,475 | 159,508 | [Condensed Consolidated Statement of Changes in Equity](index=9&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2024, the Group's total equity slightly increased, primarily due to net profit and share-based payment expenses during the period, partially offset by foreign currency translation losses Key Figures from Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Metric | 2024 (HKD thousands) | | :--- | :--- | | Total Equity at Beginning of Period | 2,061,415 | | Net Profit for the Period | 11,162 | | Other Comprehensive Loss (Exchange Loss) | (755) | | Share Option Expense | 3,629 | | Total Equity at End of Period | 2,075,451 | [Notes to the Condensed Consolidated Interim Financial Statements](index=11&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Statements) This section provides detailed notes to the condensed consolidated interim financial statements, offering further explanations and breakdowns of key financial figures and accounting policies [1. General Information](index=11&type=section&id=1.%20General%20Information) The Company is incorporated in Bermuda and listed on the Stock Exchange, primarily engaged in corporate finance, asset management, brokerage, lending, financial media, and investment businesses - The Company is incorporated in Bermuda and its shares are listed on the Stock Exchange, stock code **952**[43](index=43&type=chunk) - Principal activities include corporate finance advisory, fund management, securities dealing services, margin financing, lending services, financial media services, and investment trading[43](index=43&type=chunk) [2. Basis of Preparation](index=11&type=section&id=2.%20Basis%20of%20Preparation) The interim financial statements are prepared in accordance with HKAS 34 'Interim Financial Reporting' and the Listing Rules, and should be read in conjunction with the Group's annual financial statements for the year ended December 31, 2023 - The interim financial statements comply with HKAS 34 and the Listing Rules issued by the Hong Kong Institute of Certified Public Accountants[44](index=44&type=chunk) - They should be read in conjunction with the Group's annual financial statements for the year ended December 31, 2023[43](index=43&type=chunk) [3. Significant Accounting Policies](index=12&type=section&id=3.%20Significant%20Accounting%20Policies) The Group's accounting policies are consistent with the 2023 annual financial statements, with no significant impact from adopting revised HKFRSs; interest income and expected credit loss provisions for credit-impaired loans were reclassified during the period, without affecting net profit or cash flows - Accounting policies are consistent with the 2023 annual financial statements, with no significant impact from adopting revised HKFRSs[45](index=45&type=chunk) - Interest income and expected credit loss provisions for credit-impaired loans were reclassified, without affecting net profit in the condensed consolidated statement of profit or loss and other comprehensive income, the condensed consolidated statement of financial position, or net cash flows[46](index=46&type=chunk) Impact of Presentation Changes for the Six Months Ended June 30, 2023 (HKD thousands) | Metric | As Previously Reported | Reclassification | Restated | | :--- | :--- | :--- | :--- | | Interest Income — Calculated using the effective interest method | 174,986 | 30,814 | 205,800 | | Total Revenue | 337,886 | 30,814 | 368,700 | | Net Expected Credit Loss Expense | (16,980) | (30,814) | (47,794) | [4. Segment Information](index=14&type=section&id=4.%20Segment%20Information) The Group operates six reportable segments: corporate finance, asset management, brokerage, interest income, investment, and others; in H1 2024, total reportable segment results significantly decreased, but associate contributions were notable, with most operations and assets located in Hong Kong - The Group operates six reportable segments: corporate finance, asset management, brokerage, interest income, investment, and others[48](index=48&type=chunk) Reconciliation of Total Reportable Segment Results to Profit Before Tax (For the six months ended June 30) | Metric | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Reportable Segment Results | (7,451) | 117,390 | | Share of Results of Associates | 21,493 | — | | Unallocated Corporate Expenses | (2,282) | (2,189) | | Profit Before Tax | 11,760 | 115,201 | - Most of the Group's operations and assets are located in Hong Kong, with the exception of investment properties in the United States[52](index=52&type=chunk) - Revenue from former related parties (including subsidiaries of Oceanwide Holdings Co., Ltd., Oceanwide Holdings International Co., Ltd., and Minyun Limited) significantly decreased from **HKD 162.6 million** in H1 2023 to **HKD 30.485 million** in H1 2024[52](index=52&type=chunk) [5. Revenue](index=18&type=section&id=5.%20Revenue) The Group's total revenue significantly decreased by **62%** from **HKD 368.7 million** in H1 2023 to **HKD 138.9 million** in H1 2024, primarily due to a sharp decline in interest income calculated using the effective interest method and a shift from investment gains to losses Revenue Breakdown (For the six months ended June 30) | Revenue Source | 2024 (HKD thousands) | 2023 (HKD thousands) (Restated) | | :--- | :--- | :--- | | Corporate finance business fees and commission income | 3,970 | 9,157 | | Asset management business fees and commission income | 2,702 | 5,184 | | Brokerage business fees and commission income | 30,192 | 41,053 | | Interest income business (calculated using the effective interest method) | 42,109 | 205,800 | | Interest income business (calculated using other methods) | 57,773 | 56,653 | | Financial media service fee income | 3,995 | 3,369 | | Net (loss)/gain from investments | (1,799) | 47,484 | | Dividend income | 3,560 | 5,443 | | Total Revenue | 138,942 | 368,700 | [6. Other (Losses)/Income, Net](index=19&type=section&id=6.%20Other%20(Losses)%2FIncome%2C%20Net) The Group recorded other net losses of **HKD 14.084 million** in H1 2024, a reversal from net gains of **HKD 1.3 million** in H1 2023, primarily due to losses from modifying credit loan terms Other (Losses)/Income, Net (For the six months ended June 30) | Metric | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Changes in net assets attributable to other holders of consolidated investment funds | (4,921) | 2,639 | | Exchange gains/(losses), net | 315 | (1,517) | | Corporate guarantees | 2,717 | — | | Loss on modification of credit loans | (12,203) | — | | Miscellaneous income | 8 | 178 | | Total | (14,084) | 1,300 | - Losses of approximately **HKD 12.203 million** from modifying credit loan terms were recognized in the condensed consolidated statement of profit or loss[54](index=54&type=chunk) [7. Profit Before Tax](index=20&type=section&id=7.%20Profit%20Before%20Tax) The Group's profit before tax significantly decreased from **HKD 115.2 million** in H1 2023 to **HKD 11.76 million** in H1 2024; staff costs remained stable, depreciation and amortization expenses decreased, and share-based payment expenses for the share option scheme were recognized in 2024 Deductions from Profit Before Tax (For the six months ended June 30) | Metric | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Total staff costs | 81,030 | 81,827 | | Total depreciation and amortization | 10,167 | 19,213 | | Share-based payment expenses — Share option scheme | 3,629 | — | [8. Other Operating Expenses](index=21&type=section&id=8.%20Other%20Operating%20Expenses) The Group's other operating expenses decreased from **HKD 29.487 million** in H1 2023 to **HKD 27.236 million** in H1 2024, primarily due to reduced legal and professional fees, partially offset by increased insurance expenses Other Operating Expenses Breakdown (For the six months ended June 30) | Expense Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Advertising and promotion expenses | 756 | 524 | | Auditor's remuneration | 1,232 | 1,225 | | Bank charges | 620 | 610 | | Consultancy fees | 1,622 | 1,647 | | Entertainment expenses | 822 | 1,105 | | General office expenses | 3,266 | 2,979 | | Insurance | 2,670 | 1,310 | | Legal and professional fees | 5,585 | 9,067 | | Office reinstatement and relocation costs | 266 | 2,247 | | Property tax | 3,046 | — | | Repairs and maintenance | 2,070 | 2,173 | | Short-term leases, rates and building management fees | 1,567 | 3,352 | | Travel and transportation expenses | 1,188 | 990 | | Others | 2,526 | 2,258 | | Total | 27,236 | 29,487 | - Total legal and professional fees in H1 2023 were approximately **HKD 9.1 million**, primarily including approximately **HKD 5.7 million** in one-off professional fees for corporate transactions[60](index=60&type=chunk) [9. Tax Expense](index=21&type=section&id=9.%20Tax%20Expense) The Group's tax expense significantly decreased from **HKD 3.932 million** in H1 2023 to **HKD 0.598 million** in H1 2024, reflecting lower profit before tax; Hong Kong profits tax is calculated at **16.5%**, with a two-tiered tax system applicable to eligible subsidiaries Total Tax Expense (For the six months ended June 30) | Metric | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Current period | 598 | 8,855 | | Deferred tax credit | — | (4,923) | | Total tax expense | 598 | 3,932 | - Hong Kong profits tax provision is calculated at **16.5%** of estimated assessable profits, with eligible subsidiaries taxed at **8.25%** for the first **HKD 2 million**[61](index=61&type=chunk)[62](index=62&type=chunk) [10. Earnings Per Share](index=22&type=section&id=10.%20Earnings%20Per%20Share) Both basic and diluted earnings per share attributable to owners of the Company significantly decreased from **1.8 HK cents** in H1 2023 to **0.2 HK cents** in H1 2024, consistent with the decline in net profit; share options had a minor dilutive effect on EPS in 2024, with no effect in 2023 Earnings Per Share Calculation (For the six months ended June 30) | Metric | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Profit attributable to owners of the Company (for basic EPS calculation) | 11,162 | 111,269 | | Weighted average number of ordinary shares in issue (for basic EPS calculation) | 6,145,877,218 | 6,145,877,218 | | Profit attributable to owners of the Company (for diluted EPS calculation) | 11,162 | 111,269 | | Weighted average number of ordinary shares in issue (for diluted EPS calculation) | 6,147,760,663 | 6,145,877,218 | - Diluted earnings per share were the same as basic earnings per share in H1 2023, as there were no potentially dilutive ordinary shares in issue[66](index=66&type=chunk) [11. Dividends](index=24&type=section&id=11.%20Dividends) The Board has resolved not to declare an interim dividend for the six months ended June 30, 2024, whereas a special dividend of **1.1 HK cents** per ordinary share was declared for the corresponding period in 2023 - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2024[67](index=67&type=chunk) - A special dividend of **1.1 HK cents** per ordinary share, totaling **HKD 68.168 million**, was declared and paid for the corresponding period in 2023[67](index=67&type=chunk) [12. Financial Assets Held for Trading](index=24&type=section&id=12.%20Financial%20Assets%20Held%20for%20Trading) Financial assets held for trading primarily comprise listed equity securities, unlisted equity securities, and private equity funds - Financial assets held for trading include listed equity securities, unlisted equity securities, and private equity funds[68](index=68&type=chunk) [13. Financial Assets Not Held for Trading](index=25&type=section&id=13.%20Financial%20Assets%20Not%20Held%20for%20Trading) These assets include unlisted debt securities measured at amortized cost (net of expected credit loss provisions) and unlisted equity securities measured at fair value through other comprehensive income, with the total remaining stable at period-end Financial Assets Not Held for Trading (HKD thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Financial assets measured at amortized cost (unlisted debt securities less expected credit loss provision) | 135,586 | 135,586 | | Financial assets measured at fair value through other comprehensive income (unlisted equity securities) | 4,210 | 4,210 | | Total | 139,796 | 139,796 | [14. Loans to Margin Clients](index=25&type=section&id=14.%20Loans%20to%20Margin%20Clients) Loans to margin clients decreased from **HKD 548 million** as of December 31, 2023, to **HKD 520.4 million** as of June 30, 2024; these loans are measured at fair value through profit or loss, collateralized by client-pledged securities, and the Group continuously monitors credit risk Loans to Margin Clients (HKD thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Loans to margin clients — measured at fair value through profit or loss | 520,434 | 547,986 | - Loans are measured at fair value through profit or loss and secured by client-pledged securities with a market value of approximately **HKD 5.202 billion** as of June 30, 2024[70](index=70&type=chunk) - The Group continuously monitors lending ratios to control credit risk and has the right to sell collateral to cover unpaid margin calls from clients[70](index=70&type=chunk) [15. Credit Loans](index=26&type=section&id=15.%20Credit%20Loans) Total credit loans increased, but the net amount after expected credit loss provisions decreased from **HKD 422.2 million** as of December 31, 2023, to **HKD 354 million** as of June 30, 2024; loans include unsecured and secured portions with annual interest rates ranging from **2.5% to 12%** Credit Loans (HKD thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Credit loans, gross | 4,524,339 | 4,412,894 | | Less: Expected credit loss provision | (4,170,339) | (3,990,712) | | Credit loans, net | 354,000 | 422,182 | | Current portion | 332,997 | 422,182 | | Non-current portion | 21,003 | — | - Credit loans bear fixed annual interest rates ranging from **2.5% to 12%**[72](index=72&type=chunk) - Collateral for secured credit loans primarily includes shares of listed and private companies, as well as private company assets[72](index=72&type=chunk) [16. Trade Receivables](index=28&type=section&id=16.%20Trade%20Receivables) Net trade receivables increased from **HKD 302.3 million** as of December 31, 2023, to **HKD 317.6 million** as of June 30, 2024, primarily due to increased securities trading accounts receivable from brokers and clearing houses; most receivables are due within **30 days** Trade Receivables (HKD thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Accounts receivable for securities, futures and options contract trading — brokers and clearing houses | 285,573 | 272,879 | | Accounts receivable for securities, futures and options contract trading — cash clients | 30,061 | 29,954 | | Accounts receivable for asset management, corporate finance and other businesses — clients | 26,012 | 21,806 | | Gross | 341,646 | 324,639 | | Less: Expected credit loss provision | (24,001) | (22,367) | | Trade receivables, net | 317,645 | 302,272 | Aging Analysis of Trade Receivables by Due Date (Net of Expected Credit Loss Provision) (HKD thousands) | Aging | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within 30 days | 293,188 | 278,230 | | 31 to 90 days | 2,167 | 1,036 | | Over 90 days | 22,290 | 23,006 | | Trade receivables, net | 317,645 | 302,272 | [17. Investment Properties](index=29&type=section&id=17.%20Investment%20Properties) The Group holds four residential investment properties in the United States, measured using the fair value model; as of June 30, 2024, their fair value remained at **HKD 913.38 million**, with no fair value changes recognized in profit or loss during the period - All of the Group's investment properties are four residential properties located in the United States, held for capital appreciation purposes[77](index=77&type=chunk)[78](index=78&type=chunk) Carrying Amount and Fair Value of Investment Properties (HKD thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Carrying amount | 913,380 | 913,380 | | Fair value (Level 3 valuation) | 913,380 | 913,380 | - No fair value changes of investment properties were recognized in profit or loss for the six months ended June 30, 2024[78](index=78&type=chunk) - Fair value is determined using the direct comparison approach as the valuation technique, with no change from the valuation technique as of December 31, 2023[83](index=83&type=chunk) [18. Interests in Associates](index=31&type=section&id=18.%20Interests%20in%20Associates) In H1 2024, the Group's investment in Fuzhong Group Limited increased from **15% to 21%**, leading to its reclassification from financial assets measured at fair value through profit or loss to interests in associates, reflecting the Group's significant influence over Fuzhong - The Group's investment in Fuzhong Group Limited increased from **15% to 21%**, gaining significant influence[84](index=84&type=chunk) - The investment in Fuzhong has been reclassified from financial assets measured at fair value through profit or loss to interests in associates[84](index=84&type=chunk) Interests in Associates (HKD thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Interests in associates | 288,452 | 1,180 | [19. Other Assets](index=32&type=section&id=19.%20Other%20Assets) Other assets primarily include long-term deposits for property and equipment, lease deposits, and deposits with the Stock Exchange and clearing houses - Other assets primarily include long-term deposits for property and equipment, lease deposits, and deposits with the Stock Exchange and clearing houses[85](index=85&type=chunk) [20. Property and Equipment](index=32&type=section&id=20.%20Property%20and%20Equipment) The net carrying amount of property and equipment decreased from **HKD 85.5 million** as of December 31, 2023, to **HKD 77.272 million** as of June 30, 2024, primarily due to depreciation and amortization Net Carrying Amount of Property and Equipment (HKD thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Net carrying amount at end of period | 77,272 | 85,497 | Changes in Property and Equipment (For the six months ended June 30) | Metric | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Net carrying amount at beginning of period | 85,497 | 68,536 | | Additions | 1,203 | 34,037 | | Depreciation | (9,380) | (18,550) | | Net carrying amount at end of period | 77,272 | 82,485 | [21. Bank and Other Borrowings](index=33&type=section&id=21.%20Bank%20and%20Other%20Borrowings) Total bank and other borrowings increased from **HKD 674 million** as of December 31, 2023, to **HKD 798.8 million** as of June 30, 2024; these borrowings include secured bank loans and other secured/unsecured borrowings with varying interest rates and collateral Bank and Other Borrowings (HKD thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Bank loans — secured | 539,739 | 453,358 | | Other borrowings — secured | 96,252 | 96,253 | | Other borrowings — unsecured | 162,800 | 124,396 | | Total | 798,791 | 674,007 | | Current portion | 620,425 | 674,007 | | Non-current portion | 178,366 | — | - Collateral for bank loans includes client-pledged securities, unlisted equity securities, private equity funds, investment properties, and bank deposits[88](index=88&type=chunk) - Interest rates range from fixed annual rates of **5% to 7.25%** or floating rates of HIBOR plus **3%**[88](index=88&type=chunk)[89](index=89&type=chunk) [22. Trade Payables](index=34&type=section&id=22.%20Trade%20Payables) Total trade payables increased from **HKD 1.0769 billion** as of December 31, 2023, to **HKD 1.1336 billion** as of June 30, 2024, primarily due to increased amounts payable to cash and margin clients Trade Payables (HKD thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Accounts payable for securities, futures and options contract trading — brokers and clearing houses | 6,417 | 10,124 | | Accounts payable for securities, futures and options contract trading — cash and margin clients | 1,114,767 | 1,064,873 | | Accounts payable for other businesses — clients | 12,380 | 1,883 | | Total | 1,133,564 | 1,076,880 | - Amounts payable to brokers, clearing houses, and cash clients are repayable on demand before the settlement date[91](index=91&type=chunk) [23. Share Capital](index=35&type=section&id=23.%20Share%20Capital) The Company's share capital remained unchanged at **HKD 20.657 million**, representing **6,197,049,220** ordinary shares of one-third HK cent each; all issued shares rank pari passu in terms of dividends, voting, and return of capital Share Capital (HKD thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Issued and fully paid share capital | 20,657 | 20,657 | | Number of ordinary shares | 6,197,049,220 | 6,197,049,220 | - All issued shares rank pari passu in all respects, including all rights as to dividends, voting, and return of capital[94](index=94&type=chunk) [24. Commitments](index=35&type=section&id=24.%20Commitments) Capital commitments decreased from **HKD 3.315 million** as of December 31, 2023, to **HKD 2.884 million** as of June 30, 2024, primarily due to a reduction in commitments for property and equipment Capital Commitments (HKD thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Capital contributions payable to private equity funds | 2,280 | 2,280 | | Property and equipment | 604 | 1,035 | | Total | 2,884 | 3,315 | [25. Related Party Transactions](index=36&type=section&id=25.%20Related%20Party%20Transactions) The Group engaged in various related party transactions, including interest and commission income from directors and key management personnel, and interest income/expenses with former related parties; revenue from former related parties significantly decreased in H1 2024 Related Party Transaction Income (For the six months ended June 30) | Transacting Party | 2024 (HKD thousands) | 2023 (HKD thousands) (Restated) | | :--- | :--- | :--- | | Directors of subsidiaries, also key management personnel — commission income from securities and futures trading | 11 | 5 | | Directors of subsidiaries, also key management personnel — interest income from margin financing | 48 | 23 | | Directors of subsidiaries — commission income from securities and futures trading | 1 | — | | Directors of subsidiaries — interest income from margin financing | 1 | 25 | | Associates — interest income from margin financing | 247 | — | | Related company — a company whose ultimate beneficial owner, Mr. Lu Zhiqiang, is also a director of its parent company — interest income | — | 21 | | Fellow subsidiaries — interest income from financial assistance | — | 113,444 | | Total (partial) | 85 | 368 | | Total (partial) | 247 | 113,913 | Related Party Transaction Expenses (For the six months ended June 30) | Transacting Party | 2024 (HKD thousands) | 2023 (HKD thousands) (Restated) | | :--- | :--- | :--- | | Key management personnel — interest expense | 265 | 183 | | Associates — consultancy fees | 275 | 300 | | Associates — lease expenses | 270 | 135 | | Related company — a company whose ultimate beneficial owner, Mr. Lu Zhiqiang, is also a director of its parent company — interest expense | — | 2,278 | | Fellow subsidiaries — interest expense from financial assistance | — | 510 | | Total | 810 | 3,790 | Key Management Personnel Remuneration (For the six months ended June 30) | Remuneration Category | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Short-term employee benefits | 13,583 | 10,912 | | Post-employment benefits | 42 | 33 | | Share-based payment expenses — Share option scheme | 2,483 | — | | Total | 16,108 | 10,945 | [26. Fair Value Measurement](index=39&type=section&id=26.%20Fair%20Value%20Measurement) The Group categorizes fair value measurements into three levels, covering financial assets held for trading, loans to margin clients, financial assets not held for trading, and financial liabilities; no transfers occurred between levels during the period - Fair value measurements are categorized into Level 1 (quoted prices in active markets), Level 2 (observable inputs), and Level 3 (significant unobservable inputs)[104](index=104&type=chunk) Financial Instruments Measured at Fair Value (HKD thousands) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Financial assets held for trading | 500,133 | 604,541 | | Loans to margin clients | 520,434 | 547,986 | | Financial assets not held for trading | 4,210 | 4,210 | | Financial liabilities measured at fair value through profit or loss | 195,046 | 177,813 | - There were no transfers between Level 1 and Level 2, and no transfers into or out of Level 3 for the periods/years ended June 30, 2024, and December 31, 2023[107](index=107&type=chunk) - Fair value of Level 3 unlisted equity securities is determined using an option pricing model with an equity allocation approach, while private equity funds' fair value refers to the fund's unadjusted net asset value[107](index=107&type=chunk) [27. Non-Adjusting Events After Reporting Period](index=43&type=section&id=27.%20Non-Adjusting%20Events%20After%20Reporting%20Period) Subsequent to the reporting period, on August 9, 2024, the Company entered into a settlement arrangement with Yili International Investment Limited regarding credit loans and margin loans - On August 9, 2024, the Company entered into a settlement arrangement with Yili International Investment Limited regarding credit loans and margin loans granted to Yili[111](index=111&type=chunk) [Management Discussion and Analysis](index=44&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's perspective on the Group's financial performance, operational highlights, and future outlook, including discussions on the macroeconomic environment, market conditions, and risk management strategies [Macroeconomic Environment](index=44&type=section&id=Macroeconomic%20Environment) H1 2024 saw frequent global elections, the US Federal Reserve maintained interest rates, and US stock markets performed well; however, China's economic growth slowed, impacted by a property downturn and employment instability - 2024 is a global election year, with the US presidential election drawing significant attention[112](index=112&type=chunk) - The US Federal Reserve maintained interest rates in H1 2024, contrary to market expectations of rate cuts, though Chairman Powell hinted at potential short-term reductions[112](index=112&type=chunk) - The S&P 500 Index rose by **14.5%** in H1 2024[112](index=112&type=chunk) - China's economy grew by **4.7%** in Q2 2024, below expectations, impacted by a property market downturn and employment instability[112](index=112&type=chunk) [Hong Kong Stock Market](index=44&type=section&id=Hong%20Kong%20Stock%20Market) In H1 2024, the Hong Kong stock market remained volatile, with the Hang Seng Index closing at **17,718.61** points; average daily turnover was approximately **HKD 110.4 billion**, and IPO fundraising decreased by **26%** year-on-year; future market volatility is expected due to interest rate adjustments and China's economic risks - The Hang Seng Index closed at **17,718.61** points in H1 2024, with a fluctuation of over **4,500** points[113](index=113&type=chunk) - Average daily turnover in the Hong Kong stock market was approximately **HKD 110.4 billion** for the first six months of 2024[114](index=114&type=chunk) - There were **30** successful IPOs in H1 2024, raising a total of approximately **HKD 13.1 billion**, a year-on-year decrease of approximately **26%**[114](index=114&type=chunk) - Future stock market volatility is expected to persist, mainly influenced by anticipated interest rate adjustments and risks such as China's economic recovery and policy easing not meeting expectations[113](index=113&type=chunk) [Results and Overview](index=45&type=section&id=Results%20and%20Overview) The Group's H1 2024 profit before tax significantly decreased to **HKD 12 million**, primarily due to a one-off repayment of former related party loan balances recognized in the prior corresponding period; total revenue decreased by **HKD 230 million**, and adjusted revenue (excluding investment fair value change losses) decreased by **56%** year-on-year - Profit before tax in H1 2024 was approximately **HKD 12 million**, a significant decrease from **HKD 115 million** in the corresponding period of 2023[115](index=115&type=chunk) - Total revenue decreased to approximately **HKD 139 million**, a year-on-year decrease of approximately **HKD 230 million**[115](index=115&type=chunk) - Core operating business revenue decreased by approximately **10%** year-on-year to approximately **HKD 112 million**[115](index=115&type=chunk) - Adjusted revenue (excluding investment fair value change losses) was approximately **HKD 141 million**, a year-on-year decrease of **56%**, primarily due to the recognition of most interest income as a non-recurring item in the corresponding period of 2023[115](index=115&type=chunk) [Business Review](index=45&type=section&id=Business%20Review) Despite challenges from a strong US dollar and high interest rate environment in H1 2024, the Group achieved a turnaround; by increasing bank financing for brokerage, launching an external asset management model, and attracting talent, the Group expanded its AUM and services, while also making progress in overdue loan recovery and cost control - Achieved a turnaround in H1 2024 amidst a strong US dollar and high interest rate environment[116](index=116&type=chunk) - Committed to increasing bank financing for brokerage business and continuously strengthening financial position[116](index=116&type=chunk) - Successfully launched an external asset management model, attracted experienced talent, expanded assets under management, and broadened product sales processes[116](index=116&type=chunk) - Made good progress in negotiating the recovery of several overdue loans and continues to monitor and control costs[116](index=116&type=chunk) - Corporate finance business was affected by a decrease in transaction volume and delays in IPO timetables[116](index=116&type=chunk) [Financial Review](index=46&type=section&id=Financial%20Review) The Group's core operating business revenue decreased in H1 2024, with most major business segments showing a downward trend in revenue, except for brokerage interest income; changes in non-brokerage interest income and net investment gains significantly impacted total revenue Analysis of the Group's Major Business Revenue (HKD millions) | Revenue | H1 2024 | H1 2024 % of Total | H1 2023 | H1 2023 % of Total | Favorable/(Unfavorable) Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Corporate Finance Business | 4 | 3% | 9 | 7% | (56%) | | Asset Management Business | 3 | 3% | 5 | 4% | (40%) | | Brokerage Business | 30 | 27% | 41 | 33% | (27%) | | Brokerage Business Interest Income | 75 | 67% | 70 | 56% | 7% | | Total Core Operating Business Revenue | 112 | 100% | 125 | 100% | (10%) | | Non-Brokerage Business Interest Income | 25 | | 193 | | (87%) | | Financial Media Service Fee Income | 4 | | 4 | | 0% | | Net (Loss)/Gain from Investments | (2) | | 47 | | (104%) | | Total Revenue | 139 | | 369 | | (62%) | [Corporate Finance Business](index=46&type=section&id=Corporate%20Finance%20Business) Corporate finance business revenue decreased by **56%** from **HKD 9 million** in H1 2023 to **HKD 4 million** in H1 2024 - Corporate finance business revenue decreased from approximately **HKD 9 million** in H1 2023 to approximately **HKD 4 million** in H1 2024[119](index=119&type=chunk) [Asset Management Business](index=46&type=section&id=Asset%20Management%20Business) Asset management business revenue decreased by **40%** from **HKD 5 million** in H1 2023 to **HKD 3 million** in H1 2024 - Asset management business revenue decreased from approximately **HKD 5 million** in H1 2023 to approximately **HKD 3 million** in H1 2024[120](index=120&type=chunk) [Brokerage Business](index=47&type=section&id=Brokerage%20Business) Brokerage business revenue decreased by **27%** from **HKD 41 million** in H1 2023 to **HKD 30 million** in H1 2024, primarily due to reduced commission income from global futures products and Hong Kong securities - Brokerage business revenue decreased by **27%**, primarily due to reduced commission income from global futures products and Hong Kong securities[121](index=121&type=chunk) - Commission income from Hong Kong securities trading decreased by **33%** to **HKD 8 million**, while average daily turnover in the Hong Kong stock market decreased by **4%** year-on-year[121](index=121&type=chunk) [Brokerage Business Interest Income](index=47&type=section&id=Brokerage%20Business%20Interest%20Income) Brokerage business interest income increased by **7%** from **HKD 70 million** in H1 2023 to **HKD 75 million** in H1 2024, primarily benefiting from improved treasury management and increased margin loan interest income - Brokerage business interest income increased by **7%**, primarily due to improved treasury management leading to higher interest income and increased margin loan interest income[122](index=122&type=chunk) [Non-Brokerage Business Interest Income](index=47&type=section&id=Non-Brokerage%20Business%20Interest%20Income) Non-brokerage business interest income significantly decreased by **87%** from **HKD 193 million** in H1 2023 to **HKD 25 million** in H1 2024, primarily due to a one-off repayment of former related party loan balances in 2023 - Non-brokerage business interest income decreased by **87%**, primarily due to a one-off repayment of a portion of the outstanding loan balance from a former related party in 2023[123](index=123&type=chunk) [Financial Media Service Fee Income](index=47&type=section&id=Financial%20Media%20Service%20Fee%20Income) Financial media service fee income remained stable at approximately **HKD 4 million** in both H1 2024 and H1 2023 - Financial media service fee income was approximately **HKD 4 million** in both H1 2024 and H1 2023[124](index=124&type=chunk) [Net (Loss)/Gain from Investments](index=47&type=section&id=Net%20(Loss)%2FGain%20from%20Investments) H1 2024 saw an investment loss of **HKD 2 million**, a reversal from a **HKD 47 million** gain in the corresponding period of 2023; the loss primarily stemmed from mark-to-market losses on margin loans, partially offset by fair value gains on financial asset investments - Investment loss in H1 2024 was approximately **HKD 2 million**, including mark-to-market losses on margin loans of approximately **HKD 36 million**, offset by fair value gains on financial asset investments of approximately **HKD 34 million**[125](index=125&type=chunk) [Other (Losses)/Income, Net](index=47&type=section&id=Other%20(Losses)%2FIncome%2C%20Net) H1 2024 recorded other losses of approximately **HKD 14 million**, a reversal from a **HKD 1 million** gain in the corresponding period of 2023, primarily due to approximately **HKD 12 million** in losses from modifying credit loan terms - Other losses in H1 2024 were approximately **HKD 14 million**, primarily including approximately **HKD 12 million** in losses arising from the modification of credit loan terms[126](index=126&type=chunk) [Expenses](index=48&type=section&id=Expenses) Direct costs decreased by **29%** to **HKD 35 million** in H1 2024, primarily due to reduced brokerage commission expenses; staff costs remained relatively stable, decreasing by **1%** to **HKD 81 million**, reflecting resource streamlining - Direct costs decreased by **29%** from approximately **HKD 49 million** in H1 2023 to approximately **HKD 35 million** in H1 2024, primarily due to a decrease in brokerage commission expenses[127](index=127&type=chunk) - Staff costs decreased by **1%** from approximately **HKD 82 million** in H1 2023 to approximately **HKD 81 million** in H1 2024, reflecting resource streamlining[127](index=127&type=chunk) [Impairment Losses](index=48&type=section&id=Impairment%20Losses) In H1 2024, the Group recognized a net reversal of expected credit losses of **HKD 45 million**, primarily from credit loans to independent third parties, partially offset by expected credit loss expenses for former related party credit loans and bonds - A net reversal of expected credit losses (ECL) of approximately **HKD 45 million** was recognized in H1 2024 (H1 2023: net expense of approximately **HKD 48 million**)[128](index=128&type=chunk) - Primarily a net reversal of ECL of approximately **HKD 71 million** from credit loans to independent third parties, offset by a net ECL expense of approximately **HKD 28 million** for former related party credit loans and bonds[128](index=128&type=chunk) - A net ECL reversal of approximately **HKD 44 million** for an independent third-party credit loan was due to the completion of loan transfer, with consideration equivalent to face value settled in assignee shares[128](index=128&type=chunk)[129](index=129&type=chunk) [(a) Reasons for Impairment](index=49&type=section&id=(a)%20Reasons%20for%20Impairment) The Group assesses loan impairment losses under HKFRS 9, considering probability of default, loss given default, and forward-looking market data, while regularly monitoring the effectiveness of credit risk standards - Impairment loss provisions adopt HKFRS 9, with assessment factors including probability of default, loss given default, and forward-looking market data[130](index=130&type=chunk) - The effectiveness of credit risk standards is regularly monitored to ensure timely identification of significant increases in credit risk[130](index=130&type=chunk) [(b) Key Assumptions and Basis for Determining Impairment Amount](index=49&type=section&id=(b)%20Key%20Assumptions%20and%20Basis%20for%20Determining%20Impairment%20Amount) Credit loans and unlisted debt securities are categorized into Stage 1, 2, and 3 based on credit risk changes; impairment assessment uses an internal ECL model, considering financial instrument tenure, market probability of default, loss given default, and forward-looking market data - Credit loans and unlisted debt securities are classified into Stage 1, 2, and 3 for impairment assessment[131](index=131&type=chunk) - The internal impairment assessment's ECL model references the expected tenure of financial instruments, contractual terms, market probability of default, market loss given default or discounted recovery rate, and forward-looking market data[131](index=131&type=chunk) [Lending](index=50&type=section&id=Lending) The Group's lending business provides secured and unsecured loans, adopting credit risk policies for management; the loan portfolio is diversified, but the top five borrowers account for **69%** of gross credit loans, and net credit loans decreased in H1 2024 [(i) The Group's Lending Business and Credit Risk Assessment Policy](index=50&type=section&id=(i)%20The%20Group's%20Lending%20Business%20and%20Credit%20Risk%20Assessment%20Policy) The Group's lending business provides secured and unsecured loans to individuals and corporations, with credit risk policies covering credit assessment, collateral requirements, and repayment source evaluation to diversify the loan portfolio - The lending business provides secured and unsecured loans to individuals and corporations, earning interest income[132](index=132&type=chunk) - Credit risk policies are adopted to manage the lending business, including credit assessment, collateral requirements, and evaluation of repayment sources[132](index=132&type=chunk) - The loan portfolio is diversified by lending to various borrowers, reducing concentration risk[132](index=132&type=chunk) [(ii) Key Terms of Credit Loans Granted (Including Collateral Details), Client Size and Diversification, and Loan Concentration of Major Clients](index=50&type=section&id=(ii)%20Key%20Terms%20of%20Credit%20Loans%20Granted%20(Including%20Collateral%20Details)%2C%20Client%20Size%20and%20Diversification%2C%20and%20Loan%20Concentration%20of%20Major%20Clients) As of June 30, 2024, the Group had **37** credit loans, with principal amounts ranging from **HKD 2 million to HKD 446 million** and interest rates from **2.5% to 12%**; the client base is diversified, but the top five borrowers account for **69%** of the total principal amount of the credit loan portfolio - As of June 30, 2024, the Group had **20** borrowers, comprising **15** unlisted companies, **2** listed companies, and **3** individual borrowers[133](index=133&type=chunk) - **37** credit loans had principal amounts ranging from **HKD 2 million to HKD 446 million**, with interest rates between **2.5% and 12%**[134](index=134&type=chunk) - Loan types include secured (**9%**), unsecured but guaranteed (**48%**), and unsecured and unguaranteed (**43%**)[134](index=134&type=chunk) - The top five borrowers constituted **69%** of the total principal amount of the Group's credit loan portfolio[135](index=135&type=chunk) [(iii) Reasons for Loan Impairment (and Write-offs)](index=51&type=section&id=(iii)%20Reasons%20for%20Loan%20Impairment%20(and%20Write-offs)) Changes in loan impairment result from assessing credit risk based on factors like credit history, borrower financial condition, and forward-looking information; despite an increase in gross credit loans, the net amount after expected credit loss provisions decreased - Changes in loan impairment are a result of determining credit risk based on various factors such as credit history, borrower's financial condition, and forward-looking information[136](index=136&type=chunk) - Gross credit loans increased from approximately **HKD 4.413 billion** as of December 31, 2023, to approximately **HKD 4.524 billion** as of June 30, 2024[137](index=137&type=chunk) - Net credit loans after expected credit loss provisions decreased from approximately **HKD 422 million** as of December 31, 2023, to approximately **HKD 354 million** as of June 30, 2024[137](index=137&type=chunk) Aging Analysis of Credit Loans by Due Date (Net of Expected Credit Loss Provision) (HKD thousands) | Aging | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within 30 days | 51,537 | 94,196 | | 31 to 90 days | — | — | | Over 90 days | 302,463 | 327,986 | | Credit loans, net | 354,000 | 422,182 | [Outlook](index=52&type=section&id=Outlook) The Hong Kong market remains challenging with a weak IPO market; the Group will prudently deploy resources, focus on product and client-side development, transform transaction processes, and recover overdue receivables to capitalize on market rebound opportunities from interest rate cuts and Greater China's economic recovery - The Hong Kong market has not yet rebounded from its trough, and the IPO market remains weak[139](index=139&type=chunk) - Will maintain prudent resource deployment, continue to rationally build product and client bases, strive to transform transaction processes into business, and continue to recover long-overdue receivables[139](index=139&type=chunk) - Is prepared to seize opportunities for a Hong Kong market rebound when interest rate cuts begin and the Greater China economy regains momentum[139](index=139&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=52&type=section&id=Capital%20Structure%2C%20Liquidity%20and%20Financial%20Resources) The Group primarily funds operations through internal cash flow, bank financing, and short-term loans; cash levels increased, total borrowings grew by **19%** to **HKD 799 million**, and the gearing ratio was **38%**; the Group implements prudent risk management and complies with regulatory requirements - The Group funds its operations through internally generated cash flow, utilization of bank facilities, and short-term loans and notes from non-bank entities[140](index=140&type=chunk) - Cash level was approximately **HKD 164 million** as of June 30, 2024 (December 31, 2023: approximately **HKD 122 million**)[140](index=140&type=chunk) - Total borrowings were approximately **HKD 799 million** as of June 30, 2024, an increase of **19%** from approximately **HKD 674 million** as of December 31, 2023[141](index=141&type=chunk) - Borrowings primarily consist of utilized bank facilities (approximately **HKD 540 million**) and private notes and other loans (approximately **HKD 259 million**)[141](index=141&type=chunk) - The gearing ratio was **38%** (December 31, 2023: **33%**)[141](index=141&type=chunk) [Material Acquisitions, Disposals and Significant Investments](index=53&type=section&id=Material%20Acquisitions%2C%20Disposals%20and%20Significant%20Investments) Except as announced and disclosed in Note 18, the Group had no material acquisitions or disposals of subsidiaries and associates during this interim period; as of June 30, 2024, the Group held no significant investments - During this interim period, the Group had no material acquisitions or disposals of subsidiaries and associates, other than those announced and disclosed in Note 18[142](index=142&type=chunk) - As of June 30, 2024, the Group held no significant investments[142](index=142&type=chunk) [Pledge of the Group's Assets](index=53&type=section&id=Pledge%20of%20the%20Group's%20Assets) As of June 30, 2024, approximately **HKD 1.308 billion** of the Group's assets were pledged to banks and other lenders to secure credit, a significant increase from **HKD 514 million** as of December 31, 2023 - As of June 30, 2024, approximately **HKD 1.308 billion** of assets were pledged to banks and other lenders to secure credit (December 31, 2023: approximately **HKD 514 million**)[143](index=143&type=chunk) [Employees and Remuneration Policy](index=53&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2024, the Group employed **181** full-time staff in Hong Kong, **22** in mainland China, and **66** self-employed sales representatives; the remuneration policy is competitive, referencing industry surveys and individual expertise, and includes MPF schemes and healthcare insurance - As of June 30, 2024, the Group employed **181** full-time staff in Hong Kong (December 31, 2023: **193**) and **22** full-time staff in mainland China (December 31, 2023: **22**)[144](index=144&type=chunk) - Additionally, the Group had **66** self-employed sales representatives (December 31, 2023: **60**)[144](index=144&type=chunk) - Remuneration packages are competitive, determined by reference to industry salary surveys, market practices, and individual expertise, with annual salary reviews and discretionary bonuses[144](index=144&type=chunk) - Benefits include a Mandatory Provident Fund (MPF) scheme and healthcare insurance[144](index=144&type=chunk) [Risk Management](index=54&type=section&id=Risk%20Management) The Group implements a three-tier risk management system to address credit, market, liquidity, operational, and regulatory compliance risks; departments are responsible for initial assessment, Risk Management and Legal & Compliance provide advice and oversight, and Internal Audit conducts regular checks - The Group adopts precautionary measures and has established a three-tier risk management system to address unexpected market fluctuations and minimize risks[145](index=145&type=chunk) - The Risk Management Department is responsible for risk identification and analysis, setting and monitoring risk limits and parameters, and preparing timely risk reports for senior management[145](index=145&type=chunk) - The Legal and Compliance Department provides advice and monitors legal risks, while the Internal Audit Department conducts regular checks to ensure the elimination of procedural and potential risks[145](index=145&type=chunk) [Credit Risk](index=54&type=section&id=Credit%20Risk) Credit risk arises from borrowers or counterparties failing to meet their obligations; the Group has established credit approval policies and post-lending monitoring systems, utilizing advanced IT systems for daily monitoring of credit and concentration risk limits - Credit risk is the potential risk of loss arising from a borrower, counterparty, or issuer of a financial instrument failing to meet its obligations[146](index=146&type=chunk) - Credit approval policies and procedures have been established for pre-lending approval and post-lending monitoring systems[146](index=146&type=chunk) - Advanced IT systems are utilized for daily monitoring of credit and concentration risk limits[146](index=146&type=chunk) [Market Risk](index=54&type=section&id=Market%20Risk) Market risk refers to potential losses from changes in the market price of investment positions, including interest rate, equity price, and foreign exchange rate risks; the Risk Management Department sets limits and guidelines, and monitors and assesses market risk conditions - Market risk refers to the potential loss arising from changes in the market price of investment positions held, including interest rate risk, equity price risk, and foreign exchange rate risk[147](index=147&type=chunk) - The Risk Management Department is responsible for setting market risk limits and investment guidelines, and for timely monitoring and assessing market risk conditions[147](index=147&type=chunk) - Market risk models are refined through regular back-testing and stress scenario testing[147](index=147&type=chunk) [Liquidity Risk](index=55&type=section&id=Liquidity%20Risk) Liquidity risk refers to the Group's potential inability to obtain sufficient funds in a timely manner to meet payment obligations; the Treasury Department is responsible for fund raising, management, and allocation, the Finance Department ensures compliance, and funds are raised through banking relationships and corporate bond issuance - Liquidity risk refers to the risk that the Group may face in obtaining sufficient capital and funds in a timely manner to meet its payment obligations and funding needs for daily business activities[148](index=148&type=chunk) - The Treasury Department is responsible for raising, managing, and allocating the Group's funds, while the Finance Department has monitoring systems to ensure compliance with relevant rules[148](index=148&type=chunk) - The Group maintains good relationships with banks to obtain short-term financing and raises short-term working capital through public and private offerings of corporate bonds[148](index=148&type=chunk) [Operational Risk](index=55&type=section&id=Operational%20Risk) Operational risk primarily stems from internal procedural negligence, IT system failures, or employee misconduct; the Group manages this risk by enhancing employee risk awareness, establishing internal procedures and operational risk event reporting, and implementing business continuity policies - Operational risk is the risk of financial loss primarily arising from negligence or omissions in internal procedures, IT system failures, or individual misconduct by employees[149](index=149&type=chunk) - The Group actively organizes briefings to enhance employee risk awareness and instructs all departments to establish internal procedures and control guidelines[149](index=149&type=chunk) - Operational risk event reporting procedures and business continuity policies are in place to ensure timely corrective actions and handling of emergencies[149](index=149&type=chunk) [Regulatory Compliance Risk](index=55&type=section&id=Regulatory%20Compliance%20Risk) As a regulated financial group, the Group is committed to complying with strict and evolving regulatory requirements; the Legal and Compliance team continuously monitors, reviews, and mitigates regulatory risks to protect investor interests and maintain market integrity - The Group is committed to complying with strict and evolving regulatory requirements, including but not limited to those related to protecting investor interests and maintaining market integrity and stability[150](index=150&type=chunk) - The Legal and Compliance team continuously monitors, reviews, and mitigates the Group's regulatory risks[150](index=150&type=chunk) [Other Information](index=56&type=section&id=Other%20Information) This section covers additional disclosures including interim dividends, directors' and major shareholders' interests, share incentive schemes, and corporate governance practices [Interim Dividends](index=56&type=section&id=Interim%20Dividends) The Board has resolved not to declare an interim dividend for the six months ended June 30, 2024, whereas a special dividend of **1.1 HK cents** per share was declared for the corresponding period in 2023 - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2024[152](index=152&type=chunk) - A special dividend of **1.1 HK cents** per share was declared for the corresponding period in 2023[152](index=152&type=chunk) [Directors' Interests](index=56&type=section&id=Directors'%20Interests) As of June 30, 2024, several directors held interests in the Company's shares and related shares, primarily through controlled corporation Huaxintong, holding **68.05%** of issued shares; some directors also held personal beneficial interests and share options Directors' Long Positions in Shares and Related Shares (As of June 30, 2024) | Director's Name | Capacity | Number of Shares/Related Shares Held | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Han | Interest in controlled corporation | 4,216,809,571 | 68.05% | | Mr. Han | Beneficial owner | 12,500,000 | 0.20% | | Mr. Lam | Beneficial owner | 113,072,833 | 1.82% | | Mr. Lam | Interest in controlled corporation | 4,216,809,571 | 68.05% | | Mr. Liu Hongwei | Beneficial owner | 12,500,000 | 0.20% | | Mr. Lam Wai Hon | Beneficial owner | 3,000,000 | 0.05% | | Mr. Fang Zhou | Beneficial owner | 3,000,000 | 0.05% | | Mr. Lo Wah Kei | Beneficial owner | 5,000,000 | 0.08% | | Mr. Liu Jipeng | Beneficial owner | 5,000,000 | 0.08% | - Huaxintong is the beneficial owner of **4,216,809,571** shares, with Mr. Lam and Mr. Han holding **51%** and **49%** interests respectively[155](index=155&type=chunk) - Mr. Fang Zhou held **HKD 5.22 million** in debentures[155](index=155&type=chunk) [Interests of Substantial Shareholders and Other Persons](index=58&type=section&id=Interests%20of%20Substantial%20Shareholders%20and%20Other%20Persons) As of June 30, 2024, Huaxintong was the largest substantial shareholder, holding **68.05%** of issued shares; Mr. Lu Zhiqiang and his controlled corporations held **6.38%** interest, and Haitong Securities Co., Ltd. and its controlled corporations held **66.16%** interest Substantial Shareholders' Long Positions in Shares (As of June 30, 2024) | Name of Holder of Shares/Related Shares | Capacity | Number of Shares/Related Shares Held | Approximate Percentage of Total Interest | | :--- | :--- | :--- | :--- | | Huaxintong | Beneficial owner | 4,216,809,571 | 68.05% | | Mr. Lu Zhiqiang | Interest in controlled corporation | 395,254,732 | 6.38% | | Oceanwide Holdings Co., Ltd. | Interest in controlled corporation | 395,254,732 | 6.38% | | Oceanwide Group Co., Ltd. | Interest in controlled corporation | 395,254,732 | 6.38% | | China Oceanwide Holdings Group Co., Ltd. | Interest in controlled corporation | 395,254,732 | 6.38% | | Oceanwide Holdings | Interest in controlled corporation | 395,254,732 | 6.38% | | China Oceanwide Group Co., Ltd. | Interest in controlled corporation | 395,254,732 | 6.38% | | Oceanwide Holdings International Financial | Beneficial owner | 395,254,732 | 6.38% | | Haitong Securities Co., Ltd. | Interest in controlled corporation | 4,100,000,000 | 66.16% | | Haitong International Holdings Limited | Interest in controlled corporation | 4,100,000,000 | 66.16% | | Haitong International Securities Group Limited | Interest in controlled corporation | 4,100,000,000 | 66.16% | | Haitong International Strategic Investment Limited | Security interest in shares | 4,100,000,000 | 66.16% | - Mr. Lu Zhiqiang held more than one-third of the voting rights at the general meeting of Oceanwide Holdings Co., Ltd. and is deemed to be interested in all shares held by Oceanwide Holdings Co., Ltd.[159](index=159&type=chunk) - Haitong Securities Co., Ltd. holds the entire issued share capital of Haitong International Holdings Limited and is deemed to be interested in all shares held by it[160](index=160&type=chunk) [Share Award Scheme](index=61&type=section&id=Share%20Award%20Scheme) The Company adopted a restricted share award scheme in 2010 to recognize contributions and incentivize employees and consultants; the total number of awarded shares under the scheme shall not exceed **94,798,451** shares, and the scheme has been renewed until August 18, 2025; as of June 30, 2024, the trustee held **51,172,002** awarded shares for allocation, with no new awards granted during the period - The Share Award Scheme aims to recognize the contributions of employees and consultants, provide incentives, and assist the Group in retaining and recruiting talent[161](index=161&type=chunk) - The total number of awarded shares available for allocation under the scheme shall not exceed **94,798,451** shares (**1.53%** of the total issued shares as of the date of this interim report)[161](index=161&type=chunk) - The Share Award Scheme has been renewed for five years from August 19, 2020, to August 18, 2025[164](index=164&type=chunk) - As of June 30, 2024, the trustee held a total of **51,172,002** awarded shares for allocation, with no new awarded shares granted during the period[165](index=165&type=chunk) [Share Option Scheme](index=63&type=section&id=Share%20Option%20Scheme) The Company adopted an employee share option scheme in 2020 to incentivize eligible participants; **152.5 million** share options were granted on July 21, 2023, with an exercise price of **HKD 0.2** per share, vesting in three tranches, some with performance targets; no new share options were granted during the period ended June 30, 2024 - The Share Option Scheme aims to provide incentives or rewards to eligible participants who have contributed or will contribute to the Group[166](index=166&type=chunk) - The number of shares available for issue under the Share Option Scheme's authorized limit is **619,704,922** shares, representing **10%** of the issued shares as of the date of this interim report[166](index=166&type=chunk) - A total of **152,500,000** share options were granted on July 21, 2023, with an exercise price of **HKD 0.2** per share[167](index=167&type=chunk) - The share options will vest and become exercisable in three tranches, **12, 24, and 36 months** after the grant date, with vesting percentages of **25%, 35%, and 40%** respectively[171](index=171&type=chunk) - Share options granted to independent non-executive directors have no performance targets, while some share options granted to other grantees are subject to performance targets[171](index=171&type=chunk) Changes in Share Options Under Share Option Scheme (For the six months ended June 30, 2024) | Grantee | Grant Date | As at January 1, 2024 | Granted during the period | Exercised during the period | Cancelled during the period | Lapsed during the period | As at June 30, 2024 | Exercisable as at June 30, 2024 | Exercise Period | Exercise Price (HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Directors and key management personnel | 2023年7月21日 | 66,000,000 | 0 | 0 | 0 | 0 | 66,000,000 | 0 | 2024年7月22日至2033年7月21日 | 0.2 | | Employees | 2023年7月21日 | 86,500,000 | 0 | 0 | 0 | 11,500,000 | 75,000,000 | 0 | 2024年7月22日至2033年7月21日 | 0.2 | | Total | | 152,500,000 | 0 | 0 | 0 | 11,500,000 | 141,000,000 | 0 | | | [Disclosure Pursuant to Rule 13.15 of the Listing Rules](index=68&type=section&id=Disclosure%20Pursuant%20to%20Rule%2013.15%20of%20the%20Listing%20Rules) This section discloses several term loans and margin financing facilities provided by the Company to related parties, including China Oceanwide International Investment Limited, Minyun Limited, and Oceanwide Holdings International Development III Limited; as of June 30, 2024, all these loans remained outstanding and overdue - Discloses several term

Financial Performance - Total revenue for the six months ended June 30, 2024, was HKD 368,700,000, a decrease from HKD 4,138,942,000 in the same period of 2023[1] - Commission income was HKD 40,859,000, down 30.5% from HKD 58,763,000 year-on-year[2] - Interest income calculated using the effective interest method was HKD 42,109,000, significantly lower than HKD 205,800,000 in the previous year[1] - Net investment loss was HKD (1,799,000), compared to a gain of HKD 47,484,000 in the same period last year[1] - Pre-tax profit decreased to HKD 11,760,000 from HKD 115,201,000 year-on-year, representing a decline of 89.8%[2] - Net profit attributable to equity holders was HKD 11,162,000, down 90% from HKD 111,269,000 in the previous year[3] - Basic and diluted earnings per share were both HKD 0.2, a decrease from HKD 1.8 in the same period last year[2] Assets and Liabilities - Total assets as of June 30, 2024, amounted to HKD 4,293,599,000, compared to HKD 4,064,012,000 at the end of 2023[4] - Total liabilities increased to HKD 2,218,148,000 from HKD 2,002,597,000 at the end of the previous year[4] - Total equity attributable to equity holders was HKD 2,075,451,000, a slight increase from HKD 2,061,415,000 at the end of 2023[4] Revenue Breakdown - The company reported segment revenue for the corporate finance division at HKD 4,570,000 and for the asset management division at HKD 6,526,000 for the six months ended June 30, 2024[9] - Brokerage segment revenue reached HKD 105,339,000, while interest income for the same segment was HKD 24,910,000 for the six months ended June 30, 2024[10] - Revenue from related parties for the six months ended June 30, 2024, was HKD 30,485,000, down from HKD 162,589,000 in the previous year[12] - Corporate finance business revenue decreased from approximately HKD 9 million in the first half of 2023 to approximately HKD 4 million in the first half of 2024, representing a decline of about 56%[40] - Asset management business revenue fell from approximately HKD 5 million in the first half of 2023 to approximately HKD 3 million in the first half of 2024, a decrease of 40%[41] Operating Expenses - Total operating expenses for the six months ended June 30, 2024, were HKD 27,236,000, down from HKD 29,487,000 in the previous year, a reduction of 7.6%[16] - Tax expense for the six months ended June 30, 2024, was HKD 598,000, compared to HKD 3,932,000 for the same period in 2023, reflecting a decrease of 84.8%[19] - The company incurred a loss of HKD 12,203,000 due to modifications in credit loan terms, which was not present in the previous year[14] - Legal and professional fees amounted to HKD 5,585,000, a decrease from HKD 9,067,000 in the previous year, indicating a reduction in professional service costs[16] Credit and Loans - Margin loans to clients amounted to HKD 520,434 as of June 30, 2024, down from HKD 547,986 as of December 31, 2023[23] - Total unsecured credit loans increased to HKD 4,021,751 as of June 30, 2024, compared to HKD 3,854,279 as of December 31, 2023[24] - The expected credit loss provision for secured credit loans was HKD 502,588 as of June 30, 2024, compared to HKD 558,615 as of December 31, 2023[24] - The net amount of credit loans after expected credit loss provisions decreased from approximately HKD 422.18 million to about HKD 354 million, reflecting a decline of 16.1%[57] Employee and Operational Management - The company employed 181 full-time employees in Hong Kong as of June 30, 2024, down from 193 as of December 31, 2023[62] - The company actively conducts briefings to enhance employee risk awareness and has established internal procedures and control guidelines[67] - The company has adopted a credit risk policy to manage its lending business, which includes assessing potential borrowers and their assets, ensuring compliance with applicable laws and regulations[54] Dividends and Shareholder Returns - The company declared a special dividend of HKD 0.011 per ordinary share for the six months ended June 30, 2023, totaling HKD 68,168, while no interim dividend was declared for the six months ending June 30, 2024[22] - The board has decided not to declare an interim dividend for the six months ending June 30, 2024, compared to a special dividend of HKD 0.011 per share in 2023[69] Risk Management and Compliance - The company has a business continuity policy and a special committee to address any potential operational risks[67] - The company continues to monitor and assess market risk conditions and reports significant risks to senior management[65] - The company has committed to complying with evolving regulatory requirements to protect investor interests and maintain market integrity[68]

Financial Performance - The total net revenue of the company increased from a negative HKD 28 million in 2022 to HKD 346 million in 2023, representing a significant recovery[14]. - The adjusted recurring income for 2023 was HKD 564 million, up from HKD 551 million in 2022, marking a year-on-year increase of HKD 13 million[14]. - The company's total assets under management grew from USD 116 million to USD 146 million, reflecting a positive trend in asset management[9]. - Interest income from brokerage operations rose by 7% to HKD 145 million in 2023, compared to HKD 135 million in 2022, driven by improved fund management[18]. - The expected credit loss reversal for 2023 was approximately HKD 62 million, a significant improvement from the HKD 1.066 billion expense in 2022[21]. Market Environment - The average daily trading volume in the Hong Kong securities market decreased by 16% year-on-year to HKD 105 billion in 2023[13]. - The number of new IPOs in Hong Kong dropped significantly to 73 in 2023, raising a total of HKD 46.3 billion, which is a 55.8% decrease compared to the previous year[13]. - The Hang Seng Index and the Hang Seng China Enterprises Index fell by 13.8% and 14.0% respectively in 2023, indicating a challenging market environment[13]. Regulatory and Compliance - The company successfully obtained a virtual asset license to conduct regulated activities under the Securities and Futures Ordinance, enhancing its service offerings[9]. - The company has complied with the disclosure requirements of the Listing Rules regarding related party transactions[53]. - The group has established a credit approval policy and procedures to manage potential credit risks across five major business areas, including corporate finance and asset management[97]. - The company maintains a disciplined approach to compliance, with a dedicated legal and compliance department overseeing any non-compliance incidents[199]. Loan Management - The company provided a loan of HKD 10,000,000 to China Oceanwide International Investment Co., Ltd. as a guarantee[30]. - The expected recovery rate for the loans is derived from Moody's published average debt recovery rates, with a recovery rate of 100% for defaulted counterparties as of December 31, 2023[36]. - The company has established a repayment agreement with a subsidiary of Tonghai Holdings, settling all outstanding interest and part of the principal amounting to HKD 446 million as of August 22, 2023[39]. - The company has sent payment reminders to corporate clients 1, 2, and 3, with no repayments received from clients 1 and 3 as of the report date[40]. - An independent third party has settled HKD 124 million (52% of the transfer price) for the loan to corporate client 5, with HKD 71 million attributable to the company[41]. - The company has a total of 38 credit loans, with 12 loans exceeding HKD 100 million and up to HKD 500 million[45]. - The expected credit loss is determined based on various factors including credit records and the financial status of borrowers, reflecting changes in credit risk since initial recognition[46]. - The risk management department regularly monitors the risk levels of the loan portfolio and provides updates to senior management monthly[38]. - The company has established a continuous loan monitoring process, checking for overdue balances and conducting independent reviews of the loan portfolio[51]. - The company extended loans totaling HKD 3 million, HKD 5 million, HKD 8 million, HKD 28 million, HKD 280 million, and HKD 156 million, all at an annual interest rate of 12%[55]. - As of December 31, 2023, the company had 21 borrowers, including 15 non-listed companies, 2 listed companies, and 4 individual borrowers[60]. - The company has a credit loan portfolio where 3% is secured by shares of listed and private companies, and 48% of loans are unsecured but backed by personal or corporate guarantees[61]. - The company has adopted a credit risk policy to manage its lending operations, which includes compliance with applicable laws and regulations, credit assessments of potential borrowers, and evaluation of collateral necessity[59]. - The company provided a loan of HKD 64.5 million to Minyun Limited at an interest rate of 7.875%, maturing on January 31, 2022[56]. - The company has established an approval authority structure for loans exceeding HKD 100 million, requiring higher-level approvals for larger loans[64]. - A partial repayment of HKD 50 million was received from corporate client 6 in 2023, and a two-year repayment plan was established in January 2024[58]. - The company is exploring feasible options to recover loans from certain borrowers due to unmet repayment conditions[56]. - The company has not received any repayments from corporate client 4 as of the report date, and legal actions are ongoing[57]. - The company has a total of HKD 276 million in credit loans classified as current liabilities as of December 31, 2023[155]. - The total amount of loans and unsecured private placements provided to Pan-Hai Holdings International Development III Limited is approximately HKD 2,484.9 million, with a net book value of HKD 412 million[155]. - The company extended a loan amounting to HKD 678 million with an adjusted annual interest rate of 10.5%, maturing on January 28, 2022[151]. - The company subscribed to non-listed preferred notes issued by the issuer for USD 91 million (approximately HKD 709.8 million) with a coupon rate of 11.8%, maturing on April 25, 2023[153]. Environmental, Social, and Governance (ESG) - The board of directors is responsible for overseeing the group's environmental, social, and governance (ESG) strategies and performance[81]. - The group aims to balance sustainable business growth with stakeholder interests, emphasizing the importance of effective ESG management for long-term development[80]. - The total greenhouse gas emissions for the year amounted to 26.07 metric tons of CO2 equivalent, with a density of 210.89 metric tons of CO2 equivalent per employee[122]. - The company has identified 22 key environmental, social, and governance (ESG) issues, with privacy and data security ranked as the most important[113]. - The company is committed to integrating sustainable development principles into its operations and actively supports carbon reduction and environmental protection efforts[116]. - The company has implemented a three-step approach for materiality assessment, assisted by an independent third-party consultant, to balance financial and impact significance[110]. - The company aims to minimize its environmental footprint and proactively address climate risks as part of its low-carbon operational journey[115]. - The primary air pollutants generated by the company this year included nitrogen oxides at 0.86 kg, sulfur oxides at 0.02 kg, and particulate matter at 0.06 kg[125]. - The company emphasizes the importance of stakeholder engagement and maintains open communication channels with various stakeholders[130]. - The company has established policies covering environmental protection, climate change, employment practices, and community investment, which are regularly reviewed[127]. - The company is focused on promoting workplace health and safety as part of its corporate governance strategy[107]. - The company is actively monitoring key environmental performance indicators to set targets and improve performance[116]. - The company identified eight key environmental, social, and governance (ESG) issues based on a new materiality assessment[134]. - Total greenhouse gas emissions decreased by 22% from 270.8 tons of CO2 equivalent in 2022 to 210.89 tons in 2023[140]. - Scope 1 emissions increased by 21% from 3.2 tons of CO2 equivalent in 2022 to 3.88 tons in 2023[140]. - Scope 2 emissions decreased by 32% from 267.6 tons of CO2 equivalent in 2022 to 180.94 tons in 2023[140]. - Total water consumption decreased by 76% from 528 cubic meters in 2022 to 129 cubic meters in 2023[146]. - The company aims to reduce its carbon footprint through a series of measures to enhance resource efficiency[139]. - Direct energy consumption increased by 23% from 12.8 MWh in 2022 to 15.71 MWh in 2023[143]. - Total energy consumption decreased by 28% from 392.6 MWh in 2022 to 283.17 MWh in 2023[143]. - The company generated 5.84 tons of non-hazardous waste and 0.03 tons of hazardous waste during the year[148]. - The company is actively seeking methods to enhance water conservation and reduce water usage[145]. - Total hazardous waste generated increased to 0.03 tons in 2023 from 0.01 tons in 2022, a 200% increase[164]. - Hazardous waste density per 1,000 employees rose to 0.16 tons in 2023, up from 0.1 tons in 2022, reflecting a 60% increase[164]. - Total non-hazardous waste generated was 5.84 tons in 2023, compared to 5.6 tons in 2022, marking a 4% increase[164]. - Non-hazardous waste density per employee remained stable at 0.03 tons in both 2023 and 2022[164]. Employee and Community Engagement - The company emphasizes the importance of employee development and conducts annual performance reviews to identify and promote talent[169]. - The company aims for zero workplace injuries and continuously improves occupational health and safety management[170]. - The company has established multiple feedback channels to manage customer feedback and complaints effectively[172]. - The company is committed to sustainable finance, integrating environmental considerations into financing decisions[175]. - The company actively seeks opportunities to support community development through various initiatives[177]. - The company promotes equal opportunities and diversity in the workplace, ensuring fair treatment for all employees[181]. - The company emphasizes the importance of employee training and development, offering internal and external training programs to enhance professional knowledge and skills[186]. - No work-related fatalities or injuries were reported in the past three years, indicating a strong focus on employee health and safety[190]. - The company has established a Product and Risk Committee to oversee product quality and customer service, ensuring continuous improvement through regular market analysis[191]. - There were no customer complaints received during the year, reflecting high customer satisfaction and service quality[192]. - The company is committed to sustainable economic growth and incorporates environmental sustainability principles into its core business strategy[194]. - Plans are in place to review the investment portfolio's sensitivity to climate change to understand and mitigate potential risks[195].

Dividend Policy - The company did not declare a final dividend for the year ending December 31, 2023, consistent with the previous year[1]. - The company does not recommend any final dividend for the year ending December 31, 2023, consistent with 2022[29]. Financial Performance - Total revenue increased from a negative HKD 0.28 million in 2022 to HKD 3.46 million in 2023, a year-on-year increase of HKD 3.74 million[28]. - Adjusted recurring income rose to HKD 5.64 million in 2023 from HKD 5.51 million in 2022, an increase of HKD 13 million[28]. - Corporate finance revenue surged by 63% to HKD 31 million in 2023, up from HKD 19 million in 2022, driven by increased advisory fees from IPOs[36]. - The company reported a net profit attributable to equity holders of HKD 119,537,000 for the year ended December 31, 2023, compared to a net loss of HKD 1,583,664,000 in the previous year[55]. - Total comprehensive income attributable to equity holders amounted to HKD 114,113,000, a significant recovery from a total comprehensive loss of HKD 1,585,189,000 in the prior year[55]. - The company reported a pre-tax profit of HKD 118 million for the year ended December 31, 2023, a significant increase from a pre-tax loss of HKD 1.584 billion in 2022[78]. - Total revenue for 2023 was HKD 345.654 million, compared to a loss of HKD 27.884 million in 2022[78]. Assets and Liabilities - As of December 31, 2023, total assets amounted to HKD 4,064,012, a decrease from HKD 4,678,087 as of December 31, 2022, representing a decline of approximately 13.1%[43]. - The total liabilities reached HKD 2,002,597, down from HKD 2,666,481, indicating a reduction of about 25%[43]. - The company’s equity totalled HKD 2,061,415, an increase from HKD 2,011,606, reflecting a growth of approximately 2.5%[43]. - Cash and cash equivalents decreased to HKD 122,380 from HKD 195,206, reflecting a decline of 37.2% year-over-year[43]. Credit and Loans - The total amount of unsecured credit loans as of December 31, 2023, was HKD 3.85 billion, down from HKD 4.39 billion in the previous year, representing a decrease of approximately 12.3%[7]. - The expected credit loss expenses netted HKD 1,066,478, an increase from the previous year's figure of HKD 916,544, indicating a rise of approximately 16.4%[46]. - The expected credit loss expense for independent third-party loans was HKD 377 million in 2023, down from HKD 667 million in 2022[145]. - The net expected credit loss expense for 2023 is HKD 337 million, primarily due to overdue loans from corporate clients[147]. - The credit loss percentage for corporate clients ranges from 77% to 100%, indicating a high level of risk associated with these loans[151]. Investment Performance - Investment losses decreased significantly by 62% to HKD 218 million in 2023 from HKD 579 million in 2022[32]. - The company recorded a net unrealized loss of HKD 230.221 million, an improvement from a net unrealized loss of HKD 591.215 million in 2022[69]. - The net investment loss for 2023 was HKD 218 million, a decrease from HKD 579 million in 2022, including a market value loss of HKD 107 million[119]. Market Conditions - The average daily trading volume in the Hong Kong securities market decreased by 16% year-on-year to HKD 105 billion in 2023[26]. - The total market capitalization of the Hong Kong securities market fell by 13% year-on-year to HKD 310.39 billion at the end of 2023[26]. - The Hang Seng Index and Hang Seng China Enterprises Index dropped by 13.8% and 14.0% respectively in 2023[26]. - The S&P 500 index rose by 24.2% by the end of 2023, with the Nasdaq index soaring by 43.4%[25]. Operational Changes - The company expanded its product pipeline through the establishment of an external asset management model, enhancing business prospects[30]. - The company is evaluating the impact of new accounting standards and has identified adjustments related to interest income from impaired loans and expected credit loss provisions[59]. - The company plans to adopt new and revised Hong Kong Financial Reporting Standards effective from January 1, 2024, which may affect future financial reporting[58]. Risk Management - The company’s risk management department regularly monitors the risk levels of the loan portfolio and provides updates to senior management monthly[159]. - The company has established a long-term approval authority structure for loan approvals, which varies based on the loan size and associated risks[172]. - The company has been actively discussing alternative recovery plans for loans to certain borrowers due to unmet repayment conditions[160].

Financial Performance - Total revenue for the six months ended June 30, 2023, was HKD 337,886,000, a significant increase from HKD 26,918,000 in the same period of 2022, representing a growth of approximately 1,151%[3] - Net investment income for the period was HKD 47,484,000, recovering from a loss of HKD 252,474,000 in the previous year[3] - The company reported a profit attributable to equity holders of HKD 111,269,000, compared to a loss of HKD 245,591,000 in the same period last year[3] - Basic and diluted earnings per share for the period were HKD 2, compared to a loss of HKD 4 per share in the previous year[3] - The company declared an interim dividend of HKD 1.1 per share, compared to no dividend in the same period last year[3] - Total comprehensive income attributable to equity holders was HKD 110,032,000, compared to a total comprehensive loss of HKD 247,029,000 in the previous year, indicating improved overall performance[28] - The pre-tax profit for the period was HKD 115,201,000, a significant recovery from a pre-tax loss of HKD 259,755,000 in the prior year[32] - The total tax expense for the period was HKD 3,932, a significant improvement from a tax credit of HKD 14,164 in the previous year[74] - The company reported a basic and diluted loss per share of HKD 111,269,000 for the six months ended June 30, 2023, compared to a loss of HKD 245,591,000 for the same period in 2022[136] Cost Management - Employee costs decreased to HKD 81,827,000 from HKD 89,644,000 year-on-year, reflecting cost management efforts[3] - Direct costs for the period were HKD 49,477,000, down from HKD 54,003,000 in the previous year, contributing to improved profitability[3] - The company’s short-term employee benefits for the six months ended June 30, 2023, were HKD 10.912 million, down from HKD 17.841 million for the same period in 2022[98] - The company incurred a total of HKD 29,487,000 in operating expenses for the six months ended June 30, 2023, slightly up from HKD 28,329,000 in the previous year[135] - Financial costs increased by approximately 8% to HKD 27 million from HKD 25 million, due to rising costs following US interest rate hikes[187] Credit Quality and Provisions - Expected credit loss expenses for the period were HKD 16,980,000, a significant decrease from HKD 80,570,000 in the previous year, indicating improved credit quality[3] - The expected credit loss provision increased to HKD 24,526,000 from HKD 17,669,000, indicating a rise of 38.7%[127] - Expected credit loss provisions for certain borrowers amounted to HKD 284 million, with a significant portion related to credit loans to China Oceanwide International Investment Co., Ltd.[190] - The company's credit loans and non-listed debt securities were classified as Stage 3, indicating significant credit risk and default status[194] Liquidity and Cash Flow - The company's cash and cash equivalents decreased to HKD 159,508,000 from HKD 195,206,000 as of December 31, 2022, reflecting a reduction in liquidity[30] - The company generated a net cash inflow from operating activities of HKD 48,435,000 for the six months ended June 30, 2023, compared to HKD 197,676,000 in the same period of 2022, indicating a decline in operational cash generation[32] - For the six months ended June 30, 2023, the net cash used in investing activities was HKD 1,434 million, compared to HKD 618 million for the same period in 2022, representing an increase of 132%[33] - The net cash used in financing activities for the first half of 2023 was HKD 80,889 million, a significant decrease of 79% from HKD 387,134 million in the same period of 2022[33] Market and Strategic Initiatives - The company aims to expand its market presence and enhance its service offerings in the financial advisory and investment sectors[17] - The company plans to focus on market expansion and new product development as part of its strategic initiatives moving forward[28] - The company has enhanced its talent pool in corporate finance, securities business, and asset management to improve business development and product expansion[180] Segment Performance - The company reported a segment loss of HKD 257,529 million for the brokerage segment for the six months ended June 30, 2023, compared to a profit of HKD 21,823 million in the same period of 2022[43] - Corporate finance business revenue increased by 80% to HKD 9 million, up from HKD 5 million in the previous year[181] - Brokerage business revenue decreased by 15% to HKD 41 million, down from HKD 48 million, primarily due to a 16.5% decline in average daily market turnover on the Hong Kong Stock Exchange[185] Changes and Developments - The financial report was authorized for publication by the board on August 24, 2023, indicating ongoing transparency and governance practices[17] - The company's name was changed from "China Tonghai International Financial Limited" to "Quam Plus Financial Limited" effective July 26, 2023[175] - The company successfully secured funding from the Hong Kong government's Employment Support Scheme in 2022, which has aided in retaining employees during the subsidy period[46]

[Company Information](index=1&type=section&id=Company%20Information) [Company Name Change](index=1&type=section&id=Company%20Name%20Change) The company's name has changed from "China Tonghai International Financial Limited" to "Quam Plus International Financial Limited", with registration completed on July 14, 2023, and stock short name effective from July 26, 2023 - The company's name changed from “China Tonghai International Financial Limited” to “**Quam Plus International Financial Limited**”[79](index=79&type=chunk)[46](index=46&type=chunk) - The Certificate of Change of Name was issued by the Hong Kong Companies Registry on **July 14, 2023**[46](index=46&type=chunk) - The stock short name changed from “TONGHAI FIN” to “**QUAM PLUS FIN**” in English and from “中国通海金融” to “华富建业金融” in Chinese, effective **July 26, 2023**[46](index=46&type=chunk) [Financial Statements](index=1&type=section&id=Financial%20Statements) [Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2023, total revenue significantly increased to HK$338 million, reversing last year's loss to achieve a pre-tax profit of HK$115 million, with basic and diluted earnings per share of 2 HK cents Condensed Consolidated Statement of Profit or Loss Key Data (For the six months ended June 30) | Indicator | 2023 (HK$'000) | 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 337,886 | 26,918 | 1155% increase | | Fee and Commission Income | 58,763 | 62,696 | 6.3% decrease | | Interest Income (Effective Interest Method) | 174,986 | 151,622 | 15.4% increase | | Interest Income (Other Methods) | 56,653 | 65,074 | 12.9% decrease | | Net Investment Gains/(Losses) | 47,484 | (252,474) | Turnaround from loss to gain | | Other Income | 1,300 | 12,077 | 89.2% decrease | | Direct Costs | (49,477) | (54,003) | 8.4% decrease | | Staff Costs | (81,827) | (89,644) | 8.7% decrease | | Depreciation and Amortisation | (19,213) | (21,447) | 10.4% decrease | | Net Impairment Loss on Expected Credit Losses | (16,980) | (80,570) | 78.9% decrease | | Finance Costs | (26,999) | (24,515) | 10.1% increase | | Other Operating Expenses | (29,487) | (28,329) | 4.1% increase | | Profit/(Loss) Before Tax | 115,201 | (259,755) | Turnaround from loss to gain | | Tax (Expense)/Credit | (3,932) | 14,164 | Turnaround from credit to expense | | Net Profit/(Loss) Attributable to Equity Holders of the Company | 111,269 | (245,591) | Turnaround from loss to gain | | Basic and Diluted Earnings/(Loss) Per Share (HK cents) | 2 | (4) | Turnaround from loss to gain | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2023, total comprehensive income attributable to equity holders of the Company was HK$110 million, a significant improvement from the HK$247 million loss in the prior year Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data (For the six months ended June 30) | Indicator | 2023 (HK$'000) | 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Net Profit/(Loss) Attributable to Equity Holders of the Company | 111,269 | (245,591) | Turnaround from loss to gain | | Other Comprehensive Loss, including reclassification adjustments | (1,237) | (1,438) | Loss narrowed | | Total Comprehensive Income/(Loss) Attributable to Equity Holders of the Company | 110,032 | (247,029) | Turnaround from loss to gain | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the company's total assets were HK$4.299 billion, a decrease from HK$4.678 billion as of December 31, 2022. Total liabilities were HK$2.178 billion, total equity was HK$2.122 billion, and net current assets were HK$1.978 billion Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2023 (HK$'000) | December 31, 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Cash and Cash Equivalents | 159,508 | 195,206 | 18.3% decrease | | Bank Balances Held on Behalf of Customers | 945,114 | 1,123,090 | 15.8% decrease | | Financial Assets Held for Trading | 581,016 | 625,021 | 7.0% decrease | | Financial Assets Not Held for Trading | 125,529 | 188,489 | 33.4% decrease | | Loans to Margin Clients | 626,774 | 670,496 | 6.5% decrease | | Credit Loans | 1,327,753 | 1,158,946 | 14.6% increase | | Accounts Receivable | 309,343 | 494,320 | 37.4% decrease | | Prepayments, Deposits and Other Receivables | 67,356 | 96,124 | 30.0% decrease | | Total Assets | 4,299,569 | 4,678,087 | 8.1% decrease | | Bank and Other Borrowings | 722,147 | 905,545 | 20.3% decrease | | Accounts Payable | 1,202,545 | 1,534,134 | 21.6% decrease | | Contract Liabilities | 6,679 | 5,259 | 27.0% increase | | Lease Liabilities | 67,702 | 48,771 | 38.8% increase | | Accruals and Other Payables | 166,604 | 164,036 | 1.6% increase | | Total Liabilities | 2,177,931 | 2,666,481 | 18.3% decrease | | Total Equity | 2,121,638 | 2,011,606 | 5.5% increase | | Total Liabilities and Equity | 4,299,569 | 4,678,087 | 8.1% decrease | | Net Current Assets | 1,977,723 | 1,810,882 | 9.2% increase | [Notes to the Financial Statements](index=5&type=section&id=Notes%20to%20the%20Financial%20Statements) [1. Basis of Preparation](index=5&type=section&id=1.%20Basis%20of%20Preparation) The interim financial statements are prepared in accordance with Hong Kong Generally Accepted Accounting Principles, HKAS 34 "Interim Financial Reporting", and applicable requirements of Appendix 16 to the Listing Rules - The interim financial statements are prepared in accordance with Hong Kong Generally Accepted Accounting Principles, HKAS 34 “Interim Financial Reporting” and Appendix 16 to the Listing Rules[87](index=87&type=chunk) [2. Principal Accounting Policies](index=5&type=section&id=2.%20Principal%20Accounting%20Policies) The accounting policies adopted in preparing the interim financial statements are consistent with the 2022 annual financial statements, with no significant impact from new or revised HKFRSs - Accounting policies are consistent with the 2022 annual financial statements, with no significant impact from new or revised Hong Kong Financial Reporting Standards on the interim financial statements[88](index=88&type=chunk) [3. Segment Information](index=5&type=section&id=3.%20Segment%20Information) The Group's business is divided into six operating segments: Corporate Finance, Asset Management, Brokerage, Interest Income, Investment, and Others. For the six months ended June 30, 2023, total reportable segment revenue was HK$338 million, and total segment results were HK$117 million, a significant improvement from the prior year's loss - The Group's business is divided into six operating segments: Corporate Finance, Asset Management, Brokerage, Interest Income, Investment, and Others[89](index=89&type=chunk) Reportable Segment Revenue and Results (For the six months ended June 30) | Segment | 2023 Revenue (HK$'000) | 2023 Results (HK$'000) | 2022 Revenue (HK$'000) | 2022 Results (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | Corporate Finance | 9,157 | (5,925) | 5,097 | (4,835) | | Asset Management | 5,184 | (1,889) | 5,430 | (1,166) | | Brokerage | 110,845 | 16,760 | 117,025 | (17,208) | | Interest Income | 161,847 | 96,492 | 147,708 | 21,823 | | Investment | 47,484 | 15,075 | (252,474) | (253,055) | | Others | 3,369 | (3,123) | 4,132 | (3,088) | | **Total** | **337,886** | **117,390** | **32,260** | **(257,529)** | - In the first half of 2023, revenue from former related parties (Tonghai Holdings Company Limited, Oceanwide Holdings Co., Ltd., subsidiaries of China Oceanwide Holdings Limited, and Minyun Limited) was **HK$162 million**, accounting for a significant proportion[4](index=4&type=chunk) [4. Revenue](index=7&type=section&id=4.%20Revenue) Total revenue for the period was HK$338 million, primarily contributed by interest income business (HK$232 million) and investment and other businesses (HK$50.853 million). Corporate finance business revenue increased by 80% year-on-year, and investment business turned from loss to gain Revenue Details (For the six months ended June 30) | Business Category | 2023 (HK$'000) | 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Corporate Finance Business Fees and Commission Income | 9,157 | 5,097 | 80% increase | | Asset Management Business Fees and Commission Income | 5,184 | 5,430 | 4.5% decrease | | Brokerage Business Fees and Commission Income | 41,053 | 48,037 | 14.5% decrease | | Interest Income Business | 231,639 | 216,696 | 6.9% increase | | Investment and Other Business Fees and Commission Income | 3,369 | 4,132 | 18.5% decrease | | Net Investment Gains/(Losses) | 47,484 | (252,474) | Turnaround from loss to gain | | **Total Revenue** | **337,886** | **26,918** | **1155% increase** | - Corporate finance business revenue increased by **80%**, primarily due to increased income from financial and compliance advisory services[6](index=6&type=chunk) - Net investment gains from investment and other businesses turned from a loss of **HK$257 million** in the prior year to a gain of **HK$42.041 million**[6](index=6&type=chunk) [5. Other Income](index=8&type=section&id=5.%20Other%20Income) For the six months ended June 30, 2023, other income was HK$1.3 million, a significant decrease from HK$12.077 million in the prior year, mainly due to reduced net exchange gains and government subsidies Other Income Details (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Change in Net Assets Attributable to Other Holders of Consolidated Investment Funds | 2,639 | 1,824 | 44.7% increase | | Net Exchange (Loss)/Gain | (1,517) | 8,013 | Turnaround from gain to loss | | Government Grants | – | 1,713 | 100% decrease | | Miscellaneous Income | 178 | 527 | 66.2% decrease | | **Total** | **1,300** | **12,077** | **89.2% decrease** | [6. Profit/(Loss) Before Tax Deductions](index=8&type=section&id=6.%20Profit%2F%28Loss%29%20Before%20Tax%20Deductions) For the six months ended June 30, 2023, staff costs, depreciation and amortisation, and net impairment loss on expected credit losses all decreased, while finance costs increased Profit/(Loss) Before Tax Deductions (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Staff Costs | 81,827 | 89,644 | 8.7% decrease | | Depreciation and Amortisation | 19,213 | 21,447 | 10.4% decrease | | Net Impairment Loss on Expected Credit Losses | 16,980 | 80,570 | 78.9% decrease | | Finance Costs | 26,999 | 24,515 | 10.1% increase | [7. Other Operating Expenses](index=9&type=section&id=7.%20Other%20Operating%20Expenses) For the six months ended June 30, 2023, total other operating expenses were HK$29.487 million, a slight increase from HK$28.329 million in the prior year, mainly due to increased legal and professional fees for one-off corporate transactions - Total legal and professional fees were approximately **HK$9.1 million** (2022: HK$8.8 million), primarily due to **HK$5.7 million** (2022: HK$3.3 million) in professional fees for one-off corporate transactions[14](index=14&type=chunk) [8. Tax Expense/(Credit)](index=9&type=section&id=8.%20Tax%20Expense%2F%28Credit%29) For the six months ended June 30, 2023, total tax expense was HK$3.932 million, compared to a tax credit of HK$14.164 million in the prior year, mainly due to increased current tax and a turnaround from deferred tax credit to expense Tax Expense/(Credit) (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Current Tax - Hong Kong Profits Tax | 8,855 | 14,109 | 37.3% decrease | | Deferred Tax | (4,923) | (28,273) | Loss narrowed by 82.6% | | **Total Tax Expense/(Credit)** | **3,932** | **(14,164)** | **Turnaround from credit to expense** | - Hong Kong profits tax is calculated at **16.5%** of the estimated assessable profit, consistent with the two-tiered profits tax regime for eligible companies[99](index=99&type=chunk)[15](index=15&type=chunk) [9. Earnings/(Loss) Per Share](index=10&type=section&id=9.%20Earnings%2F%28Loss%29%20Per%20Share) For the six months ended June 30, 2023, basic and diluted earnings per share were 2 HK cents, a turnaround from a loss of 4 HK cents per share in the prior year Earnings/(Loss) Per Share (For the six months ended June 30) | Indicator | 2023 (HK cents) | 2022 (HK cents) | Change | | :--- | :--- | :--- | :--- | | Basic and Diluted | 2 | (4) | Turnaround from loss to gain | - The weighted average number of ordinary shares outstanding used for calculating earnings per share was **6,145,877,218 shares**, consistent with the prior year[10](index=10&type=chunk) [10. Dividends](index=10&type=section&id=10.%20Dividends) The Board has declared a special dividend of 1.1 HK cents per share, payable on October 6, 2023. No interim dividend was declared for the current period - The Board has declared a special dividend of **1.1 HK cents** per share, payable on **October 6, 2023**[95](index=95&type=chunk)[131](index=131&type=chunk) - No interim dividend was declared for the current period (2022: nil)[131](index=131&type=chunk) [11. Loans to Margin Clients](index=11&type=section&id=11.%20Loans%20to%20Margin%20Clients) As of June 30, 2023, loans to margin clients amounted to HK$627 million, a decrease from HK$670 million as of December 31, 2022. Margin clients are required to pledge securities collateral for credit financing, and the company continuously monitors lending ratios to manage credit risk Loans to Margin Clients | Indicator | June 30, 2023 (HK$'000) | December 31, 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Measured at Fair Value Through Profit or Loss | 626,774 | 670,496 | 6.5% decrease | - The market value of securities pledged by margin clients was **HK$4.295 billion** as of June 30, 2023 (December 31, 2022: HK$4.848 billion)[96](index=96&type=chunk) [12. Credit Loans](index=11&type=section&id=12.%20Credit%20Loans) As of June 30, 2023, total credit loans were HK$4.612 billion, with a net amount of HK$1.328 billion after deducting expected credit loss provisions. Loans bear fixed annual interest rates from 2.5% to 12%, with collateral primarily including listed and private company shares and assets Total and Net Credit Loans | Indicator | June 30, 2023 (HK$'000) | December 31, 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Credit Loans, Gross | 4,611,952 | 4,475,835 | 3.0% increase | | Less: Provision for Expected Credit Losses | (3,284,199) | (3,316,889) | Provision decreased by 1.0% | | **Credit Loans, Net** | **1,327,753** | **1,158,946** | **14.6% increase** | - Loans bear fixed annual interest rates ranging from **2.5% to 12%**[25](index=25&type=chunk) - Collateral for secured loans primarily includes shares of listed and private companies and private company assets, with a fair value of **HK$4.351 million**[32](index=32&type=chunk)[33](index=33&type=chunk) [13. Accounts Receivable](index=13&type=section&id=13.%20Accounts%20Receivable) As of June 30, 2023, net accounts receivable were HK$309 million, a significant decrease from HK$494 million as of December 31, 2022. This primarily includes accounts receivable from brokers, clearing houses, and cash clients for securities transactions Net Accounts Receivable | Indicator | June 30, 2023 (HK$'000) | December 31, 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Accounts Receivable from Securities, Futures and Options Contracts Trading | 310,413 | 493,700 | 37.1% decrease | | Accounts Receivable from Asset Management, Corporate Finance and Other Businesses | 23,456 | 18,289 | 28.2% increase | | Less: Provision for Expected Credit Losses | (24,526) | (17,669) | Provision increased by 38.8% | | **Net Accounts Receivable** | **309,343** | **494,320** | **37.4% decrease** | - Accounts receivable from brokers, clearing houses, and cash clients for securities transactions are settled on their respective settlement dates. Accounts receivable from cash clients bear interest at commercial rates[26](index=26&type=chunk) [14. Accounts Payable](index=14&type=section&id=14.%20Accounts%20Payable) As of June 30, 2023, total accounts payable were HK$1.203 billion, a decrease from HK$1.534 billion as of December 31, 2022. This primarily includes accounts payable to brokers, clearing houses, and cash and margin clients for securities, futures, and options contracts trading Total Accounts Payable | Indicator | June 30, 2023 (HK$'000) | December 31, 2022 (HK$'000) | Change | | :--- | :--- | :--- | :--- | | Accounts Payable for Securities, Futures and Options Contracts Trading | 1,192,839 | 1,531,246 | 22.1% decrease | | Accounts Payable for Other Businesses | 9,706 | 2,888 | 235.0% increase | | **Total Accounts Payable** | **1,202,545** | **1,534,134** | **21.6% decrease** | - Accounts payable to brokers, clearing houses, and cash clients are repayable on demand before their respective settlement dates. Accounts payable to margin clients are repayable on demand[36](index=36&type=chunk) [15. Non-Adjusting Events After the Reporting Period](index=14&type=section&id=15.%20Non-Adjusting%20Events%20After%20the%20Reporting%20Period) Significant non-adjusting events after the reporting period include the completion of the company name change, the settlement arrangement for the loan to China Oceanwide International Investment Limited, and the grant of 152.5 million share options - The company name change was completed on **July 14, 2023**, with the stock short name effective from **July 26, 2023**[46](index=46&type=chunk) - The settlement arrangement for the loan to China Oceanwide International Investment Limited was completed on **August 22, 2023**[38](index=38&type=chunk) - On **July 21, 2023**, the company granted a total of **152,500,000 share options** to 20 individuals, exercisable at **HK$0.2 per share**[47](index=47&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) [Macroeconomic Environment](index=15&type=section&id=Macroeconomic%20Environment) In the first half of 2023, the global economy slowed, with central banks in advanced economies raising interest rates to combat inflation. The US economy performed better than expected, with tech stocks rising due to the AI boom. China's GDP grew by 5.5% year-on-year, showing clear recovery in services and consumption - In the first half of 2023, the global economy slowed, with central banks in advanced economies raising policy rates to combat persistent inflation[55](index=55&type=chunk) - The US economy performed better than expected, with tech stocks rising due to the artificial intelligence boom[55](index=55&type=chunk) - China's GDP grew by **5.5%** year-on-year, with clear recovery in services and consumption[55](index=55&type=chunk) [Hong Kong Stock Market](index=15&type=section&id=Hong%20Kong%20Stock%20Market) In the first half of 2023, the Hong Kong stock market performed poorly, with the Hang Seng Index and Hang Seng China Enterprises Index falling by 4.4% and 4.2% respectively. Average daily turnover decreased by 16.5% year-on-year, and the IPO market remained subdued - In the first half of 2023, the Hang Seng Index and Hang Seng China Enterprises Index fell by **4.4%** and **4.2%** respectively[56](index=56&type=chunk) - Average daily turnover in the Hong Kong securities market reached **HK$115.5 billion** during the period, a **16.5%** year-on-year decrease[56](index=56&type=chunk) - The initial public offering market remained subdued, with total fundraising decreasing by **10%** year-on-year to **HK$17.8 billion**[56](index=56&type=chunk) [Performance and Overview](index=15&type=section&id=Performance%20and%20Overview) The Group recorded a pre-tax profit of HK$115 million in the first half of 2023, a significant rebound from a loss of HK$260 million in the prior year, driven by improved licensed businesses, a turnaround in fair value gains on financial assets, and reduced net expected credit losses. Adjusted recurring income increased by 4% year-on-year - In the first half of 2023, a pre-tax profit of **HK$115 million** was recorded, compared to a loss of **HK$260 million** in the prior year[48](index=48&type=chunk) - Total revenue increased to **HK$338 million**, a year-on-year increase of **HK$311 million**[59](index=59&type=chunk) - Excluding fair value changes in financial asset investments, adjusted recurring income was **HK$291 million**, a **4%** year-on-year increase[59](index=59&type=chunk) - Investment income was **HK$47 million**, including **HK$111 million** from financial asset investments, offset by **HK$64 million** in margin loan losses[59](index=59&type=chunk) [Business Review](index=16&type=section&id=Business%20Review) The Group improved its earnings quality by recruiting talent, expanding products, and increasing channels. Corporate finance business revenue increased by 80% year-on-year, brokerage business revenue decreased by 15%, and brokerage interest income slightly increased by 1%. Both direct costs and staff costs decreased - Improved earnings quality by recruiting experienced talent, expanding products, and increasing channels[60](index=60&type=chunk) Adjusted Operating Income (For the six months ended June 30) | Income | 2023 (HKD Millions) | % of Total | 2022 (HKD Millions) | % of Total | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Corporate Finance Business | 9 | 7% | 5 | 4% | 80% | | Asset Management Business | 5 | 4% | 5 | 4% | 0% | | Brokerage Business | 41 | 33% | 48 | 38% | (15)% | | Brokerage Interest Income | 70 | 56% | 69 | 54% | 1% | | **Total Adjusted Operating Income** | **125** | **100%** | **127** | **100%** | **(2)%** | - Direct costs decreased by **9%** to **HK$49 million**, mainly due to reduced brokerage commission expenses[54](index=54&type=chunk) - Staff costs decreased by **9%** to **HK$82 million**, due to streamlining of resources[54](index=54&type=chunk) [Impairment Losses](index=18&type=section&id=Impairment%20Losses) In the first half of 2023, net impairment loss on expected credit losses significantly decreased by 79% to HK$17 million, mainly due to the reversal of expected credit loss provisions for former related party loans. The company assesses impairment according to HKFRS 9 and continuously monitors and classifies loans - Net impairment loss on expected credit losses decreased by approximately **79%** from **HK$81 million** in mid-2022 to **HK$17 million** in mid-2023[68](index=68&type=chunk)[28](index=28&type=chunk) - Primarily from the reversal of **HK$130 million** in expected credit loss provisions for former related party loans, offset by **HK$152 million** in expected credit loss provisions for third-party loans[28](index=28&type=chunk) - Expected credit loss provision of **HK$290 million** for China Oceanwide International Investment Limited's credit loan was reversed due to a settlement arrangement with Tonghai Group[19](index=19&type=chunk) - All former related party and independent third-party credit loans and unlisted debt securities are classified as Stage 3 in the expected credit loss model, considered to be in default[107](index=107&type=chunk)[105](index=105&type=chunk) - The company has adopted a credit risk policy to manage lending business by conducting credit assessments of borrowers, considering repayment records, and macroeconomic factors[108](index=108&type=chunk)[12](index=12&type=chunk) - As of June 30, 2023, the top five borrowers constituted **71%** of the Group's total credit loan principal portfolio[111](index=111&type=chunk) - Gross credit loans increased from **HK$4.476 billion** as of December 31, 2022, to **HK$4.612 billion** in mid-2023[114](index=114&type=chunk) [Outlook](index=24&type=section&id=Outlook) The company is optimistic about its prospects, benefiting from increased talent, expanded products, and more channels. Despite subdued sentiment in the Hong Kong securities market and an unstable global macroeconomic environment, the company will continue to prioritize financial stability and maintain a cautious approach - The company is optimistic about its prospects, benefiting from increased talent, expanded products, and more channels[115](index=115&type=chunk) - Sentiment in the Hong Kong securities market remains subdued, and the global macroeconomic environment remains unstable[115](index=115&type=chunk) - The company will continue to prioritize financial stability and maintain a cautious approach in its business[115](index=115&type=chunk) [Capital Structure, Liquidity and Financial Resources](index=24&type=section&id=Capital%20Structure%2C%20Liquidity%20and%20Financial%20Resources) The Group primarily funds its operations through internal cash flow, bank financing, and short-term loans from non-bank entities. As of June 30, 2023, cash levels were approximately HK$160 million, total borrowings decreased by 20% to HK$722 million, and the gearing ratio fell to 34% - The Group primarily funds its operations through internally generated cash flow, bank financing, and short-term loans and notes from non-bank entities[116](index=116&type=chunk) Capital Structure, Liquidity and Financial Resources Key Data | Indicator | June 30, 2023 | December 31, 2022 | Change | | :--- | :--- | :--- | :--- | | Cash Level | HK$160 million | HK$195 million | 18% decrease | | Total Borrowings | HK$722 million | HK$906 million | 20% decrease | | Utilized Bank Facilities | HK$478 million | HK$543 million | 12% decrease | | Total Available Bank Facilities | HK$820 million | HK$837 million | 2% decrease | | Private Notes and Other Loans | HK$244 million | HK$363 million | 33% decrease | | Gearing Ratio | 34% | 45% | 11 percentage points decrease | [Significant Acquisitions, Disposals and Material Investments](index=25&type=section&id=Significant%20Acquisitions%2C%20Disposals%20and%20Material%20Investments) During the interim period, the Group did not undertake any significant acquisitions or disposals of subsidiaries and associates, nor did it hold any material investments - During the interim period, the Group did not undertake any significant acquisitions or disposals of subsidiaries and associates[119](index=119&type=chunk) - As of the end of the interim period, the Group did not hold any material investments[119](index=119&type=chunk) [Pledge of the Group's Assets](index=25&type=section&id=Pledge%20of%20the%20Group%27s%20Assets) As of June 30, 2023, HK$411 million of the Group's assets were pledged to banks and other lenders to obtain credit, a decrease from HK$441 million as of December 31, 2022 - As of June 30, 2023, **HK$411 million** of assets were pledged to banks and other lenders to obtain credit[120](index=120&type=chunk) - The amount of pledged assets decreased from **HK$441 million** as of December 31, 2022[120](index=120&type=chunk) [Employees and Remuneration Policy](index=25&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2023, the Group employed 207 full-time employees (184 in Hong Kong, 23 in mainland China) and 79 self-employed sales representatives. The company offers competitive remuneration and annually reviews salaries and awards discretionary bonuses - As of June 30, 2023, the Group employed **184 full-time employees** in Hong Kong and **23** in mainland China[121](index=121&type=chunk) - Additionally, there were **79 self-employed sales representatives**[121](index=121&type=chunk) - The company offers competitive remuneration, annually reviews salaries, and awards discretionary bonuses based on individual performance, market conditions, and the Group's financial performance[121](index=121&type=chunk) [Risk Management](index=25&type=section&id=Risk%20Management) [Risk Management System](index=25&type=section&id=Risk%20Management%20System) The Group adopts a three-tier risk management system, involving initial assessment by business units, review and advice from the Risk Management Department and Legal and Compliance Department, and regular checks by the Internal Audit Department, to comprehensively control risks - The Group adopts a three-tier risk management system, including business units' initial risk assessment, review by the Risk Management Department and Legal and Compliance Department, and regular checks by the Internal Audit Department[122](index=122&type=chunk) [Credit Risk](index=26&type=section&id=Credit%20Risk) Credit risk primarily arises from the failure of borrowers, counterparties, or financial instrument issuers to meet their obligations. The Group has established credit approval policies and procedures and uses advanced IT systems for daily credit and concentration risk monitoring - Credit risk is the potential risk of loss arising from the failure of borrowers, counterparties, or issuers of financial instruments to meet their obligations[124](index=124&type=chunk) - The Group has established credit approval policies and procedures and uses advanced information technology systems for daily credit and concentration risk monitoring[124](index=124&type=chunk) [Market Risk](index=26&type=section&id=Market%20Risk) Market risk refers to potential losses due to changes in the market value of investment positions, including interest rate, equity price, and foreign exchange rate risks. The Risk Management Department is responsible for setting risk limits and investment guidelines, as well as timely monitoring and assessing market risk conditions - Market risk refers to the potential loss arising from changes in the market value of investment positions held, including interest rate risk, equity price risk, and foreign exchange rate risk[125](index=125&type=chunk) - The Risk Management Department is responsible for setting market risk limits and investment guidelines, and for timely monitoring and assessing market risk conditions[125](index=125&type=chunk) [Liquidity Risk](index=26&type=section&id=Liquidity%20Risk) Liquidity risk refers to the risk that the Group may face in obtaining sufficient capital and funding in a timely manner to meet its payment obligations. The Treasury Department manages funds, and the Finance Department ensures compliance with financial resources rules and maintains good relationships with banks for short-term financing - Liquidity risk refers to the risk that the Group may face in obtaining sufficient capital and funding in a timely manner to meet its payment obligations and funding needs for daily business activities[126](index=126&type=chunk) - The Treasury Department is responsible for fund management, and the Finance Department has a monitoring system to ensure compliance with financial resources rules and bank lending benchmarks[126](index=126&type=chunk) [Operational Risk](index=26&type=section&id=Operational%20Risk) Operational risk primarily stems from negligence in internal procedure management, IT system failures, or employee misconduct. The Group manages operational risk by enhancing employee risk awareness, establishing internal procedure guidelines, implementing risk event reporting procedures, and business continuity policies - Operational risk is the risk of financial loss primarily arising from negligence or omission in internal procedure management, information technology system failures, or individual employee misconduct[130](index=130&type=chunk) - The Group manages operational risk by enhancing employee risk awareness, establishing internal procedure guidelines, implementing risk event reporting procedures, and business continuity policies[130](index=130&type=chunk) [Regulatory Compliance Risk](index=27&type=section&id=Regulatory%20Compliance%20Risk) As a regulated financial group, the company is committed to complying with stringent regulatory requirements, with the legal and compliance team continuously monitoring and reviewing to mitigate regulatory risk - As a financial group operating regulated businesses, the company is committed to complying with stringent and evolving regulatory requirements[129](index=129&type=chunk) - The legal and compliance team continuously monitors and reviews to mitigate the Group's regulatory risk[129](index=129&type=chunk) [Other Information](index=27&type=section&id=Other%20Information) [Dividends](index=27&type=section&id=Dividends) The Board has declared a special dividend of 1.1 HK cents per share, payable on October 6, 2023. No interim dividend was declared for the current period - The Board has declared a special dividend of **1.1 HK cents** per share, payable on **October 6, 2023**[131](index=131&type=chunk) - No interim dividend was declared for the current period (2022: nil)[131](index=131&type=chunk) [Suspension of Share Register Closure](index=27&type=section&id=Suspension%20of%20Share%20Register%20Closure) To qualify for the special dividend, the company will suspend share register closure from September 18 to September 19, 2023 - The company will suspend share register closure from **Monday, September 18, 2023, to Tuesday, September 19, 2023**[132](index=132&type=chunk) - All share transfer documents, together with the relevant share certificates, must be lodged with the share registrar no later than **4:30 p.m. on Friday, September 15, 2023**[132](index=132&type=chunk) [Purchase, Redemption or Sale of Listed Securities](index=27&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20Listed%20Securities) For the six months ended June 30, 2023, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities - For the six months ended June 30, 2023, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[133](index=133&type=chunk) [Standard Code for Securities Transactions](index=28&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The company has adopted a code of conduct no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules, extended to cover specific employees who may possess unpublished price-sensitive information. All directors confirm compliance with this code - The company has adopted a code of conduct no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 to the Listing Rules[135](index=135&type=chunk) - This code of conduct has been extended to cover specific employees who are likely to possess unpublished price-sensitive information about the company[135](index=135&type=chunk) - All directors have confirmed, upon specific enquiry, that they have complied with the Model Code for the six months ended June 30, 2023[135](index=135&type=chunk) [Corporate Governance Practices](index=28&type=section&id=Corporate%20Governance%20Practices) The company complies with the Corporate Governance Code in Appendix 14 to the Listing Rules, except for the Joint Chairman also serving as Chief Executive Officer, which constitutes a deviation from code provision C.2.1. The Board believes this arrangement is beneficial and effective under current operations - The company complies with the Corporate Governance Code in Appendix 14 to the Listing Rules, except for the Joint Chairman also serving as Chief Executive Officer, which constitutes a deviation from code provision C.2.1[136](index=136&type=chunk) - The Board believes that, given the Group's current operations, structure, size, and resources, and the Chief Executive Officer's extensive experience, maintaining the current leadership structure is highly beneficial and effective[136](index=136&type=chunk) [Review by Audit Committee](index=28&type=section&id=Review%20by%20Audit%20Committee) The Audit Committee has reviewed the company's unaudited condensed consolidated financial results for the six months ended June 30, 2023, and discussed accounting principles, internal controls, and financial reporting matters with management - The Audit Committee has reviewed the company's unaudited condensed consolidated financial results for the six months ended June 30, 2023[139](index=139&type=chunk) - The Committee discussed with the company's management the accounting principles and practices adopted by the Group, internal controls, and financial reporting matters[139](index=139&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=29&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This interim results announcement has been published on the websites of Hong Kong Exchanges and Clearing Limited and the company. The interim report will be dispatched to shareholders in due course - This interim results announcement has been published on the website of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the company's website (www.quamplus.com)[138](index=138&type=chunk) - The company's 2023 interim report will be dispatched to the company's shareholders in due course[138](index=138&type=chunk)

Financial Performance - In 2022, China Tonghai International Financial Limited recorded a significant loss of HKD 1.58 billion due to provisions for risks related to past connected parties and the negative impact of the macro environment[15]. - The company reported a net loss of approximately HKD 1.584 billion for the year ended December 31, 2022, compared to a loss of HKD 2.261 billion in 2021, primarily due to expected credit losses and investment losses[27]. - Expected credit losses reached approximately HKD 900 million in 2022, down from HKD 2.6 billion in 2021[27]. - Adjusted operating income for 2022 was HKD 247 million, a decrease of about 29% from HKD 346 million in 2021[28]. - Revenue from corporate finance business decreased by 27% to HKD 19 million, while asset management revenue dropped by 66% to HKD 12 million[30]. - Brokerage business revenue fell by 33% to HKD 93 million, and margin loan interest income decreased by 16% to HKD 123 million[30]. - The average daily trading volume in the Hong Kong securities market decreased by 25.1% year-on-year to HKD 124.9 billion in 2022[26]. - The Hang Seng Index and Hang Seng China Enterprises Index fell by 15.5% and 18.6% respectively in 2022[26]. - The total market capitalization of the securities market at the end of 2022 was HKD 35.667 trillion, a decline of 15.8% year-on-year[26]. - The company does not recommend the distribution of any final dividend for 2022, consistent with the previous year[27]. Business Strategy and Management - Management is focused on liquidity management and cost control as primary tasks to navigate the challenging environment[15]. - The company is restructuring its divisions to enhance customer service efficiency by merging corporate finance and securities departments into a streamlined stock chain[17]. - A new wealth management division will be formed by integrating asset management, private wealth management, and Huafu Finance, focusing on providing a "wealth care" service platform[17]. - The management is committed to exploring ways to return the business to a growth trajectory and deliver returns to shareholders[16]. - The company is actively recruiting talent to adapt to rapidly changing investment trends and asset allocation needs[22]. - The company is implementing a talent recruitment policy focused on customer-centric approaches, which is beginning to show positive results[19]. - The company plans to provide shareholders with updates in the next report[20]. Credit Risk and Loan Management - The total outstanding loans amounted to HKD 4.449 billion, with cumulative provisions for expected credit losses at HKD 3.458 billion, resulting in a cumulative expected credit loss percentage of approximately 78%[59]. - Corporate clients 1, 2, and 3's loans were classified as Stage 3 due to overdue payments as of December 31, 2022, indicating default status[59]. - The expected credit loss provision for loans granted to corporate clients was assessed at HKD 1.02 billion[54]. - The company has extended the repayment arrangement deadline with Pan Ocean Holdings Limited and Zhongfan Holdings Limited to June 30, 2023, due to ongoing credit default events[61]. - The company classified loans to related parties as Stage 3, reflecting significant concerns regarding their liquidity and refinancing capabilities[61]. - The company has identified several counterparties as defaulting due to overdue principal and interest, leading to an increase in expected credit losses[71]. - The risk management department regularly monitors the risk levels of the loan portfolio and provides updates to the executive directors[76]. - The company monitors overdue balances and repayment schedules closely, taking appropriate actions for collections, including legal actions if necessary[94]. Environmental, Social, and Governance (ESG) Initiatives - The company has identified 25 significant ESG issues, including "Responsible Investment," "Cybersecurity," and "Systemic Risk Management" as new additions this year[128]. - The company reported no incidents related to data privacy and information security during the year, highlighting its commitment to customer privacy and cybersecurity[131]. - The board approved the ESG report on March 28, 2023, ensuring the accuracy and reliability of the data presented[116]. - The company has established an ESG Committee to drive effective ESG management and report progress to the board regularly[117]. - The company aims to enhance stakeholder engagement and diversify communication channels to improve ESG performance and sustainable development strategies[134]. - The company has integrated ESG-related risks into its risk management framework to enhance governance and management[118]. - The report emphasizes the importance of stakeholder participation in ESG management and reporting, utilizing various communication channels[120]. - The company has committed to developing a sustainable development strategy and setting goals to improve ESG management and performance[118]. Employee and Workplace Practices - The company promotes a diverse and inclusive workplace, adhering to equal employment principles and maintaining a zero-tolerance policy towards harassment and discrimination[156]. - The company has established a rigorous anti-money laundering and counter-terrorist financing policy, adopting a risk-based approach for customer due diligence and ongoing monitoring[149]. - The company has implemented dual-factor authentication for remote access and encryption for sensitive data, strengthening internal policies and controls[137]. - The company is committed to responsible employment practices, prohibiting child labor and forced labor, and ensuring compliance with employment terms and conditions[165]. - The company encourages employee professional development through internal training programs and external training subsidies, supporting skill enhancement and career growth[163]. - The company has introduced an employee recognition program to identify and reward outstanding employees, enhancing morale and acknowledging significant contributions[164]. Environmental Impact and Sustainability - The company has developed an environmental policy to manage emissions and resource use, focusing on sustainability and reducing waste through the "3R" principle (Reduce, Reuse, Recycle)[162]. - The total water consumption for the year was 528 cubic meters, with a consumption density of 2.78 cubic meters per employee[171]. - The company generated 5.6 tons of non-hazardous waste and 0.01 tons of hazardous waste during the year[172]. - The total greenhouse gas emissions amounted to 270.8 tons of CO2 equivalent, representing a 19% decrease compared to the previous year[175]. - The total energy consumption for the year was 392.6 MWh, with a density of 2.07 MWh per employee[175]. - The company donated HKD 75,000 and mobilized 37 employees for community activities during the year[185].