[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].

Financial Performance - The total revenue for the year ended December 31, 2022, was a loss of HKD 177,818,000 compared to a revenue of HKD 857,822,000 in 2021, representing a significant decline[18]. - The company reported a net loss attributable to equity holders of HKD 1,583,664,000 for the year, compared to a net loss of HKD 2,260,577,000 in the previous year, indicating an improvement in losses[22]. - The company incurred a net investment loss of HKD 578,750,000 in 2022, compared to a net gain of HKD 33,983,000 in 2021, indicating a substantial negative shift in investment performance[18]. - The company reported a comprehensive loss attributable to equity holders of HKD 1,585,189,000 for the year ended December 31, 2022, compared to HKD 2,263,437,000 in the previous year[35]. - The pre-tax consolidated loss for 2022 was HKD (1,584,178) thousand, compared to a loss of HKD (2,199,184) thousand in 2021, showing an improvement of about 28%[45]. - The basic and diluted loss per share for 2022 was HKD (26), compared to HKD (37) in 2021, indicating a reduction in loss per share[54]. - The group recorded a net exchange gain of HKD 419 thousand in 2022, a significant decrease from HKD 8,280 thousand in 2021[49]. - The financial costs for the group decreased to HKD 50.355 million in 2022 from HKD 62.442 million in 2021, indicating improved cost management[72]. - The group reported a pre-tax loss of HKD 1.579 billion for 2022, a significant increase from a pre-tax loss of HKD 2.194 billion in 2021[74]. - The company recorded a net loss of approximately HKD 1.584 billion for the year ended December 31, 2022, compared to a net loss of HKD 2.261 billion in 2021, primarily due to expected credit losses and investment losses[115]. Revenue Decline - The company experienced a significant drop in asset management fee income, which fell to HKD 11,748,000 from HKD 35,378,000, a decrease of about 67%[15]. - The company reported a decrease in commission income from corporate finance activities, which fell to HKD 18,676,000 from HKD 26,287,000, a decline of approximately 29%[15]. - The reported segment revenue for 2022 was HKD (166,476) thousand, compared to HKD 866,438 thousand in 2021, indicating a significant decline[45]. - The consolidated revenue for 2022 was HKD (177,818) thousand, down from HKD 857,822 thousand in 2021, reflecting a decrease of approximately 20.7%[45]. - Revenue from corporate finance business fell by 27% to HKD 19 million in 2022, primarily due to reduced income from sponsor projects and advisory services[94]. - Asset management revenue dropped 66% to HKD 12 million in 2022, impacted by a reduction in management scale and performance fees[95]. - Brokerage business revenue decreased by 33% to HKD 93 million in 2022, mainly due to a 50% drop in commission income from trading Hong Kong securities[95]. Liquidity and Financial Position - The company has taken measures to improve liquidity, including issuing secured and unsecured private notes and seeking additional financing from banks and financial institutions[5]. - The company faced liquidity concerns due to credit defaults and litigation involving related parties, impacting its ability to raise additional funds[25]. - The total assets as of December 31, 2022, amounted to HKD 4,678,087,000, a decrease from HKD 6,841,285,000 as of December 31, 2021[37]. - The total liabilities decreased to HKD 2,666,481,000 from HKD 3,244,490,000 year-over-year[37]. - The company's cash and cash equivalents were HKD 195,206,000, down from HKD 405,290,000 in the previous year[37]. - The total equity as of December 31, 2022, was HKD 2,011,606,000, compared to HKD 3,596,795,000 in the prior year[37]. - The company reduced its total borrowings from HKD 906,000,000 at the end of 2022 to HKD 755,000,000 by February 2023[39]. - The company has extended the maturity of its largest single bank loan of HKD 330,000,000 to December 2023[39]. - The company’s total available bank financing was approximately HKD 837 million at the end of 2022, down from HKD 1.888 billion in 2021[190]. Credit Risk and Provisions - The company has classified all loans, unlisted debt securities, and advances to customers as Stage 3, indicating significant credit impairment[128]. - The expected credit loss for advances to customers is HKD 102 million[146]. - The total amount of loans to related parties is HKD 4,449 million, with a cumulative provision of HKD 3,458 million, resulting in a cumulative expected credit loss percentage of 78%[153]. - The loans to China Oceanwide International Investment Co., Ltd. and Minyun Limited have a cumulative provision of HKD 973 million, representing 75% of the total amount[153]. - The loans to Oceanwide Holdings International Development Third Limited have a cumulative provision of HKD 1,352 million, representing 80% of the total amount[153]. - The loans to Zhongfan Holdings Limited have a cumulative provision of HKD 456 million, representing 85% of the total amount[153]. - The expected credit loss for corporate clients 1, 2, and 3 is calculated using a 100% default probability due to overdue loans[158][176]. - The company has recognized a significant credit loss provision of HKD 973 million for Minyun Limited, reflecting a 73.96% to 80.06% expected credit loss percentage[160]. - The company has been monitoring credit risk and has sent payment reminders to related parties every 2 to 3 months[138]. - The default probability for the loans is assessed at 100% due to the counterparties' default or high likelihood of default[133]. Government Assistance and Support - The company received financial assistance under the Employment Support Scheme, aimed at retaining employees who would otherwise be laid off[14]. - The group recognized government subsidies of HKD 4,546 thousand in 2022, a substantial increase from HKD 825 thousand in 2021[49]. Shareholder Actions and Corporate Governance - The company completed a share acquisition on February 3, 2023, involving 4,098,510,000 shares, representing approximately 66.14% ownership[40]. - The company completed a conditional sale of shares, resulting in the acquirer holding approximately 66.14% of the company's ordinary shares, totaling 4,098,510,000 shares[63]. - The company did not declare a final dividend for the year ended December 31, 2022, consistent with the previous year[78]. - The company did not recommend a final dividend for the year ended December 31, 2022, consistent with 2021[87]. Risk Management and Recovery Actions - The company’s risk management department continuously monitors loan risk levels and reports to senior management at least monthly[189]. - The risk management department conducts independent reviews of the loan portfolio and closely monitors overdue balances and repayments[200]. - Actions for debt recovery are discussed internally, including phone reminders, collateral seizure, and legal actions[200]. - Legal actions may be taken against borrowers to recover overdue payments and seize collateral when necessary[200]. - Monthly risk management reports are submitted to the executive committee detailing recovery and collection decisions and procedures[200].

Financial Performance - Total revenue for the six months ended June 30, 2022, was HKD 26,918,000, a significant decrease of 94.66% compared to HKD 502,958,000 for the same period in 2021[5]. - The company reported a net loss attributable to equity holders of HKD 245,591,000 for the six months ended June 30, 2022, compared to a profit of HKD 13,901,000 in the same period of 2021[5]. - The company’s basic and diluted loss per share for the six months ended June 30, 2022, was HKD (3.996), compared to earnings of HKD 0.226 per share in the same period of 2021[5]. - The company reported a pre-tax loss of HKD 259,755,000 for the six months ended June 30, 2022, compared to a profit of HKD 15,917,000 in the same period of 2021[27]. - The total loss before tax for the group was HKD 259,755,000, a significant decline from a profit of HKD 15,917,000 in the previous year[50]. - The company reported a net loss of HKD 246 million for the six months ended June 30, 2022, compared to a net profit of HKD 14 million in the same period of 2021[141]. - Total revenue decreased approximately 95% to HKD 27 million for the six months ended June 30, 2022, down from HKD 503 million in the same period of 2021[141]. Revenue Breakdown - For the six months ended June 30, 2022, the total revenue from the corporate finance segment was HKD 8,097,000, a decrease from HKD 21,512,000 for the same period in 2021[46]. - The asset management segment generated revenue of HKD 7,308,000, compared to HKD 17,290,000 in the previous year, reflecting a decline of approximately 57.7%[46]. - Brokerage segment revenue was HKD 117,025,000, down from HKD 163,457,000, indicating a decrease of about 28.4% year-over-year[46]. - The income from corporate finance business fees and commissions was HKD 1,352,000, down from HKD 6,441,000 in the previous year, reflecting a decrease of about 79.02%[54]. - Total revenue from core businesses decreased by 36% from HKD 427 million in the first half of 2021 to HKD 275 million in the first half of 2022[145]. - Corporate finance business revenue fell 76% from HKD 21 million in the first half of 2021 to HKD 5 million in the first half of 2022[147]. - Asset management business revenue decreased by 67% from HKD 15 million in the first half of 2021 to HKD 5 million in the first half of 2022[148]. - Brokerage business revenue dropped 40% from HKD 80 million in the first half of 2021 to HKD 48 million in the first half of 2022, attributed to a 27% decline in average daily market turnover on the Hong Kong Stock Exchange[149]. Cash Flow and Liquidity - Cash and cash equivalents as of June 30, 2022, were HKD 213,695,000, down from HKD 405,290,000 at the end of 2021[24]. - The net cash generated from operating activities for the six months ended June 30, 2022, was HKD 197,676,000, a decrease from HKD 290,711,000 for the same period in 2021[27]. - The total cash and cash equivalents at the end of the period decreased to HKD 213,695,000 from HKD 328,184,000 year-over-year[29]. - The company’s cash flow from operations included a decrease in accounts payable and other liabilities amounting to HKD 98,721,000[27]. - Cash level as of June 30, 2022, was approximately HKD 214 million, down from HKD 405 million on December 31, 2021[182]. Assets and Liabilities - Total assets amounted to HKD 6,131,188,000 as of June 30, 2022, compared to HKD 6,841,285,000 at the end of 2021, reflecting a decrease of approximately 10.4%[24]. - Total liabilities were HKD 2,781,422,000, down from HKD 3,244,490,000 at the end of 2021, indicating a reduction of about 14.3%[24]. - The company’s total equity attributable to shareholders was HKD 5,352,580,000 as of June 30, 2022[31]. - The total amount of other loans increased by HKD 1.819 billion to HKD 42.195 billion as of June 30, 2022, compared to HKD 40.376 billion on December 31, 2021[180]. - Total borrowings decreased by 23% to HKD 11.59 billion from HKD 15.03 billion as of December 31, 2021[184]. Credit Quality and Provisions - The expected credit loss expense for the period was HKD 80,570,000, a significant reduction from HKD 234,444,000 in the previous year, indicating improved credit quality[5]. - Expected credit loss provisions decreased by approximately 65% from HKD 234 million in the first half of 2021 to HKD 81 million in the first half of 2022[153]. - The expected credit loss provision for non-listed debt securities was HKD 643,184,000 as of June 30, 2022, compared to HKD 605,362,000 as of December 31, 2021, reflecting an increase in risk assessment[76]. - The cumulative expected credit loss percentage for major borrowers ranges from 20% to 73%[170]. - The company has adopted a credit risk policy to manage its lending business, ensuring compliance with applicable laws and regulations[172]. Operational Challenges and Strategies - The company is focusing on improving its financial position and exploring new strategies for market expansion and product development[5]. - The company is focused on maintaining the stability and sustainability of its brokerage, corporate finance, and asset management businesses amid macroeconomic uncertainties[181]. - The company has capital commitments of HKD 5,288,000 as of June 30, 2022, compared to HKD 2,032,000 as of December 31, 2021[109]. - The company employed 197 full-time employees in Hong Kong as of June 30, 2022, a decrease from 222 on December 31, 2021[188]. Dividends and Shareholder Information - The company did not declare any dividends for the period, consistent with the previous year[5]. - The board has decided not to declare an interim dividend for the six months ended June 30, 2022, compared to no dividend in 2021[198]. - As of June 30, 2022, Mr. Lam holds 113,072,833 shares, representing approximately 1.82% of the issued share capital[199]. - A controlled corporation holds 4,098,510,000 shares, accounting for approximately 66.13% of the issued share capital[199].

Financial Performance - The group reported a significant loss of approximately HKD 2.199 billion for the year ended December 31, 2021, compared to a profit of HKD 113 million in the same period of 2020[13]. - Excluding the impact of related party loans and bonds, the group's profit before tax for 2021 would have been approximately HKD 78 million[13]. - Total revenue decreased by 22% to HKD 858 million in 2021, down from HKD 1.105 billion in 2020, with a net loss of approximately HKD 2.261 billion compared to a net profit of HKD 103 million in 2020[27]. - The company's investment and other business revenue fell to HKD 44 million in 2021 from HKD 212 million in 2020, indicating a significant decline[32]. - The asset management segment experienced a 17% revenue drop primarily due to COVID-19, with global travel restrictions impacting product launches and investment management activities[20]. - The company reported a pre-tax loss of HKD 2.199 billion for the year 2021, but excluding impairments and fair value changes from related party loans and bonds, the pre-tax profit would be HKD 78 million[18]. - The company does not recommend any final dividend for 2021, compared to a dividend of HKD 0.005 per share in 2020[27]. Economic Context - The Hong Kong economy rebounded significantly with a real GDP growth of 6.4% in 2021, and the unemployment rate decreased to 3.9%[14]. - The Hong Kong market saw a 97.4% drop in tourist numbers in 2021 compared to 2020, severely impacting various industries[26]. - The Hang Seng Index declined by approximately 14% to 23,397 points, reflecting the adverse effects of the pandemic and other economic pressures on the Hong Kong stock market[26]. Business Strategy and Outlook - The company maintains a cautiously optimistic outlook for the brokerage, corporate finance, and asset management businesses moving forward[14]. - The board emphasizes the importance of balancing risk and return in its business strategy[14]. - The company continues to explore new revenue sources and strategically manage its investment portfolio[13]. - The management team believes that the worst period is nearing its end, indicating a potential recovery and renewed vigor for the company[23]. Risk Management - The group has established a credit risk approval policy and monitoring procedures for financing projects, focusing on five main business areas: corporate financing, asset management, brokerage, interest income, and proprietary investment[49]. - The risk management headquarters is responsible for overseeing all risk management functions, including risk identification, limit setting, measurement, and monitoring, as well as scenario analysis[50]. - The group is closely monitoring credit risk associated with non-margin loans to clients and has ceased increasing the principal amount lent to related parties[55]. - The group has implemented a liquidity management system to ensure sufficient liquid assets are available to meet any urgent liquidity needs[52]. - The group is committed to maintaining compliance with stringent regulatory requirements to mitigate regulatory compliance risks[54]. Environmental, Social, and Governance (ESG) Initiatives - The group received the "Low Carbon Care ESG Label" for its efforts in sustainable development and creating a green future[13]. - The company has adopted a zero-tolerance policy towards corruption, bribery, extortion, money laundering, and other fraudulent activities, with no corruption-related lawsuits reported during the year[82]. - The company has implemented a robust anti-money laundering (AML) and counter-terrorist financing (CTF) program, including the deployment of regulatory technology (RegTech) to identify risk information[84]. - The company plans to develop a long-term ESG strategy with specific goals and objectives in the future[68]. - The company engaged stakeholders through various channels, including surveys and workshops, to gather insights on ESG issues[75]. - The company has established a product and risk committee to oversee the launch of new products based on market conditions and risk tolerance[92]. Community Engagement - The company donated a total of HKD 631,500 to community projects and mobilized 24 employees for community activities[105]. - The company sponsored various community events, including the Hong Kong Grand Opera House concert and the "Never Golf Alone" charity golf tournament[106]. - The company continues to strengthen its market position through strategic sponsorships and community involvement, fostering collaboration opportunities across various sectors[163]. Employee Management and Development - The company has a comprehensive employee compensation package, including bonuses, rewards, and medical insurance, to attract and retain talent[97]. - The company has established a career development path for employees, with opportunities for internal training and external training funding[102]. - The average training hours per employee increased to 20.5 hours in 2021 from 2.8 hours in 2020, showing a substantial improvement in employee development[125]. - The employee turnover rate increased to 32.4% in 2021 from 20.8% in 2020, indicating a significant rise in workforce attrition[123]. Corporate Governance - The company has a strong governance structure with experienced board members from diverse backgrounds[186]. - The independent directors bring extensive experience from various sectors, contributing to robust governance and oversight[188][191]. - The company is committed to maintaining a robust governance structure, with members actively participating in various financial and investment committees[198]. Marketing and Brand Recognition - The company won the "Outstanding Private Wealth Planning Service Brand Award" at the NOW Finance Awards, highlighting its diverse financial products and tailored financial planning solutions[146]. - The "Double Reward for Bull and Bear" promotional campaign successfully increased user engagement and account openings during its run, demonstrating effective marketing strategies[148]. - China Tonghai Financial was recognized for its cost-effective marketing strategies, winning the "Most Cost-Effective Marketing" award at the Marketing Events Awards 2021[148].

Financial Performance - Total revenue for the six months ended June 30, 2021, was HKD 502,958,000, a significant increase of 84.6% compared to HKD 272,273,000 for the same period in 2020[5] - The company reported a profit attributable to equity holders of HKD 13,901,000, compared to a loss of HKD 161,619,000 in the same period last year[5] - Basic and diluted earnings per share for the period was HKD 0.226, a recovery from a loss per share of HKD 2.630 in the previous year[5] - For the six months ended June 30, 2021, the company reported a pre-tax profit of HKD 15,917,000, a significant recovery from a loss of HKD 164,074,000 in the same period of 2020[12] - The total segment profit for the six months ended June 30, 2021, was HKD 19,469,000, compared to a loss of HKD 161,618,000 in the same period of 2020, indicating a significant improvement[30][32] - The company recorded a net profit of HKD 0.139 billion for the six months ended June 30, 2021, compared to a net loss of HKD 1.616 billion in the same period of 2020[120] Revenue Breakdown - The brokerage segment generated revenue of HKD 153,914,000, a significant increase from HKD 107,689,000 in the previous year, reflecting a growth of about 42.9%[30][32] - The corporate finance segment's revenue was HKD 21,512,000, up from HKD 9,079,000, marking an increase of approximately 136.8%[30][32] - The asset management segment's revenue increased to HKD 17,290,000 from HKD 23,017,000, reflecting a decrease of about 25%[30][32] - The corporate finance business revenue increased by approximately 147% to HKD 21 million for the six months ended June 30, 2021, from HKD 8 million in the same period of 2020[125] - The asset management business revenue decreased by 32% to HKD 15 million for the six months ended June 30, 2021, down from HKD 22 million in the same period of 2020[126] - Brokerage business revenue slightly decreased by about 6% to HKD 80 million for the six months ended June 30, 2021, from HKD 86 million in the same period of 2020[127] Assets and Liabilities - Total assets as of June 30, 2021, amounted to HKD 9,571,387,000, compared to HKD 9,936,922,000 as of December 31, 2020[11] - Total liabilities were HKD 3,696,708,000, a decrease from HKD 4,045,705,000 at the end of the previous year[11] - The company’s total equity attributable to shareholders as of June 30, 2021, was HKD 5,874,679,000, compared to HKD 5,783,554,000 as of June 30, 2020, reflecting a growth in shareholder value[16] - The total amount of loans, net of expected credit loss provisions, was HKD 3,330,508,000 as of June 30, 2021, compared to HKD 3,338,900,000 as of December 31, 2020[67] - The total liabilities, including bank loans and other borrowings, decreased to HKD 1,782,521 million as of June 30, 2021, compared to HKD 1,872,838 million as of December 31, 2020[85] Cash Flow and Investments - Operating cash flow for the first half of 2021 was HKD 290,711,000, compared to HKD 113,169,000 in the first half of 2020, indicating a strong improvement in cash generation[12] - The company experienced a net cash inflow of HKD 113,872,000 for the six months ended June 30, 2021, compared to an inflow of HKD 101,757,000 in the same period of 2020[14] - The net cash used in investing activities was HKD 1,986,000 for the first half of 2021, a decrease from HKD 5,855,000 in the same period of 2020, indicating reduced capital expenditures[14] - The company reported a significant increase in management fee income to HKD 7,453,000, compared to HKD 7,869,000 in the previous year[36] Credit Losses and Provisions - The company recognized expected credit losses of HKD 234,444,000, an increase from HKD 121,255,000 in the previous year[5] - The expected credit loss provision for accounts receivable was HKD 9,465 million as of June 30, 2021, compared to HKD 8,794 million as of December 31, 2020[74] - The company’s total expected credit loss provision across all receivables was HKD 18,832 million as of June 30, 2021, compared to HKD 27,020 million as of December 31, 2020[74] Shareholder Information - The company’s issued and paid-up share capital remained at 6,197,049,220 shares as of June 30, 2021, with a par value of HKD 0.1[91] - Mr. Lu Zhiqiang controls 4,493,764,732 shares, accounting for 72.51% of the issued shares[162] - The company has a total of 4,100,000,000 shares held by Haitong Securities Co., Ltd., which represents 66.16% of the issued share capital[169] - The company’s shareholding structure indicates a high concentration of ownership among a few major shareholders[162] Employee and Management Compensation - The total compensation for key management personnel for the six months ended June 30, 2021, was HKD 12,208,000, a decrease of 37.5% compared to HKD 19,513,000 for the same period in 2020[102] - The group employed 239 full-time employees in Hong Kong as of June 30, 2021, down from 249 on December 31, 2020[140] Related Party Transactions - Revenue from related party transactions with Zhongfan Group reached HKD 180,917,000 for the six months ended June 30, 2021, compared to HKD 153,848,000 for the same period in 2020[94] - The company has received shareholder approval for related party transactions with various groups, including 中泛集團, 泛海控股集團, and 通海集團, as detailed in the announcements dated September 24, 2019, and January 28, 2021[101] Financial Instruments and Fair Value - The fair value of financial instruments measured at fair value as of June 30, 2021, totaled HKD 3,544,017,000, with HKD 726,088,000 classified as Level 1, HKD 2,154,885,000 as Level 2, and HKD 663,044,000 as Level 3[106] - The company utilizes observable market data for fair value estimation and engages qualified external valuers when necessary, ensuring compliance with Hong Kong Accounting Standards[104] - The fair value measurement hierarchy consists of three levels, with Level 1 using quoted prices in active markets, Level 2 using observable inputs, and Level 3 using significant unobservable inputs[104]

Financial Performance - The company recorded a significant increase in consolidated profit before tax for 2020, reaching approximately HKD 113 million, compared to HKD 3.6 million in 2019 and a loss of HKD 164 million in the first half of 2020[9]. - In 2020, the company recorded total revenue of HKD 1.105 billion, an increase of approximately 42% compared to HKD 779 million in 2019[24]. - The net profit for 2020 was approximately HKD 103 million, a significant increase of about 20 times from HKD 5 million in 2019[24]. - The company achieved a turnaround from a pre-tax loss of HKD 164 million in 2019 to a pre-tax profit of HKD 113 million in 2020, primarily due to improved asset management fees and interest income[16]. - The adjusted revenue for 2020 was HKD 885.78 million, a 20% increase from HKD 736.67 million in 2019[28]. - The adjusted profit before tax for 2020 was approximately HKD 142.90 million, up 30% from HKD 109.54 million in 2019[28]. Asset Management and Investment - The asset management business, particularly the China Tonghai Greater China Fund and the Global Alliance Partners SICAV, showed outstanding performance with returns exceeding market indices[10]. - Asset management income surged by 80%, driven by an increase in managed asset scale and performance fees earned during the year[20]. - The proprietary investment business turned profitable, benefiting from a substantial increase in the fair value of a US-listed depositary stock, a non-listed stock, and a private equity investment[10]. - Investment income for 2020 contributed approximately HKD 203 million, a significant recovery from a loss of HKD 76 million in 2019[20]. - The total assets under management reached HKD 26.83 billion at the end of 2020, an 18% increase from HKD 22.67 billion at the end of 2019[37]. Revenue Sources - Interest income from loans provided to clients increased compared to 2019, driven by market demand, contributing to revenue growth[10]. - Interest income business recorded total revenue of HKD 667 million in 2020, a 9% increase from HKD 611 million in 2019[45]. - Revenue from asset management business increased by 83% to HKD 42 million in 2020, compared to HKD 23 million in 2019[43]. - Brokerage business revenue rose by 2% to HKD 170 million in 2020, up from HKD 166 million in 2019[44]. - The total revenue from corporate finance business decreased by approximately 69% to HKD 14 million in 2020, down from HKD 45 million in 2019[41]. Corporate Governance and Compliance - The company is committed to maintaining high ethical standards and protecting the interests of shareholders and stakeholders through effective corporate governance[79]. - The company has established a compliance team that collaborates closely with internal and external professionals to continuously review internal control procedures to reduce regulatory risks[63]. - The group has implemented a strong anti-money laundering and counter-terrorism financing program to mitigate legal and regulatory risks[90]. - The group has adopted multiple cybersecurity measures, including multi-layer firewalls and two-factor authentication, to protect customer data[96]. - The company has significantly invested in improving systems and capabilities to combat money laundering and other financial crimes[139]. Social Responsibility and Community Engagement - The company actively participated in social welfare activities during the COVID-19 pandemic, including donating masks to assist those in need[11]. - The company donated HKD 400,000 to the Hong Kong Tennis Association to support the Red Ball Challenge, aimed at enhancing young athletes' experience[117]. - A donation of HKD 100,000 was made to the Christian Zheng Sheng College to assist youth recovering from drug-related issues, addressing financial challenges exacerbated by the COVID-19 pandemic[117]. - The group has been recognized as a "Caring Company" by the Hong Kong Council of Social Service for its community service efforts this year[119]. - The company has invested a total of HKD 732,500 in community projects during the year[116]. Environmental, Social, and Governance (ESG) Initiatives - The company received the "Low Carbon Care ESG Label" for its outstanding performance in environmental, social, and governance reporting[11]. - The group identified 21 significant environmental, social, and governance issues related to its business, with 11 deemed critical for reporting and management[84]. - The group has implemented a risk-based approach to customer due diligence, including enhanced monitoring for high-risk clients[92]. - The group plans to explore carbon offset projects to further mitigate greenhouse gas emissions in the future[129]. - The company is planning to develop long-term strategies for environmental, social, and governance management as part of its sustainable development policies[79]. Market Conditions and Economic Impact - The Hong Kong economy faced a 6.1% real GDP decline in 2020 due to the pandemic, impacting various industries[9]. - The Hong Kong stock market experienced significant volatility, with the Hang Seng Index showing a fluctuation of over 8,000 points throughout the year[9]. - The average daily trading volume in the Hong Kong stock market reached HKD 129.5 billion in 2020, a year-on-year increase of 49%[23]. - The company anticipates a rebound in growth for 2021, supported by government stimulus measures and vaccine impacts on the economy[22]. Employee and Workforce Management - The workforce included 249 full-time employees in Hong Kong and 33 in mainland China as of December 31, 2020, reflecting a slight increase in staffing levels[55]. - Employee costs rose to HKD 255 million in 2020, up approximately 19% from HKD 215 million in 2019, driven by performance-based bonuses and a slight increase in annual salaries[48]. - The number of new hires was 52, with a hiring rate of 20.8% in 2020[2]. - Employee turnover was 41, resulting in a turnover rate of 16.4% in 2020[2]. - The average training hours for male employees was 3.2 hours, while for female employees it was 2.2 hours, leading to an overall average of 2.8 hours[3].

Financial Performance - Total revenue for the six months ended June 30, 2020, was HKD 272,273,000, a decrease of 40.7% compared to HKD 459,522,000 for the same period in 2019[6] - The company reported a loss attributable to equity holders of HKD 161,619,000, compared to a profit of HKD 50,241,000 in the same period last year[6] - Basic and diluted loss per share was HKD (2.630), compared to earnings of HKD 0.813 per share in the prior year[6] - For the six months ended June 30, 2020, the company reported a pre-tax loss of HKD 164,074,000 compared to a profit of HKD 57,372,000 for the same period in 2019[15] - The company’s total comprehensive income for the period was a loss of HKD 162,268,000, compared to a loss of HKD 161,619,000 in the previous year[18] - The company reported a decrease in dividend income, with losses of HKD 5,431,000 compared to losses of HKD 2,723,000 in the previous year[15] - The company recorded a net loss of HKD 162 million for the six months ended June 30, 2020, compared to a net profit of HKD 50.24 million for the same period in 2019, representing a significant decline[123] - Total revenue decreased by approximately 41% to HKD 272 million for the six months ended June 30, 2020, down from HKD 460 million in the same period of 2019[123] Revenue Breakdown - The total revenue from the brokerage and interest income segment was HKD 341,050,000, while the corporate finance segment generated HKD 9,079,000[32] - Interest income for the group was HKD 330,107,000, showing a significant contribution to overall revenue[32] - The corporate finance segment's revenue decreased from HKD 22,500,000 in the previous year to HKD 8,279,000[35] - Asset management business commission income totaled HKD 21,546,000, a decrease of 80.9% from HKD 11,066,000 in the previous year[39] - Brokerage business commission income was HKD 43,916,000, down 9.1% from HKD 40,123,000 in the prior year[39] - Interest income from various sources amounted to HKD 330,107,000, an increase of 19% from HKD 277,545,000 year-on-year[39] - The corporate finance business revenue dropped approximately 63% to HKD 8.28 million from HKD 22.5 million in the same period of 2019[138] - Asset management revenue increased by 95% from HKD 11.07 million in H1 2019 to HKD 21.55 million in H1 2020, driven by a significant rise in performance fee income, which surged approximately 7 times to HKD 13.68 million[139] Assets and Liabilities - Total assets as of June 30, 2020, amounted to HKD 9,998,194,000, an increase from HKD 9,726,044,000 at the end of 2019[11] - Total liabilities were HKD 4,376,908,000, compared to HKD 3,942,490,000 at the end of 2019, reflecting an increase in financial obligations[11] - The company held cash and cash equivalents of HKD 284,304,000 as of June 30, 2020, up from HKD 182,449,000 at the end of 2019[11] - The total cash and cash equivalents at the end of the period increased to HKD 284,304,000 from HKD 242,367,000 year-on-year[16] - The total loan amount, including margin loans and other loans, was HKD 5.169 billion, down 5% from HKD 5.466 billion as of December 31, 2019[134] - The company’s assets under management decreased by 14% year-on-year to USD 259 million, primarily due to a decline in portfolio value[134] - Margin loan balance as of June 30, 2020, was HKD 1.668 billion, a decrease of 16% from HKD 1.978 billion at the end of 2019[134] Cash Flow and Investments - The company reported a net cash outflow from operating activities of HKD 164,074,000 for the six months ended June 30, 2020[13] - The company’s operating cash flow generated a net cash of HKD 113,169,000, a decrease from HKD 382,827,000 in the previous year[15] - The net cash used in investing activities was HKD 5,855,000, a decrease from HKD 8,591,000 in the prior year[16] - The financing activities resulted in a net cash outflow of HKD 5,557,000, contrasting sharply with a net outflow of HKD 489,296,000 in the previous year[16] - The company experienced a significant decrease in loans to clients, with a reduction of HKD 234,676,000 compared to HKD 580,409,000 in the previous year[15] - The company reported a fair value change of HKD 74,490,000 for derivative financial instruments during the reporting period[112] Shareholder Information - The total issued and paid-up shares as of June 30, 2020, were 6,197,049,220, with a par value of HKD 0.031[87] - Mr. Lin Jianxing holds 113,072,833 shares, representing approximately 1.82% of the issued shares[167] - The company has a significant concentration of ownership, with major shareholders controlling over 5% of the issued shares[178] - The ownership structure indicates a high level of control by a few major shareholders, impacting corporate governance and decision-making[178] - The company adopted a restricted share incentive plan on August 19, 2010, allowing the board to grant up to 10% of the issued share capital as reward shares[189] Risk Management and Compliance - The company has established credit risk approval policies and management procedures to address potential credit risk increases across five major business areas[159] - The risk management department is responsible for setting market risk limits and investment guidelines, with daily monitoring and assessment of market risk conditions[160] - The company is committed to complying with stringent regulatory requirements to mitigate compliance risks[164] - The company has implemented an operational risk reporting procedure to ensure timely reporting of risk events to relevant departments[163] Future Plans and Strategies - The company has plans for market expansion and new product development, although specific details were not disclosed in the report[6] - The company is exploring potential mergers and acquisitions to enhance its market position and operational capabilities[6] - The company is focused on cost control measures to mitigate potential revenue declines and is actively seeking to expand its client base and product offerings[147]

Financial Performance - In 2019, China Tonghai International Financial Limited recorded a significant decrease in net profit to HKD 5.35 million, down from HKD 100 million in 2018[10]. - In 2019, the company recorded a revenue of HKD 779 million, a 16% increase from HKD 672 million in 2018[29]. - The company's net profit for 2019 dropped to HKD 5.35 million, a 95% decrease from HKD 100 million in 2018[29]. - Operating expenses increased significantly, with employee costs rising nearly 30% due to direct cost accounting provisions and recruitment for future business development[18]. - The company's pre-tax profit for 2019 was HKD 3.61 million, down 97% from HKD 110 million in 2018[29]. - The overall turnover of China Tonghai Financial increased by 16%, with revenue rising from HKD 209 million in 2018 to HKD 341 million in 2019[17]. - The adjusted revenue for 2019 was HKD 722.86 million, a 5% increase from HKD 689.84 million in 2018[31]. - The adjusted profit before tax for 2019 was approximately HKD 95.72 million, a 52% decrease from HKD 199.25 million in 2018[31]. - The company will not recommend any final dividend for 2019, consistent with the previous year[29]. Market Conditions - The company faced challenges due to macroeconomic factors such as the US-China trade war, Brexit, and local social events, which increased market volatility[10]. - The ongoing COVID-19 pandemic and geopolitical uncertainties continue to pose challenges for the economic environment[14]. - The company anticipates that the "Guangdong-Hong Kong-Macao Greater Bay Area" and "Belt and Road" initiatives will attract more capital into the Hong Kong market, enhancing its financial services[14]. - The total market capitalization of Hong Kong stocks increased by HKD 8.3 trillion or 28% to HKD 38.2 trillion by the end of 2019[26]. - The Hang Seng Index rose by 2,344 points or approximately 9% year-on-year by the end of 2019[26]. Business Strategy and Development - The company has been actively developing various business segments and enhancing risk management while maintaining a low leverage ratio[11]. - The company aims to balance growth and stability while maintaining a cautiously optimistic outlook for 2020[14]. - The company plans to focus on improving economies of scale and cost savings while maintaining business growth and expanding product coverage[18]. - The company plans to continue its brand management philosophy of being a "partner for success" in the financial services industry[14]. - The company aims to maintain stability and continue to play an active role in its operations moving forward into 2020[22]. - The company plans to increase fee-based income by investing more resources in sales and marketing for securities, corporate finance, and asset management, aiming to expand market share and increase business volume[74]. Risk Management - The company has strengthened risk management by provisioning significantly in 2019, focusing on maximizing recoverability on existing problematic loans and reducing future provisioning needs through lower concentration risk and targeting higher quality clients[74]. - The company actively monitors market risk through daily assessments and reports significant risks to senior management to maintain overall market risk within acceptable levels[68]. - The company has established a liquidity management system to ensure sufficient liquid assets to meet any urgent liquidity needs[69]. - The company has established a risk event reporting procedure to ensure timely reporting of all risk events to relevant departments for immediate corrective actions[72]. - The company is committed to complying with stringent regulatory requirements to mitigate potential regulatory risks affecting its business[73]. Awards and Recognition - In 2019, the company received multiple awards, including the "Outstanding Listed Company Award 2019" from Hong Kong Economic Journal for the second consecutive year[12]. - The company received multiple awards in 2019, including the "Excellence Award for Listed Companies 2019" from Hong Kong Economic Journal for the second consecutive year[45]. - China Tonghai Financial was honored as a gold sponsor at the "2019 Hong Kong Corporate Governance Excellence Awards" ceremony, celebrating the 17th anniversary of the Hong Kong Listed Companies Association[186]. - China Tonghai Financial received two awards at the "Financial Services Excellence Awards 2019," including "Excellence in Asset Management" and "Excellence in Multi-Asset Securities Management" for its outstanding achievements[191]. - The company was recognized for the second consecutive year with the "Outstanding Listed Company Award 2019" by Hong Kong Economic Journal, highlighting its exceptional performance[193]. - China Tonghai Financial won the "Corporate Governance Award" at the "Outstanding Listed Enterprises Awards 2019," acknowledging its superior achievements in corporate governance planning over the past year[194]. Employee and Community Engagement - The company expresses gratitude to its employees for their efforts during the past year and aims to create better returns for shareholders and stakeholders[15]. - The company emphasizes employee rights and provides competitive compensation and benefits, ensuring equal opportunities regardless of gender, age, or background[124]. - During the reporting year, the company conducted 13 Mandarin courses to enhance employees' language skills, alongside compliance training and other professional development initiatives[131]. - The company has implemented a community investment policy focusing on charity, education, and community activities, encouraging employee participation in volunteer services[132]. - The company has been recognized as a "Caring Company" by the Hong Kong Council of Social Service for its commitment to community welfare during the reporting year[136]. - The total amount of community investment was HKD 135,000, with 160.5 volunteer hours contributed[171]. Environmental, Social, and Governance (ESG) Initiatives - The company has implemented measures to protect customer privacy, including encryption and multi-layered security protocols to prevent unauthorized access to personal data[101]. - The company has a zero-tolerance policy towards corruption and fraud, with training provided to employees on internal due diligence policies and procedures[108]. - The company has established policies for effective resource use, including energy and water efficiency[173]. - The company is focused on reducing environmental impact through initiatives such as electronic brochures and providing non-disposable utensils to employees[141]. - The total greenhouse gas emissions for the reporting year amounted to 508.9 tons of CO2 equivalent, a significant increase from 322.8 tons in the previous year, representing a 57.7% rise[159]. - The company is developing a set of sustainable development goals to address key sustainability issues, which will serve as the basis for setting key performance indicators and targets[92]. - A total of 328 questionnaires were sent out to stakeholders, with 76 valid responses received, leading to the identification of nine significant issues related to environmental, social, and governance matters[95]. - The company has implemented measures to improve energy efficiency, including regular cleaning of filters and considering the use of LED lighting for future renovations[146]. - The company encourages the use of video and telephone conferencing to reduce air emissions from business travel[146].

Financial Performance - Total revenue for the six months ended June 30, 2019, was HKD 459,522,000, an increase of 71.4% compared to HKD 268,101,000 for the same period in 2018[5]. - Net investment income for the period was HKD 54,560,000, a significant recovery from a loss of HKD 71,243,000 in the previous year[5]. - Basic and diluted earnings per share increased to HKD 0.813, up from HKD 0.495 in the same period last year, representing a growth of 64.1%[5]. - The company reported a pre-tax profit of HKD 57,372,000, compared to HKD 37,513,000 in the previous year, marking a growth of 53.0%[5]. - The total comprehensive income attributable to equity holders was HKD 50,136,000, up from HKD 29,981,000, an increase of 67.5%[6]. - Operating cash flow generated was HKD 330,548,000, a significant recovery from an outflow of HKD 1,347,944,000 in the previous year[11]. - The total tax expense for the six months ended June 30, 2019, was HKD 7,131,000, compared to HKD 6,755,000 for the same period in 2018, representing an increase of approximately 5.56%[71]. Expenses and Liabilities - Total operating expenses decreased to HKD 83,544,000 from HKD 100,451,000, reflecting a reduction of 16.8%[5]. - Total liabilities were reported at HKD 1,790,247,000, with a notable increase in bank borrowings[9]. - The company did not declare any dividends for the period[5]. - The company reported a decrease in other intangible asset amortization expenses, contributing positively to its overall profitability[11]. - The company’s total liabilities as of June 30, 2018, were HKD 5,767,404 million, indicating a significant financial position[19]. - The company’s total liabilities for cash clients were HKD 704,931,000 as of June 30, 2019, slightly down from HKD 706,408,000 as of December 31, 2018, reflecting a marginal decrease of about 0.2%[139]. Assets and Investments - Cash and cash equivalents as of June 30, 2019, amounted to HKD 242,367,000, compared to HKD 357,300,000 at the end of 2018[9]. - Total assets increased to HKD 1,906,886,000 from HKD 1,969,446,000, indicating a slight decrease of 3.2%[9]. - The company recognized a total comprehensive income of HKD 50,241,000 for the period, compared to HKD 50,136,000 in the previous year, indicating stable performance[16]. - The fair value of listed equity securities held for trading as of June 30, 2019, was HKD 488,689,000, slightly up from HKD 485,331,000 as of December 31, 2018[81]. - The total fair value of non-listed equity securities as of June 30, 2019, was HKD 468,546,000, compared to HKD 469,884,000 as of December 31, 2018, showing a minor decrease[81]. - The total fair value of financial instruments measured at fair value was HKD 4,188,808,000[180]. Strategic Initiatives - The company plans to continue focusing on market expansion and new product development as part of its growth strategy[17]. - The company is actively exploring mergers and acquisitions to enhance its market position and drive future growth[17]. - The company plans to expand its market presence and enhance its product offerings in the upcoming quarters, focusing on new technologies and strategic partnerships[61]. - The company is focused on expanding its market presence and enhancing its product offerings through strategic initiatives and potential acquisitions[113]. Accounting and Reporting Standards - The company has adopted the new Hong Kong Financial Reporting Standard No. 16 for leases, which impacts the recognition of right-of-use assets and lease liabilities[26]. - The company has not adopted any new standards or interpretations that have not yet come into effect during the reporting period[25]. - The company’s financial statements are prepared in accordance with Hong Kong Accounting Standards and comply with the relevant regulations of the Stock Exchange[23]. - The company has chosen not to recognize certain low-value asset leases as right-of-use assets and lease liabilities[29]. - The company’s accounting policy changes did not have a net impact on retained earnings as of January 1, 2019[47]. Related Party Transactions - The company reported interest income from related parties amounting to HKD 12,257,000 for the six months ended June 30, 2019, compared to HKD 8,504,000 for the same period in 2018, representing a growth of approximately 44.5%[158]. - The company’s total income from related party transactions for the six months ended June 30, 2019, was HKD 100,087,000, compared to HKD 43,426,000 for the same period in 2018, indicating a significant increase of approximately 130.1%[158]. Market and Economic Conditions - The interest rates for loans ranged from 5.0% to 20.0% as of June 30, 2019, compared to 5.0% to 9.5% on December 31, 2018, indicating a potential increase in borrowing costs[129]. - The interest rate for bank loans secured by client collateral ranged from 2.25% to 4.95% as of June 30, 2019, compared to 3.50% to 4.07% as of December 31, 2018, indicating a shift in borrowing costs[147].