Core Viewpoint - The company expects a significant decrease in profit attributable to shareholders for the six months ending June 30, 2025, compared to the same period in 2024, primarily due to impairment losses on assets classified as held for sale [1] Financial Performance - The anticipated profit attributable to shareholders for the upcoming period is projected to be between approximately 1.0 million HKD and 5.0 million HKD [1] - In contrast, the profit attributable to shareholders for the same period in 2024 was approximately 28.8 million HKD [1] - The decrease in profit is mainly attributed to an impairment loss provision of about 29.9 million HKD related to assets classified as held for sale, which was not present in 2024 [1]

香 港 交 易 及 結 算 所 有 限 公 司 及 香 港 聯 合 交 易 所 有 限 公 司 對 本 公 佈 的 內 容 概 不 負 責，對其準確性或完整性亦不發表任何聲明，並明確表示概不就因本公佈全部或 任何部分內容而產生或因依賴該等內容而引致的任何損失承擔任何責任。 LITU HOLDINGS LIMITED 力 圖 控 股 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：1008） 公佈 由於本公司仍在落實截至二零二五年六月三十日止六個月的未經審核中期業績， 本公佈所載資料僅以對本公司未經審核綜合管理賬目所作初步審閱為依據，而該 等管理賬目並未經本公司核數師或本公司審核委員會審閱，或會根據進一步更新 的資料予以調整。因此，股東及潛在投資者務請參閱將於二零二五年八月底刊發 的本集團截至二零二五年六月三十日止六個月的中期業績公佈。 本公司股東及潛在投資者在買賣本公司股份時宜審慎行事。 承董事會命 力圖控股有限公司 主席 黃萬如先生 香港，二零二五年八月八日 本公佈乃由力圖控股有限公司（「本公司」，連同其附屬公司統稱為「本集團」）根據 香港聯合交易所有限公司證券上市規則第13.09條及香港法例 ...

股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 | | | 致：香港交易及結算所有限公司 公司名稱: 力圖控股有限公司 呈交日期: 2025年8月1日 I. 法定/註冊股本變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | | 是 | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01008 | 說明 | | | | | | | | | | | 法定/註冊股份數目 | | | 面值 | | | 法定/註冊股本 | | | 上月底結存 | | | 10,000,000,000 | HKD | | 0.005 | HKD | | 50,000,000 | | 增加 / 減少 (-) | | | | | | | HKD | | | | 本月底結存 | | | 10,000,000,000 | HKD | | 0.005 | HKD | | 50,000,000 | FF301 II. 已發行股份及/或庫存股份變動 | ...

Financial Performance - The Group recorded a profit attributable to owners of the Company of approximately HK$80.6 million for the year ended 31 December 2024, compared to a loss of approximately HK$163.9 million in 2023[16]. - Basic earnings per share was approximately HK5.1 cents, a significant improvement from the basic loss per share of approximately HK10.5 cents in 2023[16]. - The Group recorded revenue from continuing operations of approximately HK$725.5 million in 2024, representing an increase of 1.2% compared to HK$716.7 million in 2023[29]. - Gross profit from continuing operations increased by 39.1% to approximately HK$176.8 million in 2024, up from HK$127.1 million in 2023[30]. - Other income from continuing operations decreased by 18.6% to approximately HK$18.8 million in 2024, down from HK$23.1 million in 2023[31]. - Selling and distribution expenses decreased by 22.6% to approximately HK$13.7 million in 2024, compared to HK$17.7 million in 2023[37]. - Administrative expenses increased by 7.7% to approximately HK$75.7 million in 2024, up from HK$70.3 million in 2023[38]. - Finance costs from continuing operations decreased slightly by 2.4% to approximately HK$4.1 million in 2024, down from HK$4.2 million in 2023[42]. - The turnaround from loss to profit was primarily due to a decrease in impairment loss on interest in an associate by approximately HK$66.4 million and a decrease in impairment loss on goodwill by approximately HK$92.7 million[51]. - Return on equity increased from -7.2% in 2023 to 3.8% in 2024, and return on total assets increased from -5.5% to 3.0%[58]. Dividends - The Board proposed a final dividend of HK2.0 cents per share for the year ended 31 December 2024, while no final dividend was recommended for 2023[16]. - The proposed final dividend is subject to shareholder approval at the upcoming annual general meeting and will be payable on or about June 30, 2025[137]. - The register of members will be closed from June 2, 2025, to June 6, 2025, for determining entitlement to attend and vote at the annual general meeting[138]. - The Board recommended a final dividend of HK2 cents per share for the year ended December 31, 2024, while no final dividend was recommended for the year ended December 31, 2023[137]. - The register of members will be closed from June 13, 2025, to June 17, 2025, for the proposed final dividend[142]. Operational Strategy - The Group focused resources on Bengbu Jinhuangshan Rotogravure Printing Co., Ltd. to achieve centralized management and production, improving cost control and production efficiency[15]. - The centralized production strategy is expected to reduce the administrative burden related to environmental protection compliance across different subsidiaries[15]. - The Group aims to optimize its asset portfolio and focus on core businesses while exploring acquisitions and disposals to achieve sustainable growth[23]. - The Group plans to continue expanding into other packaging markets and increase participation in tenders to maximize income from investment properties[21]. - The Group's corporate mission includes improving financial performance and broadening revenue streams within acceptable risk levels[22]. Compliance and Governance - The Group has maintained compliance with all relevant rules and regulations in the PRC that significantly impact its operations[12]. - The Group's success relies on strong relationships with key stakeholders, including state-owned cigarette manufacturers[12]. - The Group's performance is closely tied to the regulatory environment and support from stakeholders such as shareholders and local communities[12]. - The Company has complied with the disclosure requirements of Chapter 14A of the Listing Rules regarding related party transactions, specifically the purchase of printing and packing machineries[136]. - The Company has adopted the Corporate Governance Code and generally complied with it during the year ended December 31, 2024[181]. Financial Position - As of 31 December 2024, the Group had net current assets of approximately HK$655.4 million, an increase from approximately HK$577.7 million in 2023[59]. - The Group's outstanding bank borrowings as of 31 December 2024 were approximately HK$207.2 million, up from approximately HK$131.6 million in 2023[60]. - The Group's net cash position improved to approximately HK$424.2 million in 2024 from approximately HK$236.1 million in 2023[60]. - The Group's current ratio improved to 2.3 times in 2024 from 2.2 times in 2023, while the quick ratio improved to 2.2 times from 2.0 times[57]. - The Group's reserves available for distribution as of December 31, 2024, amounted to approximately HK$6,188.9 million[100]. Employee and Remuneration - The total remuneration cost incurred by the Group for the year ended December 31, 2024, was approximately HK$69.8 million, down from approximately HK$84.8 million in 2023, with a reduction in the number of employees from 582 to 454[77]. - The Group's retirement benefit scheme costs charged to the consolidated statement for the year ended December 31, 2024, were approximately HK$4.2 million, a decrease from HK$5.0 million in 2023[120]. Investments and Acquisitions - The Group completed the disposal of a 70% equity interest in Jiangsu HY Link for a cash consideration of RMB51.1 million, with the transaction finalized in the second half of 2024[74]. - An acquisition of approximately 86.67% of a 17-storey commercial building in Hong Kong is planned for a total cash consideration of HK$388 million, expected to complete on or before July 31, 2025[78]. - The Group has not held any significant investments representing more than 5% of total assets nor made any material acquisitions or disposals during the year ended December 31, 2024[73]. Risk Management - The Group maintained a healthy liquidity position throughout 2024, with ongoing credit assessments to reduce exposure to credit risk[68]. - The Group's treasury policy emphasizes prudent financial management to ensure liquidity can meet funding requirements[68]. Environmental and Social Responsibility - Further details on environmental and social responsibility will be published in a separate report available on the Company's and Hong Kong Stock Exchange's websites[12]. - The Board has overall responsibility for the Company's ESG strategy and conducts regular reviews of ESG-related matters[177]. - The Group did not make any charitable donations during the year, consistent with 2023[113].

Financial Performance - Total revenue for the year ending December 31, 2024, was HKD 725,453,000, representing an increase from HKD 716,658,000 in the previous year, a growth of approximately 1.1%[2] - Gross profit for the same period was HKD 176,781,000, up from HKD 127,139,000, indicating a significant increase of approximately 39%[2] - Other income increased to HKD 23,146,000 from HKD 18,825,000, reflecting a growth of about 22.5%[2] - The company reported a loss before tax of HKD 139,784,000, compared to a profit of HKD 95,790,000 in the previous year, marking a decline of approximately 246%[2] - Administrative expenses rose to HKD 75,748,000 from HKD 70,258,000, an increase of about 7%[2] - The company experienced a net loss of HKD 156,143,000 from continuing operations, compared to a profit of HKD 78,471,000 in the previous year, indicating a significant downturn[2] - The cost of sales increased to HKD 589,519,000 from HKD 548,672,000, which is an increase of approximately 7.4%[2] - The company reported a net profit of HKD 79,357,000 for the fiscal year, compared to a loss of HKD 163,699,000 in the previous year[3] - The basic earnings per share for continuing operations was HKD 0.050, an improvement from a loss of HKD 0.100 in the prior year[3] - The total comprehensive income for the year was HKD 36,093,000, compared to a loss of HKD 255,767,000 in the previous year[3] Revenue Breakdown - Total revenue for the year ended December 31, 2024, was HKD 748,957,000, compared to HKD 762,322,000 for the previous year, representing a decrease of approximately 1.5%[21] - Revenue from the sale of goods for the year ended December 31, 2024, was HKD 675,700,000, down from HKD 683,557,000 in 2023, indicating a decline of about 1.3%[21] - Investment property rental income increased to HKD 49,753,000 in 2024 from HKD 33,101,000 in 2023, reflecting a growth of approximately 50.5%[21] - Revenue from discontinued operations for the year ended December 31, 2024, was HKD 23,504,000, compared to HKD 45,664,000 in 2023, showing a decrease of about 48.6%[21] - The total revenue from continuing operations for the year ended December 31, 2024, was HKD 725,453,000, slightly down from HKD 716,658,000 in 2023, a decrease of around 1.0%[21] - The revenue from the printing and manufacturing of paper packaging for the year ended December 31, 2024, was HKD 644,724,000, compared to HKD 607,056,000 in 2023, an increase of approximately 6.2%[25] Operational Strategies - The company has plans for market expansion and new product development to drive future growth[2] - The overall performance indicates a need for strategic adjustments to improve profitability moving forward[2] - The company is focusing on enhancing operational efficiency to mitigate rising costs and improve margins[2] - The company plans to focus on market expansion and new product development in the upcoming fiscal year[3] - The company has initiated new strategies to enhance operational efficiency and reduce costs[3] - The company aims to improve user data analytics to better understand market trends and customer preferences[3] Asset and Liability Management - Total assets decreased from HKD 2,218,066,000 in 2023 to HKD 2,186,951,000 in 2024, a decline of approximately 1.4%[5] - Current liabilities increased slightly from HKD 496,574,000 in 2023 to HKD 496,574,000 in 2024, remaining stable[5] - The company's cash and cash equivalents rose significantly from HKD 345,798,000 in 2023 to HKD 570,949,000 in 2024, an increase of about 65%[5] - The total non-current assets decreased from HKD 1,640,350,000 in 2023 to HKD 1,531,522,000 in 2024, a reduction of approximately 6.6%[4] - The company's equity attributable to shareholders increased from HKD 2,131,555,000 in 2023 to HKD 2,138,065,000 in 2024, a growth of about 0.3%[6] Corporate Governance and Compliance - The financial statements comply with the Hong Kong Financial Reporting Standards and the applicable disclosure requirements of the Stock Exchange[8] - The company has adopted new amendments to the Hong Kong Financial Reporting Standards, which do not have any significant impact on the consolidated financial statements[12] - The financial statements have been prepared consistently with the accounting policies adopted in the previous year[9] - The company ensures that all amounts are rounded to the nearest thousand, providing clarity in financial reporting[9] - The company is committed to high standards of corporate governance and has generally complied with the corporate governance code, except for specific provisions[93] Future Outlook - The outlook for the Chinese economy remains uncertain due to global inflation and geopolitical tensions, which may adversely affect the group's operating environment in 2025[85] - The group aims to continue focusing on paper packaging as a solid foundation for development and seeks to maximize returns from investment properties[86] - The group will actively expand into other packaging markets while implementing cost control measures to mitigate pressure on gross margins[86] - The company will continue to optimize its asset portfolio by selling non-core assets and focusing on core business development to achieve sustainable growth and enhance profitability[87]

[Corporate Information](index=3&type=section&id=Corporate%20information) This section provides an overview of the company's governance structure, including changes in its board and key personnel, committee compositions, and other essential corporate details. [Directors and Company Secretary](index=3&type=section&id=Directors%20and%20Company%20Secretary) During the reporting period, the company experienced multiple changes in its board of directors and company secretary team, including resignations and new appointments - Executive Director Mr. Jiang Xiangyu resigned effective **January 29, 2024**[3](index=3&type=chunk) - Executive Director Mr. Deng Weichao was appointed effective **January 29, 2024**, and resigned effective **April 16, 2024**[3](index=3&type=chunk) - Executive Director Ms. Chen Lingling was appointed effective **April 16, 2024**[3](index=3&type=chunk) - Company Secretary Mr. Wu Yongzhen resigned effective **June 7, 2024**, and Mr. Chen Yongzhong was appointed on the same date[3](index=3&type=chunk) [Committee Composition](index=3&type=section&id=Committee%20Composition) The company has established Audit, Remuneration, and Nomination Committees, each comprising multiple directors to ensure effective corporate governance - The Audit Committee is chaired by Mr. Lu Tianneng, with members including Mr. Lin Yinghong, Ms. Li Li, and Mr. Hao Wenhao[3](index=3&type=chunk) - The Remuneration Committee is chaired by Mr. Lin Yinghong, with members including Mr. Huang Wanru, Ms. Li Li, Mr. Lu Tianneng, and Mr. Hao Wenhao[3](index=3&type=chunk) - The Nomination Committee is chaired by Mr. Hao Wenhao, with members including Mr. Lin Yinghong, Ms. Li Li, Mr. Lu Tianneng, and Mr. Huang Wanru[3](index=3&type=chunk) [Other Key Information](index=4&type=section&id=Other%20Key%20Information) Key information such as authorized representatives, auditor, principal bankers, share registrars, registered office, and listing details are disclosed - Authorized representatives are Mr. Huang Wanru and Mr. Chen Yongzhong (Mr. Wu Yongzhen has resigned)[5](index=5&type=chunk) - The auditor is RSM Hong Kong Certified Public Accountants[5](index=5&type=chunk) - Principal bankers include Hang Seng Bank, Agricultural Bank of China, Bank of China, and China Merchants Bank[5](index=5&type=chunk) - The company's stock code is **1008**, and its listing date was **March 30, 2009**[6](index=6&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20discussion%20and%20analysis) This section provides a detailed review of the company's financial performance, business operations, future outlook, and financial position for the reporting period [Financial Highlights](index=5&type=section&id=Financial%20Highlights) For the six months ended June 30, 2024, the company's revenue from continuing operations slightly decreased, but it successfully turned losses into profits and declared an interim dividend Financial Highlights for H1 2024 | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue | 318,598 | 335,460 | -5.0% | | Profit/(Loss) Attributable to Owners of the Company | 28,811 | (51,290) | Turned to profit | | Basic and Diluted Earnings/(Loss) Per Share (HK$) | 0.018 | (0.033) | Turned to profit | | Interim Dividend Per Share | 2 HK cents | Nil | First dividend payment | [Business Review](index=7&type=section&id=Business%20Review) In H1 2024, revenue from continuing operations decreased by 5.0% to HK$318.6 million, but the company achieved a profit of HK$28.8 million by implementing cost control measures - Revenue from continuing operations was approximately **HK$318.6 million**, a year-on-year decrease of **5.0%**[9](index=9&type=chunk)[12](index=12&type=chunk) - Profit attributable to owners of the company was approximately **HK$28.8 million**, compared to a loss of HK$51.3 million in the same period last year, representing a **turnaround to profit**[9](index=9&type=chunk)[12](index=12&type=chunk) - Basic earnings per share was approximately **HK$0.018**, compared to a loss of HK$0.033 in the same period last year[9](index=9&type=chunk)[12](index=12&type=chunk) - The Board declared an interim dividend of **HK 2 cents** per share (same period last year: nil)[9](index=9&type=chunk)[12](index=12&type=chunk) - China's GDP grew by **5.0%** in the first half, but global inflation, US-China competition, and the Russia-Ukraine war continue to cloud the economic outlook[10](index=10&type=chunk)[12](index=12&type=chunk) - The tobacco industry faces operating pressure due to falling bidding prices under mandatory bidding policies and intensified competition[10](index=10&type=chunk)[12](index=12&type=chunk) - To address challenges, the Group implemented measures such as simplifying management structure, improving inventory management efficiency, and raw material procurement bidding systems to control costs and enhance bargaining power[11](index=11&type=chunk)[12](index=12&type=chunk) - Revenue from the printing and manufacturing of paper packaging and related materials segment decreased by **6.0%** to **HK$301.6 million**, primarily due to reduced sales orders from major customers[14](index=14&type=chunk)[17](index=17&type=chunk) - This segment was impacted by failure to secure some major customer orders, falling bidding prices, and inflation; the Group is responding by increasing bidding participation, seeking new market opportunities, R&D of new products, and cost control measures[15](index=15&type=chunk)[17](index=17&type=chunk) - The Group is consolidating resources and production at Bengbu Jin Huangshan Gravure Printing Co., Ltd. to improve cost control, production efficiency, and reduce environmental compliance administrative burden[16](index=16&type=chunk)[17](index=17&type=chunk) - Revenue from the investment property leasing segment increased by **14.9%** to **HK$17.0 million**, mainly due to increased leased area of investment properties[16](index=16&type=chunk)[17](index=17&type=chunk) [Prospects](index=9&type=section&id=Prospect) The Group will continue to focus on paper packaging and maximize investment property rental income, while exploring new investments and diversification for sustainable growth - The Group will continue to base its development on paper packaging and maximize investment property rental income[18](index=18&type=chunk)[21](index=21&type=chunk) - It will increase bidding participation, actively expand into other packaging markets, and mitigate pressure from falling bidding prices through cost control, efficiency improvements, and resource integration[18](index=18&type=chunk)[21](index=21&type=chunk) - The corporate mission is to improve financial performance, provide growth momentum, and broaden revenue streams within acceptable risk levels[19](index=19&type=chunk)[21](index=21&type=chunk) - It will continue to explore possibilities for acquiring new investments, disposing of subsidiaries or associates, or diversifying into other profitable businesses to achieve sustainable growth, enhance profitability, and maximize shareholder returns[19](index=19&type=chunk)[21](index=21&type=chunk) [Revenue Analysis](index=9&type=section&id=Revenue%20Analysis) Total revenue from continuing operations decreased by 5.0% year-on-year, primarily due to reduced paper packaging volume, delayed customer orders, and RMB depreciation against HKD Revenue Composition from Continuing Operations | Business Segment | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Printing and Manufacturing of Paper Packaging and Related Materials | 301,600 | 320,700 | -5.95% | | Investment Property Leasing | 17,000 | 14,800 | +14.86% | | **Total** | **318,600** | **335,500** | **-5.04%** | - The decrease in total revenue was mainly due to a subsidiary failing to secure some major customer orders, leading to reduced business volume in printing and manufacturing of paper packaging and related materials[21](index=21&type=chunk)[22](index=22&type=chunk) - Some customers delayed sales orders due to product design changes[21](index=21&type=chunk)[22](index=22&type=chunk) - The average depreciation of the RMB against the HKD by approximately **4.0%** exacerbated the impact on revenue decline[21](index=21&type=chunk)[22](index=22&type=chunk) [Gross Profit and Other Income](index=10&type=section&id=Gross%20Profit%20and%20Other%20Income) Gross profit significantly increased, with the gross profit margin rising to 24.8%, primarily due to new cost control measures, while other income remained stable Changes in Gross Profit and Gross Profit Margin | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Gross Profit | 79,000 | 55,700 | +41.83% | | Gross Profit Margin | 24.8% | 16.6% | +8.2 percentage points | - The increase in gross profit margin was mainly due to the implementation of new cost control measures, improving cost control efficiency[23](index=23&type=chunk)[26](index=26&type=chunk) Other Income | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Other Income | 9,500 | 7,700 | +23.38% | [Other Net Gains and Losses](index=10&type=section&id=Other%20Net%20Gains%20and%20Losses) Net other gains from continuing operations turned from a loss to a gain, mainly due to a significant reduction in impairment losses on interests in associates and goodwill Other Net Gains and Losses from Continuing Operations | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Other Net Gains and Losses | 1,500 | (62,500) | Turned to gain | | Decrease in impairment loss on interests in associates | 20,000 | - | - | | Decrease in goodwill impairment loss | 40,000 | - | - | [Expenses Analysis](index=10&type=section&id=Expenses%20Analysis) Selling and distribution expenses remained stable, administrative expenses increased due to higher staff costs and professional fees, finance costs decreased, and tax expenses rose significantly Changes in Various Expenses | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 5,800 | 6,600 | -12.12% | | Administrative Expenses | 39,400 | 32,400 | +21.60% | | Finance Costs | 2,000 | 2,200 | -9.09% | | Taxation | 11,300 | 7,200 | +56.94% | - The increase in administrative expenses was mainly due to higher salaries and other benefits, termination benefits, and legal and professional service fees[25](index=25&type=chunk)[27](index=27&type=chunk) - The decrease in finance costs was mainly due to a reduction in the average amount of bank borrowings, partially offset by an increase in average interest rates[28](index=28&type=chunk) - The increase in taxation was mainly due to higher profit before tax[28](index=28&type=chunk) [Profit Attributable to Owners of the Company](index=11&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Company) Profit attributable to owners of the company turned from a loss to a gain, primarily due to significant reductions in impairment losses on interests in associates and goodwill, and improved cost control efficiency Profit/(Loss) Attributable to Owners of the Company | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Profit/(Loss) Attributable to Owners of the Company | 28,800 | (51,300) | Turned to profit | - The turnaround to profit was mainly attributable to: (i) a decrease in impairment loss on interests in associates of approximately **HK$20 million**; (ii) a decrease in goodwill impairment loss of approximately **HK$48.2 million**; and (iii) improved cost control efficiency of the Group, primarily due to the implementation of new cost control measures[28](index=28&type=chunk) [Segment Information](index=11&type=section&id=Segment%20Information) Both the printing and manufacturing of paper packaging and related materials segment and the investment property leasing segment achieved significant profit growth from continuing operations, with the latter showing particularly strong growth Segment Profit from Continuing Operations (Before Unallocated Items) | Business Segment | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Printing and Manufacturing of Paper Packaging and Related Materials | 68,800 | 47,900 | +43.63% | | Investment Property Leasing | 4,500 | 1,600 | +181.25% | - Profit from the printing and manufacturing of paper packaging and related materials segment accounted for approximately **93.9%** of the total segment profit before unallocated items (H1 2023: 96.9%)[28](index=28&type=chunk) [Financial Position and Liquidity](index=12&type=section&id=Financial%20Position%20and%20Liquidity) As of June 30, 2024, the Group's net current assets and bank balances and cash increased, significantly improving net cash, while bank borrowings rose, but the gearing ratio remained reasonable Key Financial Position and Liquidity Indicators | Metric | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Net Current Assets | 616,500 | 577,700 | +6.72% | | Bank Balances and Cash | 501,600 | 345,800 | +45.06% | | Bank Borrowings (Repayable within one year) | 208,300 | 131,600 | +58.28% | | Net Cash | 301,900 | 236,000 | +27.92% | | Gearing Ratio | 14.1% | 10.9% | +3.2 percentage points | - The increase in net current assets was mainly due to an increase in net cash[30](index=30&type=chunk)[33](index=33&type=chunk) - The carrying amount of bank deposits pledged for bank financing of bills payable was approximately **HK$8.6 million** (December 31, 2023: HK$21.8 million)[31](index=31&type=chunk)[33](index=33&type=chunk) [Capital Commitments](index=12&type=section&id=Capital%20Commitments) As of June 30, 2024, the Group's capital commitments significantly decreased, primarily because most committed payments for new plant construction had been settled Capital Commitments | Metric | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Capital commitments for acquisition of property, plant and equipment | 7,000 | 39,600 | -82.32% | - The decrease in capital commitments was mainly due to most committed payments for the construction of new plant being settled before **June 30, 2024**[32](index=32&type=chunk)[33](index=33&type=chunk) [Treasury Policies and Capital Structure](index=13&type=section&id=Treasury%20Policies%20and%20Capital%20Structure) The Group adopts prudent financial management, maintains a sound liquidity position, manages credit risk through continuous assessment, and monitors foreign exchange risk - The Group adopts prudent financial management policies to maintain a sound liquidity position[35](index=35&type=chunk)[37](index=37&type=chunk) - It strives to mitigate credit risk through continuous credit assessment and periodic evaluation of existing customers' financial standing[35](index=35&type=chunk)[37](index=37&type=chunk) - The Board closely monitors the Group's liquidity position to ensure that the liquidity structure of assets, liabilities, and other commitments can meet funding requirements[35](index=35&type=chunk)[37](index=37&type=chunk) - The Group's working capital primarily comes from funds generated from operations and bank borrowings[36](index=36&type=chunk)[37](index=37&type=chunk) - Bank borrowings, cash and cash equivalents are mainly denominated in **HKD** and **RMB**, while revenue, costs, and expenses are primarily denominated in **RMB** and **HKD** respectively[36](index=36&type=chunk)[37](index=37&type=chunk) - No financial instruments were used for hedging during the period; management closely monitors foreign exchange risk and will consider hedging when necessary[36](index=36&type=chunk)[37](index=37&type=chunk) [Contingent Liabilities and Charges on Assets](index=13&type=section&id=Contingent%20Liabilities%20and%20Charges%20on%20Assets) As of June 30, 2024, the Group had no significant contingent liabilities, but bank borrowings were secured by property, plant and equipment, investment properties, and corporate guarantees - As of **June 30, 2024**, the Group had no significant contingent liabilities[35](index=35&type=chunk) - As of **December 31, 2023**, a corporate guarantee of **HK$11 million** was provided to a bank for bank financing granted to a third party[35](index=35&type=chunk) - As of **June 30, 2024**, bank loan facilities totaling **HK$270 million** were secured by the Group's property, plant and equipment with a carrying amount of approximately **HK$169.7 million**, investment properties of approximately **HK$37 million**, and corporate guarantees[39](index=39&type=chunk)[62](index=62&type=chunk) - As of **June 30, 2024**, bank deposits with a total carrying amount of approximately **HK$8.6 million** were pledged to banks to secure bank financing for bills payable[39](index=39&type=chunk) [Equity Fund Raising and Significant Investments](index=14&type=section&id=Equity%20Fund%20Raising%20and%20Significant%20Investments) During the review period, the company did not undertake any equity fundraising activities or hold significant investments exceeding 5% of total assets, nor are there plans for other major investments - During the review period, the Company did not undertake any equity fund-raising activities, nor were there any unutilized proceeds from the issuance of any equity securities in previous financial years[39](index=39&type=chunk) - Except for Changde Jinpeng Printing Co., Ltd., as of **June 30, 2024**, and **June 30, 2023**, the Group did not hold any significant investments with a value of **5%** or more of the Company's total assets[40](index=40&type=chunk) - Save as disclosed in this report, as of the date of this report, the Board had not authorized any other significant investments or plans to increase capital assets[40](index=40&type=chunk) [Material Acquisition and Disposal of Subsidiaries, Associates and Joint Ventures](index=15&type=section&id=Material%20Acquisition%20and%20Disposal%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) The Group is undertaking two significant disposals: 70% equity in Jiangsu Lianheng Wuyu and 31% equity in Changde Jinpeng, both expected to complete in H2 2024 - On **May 29, 2023**, Wealthy Dragon (China) Limited, a wholly-owned subsidiary of the Company, entered into an agreement with a third party to dispose of **70%** equity interest in Jiangsu Lianheng Wuyu Technology Co., Ltd. for **RMB51.1 million**[43](index=43&type=chunk)[46](index=46&type=chunk) - As of **June 30, 2024**, a deposit of approximately **RMB41.551 million** has been received, but due to the buyer's delay in settling the final consideration, the disposal has not yet been completed and is expected to be completed in **H2 2024**[43](index=43&type=chunk)[46](index=46&type=chunk) - On **December 28, 2023**, Guilian Development Co., Ltd., a wholly-owned subsidiary of the Company, entered into a framework agreement with the major shareholders of Changde Jinpeng Printing Co., Ltd. to dispose of its **31%** equity interest in Changde Jinpeng[44](index=44&type=chunk)[46](index=46&type=chunk) - The consideration for the disposal of Changde Jinpeng will be determined with reference to the valuation by an independent valuer, and terms are currently under negotiation, with the final sale and purchase agreement expected to be signed and completed in **H2 2024**[44](index=44&type=chunk)[46](index=46&type=chunk) [Post-Reporting Period Events, Human Resources and Interim Dividend](index=16&type=section&id=Important%20Events%2C%20Human%20Resources%20and%20Interim%20Dividend) No significant events occurred post-June 30, 2024; the Group employed 623 full-time staff, with remuneration based on market terms, and declared an interim dividend of HK 2 cents per share - No significant events affecting the Group have occurred since **June 30, 2024**, up to the date of this report[48](index=48&type=chunk) - As of **June 30, 2024**, the Group employed **8** full-time staff in Hong Kong and **615** in China, respectively[48](index=48&type=chunk) - The Group's remuneration packages are determined with reference to market conditions and individual qualifications, operating a Mandatory Provident Fund Scheme for Hong Kong employees and contributing to provident funds, pension insurance, medical insurance, unemployment insurance, and work injury insurance for Chinese employees[48](index=48&type=chunk) - The Board declared an interim dividend of **HK 2 cents** per share for the review period (2023: nil)[49](index=49&type=chunk) - The proposed interim dividend will be paid on or about **November 8, 2024**, to shareholders whose names appear on the Company's register of members on **October 17, 2024**[49](index=49&type=chunk) [Other Information](index=17&type=section&id=Other%20information) This section covers directors' and substantial shareholders' interests, securities transactions, corporate governance, and other compliance-related disclosures [Directors' and Chief Executives' Interests](index=17&type=section&id=Directors%27%20and%20Chief%20Executives%27%20Interests) As of June 30, 2024, the company's directors and chief executives held interests in the company's shares, with Ms. Li Li holding 15.98% through a controlled corporation Directors' Interests in the Company's Shares | Director's Name | Capacity | Number of Shares/Relevant Shares Held | Position | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Huang Wanru | Beneficial Owner | 1,735,204 | Long Position | - | | Ms. Li Li | Interest in Controlled Corporation | 250,551,964 | Long Position | 15.98% | [Substantial Shareholders' Interests](index=18&type=section&id=Substantial%20Shareholders%27%20Interests) As of June 30, 2024, Mr. Cai Xiaoming, through his controlled corporations, held 57.50% of the company's issued share capital, making him the single largest shareholder Substantial Shareholders' Interests in the Company's Shares | Shareholder's Name/Name | Capacity | Number of Shares/Relevant Shares Held | Position | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Cai Xiaoming | Interest in Controlled Corporation | 901,456,892 | Long Position | 57.50% | | Chuangyi Co., Ltd. | Beneficial Owner | 274,325,278 | Long Position | 17.50% | | Zhenhua International Co., Ltd. | Beneficial Owner | 627,131,614 | Long Position | 40.00% | | Tianjin Changrong Technology Group Co., Ltd. | Interest in Controlled Corporation | 250,551,964 | Long Position | 15.98% | | Changrong Shares (Hong Kong) Co., Ltd. | Beneficial Owner | 250,551,964 | Long Position | 15.98% | | Tianjin Dehou Investment Management Partnership (Limited Partnership) | Interest in Controlled Corporation | 103,555,231 | Long Position | 6.60% | - Mr. Cai Xiaoming beneficially owns the entire share capital of Chuangyi Co., Ltd. and Zhenhua International Co., Ltd., and is therefore deemed to be interested in the aggregate shares held by both companies[55](index=55&type=chunk) - Tianjin Changrong Technology Group Co., Ltd. beneficially owns the entire share capital of Changrong Shares (Hong Kong) Co., Ltd., and is therefore deemed to be interested in the shares held by Changrong Shares (Hong Kong) Co., Ltd.[56](index=56&type=chunk) [Purchase, Sale or Redemption of Securities](index=19&type=section&id=Purchase%2C%20Sale%20or%20Redemption%20of%20Securities) During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's securities, and no treasury shares were held as of June 30, 2024 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's securities (including sales of treasury shares) during the review period[57](index=57&type=chunk) - As of **June 30, 2024**, the Company did not hold any treasury shares[57](index=57&type=chunk) [Corporate Governance](index=19&type=section&id=Corporate%20Governance) The company has adopted and largely complied with the Corporate Governance Code, with two deviations concerning independent non-executive directors' tenure and the separation of Chairman and CEO roles - The Company has adopted and largely complied with the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules, save for code provisions B.2.4(b) and C.2.1[57](index=57&type=chunk) - Deviation from B.2.4(b): Mr. Lin Yinghong, Mr. Lu Tianneng, and Mr. Xiao Wenhao have each served as independent non-executive directors for over **9 years**. The Company believes their diverse backgrounds and professional development continue to bring fresh perspectives to the Board, and suitable candidates are being sought[58](index=58&type=chunk)[60](index=60&type=chunk) - Deviation from C.2.1: Mr. Huang Wanru is the Chairman of the Company, but no Chief Executive Officer has been appointed, with the role and functions collectively performed by all executive directors. The Board will review this from time to time and appoint a Chief Executive Officer when appropriate and necessary[59](index=59&type=chunk)[60](index=60&type=chunk) [Compliance with Model Code and Disclosure under Rule 13.21](index=20&type=section&id=Compliance%20with%20Model%20Code%20and%20Disclosure%20under%20Rule%2013.21) Directors confirmed compliance with the Model Code for securities transactions, and the company committed to Mr. Cai Xiaoming maintaining at least 50% beneficial shareholding for bank revolving loan facilities - The Company has made specific enquiries to all Directors, and all Directors have confirmed their compliance with the standards set out in the Model Code and the code of conduct regarding securities transactions by Directors throughout the review period[62](index=62&type=chunk) - As of **June 30, 2024**, the Group was granted certain revolving loan facilities totaling **HK$270 million** by a bank[62](index=62&type=chunk) - The Company has undertaken that Mr. Cai Xiaoming shall maintain at least **50%** beneficial shareholding or remain the single largest shareholder of the Company, and a breach of this undertaking may result in the loans becoming immediately due and repayable[62](index=62&type=chunk) [Changes in Director's Information](index=20&type=section&id=Changes%20in%20Director%27s%20Information) Mr. Lin Yinghong retired as an independent non-executive director after the annual general meeting of Synergis Holdings Limited on August 29, 2024 - Mr. Lin Yinghong retired as an independent non-executive director after the annual general meeting of Synergis Holdings Limited held on **August 29, 2024**, as he was not re-elected[61](index=61&type=chunk)[63](index=63&type=chunk) [Audit Committee and Closure of Register of Members](index=21&type=section&id=Audit%20Committee%20and%20Closure%20of%20Register%20of%20Members) The Audit Committee reviewed accounting principles and financial reporting, with interim financial information reviewed by independent auditors, and the share register will be closed to determine interim dividend eligibility - The Audit Committee, together with management, has reviewed the accounting principles and practices adopted by the Group and discussed internal controls, risk management, and financial reporting matters[64](index=64&type=chunk)[66](index=66&type=chunk) - The independent auditor, RSM Hong Kong Certified Public Accountants, has reviewed the Group's interim financial information for the review period[64](index=64&type=chunk)[66](index=66&type=chunk) - The Audit Committee comprises three independent non-executive directors (Mr. Lu Tianneng, Mr. Lin Yinghong, Mr. Xiao Wenhao) and one non-executive director (Ms. Li Li)[64](index=64&type=chunk)[66](index=66&type=chunk) - To determine eligibility for the proposed interim dividend, the register of members will be closed from **Wednesday, October 16, 2024**, to **Thursday, October 17, 2024**[65](index=65&type=chunk)[66](index=66&type=chunk) - Shareholders must lodge all transfer documents for registration by **4:30 p.m. on Tuesday, October 15, 2024**[65](index=65&type=chunk)[66](index=66&type=chunk) [Report on Review of Condensed Consolidated Financial Statements](index=22&type=section&id=Report%20on%20review%20of%20condensed%20consolidated%20financial%20statements) This section presents the auditor's review report on the condensed consolidated financial statements, outlining the scope and conclusion of their work [Introduction](index=22&type=section&id=Introduction) The auditor reviewed the condensed consolidated financial statements of Litu Holdings Limited for the six months ended June 30, 2024, prepared in accordance with HKAS 34 and Listing Rules - The auditor has reviewed the condensed consolidated financial statements of the Company and its subsidiaries for the six months ended **June 30, 2024**[68](index=68&type=chunk)[69](index=69&type=chunk) - The financial statements were prepared in accordance with Hong Kong Accounting Standard **34** "Interim Financial Reporting" and the relevant disclosure requirements of the Listing Rules[68](index=68&type=chunk)[69](index=69&type=chunk) - The Company's directors are responsible for the preparation and presentation of the financial statements[68](index=68&type=chunk)[69](index=69&type=chunk) [Scope of Review](index=23&type=section&id=Scope%20of%20Review) The auditor conducted the review in accordance with Hong Kong Standard on Review Engagements 2410, primarily through inquiries and analytical procedures, which is less extensive than an audit - The review was conducted in accordance with Hong Kong Standard on Review Engagements **2410** issued by the Hong Kong Institute of Certified Public Accountants[71](index=71&type=chunk) - The review included making inquiries of persons responsible for financial and accounting matters and applying analytical and other review procedures[71](index=71&type=chunk) - The scope of a review is substantially less than an audit conducted in accordance with Hong Kong Standards on Auditing, and consequently, no audit opinion is expressed[71](index=71&type=chunk) [Conclusion](index=23&type=section&id=Conclusion) Based on the review, the auditor found no matters suggesting that the condensed consolidated financial statements were not prepared in all material respects in accordance with HKAS 34 - Nothing has come to the auditor's attention that causes them to believe that the condensed consolidated financial statements are not prepared, in all material respects, in accordance with Hong Kong Accounting Standard **34**[72](index=72&type=chunk) [Condensed Consolidated Statement of Comprehensive Income](index=23&type=section&id=Condensed%20consolidated%20statement%20of%20comprehensive%20income) This section provides a summary of the company's financial performance, including profit or loss and other comprehensive income, for the reporting period [Comprehensive Income Analysis](index=23&type=section&id=Comprehensive%20Income%20Analysis) For the six months ended June 30, 2024, the company achieved a profit of HK$27.579 million, a significant improvement from last year's loss, but total comprehensive loss was HK$17.62 million due to exchange differences Key Data from Condensed Consolidated Statement of Comprehensive Income | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Revenue from continuing operations | 318,598 | 335,460 | -5.0% | | Gross profit | 79,048 | 55,698 | +41.9% | | Other net gains and losses | 1,511 | (62,543) | Turned to profit | | Profit/(Loss) before tax | 42,965 | (34,986) | Turned to profit | | Profit/(Loss) for the period from continuing operations | 31,687 | (42,224) | Turned to profit | | Loss for the period from discontinued operations | (4,108) | (9,433) | Loss narrowed | | Profit/(Loss) for the period | 27,579 | (51,657) | Turned to profit | | Profit/(Loss) attributable to owners of the Company | 28,811 | (51,290) | Turned to profit | | Loss attributable to non-controlling interests | (1,232) | (367) | Loss widened | | Exchange differences arising on translation to presentation currency | (45,199) | (93,967) | Loss narrowed | | Total comprehensive loss for the period | (17,620) | (145,624) | Loss narrowed | | Basic and diluted earnings/(loss) per share (HK$) | 0.018 | (0.033) | Turned to profit | [Condensed Consolidated Statement of Financial Position](index=26&type=section&id=Condensed%20consolidated%20statement%20of%20financial%20position) This section provides a snapshot of the company's assets, liabilities, and equity at the end of the reporting period [Financial Position Overview](index=26&type=section&id=Financial%20Position%20Overview) As of June 30, 2024, total assets less current liabilities slightly decreased, but net current assets and bank balances and cash significantly increased, indicating improved liquidity Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Property, plant and equipment | 700,806 | 735,007 | -4.65% | | Investment properties | 158,127 | 168,599 | -6.21% | | Goodwill | 601,177 | 615,939 | -2.39% | | Inventories | 33,515 | 72,486 | -53.77% | | Trade receivables | 217,371 | 242,576 | -10.39% | | Bank balances and cash | 501,593 | 345,798 | +45.06% | | Assets classified as held for sale | 292,694 | 307,373 | -4.80% | | Trade payables | 118,928 | 189,418 | -37.21% | | Bank borrowings | 208,344 | 131,550 | +58.37% | | Net current assets | 616,463 | 577,716 | +6.70% | | Net assets | 2,139,035 | 2,156,655 | -0.82% | | Equity attributable to owners of the Company | 2,115,710 | 2,131,555 | -0.74% | | Total equity | 2,139,035 | 2,156,655 | -0.82% | [Condensed Consolidated Statement of Changes in Equity](index=29&type=section&id=Condensed%20consolidated%20statement%20of%20changes%20in%20equity) This section details the changes in the company's equity components over the reporting period, including profit, other comprehensive income, and dividend distributions [Equity Changes Analysis](index=29&type=section&id=Equity%20Changes%20Analysis) For the six months ended June 30, 2024, equity attributable to owners of the company slightly decreased, but profit for the period offset some negative impacts from exchange differences and other comprehensive losses Key Data from Condensed Consolidated Statement of Changes in Equity | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Profit/(Loss) for the period | 28,811 | (51,290) | Turned to profit | | Other comprehensive loss | (42,721) | (93,260) | Loss narrowed | | Total comprehensive loss for the period | (13,910) | (144,550) | Loss narrowed | | Proposed interim dividend | 31,358 | - | New | | Equity attributable to owners of the Company at end of period | 2,115,710 | 2,242,622 | -5.66% | | Total equity at end of period | 2,139,035 | 2,266,798 | -5.64% | - Chinese subsidiaries are required to establish statutory reserves, appropriated from after-tax profits, with the amount and basis of appropriation determined annually by the Board[83](index=83&type=chunk)[85](index=85&type=chunk) - Equity related to assets classified as held for sale represents amounts recognized in other comprehensive income/loss and accumulated in equity related to assets held for sale[84](index=84&type=chunk)[85](index=85&type=chunk) [Condensed Consolidated Statement of Cash Flows](index=30&type=section&id=Condensed%20consolidated%20statement%20of%20cash%20flows) This section outlines the cash inflows and outflows from operating, investing, and financing activities, providing insights into the company's liquidity and solvency [Cash Flow Analysis](index=30&type=section&id=Cash%20Flow%20Analysis) For the six months ended June 30, 2024, net cash from operating activities decreased, but net cash from investing and financing activities turned from outflow to inflow, leading to a significant increase in cash and cash equivalents at period-end Key Data from Condensed Consolidated Statement of Cash Flows | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | Net cash generated from operating activities | 79,467 | 98,558 | -19.47% | | Net cash generated from/(used in) investing activities | 4,363 | (6,003) | Turned to inflow | | Net cash generated from/(used in) financing activities | 79,879 | (43,973) | Turned to inflow | | Net increase/(decrease) in cash and cash equivalents | 163,709 | 48,582 | +237.00% | | Cash and cash equivalents at end of period | 501,593 | 339,380 | +47.79% | - Cash inflow from investing activities mainly included interest received, deposits received from disposal of a subsidiary, and proceeds from disposal of property, plant and equipment[87](index=87&type=chunk) - Cash inflow from financing activities mainly came from new bank borrowings, offsetting outflows from repayment of bank borrowings and lease liabilities[87](index=87&type=chunk) - During the period, the Group directly settled bills payable of approximately **HK$21.177 million** (H1 2023: approximately HK$16.271 million) with pledged bank deposits[90](index=90&type=chunk)[91](index=91&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=32&type=section&id=Notes%20to%20the%20condensed%20consolidated%20financial%20statements) This section provides detailed explanations and breakdowns of the figures presented in the condensed consolidated financial statements, including accounting policies, segment information, and other disclosures [1. General Information](index=33&type=section&id=1.%20General%20Information) Litu Holdings Limited, incorporated in the Cayman Islands and listed in Hong Kong, is ultimately controlled by Mr. Cai Xiaoming, primarily engaged in printing, packaging, RFID products, and investment property leasing - Litu Holdings Limited was incorporated in the Cayman Islands on **November 11, 2008**, and its shares are listed on the Main Board of The Stock Exchange of Hong Kong[94](index=94&type=chunk)[97](index=97&type=chunk) - The ultimate controlling party is Mr. Cai Xiaoming[94](index=94&type=chunk)[97](index=97&type=chunk) - The Group is principally engaged in the printing of cigarette packaging, manufacturing of paper packaging materials, sales of RFID products, printing of packaging and decorative printed products, research and development of printing technology, wholesale and import/export of packaging products and other related services, and investment property leasing[95](index=95&type=chunk)[97](index=97&type=chunk) - The Company's functional currency is **RMB**, and the condensed consolidated financial statements are presented in **HKD**[95](index=95&type=chunk)[97](index=97&type=chunk) [2. Basis of Preparation](index=33&type=section&id=2.%20Basis%20of%20Preparation) The condensed consolidated financial statements are prepared in compliance with HKAS 34 "Interim Financial Reporting" and applicable disclosure requirements of Appendix 16 to the Listing Rules - The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard **34** "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix **16** to the Listing Rules[96](index=96&type=chunk)[97](index=97&type=chunk) [3. Principal Accounting Policies](index=34&type=section&id=3.%20Principal%20Accounting%20Policies) The condensed consolidated financial statements are prepared on a historical cost basis, with no significant impact from new HKFRS amendments, and the Group has not early adopted any new or revised HKFRS - The condensed consolidated financial statements are prepared on a historical cost basis[98](index=98&type=chunk)[105](index=105&type=chunk) - The Group has applied for the first time certain amendments to Hong Kong Financial Reporting Standards (HKFRS) issued by the Hong Kong Institute of Certified Public Accountants that are mandatorily effective for annual periods beginning on or after **January 1, 2024**[98](index=98&type=chunk)[105](index=105&type=chunk) - The application of the amendments has no material impact on the Group's financial position and performance and/or disclosures for the current and prior periods[100](index=100&type=chunk)[105](index=105&type=chunk) - The Group has not early adopted any new/revised HKFRS that have been issued but are not yet effective for the financial year beginning on **January 1, 2024**[109](index=109&type=chunk)[110](index=110&type=chunk) [4. Revenue](index=36&type=section&id=4.%20Revenue) The Group's continuing operations revenue primarily derives from printing and manufacturing paper packaging and related materials, with cigarette packaging being the main income source, largely recognized over time and from customers in China Revenue Analysis from Continuing Operations | Revenue Source | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | | :--- | :--- | :--- | | Sale of goods | 301,621 | 320,692 | | Rental income from investment properties | 16,977 | 14,768 | | **Total revenue from continuing operations** | **318,598** | **335,460** | | Sale of goods from discontinued operations | 23,504 | 20,857 | | **Total** | **342,102** | **356,317** | Revenue Classification by Type of Goods from Continuing Operations | Type of Goods | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | | :--- | :--- | :--- | | Printing of cigarette packaging | 297,233 | 276,037 | | Manufacturing of paper packaging materials | 4,180 | 42,995 | | Other related products | 208 | 1,660 | | **Total sale of goods from continuing operations** | **301,621** | **320,692** | | Sale of RFID products from discontinued operations | 23,504 | 20,857 | | **Total** | **325,125** | **341,549** | - For continuing operations, revenue from printing of cigarette packaging is primarily recognized over time (**HK$297,233 thousand**), while manufacturing of paper packaging materials and other related products are recognized at a point in time (total **HK$4,388 thousand**)[118](index=118&type=chunk) - Revenue from external customers (presented by customer location) for the Group primarily originates from **China**[120](index=120&type=chunk)[121](index=121&type=chunk) [5. Segment Information](index=40&type=section&id=5.%20Segment%20Information) The Group's reportable segments include printing and manufacturing paper packaging, sales of RFID products (discontinued), and investment property leasing, with the former remaining the main contributor and the latter showing strong profit growth - The Group's operating and reportable segments are currently: (i) printing and manufacturing of paper packaging and related materials; (ii) sales of RFID products (included in discontinued operations); and (iii) investment property leasing[122](index=122&type=chunk) Segment Revenue and Results for H1 2024 | Segment | Revenue (HK$ thousand) | Results (HK$ thousand) | | :--- | :--- | :--- | | Printing and Manufacturing of Paper Packaging and Related Materials | 301,621 | 68,812 | | Investment Property Leasing | 16,977 | 4,461 | | Subtotal from continuing operations | 318,598 | 73,273 | | Sales of RFID products (discontinued operations) | 23,504 | (1,930) | Segment Revenue and Results for H1 2023 | Segment | Revenue (HK$ thousand) | Results (HK$ thousand) | | :--- | :--- | :--- | | Printing and Manufacturing of Paper Packaging and Related Materials | 320,692 | 47,930 | | Investment Property Leasing | 14,768 | 1,555 | | Subtotal from continuing operations | 335,460 | 49,485 | | Sales of RFID products (discontinued operations) | 20,857 | (1,071) | - Segment results refer to the profit or loss earned (generated) by each segment, without allocation of company management expenses, directors' remuneration, share of results of an associate, finance costs, unallocated other income, unallocated other net gains and losses, etc[126](index=126&type=chunk)[128](index=128&type=chunk) - All segment revenue is derived from external customers[127](index=127&type=chunk)[128](index=128&type=chunk) [6. Taxation](index=42&type=section&id=6.%20Taxation) Income tax expense from continuing operations significantly increased due to current period EIT and under-provision for prior years, with no Hong Kong profits tax provision and varying EIT rates in China Income Tax Expense from Continuing Operations | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | Change | | :--- | :--- | :--- | :--- | | PRC Enterprise Income Tax (EIT) | 10,257 | 8,176 | +25.45% | | Under/(Over) provision for EIT in prior years | 6,146 | (607) | Increase | | Deferred tax | (5,125) | (331) | Decrease | | **Income tax expense from continuing operations** | **11,278** | **7,238** | **+55.82%** | | Income tax credit from discontinued operations | (80) | (33) | Credit increased | | **Total tax expense for the period** | **11,198** | **7,205** | **+55.42%** | - No provision for Hong Kong profits tax has been made as the Group did not generate or derive any assessable profits in Hong Kong[133](index=133&type=chunk) - PRC Enterprise Income Tax is calculated at the prevailing PRC tax rates ranging from **15% to 25%**[133](index=133&type=chunk) - Certain PRC subsidiaries (i.e. high-tech enterprises) are entitled to a reduced EIT rate of **15%** for three years from the approval date[133](index=133&type=chunk) - PRC withholding income tax is applicable to dividends payable to investors classified as "non-PRC resident tax enterprises", with a **5%** withholding tax rate for Hong Kong resident companies[136](index=136&type=chunk)[137](index=137&type=chunk) - Deferred tax has been provided for undistributed earnings of all subsidiaries and an associate[136](index=136&type=chunk)[137](index=137&type=chunk) [7. Other Net Gains and Losses](index=45&type=section&id=7.%20Other%20Net%20Gains%20and%20Losses) Net other gains from continuing operations turned from a loss to a gain, primarily due to significant reductions in goodwill and associate impairment losses, as well as foreign exchange gains and gains from disposal of property, plant and equipment Composition of Other Net Gains and Losses from Continuing Operations | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | | :--- | :--- | :--- | | Net foreign exchange gains/(losses) | 459 | (372) | | Gains/(losses) on disposal of property, plant and equipment | 199 | (2,203) | | Impairment loss on goodwill | - | (40,000) | | Impairment loss on interests in associates | - | (20,000) | | Net reversal of loss allowance for trade and other receivables and contract assets | 853 | 259 | | Loss on derecognition of a subsidiary | - | (226) | | **Total from continuing operations** | **1,511** | **(62,543)** | | Total from discontinued operations | (188) | (7,895) | | **Total** | **1,323** | **(70,438)** | [8. Profit (Loss) Before Taxation](index=47&type=section&id=8.%20Profit%20%28Loss%29%20Before%20Taxation) Profit (loss) before taxation is derived after deducting finance costs, staff costs, amortization, depreciation, inventory costs, government grants, and investment property operating expenses Key Deductions from Continuing Operations | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | | :--- | :--- | :--- | | Finance costs | 1,980 | 2,160 | | Total staff costs | 41,641 | 41,234 | | Amortisation of intangible assets | 16 | 603 | | Total depreciation | 50,306 | 50,200 | | Cost of inventories | 226,416 | 279,762 | | Government grants (included in other income) | (478) | (1,490) | | Direct operating expenses from investment properties that generated rental income | 946 | 885 | | Direct operating expenses from investment properties that did not generate rental income | 116 | 176 | - Cost of inventories for continuing operations included staff costs of approximately **HK$17.93 million** (H1 2023: HK$20.17 million) and depreciation and amortisation of approximately **HK$17.909 million** (H1 2023: HK$22.89 million)[141](index=141&type=chunk)[142](index=142&type=chunk) Key Deductions from Discontinued Operations | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | | :--- | :--- | :--- | | Finance costs | 302 | - | | Total staff costs | 5,348 | 3,651 | | Depreciation of property, plant and equipment | - | 4,039 | | Cost of inventories | 24,496 | 21,339 | | Research expenses | 1,146 | 2,757 | [9. Dividends](index=48&type=section&id=9.%20Dividends) The Board determined to pay an interim dividend of HK 2 cents per share for the six months ended June 30, 2024, totaling approximately HK$31.358 million, with no interim dividend paid in the prior period - A final dividend of **HK 4 cents** per share, totaling **HK$62.715 million**, for the year ended **December 31, 2022**, was declared and paid during the six months ended **June 30, 2023**[148](index=148&type=chunk)[151](index=151&type=chunk) - The Directors of the Company have determined to pay an interim dividend of **HK 2 cents** per share (H1 2023: nil) for the six months ended **June 30, 2024**, amounting to approximately **HK$31.358 million**[149](index=149&type=chunk)[151](index=151&type=chunk) [10. Earnings (Losses) Per Share](index=49&type=section&id=10.%20Earnings%20%28Losses%29%20Per%20Share) For the six months ended June 30, 2024, basic earnings per share attributable to owners of the company was HK$0.018, a turnaround from a loss of HK$0.033 in the prior period, with diluted EPS being the same due to no potential ordinary shares Earnings (Losses) Per Share Calculation Data | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Profit/(Loss) for the period from continuing operations attributable to owners of the Company (HK$ thousand) | 31,687 | (42,224) | | Loss for the period from discontinued operations attributable to owners of the Company (HK$ thousand) | (2,876) | (9,066) | | **Profit/(Loss) for the period attributable to owners of the Company for basic earnings/(losses) per share calculation (HK$ thousand)** | **28,811** | **(51,290)** | | Weighted average number of ordinary shares in issue (thousand shares) | 1,567,885 | 1,567,885 | | **Basic and diluted earnings/(losses) per share (HK$)** | **0.018** | **(0.033)** | - For the six months ended **June 30, 2024**, and **2023**, diluted earnings (losses) per share were the same as basic earnings (losses) per share as there were no potential ordinary shares in existence[154](index=154&type=chunk) [11. Property, Plant and Equipment Movements](index=50&type=section&id=11.%20Property%2C%20Plant%20and%20Equipment%20Movements) During the interim period, the Group disposed of certain plant and machinery, realizing a gain of HK$0.199 million, and acquired property, plant and equipment totaling approximately HK$25.085 million for business expansion - During the period, the Group disposed of plant and machinery with a total carrying amount of approximately **HK$11.874 million** (H1 2023: HK$17.128 million) for proceeds of approximately **HK$12.073 million** (H1 2023: HK$14.925 million)[156](index=156&type=chunk) - A gain of **HK$0.199 million** (H1 2023: loss of HK$2.203 million) was recorded on disposal[156](index=156&type=chunk) - During the period, the Group paid approximately **HK$25.085 million** (H1 2023: HK$20.373 million) for the acquisition of property, plant and equipment to expand its business[156](index=156&type=chunk) [12. Goodwill](index=51&type=section&id=12.%20Goodwill) As of June 30, 2024, the carrying amount of goodwill was approximately HK$601.2 million, a slight decrease from year-end 2023, with no impairment loss recognized during the period Goodwill Movements | Metric | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | | At beginning of reporting period | 615,939 | 728,704 | | Impairment loss recognised | - | (92,693) | | Exchange differences | (14,762) | (20,072) | | **At end of reporting period** | **601,177** | **615,939** | - For the six months ended **June 30, 2024**, the Directors considered that there were no indications of impairment for any cash-generating units containing goodwill[158](index=158&type=chunk) - For the six months ended **June 30, 2023**, an impairment loss of **HK$48.209 million** was recognized in aggregate for cash-generating units 1, 5, and 7, mainly due to the cessation of manufacturing operations at the Shenzhen plant and a decline in the market value of the premises[158](index=158&type=chunk) [13. Movements in Intangible Assets](index=51&type=section&id=13.%20Movements%20in%20Intangible%20Assets) Intangible assets, primarily licenses and concessions, had a carrying amount of approximately HK$0.44 million, with amortization of approximately HK$0.016 million during the interim period - Intangible assets refer to licenses and concessions with a carrying amount of approximately **HK$0.44 million** (December 31, 2023: HK$0.467 million)[159](index=159&type=chunk)[160](index=160&type=chunk) - During the interim period, amortization of intangible assets was approximately **HK$0.016 million** (H1 2023: HK$0.603 million)[159](index=159&type=chunk)[160](index=160&type=chunk) [14. Trade Receivables](index=52&type=section&id=14.%20Trade%20Receivables) As of June 30, 2024, total trade receivables were HK$217.4 million, a decrease from year-end 2023, with credit terms of 60 to 90 days and most receivables due within 90 days Trade Receivables | Metric | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Trade receivables from third parties | 219,060 | 245,037 | | Less: Loss allowance for credit losses | (1,689) | (2,461) | | **Net trade receivables** | **217,371** | **242,576** | - The Group grants credit terms of **60 to 90 days** to its trade customers[163](index=163&type=chunk)[164](index=164&type=chunk) Ageing Analysis of Trade Receivables (by invoice date) | Ageing | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | | 0–90 days | 192,379 | 220,795 | | 91–180 days | 16,928 | 10,092 | | 181–365 days | 8,897 | 9,504 | | Over 365 days | 856 | 4,646 | | **Total** | **219,060** | **245,037** | - As of **June 30, 2024**, trade receivables included bills receivable of **HK$9.047 million** (December 31, 2023: HK$11.578 million), all of which are due within one year[166](index=166&type=chunk) [15. Contract Assets](index=54&type=section&id=15.%20Contract%20Assets) As of June 30, 2024, contract assets decreased to HK$34.242 million, mainly due to fewer ongoing contracts, primarily related to unbilled cigarette packaging printing work Contract Assets | Metric | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Contract assets | 34,242 | 50,836 | | Less: Loss allowance for credit losses | (165) | - | - Contract assets primarily represent the Group's right to consideration for work completed but not yet billed, as this right is conditional on the Group's future performance in delivering goods involved in cigarette packaging printing to customers as of the reporting date[168](index=168&type=chunk) - Contract assets are typically reclassified to trade receivables upon delivery of products to customers[168](index=168&type=chunk) - The decrease in contract assets resulted from a reduction in ongoing contracts as of **June 30, 2024**[168](index=168&type=chunk) - Consideration is payable upon delivery and acceptance of finished goods by the customer or notification of order cancellation by the customer, whichever is earlier[169](index=169&type=chunk)[170](index=170&type=chunk) [16. Trade Payables](index=55&type=section&id=16.%20Trade%20Payables) As of June 30, 2024, total trade payables significantly decreased to HK$118.9 million, with credit terms ranging from 30 to 180 days, and sufficient cash maintained for timely payments Trade Payables | Metric | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Trade payables to third parties | 118,811 | 189,244 | | Trade payables to related parties | 117 | 174 | | **Total trade payables** | **118,928** | **189,418** | - Credit terms for purchases of goods range from **30 to 180 days**[173](index=173&type=chunk) Ageing Analysis of Trade Payables (by date of receipt of goods/invoice date) | Ageing | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | | 0–30 days | 59,319 | 95,964 | | 31–90 days | 28,315 | 71,733 | | 91–180 days | 27,347 | 21,633 | | 181–365 days | 3,947 | - | | Over 365 days | - | - | | **Total** | **118,928** | **189,418** | - As of **June 30, 2024**, bills amounting to **HK$19.158 million** (December 31, 2023: HK$46.145 million) were transferred to suppliers to settle trade payables[174](index=174&type=chunk) [17. Bank Borrowings](index=56&type=section&id=17.%20Bank%20Borrowings) As of June 30, 2024, the Group's unsecured bank borrowings significantly increased to HK$208.3 million, all fixed-rate with effective interest rates between 2.80% and 5.05% per annum Bank Borrowings | Metric | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Unsecured bank borrowings | 208,344 | 131,550 | - Bank borrowings refer to unsecured bank loans covered by various cross-guarantee arrangements entered into by the Group's entities[175](index=175&type=chunk) - Bank borrowings with a repayment on demand clause are classified as current liabilities, even if the Directors do not expect the bank to exercise that right[175](index=175&type=chunk) - As of **June 30, 2024**, all bank borrowings were fixed-rate borrowings, with effective interest rates ranging from **2.80% to 5.05%** per annum (December 31, 2023: 3.10% to 3.20%)[179](index=179&type=chunk)[180](index=180&type=chunk) [18. Share Capital](index=57&type=section&id=18.%20Share%20Capital) As of June 30, 2024, the company's authorized share capital was HK$50 million (10 billion ordinary shares of HK$0.005 each), with issued and fully paid share capital of HK$7.839 million (1.5679 billion shares), consistent with year-end 2023 Share Capital Structure | Metric | Number of Shares | Amount (HK$ thousand) | | :--- | :--- | :--- | | Authorised share capital (ordinary shares of HK$0.005 each) | 10,000,000,000 | 50,000 | | Issued and fully paid share capital (ordinary shares of HK$0.005 each) | 1,567,884,634 | 7,839 | [19. Discontinued Operations and Assets Classified as Held for Sale](index=58&type=section&id=19.%20Discontinued%20Operations%20and%20Assets%20Classified%20as%20Held%20for%20Sale) The Group is in the process of disposing of 70% equity in subsidiary Jiangsu Lianheng Wuyu and 31% equity in associate Changde Jinpeng, with their assets and liabilities classified as held for sale [(a) Disposal of a Subsidiary](index=58&type=section&id=19%28a%29%20Disposal%20of%20a%20subsidiary) The company's wholly-owned subsidiary, Wealthy Dragon (China) Limited, agreed to sell 70% equity in Jiangsu Lianheng Wuyu Technology Co., Ltd. for RMB51.1 million, with completion expected in H2 2024 due to buyer's payment delay - On **May 29, 2023**, Wealthy Dragon (China) Limited, a wholly-owned subsidiary of the Company, entered into an agreement with a third party to dispose of **70%** equity interest in Jiangsu Lianheng Wuyu Technology Co., Ltd. for **RMB51.1 million** (approximately HK$56.018 million)[182](index=182&type=chunk)[183](index=183&type=chunk) - As of **June 30, 2024**, a deposit of approximately **RMB41.551 million** (approximately HK$44.459 million) has been received, but due to the buyer's delay in settling the final consideration, the disposal has not yet been completed and is expected to be completed in **H2 2024**[182](index=182&type=chunk)[183](index=183&type=chunk) Results of Discontinued Operations of Jiangsu Lianheng Wuyu | Metric | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 23,504 | 20,857 | | Cost of sales | (24,496) | (21,339) | | Gross loss | (992) | (482) | | Other income | 205 | 607 | | Other net gains and losses | (188) | (7,895) | | Selling and distribution expenses | (938) | (589) | | Administrative expenses | (1,973) | (1,107) | | Finance costs | (302) | - | | Loss before tax | (4,188) | (9,466) | | Taxation | 80 | 33 | | **Loss for the period from discontinued operations** | **(4,108)** | **(9,433)** | | Net cash inflow/(outflow) from operating activities | (10,610) | 11,094 | | Net cash inflow/(outflow) from investing activities | (495) | (1,712) | | Net cash inflow/(outflow) from financing activities | 14,841 | (12,779) | | **Net cash inflow/(outflow)** | **3,736** | **(3,397)** | Assets Classified as Held for Sale and Related Liabilities of Jiangsu Lianheng Wuyu | Metric | June 30, 2024 (HK$ thousand) | December 31, 2023 (HK$ thousand) | | :--- | :--- | :--- | | Property and equipment | 30,666 | 34,291 | | Inventories | 69,773 | 66,472 | | Trade and other receivables | 6,572 | 20,676 | | Bank balances | 4,852 | 868 | | **Total assets classified as held for sale** | **114,432** | **124,909** | | Trade and other payables | 18,848 | 39,633 | | Bank borrowings | 16,050 | - | | **Total liabilities associated with assets classified as held for sale** | **38,454** | **43,044** | [(b) Disposal of Interest in an Associate](index=61&type=section&id=19%28b%29%20Disposal%20of%20interest%20in%20an%20associate) Guilian Development Co., Ltd. signed a framework agreement to sell its 31% equity in Changde Jinpeng Printing Co., Ltd., with the consideration to be determined by an independent valuation, and completion expected in H2 2024 - Guilian Development Co., Ltd. entered into a framework agreement on **December 28, 2023**, to dispose of its **31%** equity interest in Changde Jinpeng Printing Co., Ltd.[191](index=191&type=chunk)[192](index=192&type=chunk) - The consideration for the disposal will be determined with reference to a valuation conducted by an independent valuer jointly appointed by the Group and the buyer[191](index=191&type=chunk)[192](index=192&type=chunk) - The final sale and purchase agreement is expected to be signed and the disposal completed in **H2 2024**[191](index=191&type=chunk)[192](index=192&type=chunk) - The interest in an associate of **HK$178.3 million** (December 31, 2023: HK$182.5 million) has been classified as an asset held for sale in accordance with Hong Kong Financial Reporting Standard **5**[191](index=191&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk) [20. Pledge of or Restrictions on Assets](index=62&type=section&id=20.%20Pledge%20of%20or%20Restrictions%20on%20Assets) As of June 30, 2024, the Group's bank loan facilities were secured by property, plant and equipment, investment properties, corporate guarantees, and pledged bank deposits for bills payable - As of **June 30, 2024**, bank loan facilities granted to the Group were secured by property, plant and equipment with a carrying amount of approximately **HK$169.7 million** (December 31, 2023: HK$177.6 million), investment properties of approximately **HK$37 million** (December 31, 2023: HK$37.811 million), and corporate guarantees[195](index=195&type=chunk) - As of **June 30, 2024**, the Group pledged bank deposits of approximately **HK$8.591 million** (December 31, 2023: HK$21.832 million) to secure bank financing granted to the Group for bills payable[195](index=195&type=chunk) [21. Related Party Disclosures](index=63&type=section&id=21.%20Related%20Party%20Disclosures) The Group engaged in transactions and balances with related parties, with no raw material purchases from director-controlled companies or sales to associates during the period, and increased key management personnel remuneration Significant Transactions with Related Companies | Type of Transaction | H1 2024 (HK$ thousand) | H1 2023 (HK$ thousand) | | :--- | :--- | :--- | | Purchases of raw materials and related materials for printing and manufacturing of cigarette packaging (from companies controlled by a director) | - | 762 | | Sales of printing and manufacturing of cigarette packaging and related materials (to an associate) | - | 25,136 | - As of the end of the reporting period, trade payables due to a related party controlled by a director of the Company amounted to **HK$0.117 million** (December 31, 2023: HK$0.174 million)[200](index=200&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 318,598,000, a decrease of 5.2% compared to HKD 335,460,000 for the same period in 2023[1] - Gross profit increased to HKD 79,048,000, representing a significant increase of 41.9% from HKD 55,698,000 in the prior year[1] - The net profit before tax for continuing operations was HKD 42,965,000, compared to a loss of HKD 34,986,000 in the same period last year[1] - The total comprehensive loss for the period was HKD 17,620,000, a significant improvement from a loss of HKD 145,624,000 in the prior year[2] - The company reported a basic and diluted loss per share from continuing operations of HKD 0.020, compared to a loss of HKD 0.027 in the same period last year[2] - The company achieved a profit attributable to owners of approximately HKD 28.8 million for the six months ended June 30, 2024, compared to a loss of HKD 51.3 million for the same period in 2023, indicating a significant turnaround[34] Assets and Liabilities - Total assets as of June 30, 2024, amounted to HKD 1,573,170,000, down from HKD 1,640,350,000 as of March 31, 2023[3] - Cash and cash equivalents increased to HKD 501,593,000 from HKD 345,798,000 in the previous year, indicating improved liquidity[3] - As of June 30, 2024, the total assets minus current liabilities amounted to HKD 2,189,633,000, compared to HKD 2,218,066,000 as of December 31, 2023, reflecting a decrease of approximately 1.3%[4] - The total liabilities were reported at HKD 508,288,000 as of June 30, 2024, compared to HKD 495,461,000 as of December 31, 2023, indicating an increase of approximately 2.7%[4] - The company’s total equity was reported at HKD 2,139,035,000, down from HKD 2,156,655,000, indicating a decrease of about 0.8%[4] Revenue Streams - The sales of goods in the printing and manufacturing segment amounted to HKD 301,621,000, down 5.9% from HKD 320,692,000 in the previous year[12] - Rental income from investment properties increased to HKD 16,977,000, up 14.9% from HKD 14,768,000 year-on-year[11] - The revenue from the sales of frequency identification products was HKD 23,504,000, an increase of 12.9% compared to HKD 20,857,000 in the same period last year[12] - The group’s revenue from external customers primarily came from the People's Republic of China, indicating a strong market presence in that region[14] - The printing and manufacturing segment reported a revenue decrease of 6.0% to HKD 301.6 million for the six months ended June 30, 2024, down from HKD 320.7 million for the same period in 2023[35] Operational Efficiency - The cost of sales decreased to HKD 239,550,000 from HKD 279,762,000, reflecting improved operational efficiency[1] - The segment performance for the printing and manufacturing division showed a profit of HKD 68,812 thousand for 2024, down from HKD 47,930 thousand in 2023, indicating a significant increase in profitability[15][16] - The company is centralizing production and management at its subsidiary in Bengbu to improve cost control and production efficiency, which is expected to enhance returns to shareholders[36] Tax and Expenses - The tax expense for continuing operations was HKD 11,278 thousand for 2024, compared to HKD 7,238 thousand for 2023, representing an increase of approximately 56.4%[18][19] - Administrative expenses increased by approximately 21.6% to about HKD 39,400,000, primarily due to salary and other benefits[44] - Financing costs decreased by approximately 9.1% to about HKD 2,000,000, attributed to a reduction in average bank borrowings[45] Dividends - The company declared an interim dividend of HKD 0.02 per share for the six months ended June 30, 2024, totaling approximately HKD 31,358,000, compared to zero for the same period in 2023[23] - The board proposed an interim dividend of HKD 0.02 per share for the review period, compared to no dividend in 2023[63] Future Plans and Market Strategy - The company has plans for market expansion and new product development, although specific details were not disclosed in the earnings call[1] - The company is focusing on increasing participation in tenders and seeking new market opportunities to mitigate the impact of declining tender prices and inflation[36] - The company is implementing measures to simplify management structures and improve decision-making efficiency in response to market challenges[34] Employee and Management - The company employed 8 and 615 full-time employees in Hong Kong and China respectively as of June 30, 2024[62] - The roles of the chairman and CEO are not held by the same individual, with the chairman being Mr. Wong Man Yu[65] Governance and Compliance - The company has adhered to the corporate governance code, with some exceptions regarding independent non-executive directors serving over nine years[64] - The audit committee reviewed the accounting principles and internal controls during the review period[67]

Financial Performance - The Group's total revenue from continuing operations decreased by 22.8% from approximately HK$928.5 million in 2022 to approximately HK$716.7 million in 2023[12]. - The Group recorded a loss attributable to owners of the Company of approximately HK$163.9 million, compared to a profit of approximately HK$6.2 million in 2022, resulting in basic losses per share of approximately HK16.3 cents[18]. - Revenue from the printing and manufacturing of paper packages and related materials was approximately HK$683.6 million, down from HK$890.6 million in 2022, accounting for approximately 95.4% of total revenue[32]. - Other income from continuing operations decreased by 29.3% to approximately HK$23.1 million in 2023, down from approximately HK$32.7 million in 2022, mainly due to a reduction in government grants[34]. - Other losses from continuing operations amounted to HK$167.5 million in 2023, compared to other gains of HK$15.9 million in 2022, primarily due to impairment losses on interests in an associate and goodwill[39]. - The share of results of associates turned from a profit of approximately HK$1.6 million for the year ended 31 December 2022 to a loss of approximately HK$30.4 million for the year ended 31 December 2023[48]. - Loss attributable to owners of the Company was approximately HK$163.9 million for the year ended 31 December 2023, compared to a profit of approximately HK$6.2 million for the year ended 31 December 2022[59]. - The loss was primarily due to a decline in share of results of an associate of approximately HK$32.0 million and recognition of impairment losses totaling approximately HK$159.1 million on interests in associates and goodwill[60]. Cost Management and Efficiency - The Group implemented measures to enhance inventory management and improve decision-making efficiency in response to operating pressures from declining tender prices and rising raw material costs[13]. - The Group focused resources on centralized management and production at Bengbu Jinhuangshan Rotogravure Printing Co., Ltd. to improve cost control and production efficiency[17]. - The Group's measures included implementing a tendering system for raw material purchases to enhance bargaining power and control costs[13]. - Selling and distribution expenses decreased by 22.4% to approximately HK$17.7 million in 2023 from approximately HK$22.8 million in 2022[41]. - Administrative expenses decreased by 36.0% to approximately HK$70.3 million in 2023 from approximately HK$109.8 million in 2022[42]. - Finance costs from continuing operations decreased by 57.7% from approximately HK$10.0 million for the year ended 31 December 2022 to approximately HK$4.2 million for the year ended 31 December 2023[46]. - The Group's total remuneration cost for the year ended 31 December 2023 was approximately HK$84.8 million, a decrease from approximately HK$127.3 million in 2022[90]. Economic Environment - The GDP of the People's Republic of China increased by 5.2% in 2023, higher than the 3.0% increase in 2022[11]. - The economic outlook for the PRC remains uncertain due to global inflation and various geopolitical factors, which may adversely affect the Group's operating environment in 2024[19]. - The outlook for the global and Chinese economy remains uncertain, which may adversely affect the Group's operating environment in 2024[22]. Dividends and Shareholder Returns - The Board does not recommend the payment of a final dividend for the year ended 31 December 2023, compared to HK4 cents per share in 2022[18]. - As of December 31, 2023, the company's reserves available for distribution amounted to approximately HK$6,222.3 million[113]. Assets and Liabilities - The Group's current ratio improved to 2.2 times in 2023, up from 1.5 times in 2022[65]. - The quick ratio also improved to 2.0 times in 2023, compared to 1.3 times in 2022[65]. - As of December 31, 2023, the Group had net current assets of approximately HK$577.7 million, an increase from approximately HK$321.1 million in 2022[67]. - The Group's bank balances and cash amounted to approximately HK$345.8 million as of December 31, 2023, compared to approximately HK$313.3 million in 2022[67]. - Outstanding bank borrowings decreased to approximately HK$131.6 million in 2023 from approximately HK$266.6 million in 2022[68]. - The Group's net cash position improved to approximately HK$236.1 million in 2023, up from approximately HK$137.9 million in 2022[68]. - Capital commitments increased to approximately HK$39.6 million in 2023, compared to approximately HK$7.4 million in 2022, mainly related to the development of an industrial park[76]. Corporate Governance and Compliance - The Group has complied with all relevant rules and regulations in the PRC that significantly impact its operations[98]. - The company has complied with the disclosure requirements of Chapter 14A of the Listing Rules regarding related party transactions[157]. - The company has maintained liability insurance for Directors and officers throughout the year[162]. - All three independent non-executive Directors have confirmed their independence as per the Listing Rules[149]. - The company has taken steps to ensure that all Directors are indemnified against actions incurred in the execution of their duties[161]. - The company generally complies with the Corporate Governance Code, with exceptions noted in provisions B.2.4(b), C.1.6, and C.2.1[198]. Employee and Social Responsibility - As of 31 December 2023, the Group had 582 employees, down from 663 in 2022[90]. - The Group emphasizes workplace safety, employee relations, and efficient resource use as part of its corporate culture[192]. - The Board is responsible for the Company's ESG strategy and conducts regular reviews of ESG-related matters[194]. - The board regularly reviews the company's environmental, social, and governance (ESG) performance and risks, ensuring adequate resources and training programs are in place[197].

Financial Performance - For the fiscal year ending December 31, 2023, the company reported revenue from continuing operations of HKD 716,658,000, a decrease of 22.8% compared to HKD 928,475,000 in the previous year[11]. - The company recorded a loss from continuing operations of HKD 156,143,000, compared to a loss of HKD 1,290,000 in the previous year, indicating a significant decline in performance[11]. - The company reported a net loss before tax of HKD 139,784,000, compared to a profit of HKD 7,351,000 in the previous year, highlighting a substantial downturn[11]. - The total comprehensive loss for the year amounted to HKD 255,767,000, compared to HKD 196,510,000 in the previous year, representing an increase of 30%[2]. - The company’s basic and diluted loss per share from continuing operations was HKD (0.100), compared to HKD (0.001) in the previous year[2]. - The company reported a significant loss attributable to shareholders, mainly due to a decrease in the share of joint venture performance by approximately HKD 32,000,000 and goodwill impairment losses of approximately HKD 92,700,000[113]. - The group reported a loss attributable to shareholders of approximately HKD 163.9 million for the year ended December 31, 2023, compared to a profit of HKD 6.2 million in 2022[140]. Revenue and Income - Other income for the year was HKD 23,146,000, down from HKD 32,743,000, reflecting a decrease of 29.3%[11]. - The company’s total revenue for the year ended December 31, 2023, was HKD 729,221 thousand, compared to HKD 683,145 thousand in 2022, reflecting a growth of approximately 6.7%[30]. - The total revenue from continuous operations was HKD 762,322 thousand, down from HKD 1,022,402 thousand, a decrease of 25.4%[44]. - The revenue from the printing and manufacturing of paper packaging and related materials was approximately HKD 683.6 million, accounting for about 95.4% of total revenue in 2023[130]. - Total revenue for the year ended December 31, 2023, was HKD 683,557,000, compared to HKD 607,056,000 in 2022, representing an increase of approximately 12.6%[190]. Costs and Expenses - The cost of sales for the year was HKD 589,519,000, down from HKD 828,810,000, resulting in a gross profit of HKD 127,139,000, an increase of 27.7% from HKD 99,665,000[11]. - Employee costs for continuing operations amounted to HKD 78.353 million in 2023, down 32.6% from HKD 116.216 million in 2022[88]. - The cost of inventory for continuing operations was HKD 452.558 million in 2023, a decrease of 24.1% from HKD 596.720 million in 2022[88]. - Sales and distribution expenses for the year ending December 31, 2023, decreased by 22.4% to approximately HKD 17,700,000 from HKD 22,800,000 for the year ending December 31, 2022, primarily due to reduced transportation and hospitality costs[107]. - Administrative expenses for the year ending December 31, 2023, decreased by 36.0% to approximately HKD 70,300,000 from HKD 109,800,000 for the year ending December 31, 2022[108]. Assets and Liabilities - Total assets decreased from HKD 2,554,213 thousand in 2022 to HKD 2,218,066 thousand in 2023, a decline of approximately 13.2%[14]. - Current liabilities decreased from HKD 640,448 thousand in 2022 to HKD 495,461 thousand in 2023, a reduction of about 22.7%[14]. - Trade receivables decreased from HKD 363,892 thousand in 2022 to HKD 242,576 thousand in 2023, a drop of approximately 33.3%[14]. - The company reported a net asset value of HKD 2,156,655 thousand in 2023, down from HKD 2,475,137 thousand in 2022, a decrease of about 12.9%[14]. - The group’s current ratio improved to 2.2 times in 2023 from 1.5 times in 2022, and the quick ratio improved to 2.0 times from 1.3 times[143]. Strategic Plans and Future Outlook - The company plans to focus on new product development and market expansion strategies to improve future performance[11]. - The company aims to enhance operational efficiency and reduce costs in response to the challenging market conditions[11]. - The company plans to expand its market presence in Brazil, India, Turkey, Portugal, and South Korea[55]. - The group aims to optimize its asset portfolio by selling non-core assets and focusing on core business development to enhance profitability and shareholder returns[155]. - The group plans to continue expanding its market presence in packaging while seeking maximum returns from investment properties[155]. Governance and Management - The company is committed to maintaining a clear division of responsibilities between the Chairman and the CEO, as per governance guidelines[182]. - The company has not yet appointed an individual to fill the vacancy of the Chief Executive Officer since the resignation of the previous CEO on April 22, 2022[183]. - The company is currently undergoing a review by the audit committee, indicating a focus on financial oversight and compliance[184]. Market Conditions and Challenges - The company has faced operational pressure due to increased competition and rising raw material costs in the tobacco industry[100]. - The economic outlook for China remains uncertain due to global inflation, competition between the US and China, and ongoing geopolitical tensions, which may adversely affect the Group's business environment in 2024[176].

Financial Performance - For the six months ended June 30, 2023, the company achieved revenue from continuing operations of approximately HK$335.5 million, with a total loss attributable to owners amounting to approximately HK$51.3 million and a total basic loss per share of approximately HK$0.033[9]. - Revenue from continuing operations decreased by approximately HK$144.0 million or 30.0% to HK$335.5 million compared to the same period in 2022[30]. - Revenue for the six months ended June 30, 2023, was HK$356,317,000, a decrease of 31.6% compared to HK$521,200,000 for the same period in 2022[183]. - The overall financial performance for the first half of 2023 indicates a significant decline in revenue across various segments compared to the previous year[183]. - The company reported a basic and diluted loss per share of HK$0.033 for the total operations, compared to earnings of HK$0.011 in the previous year[129]. - Total comprehensive loss for the period was HK$145,624,000, compared to HK$68,044,000 in the previous year, reflecting an increase of 114%[131]. Revenue Breakdown - Revenue from the sale of goods in continuing operations was HK$320,692,000, down 31.0% from HK$465,232,000 in the previous year[186]. - Revenue from discontinued operations, specifically from the sale of RFID products, was HK$20,857,000, a decline of 50.0% from HK$41,686,000 in the prior year[186]. - The Group's revenue from printing cigarette packages was HK$276,037,000, down 27.2% from HK$379,175,000 in the previous year[186]. - Manufacturing of paper packaging materials generated revenue of HK$42,995,000, a decrease of 49.3% compared to HK$84,858,000 in the same period last year[186]. - Revenue from investment properties leasing increased slightly to HK$14,768,000 from HK$14,282,000, reflecting a growth of 3.4%[183]. Economic Environment - The gross domestic product (GDP) of the People's Republic of China increased by 5.5% compared to 2022, but the global economic outlook remains uncertain due to high inflation and geopolitical tensions[10]. - The ongoing geopolitical tensions and inflationary pressures are expected to adversely affect the company's operating environment in the second half of 2023[10]. Cost Management and Profitability - The company implemented measures to cope with profitability challenges, including simplifying management structure and enhancing inventory management[12]. - The company centralized its production resources to improve cost control and production efficiency, particularly in response to stringent environmental protection requirements[18]. - Selling and distribution expenses decreased by approximately HK$3.4 million or 34.2% to HK$6.6 million compared to the previous year[42]. - Administrative expenses decreased by approximately HK$39.0 million or 54.6% compared to the same period in 2022[43]. - Finance costs decreased by approximately HK$3.4 million or 61.0% due to a reduction in bank borrowings and interest rates[44]. Assets and Liabilities - As of June 30, 2023, net current assets increased to approximately HK$375.0 million from HK$321.1 million as of December 31, 2022, primarily due to a decrease in bank borrowings[58]. - Bank borrowings (repayable within one year) decreased to approximately HK$129.4 million from HK$266.6 million as of December 31, 2022[63]. - Total assets less current liabilities decreased to HK$2,328,306, down from HK$2,554,213 as of December 31, 2022, representing a decline of approximately 8.8%[134]. - Current liabilities decreased to HK$518,480 from HK$640,448, a reduction of approximately 19.0%[134]. Corporate Governance - The Company has complied with the Corporate Governance Code, except for specific provisions regarding independent non-executive directors[99]. - The roles of chairman and chief executive officer are currently performed collectively by all executive directors since April 22, 2022[102]. - The audit committee consists of three independent non-executive Directors and one non-executive Director, ensuring oversight of financial reporting[118]. Future Outlook - The Group plans to maximize leasing income from investment properties and actively expand into other packaging markets[25]. - The Group aims to explore acquisition opportunities and diversification into other profitable businesses for sustainable growth[26]. - Future outlook may include potential new product developments and market strategies to enhance revenue streams[200]. Shareholder Information - As of June 30, 2023, Mr. Cai Xiao Ming, David holds 901,456,892 shares, representing approximately 57.50% of the issued share capital[96]. - Profitcharm Limited, beneficially owned by Mr. Cai, holds 274,325,278 shares, accounting for about 17.50% of the issued share capital[96]. - The Company has not purchased, sold, or redeemed any of its securities during the review period[98].