[Financial Statements and Summary](index=2&type=section&id=Financial%20Statements%20and%20Summary) [Consolidated Performance](index=2&type=section&id=Consolidated%20Performance) The Group's H1 2024 revenue declined by 29.9% year-on-year, yet improved gross margin and expense control significantly narrowed losses, with attributable loss to equity holders decreasing from HKD 20.2 million to HKD 10.07 million Consolidated Performance Overview (HKD Thousands) | Metric (HKD Thousands) | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 538,975 | 769,700 | -29.9% | | Gross Profit | 75,503 | 69,021 | +9.4% | | Operating Results | 11,606 | (27,942) | Turnaround to Profit | | Loss for the Period | (13,191) | (39,149) | -66.7% | | Loss Attributable to Equity Holders | (10,069) | (20,197) | -50.1% | | Basic Loss Per Share (HKD) | (0.006) | (0.011) | -45.5% | [Financial Position](index=4&type=section&id=Financial%20Position) As of June 30, 2024, the Group remained in a net liability position, which slightly worsened, with total liabilities stable but increased net current liabilities indicating ongoing liquidity pressure, alongside overdue bank borrowings and covenant breaches Financial Position Summary (HKD Thousands) | Metric (HKD Thousands) | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Total Assets | 957,909 | 1,011,951 | -54,042 | | Total Liabilities | 1,695,408 | 1,701,330 | -5,922 | | Net Current Liabilities | (1,018,661) | (979,241) | -39,420 | | Net Liabilities | (737,499) | (689,379) | -48,120 | - As of June 30, 2024, the Group's total bank borrowings were **HKD 465 million**, with some overdue and in breach of covenants, and these debts are included in a consolidated restructuring plan[7](index=7&type=chunk)[15](index=15&type=chunk) [Cash Flow](index=5&type=section&id=Cash%20Flow) During the period, the Group's operating cash outflow significantly decreased, but continuous net outflows from investing and financing activities led to a decline in cash and cash equivalents from HKD 39.3 million at the beginning of the period to HKD 31.67 million Cash Flow Summary (HKD Thousands) | Metric (HKD Thousands) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (33) | (7,386) | | Net Cash Used in Investing Activities | (5,882) | (5,035) | | Net Cash Used in Financing Activities | (1,469) | (2,323) | | Net Decrease in Cash and Cash Equivalents | (7,384) | (14,744) | | Cash and Cash Equivalents at End of Period | 31,666 | 26,319 | [Going Concern Analysis](index=6&type=section&id=Going%20Concern%20Analysis) Auditors raised significant doubts about the Group's going concern ability due to substantial net current liabilities and net liabilities, along with overdue bank borrowings and litigation, while management's mitigation plans face significant uncertainties that may hinder asset realization and liability settlement in the normal course of business - As of June 30, 2024, the Group recorded a net loss of **HKD 13.19 million**, with net current liabilities reaching **HKD 1.019 billion** and net liabilities of **HKD 737 million**[7](index=7&type=chunk) - The Group has **HKD 434 million** in overdue bank borrowings and has breached several loan covenants, leading to litigation initiated by the relevant banks[7](index=7&type=chunk) - Management is taking measures to alleviate liquidity pressure, including negotiating renewals with banks, seeking waivers for default clauses, and expecting to resolve some debts through a consolidated restructuring plan; however, the success of these plans remains highly uncertain[7](index=7&type=chunk)[9](index=9&type=chunk) [Management Discussion and Analysis](index=15&type=section&id=Management%20Discussion%20and%20Analysis) [Industry and Business Review](index=15&type=section&id=Industry%20and%20Business%20Review) Facing challenges of insufficient domestic demand and declining pork consumption, the Group in H1 2024 focused on the 'Harbin Meat Union' brand, enhancing new product development and marketing, while strategically reducing production at low-profit facilities to improve overall profitability - Industry Background: In H1 2024, the domestic economy faced insufficient effective demand, with pork consumption projected to decline long-term, yet consumer trends are shifting towards high-quality, safe, and healthy products[31](index=31&type=chunk) - Business Strategy: The Group primarily operates under the 'Harbin Meat Union' brand, strengthening new product development and market promotion to meet diverse and quality-oriented consumer demands[32](index=32&type=chunk) [Segment Business Performance](index=16&type=section&id=Segment%20Business%20Performance) Upstream slaughtering revenue significantly declined due to strategic production cuts, but downstream processed meat products remained robust, with low-temperature meat products achieving counter-cyclical growth, becoming a core driver of stable revenue and profit, significantly enhancing the Group's overall gross margin Segment Revenue (HKD Millions) | Business Segment | H1 2024 Revenue (HKD Millions) | H1 2023 Revenue (HKD Millions) | YoY Change | | :--- | :--- | :--- | :--- | | Upstream - Chilled and Frozen Meat | 312 | 549 | -43.1% | | Downstream - Processed Meat Products | 227 | 232 | -2.2% | - High-value-added products performed prominently: - **Chilled meat** sales amounted to **HKD 270 million**, a 39.0% year-on-year decrease - **Low-temperature meat products** sales reached **HKD 154 million**, a 9.5% year-on-year increase, with their revenue contribution to downstream business rising from 61% to 68%[34](index=34&type=chunk)[40](index=40&type=chunk) [Financial Performance Analysis](index=17&type=section&id=Financial%20Performance%20Analysis) Despite a decline in total revenue, the Group's financial performance significantly improved, with overall gross margin substantially increasing from 9.0% to 14.0% driven by optimized high-margin downstream products, while operating expenses decreased by 33.5% year-on-year due to significant impairment provisions in the prior period, ultimately achieving a turnaround to operating profit Gross Margin by Segment | Gross Margin | H1 2024 | H1 2023 | Change (Percentage Points) | | :--- | :--- | :--- | :--- | | Group Overall | 14.0% | 9.0% | +5.0 | | Upstream Business | 1.4% | 1.1% | +0.3 | | Downstream Business | 31.4% | 25.8% | +5.6 | - Operating expenses were **HKD 66 million**, a 33.5% year-on-year decrease, primarily due to approximately **HKD 36 million** in non-current asset impairment losses recognized in the prior period[43](index=43&type=chunk) - Operating business achieved a profit of approximately **HKD 12 million**, compared to a loss of approximately **HKD 28 million** in the prior period, successfully turning losses into profits[44](index=44&type=chunk) - Net finance costs increased by 38.6% year-on-year to **HKD 25 million**, mainly due to increased accrued penalty interest from court judgments[45](index=45&type=chunk) [Financial Resources, Liquidity and Capital Structure](index=19&type=section&id=Financial%20Resources%2C%20Liquidity%20and%20Capital%20Structure) The Group's financial position remains severe with limited cash reserves and **HKD 434 million** in overdue bank borrowings and related litigation, which are part of a consolidated restructuring plan; management is actively communicating with banks and believes immediate repayment risk is low, yet significant uncertainty regarding going concern persists - As of June 30, 2024, cash and cash equivalents were approximately **HKD 32 million**, with total bank borrowings of **HKD 465 million**[48](index=48&type=chunk) - The Group failed to meet covenants for **HKD 434 million** in bank borrowings, which, along with **HKD 285 million** in interest, are overdue and included in a consolidated restructuring plan[49](index=49&type=chunk) - Management believes that despite defaults and litigation, ongoing communication with banks mitigates immediate repayment risk and will not materially adversely affect business operations[49](index=49&type=chunk) - The Group remains in a net liability position but possesses approximately **HKD 364 million** in non-current assets to support daily operations; management is confident in restoring a net asset position with economic improvement and internal efforts[50](index=50&type=chunk) [Human Resources and Environmental Responsibility](index=23&type=section&id=Human%20Resources%20and%20Environmental%20Responsibility) During the reporting period, the Group's total employee count decreased, while staff costs as a percentage of revenue remained stable; the company emphasizes protecting employee rights and actively fulfills environmental responsibilities by integrating green and low-carbon concepts into daily operations - As of June 30, 2024, the Group employed approximately **800 staff**, a decrease from approximately **1,000 staff** at the end of 2023[54](index=54&type=chunk) - Total staff costs for H1 were **HKD 35 million**, representing 6.4% of revenue (H1 2023: **HKD 51 million**, 6.6% of revenue)[54](index=54&type=chunk) - The Group actively promotes energy conservation, emission reduction, and circular economy, fostering green production methods through measures such as energy saving, recycling, and green packaging[55](index=55&type=chunk) [Corporate Governance and Other Matters](index=24&type=section&id=Corporate%20Governance%20and%20Other%20Matters) [Corporate Governance Practices](index=24&type=section&id=Corporate%20Governance%20Practices) The company generally complies with corporate governance codes, with one deviation: Ms. Zhu Yuan serves as both Board Chairman and CEO; the Board believes this arrangement currently facilitates efficient decision-making and business management, with long-term plans to identify a suitable CEO - The company deviates from the Corporate Governance Code's requirement for distinct roles between Chairman and CEO, as Ms. Zhu Yuan serves concurrently as Board Chairman and Chief Executive Officer[57](index=57&type=chunk) - The Board believes the current arrangement allows for more effective formulation and execution of business strategies, and with over half of the Board comprising independent non-executive directors, power balance is ensured[57](index=57&type=chunk) [Events After Reporting Period](index=14&type=section&id=Events%20After%20Reporting%20Period) Subsequent to the reporting period, an indirect non-wholly owned subsidiary of the Group signed an agreement to sell land and properties in Xinjiang County, China, for RMB 51 million (approximately HKD 55.59 million), with the transaction completed on August 5, 2024 - On August 5, 2024, Xinjiang Qixing, an indirect non-wholly owned subsidiary of the company, agreed to sell land and properties to Yuncheng Yuanhui Logistics Co Ltd for a total consideration of **RMB 51 million**[29](index=29&type=chunk)[61](index=61&type=chunk)

Financial Performance - In 2023, the company achieved revenue of HKD 1.411 billion, a decrease from HKD 2.162 billion in 2022, representing a decline of approximately 34.6%[19] - The loss attributable to equity holders was HKD 148 million, compared to a loss of HKD 15 million in 2022, indicating a significant increase in losses[19] - The sales revenue from deep-processed meat products was HKD 445 million, down from HKD 496 million in 2022, reflecting a decrease of about 10.3%[22] - The company recorded a net loss of approximately HKD 105 million from other activities, compared to a net income of HKD 27 million in 2022, primarily due to the assessment of certain non-operational facilities[23] - The sales revenue of chilled meat was HKD 835 million, a decrease of 43.1% compared to HKD 1.468 billion in 2022, accounting for approximately 59% of total revenue[36] - The revenue from low-temperature meat products was HKD 271 million, a decrease of 4.9% from HKD 285 million in 2022, representing about 19% of total revenue[36] - The slaughter volume decreased by approximately 19.8% to about 500,000 heads compared to the previous year[38] - Operating expenses for the year were HKD 177 million, accounting for 12.6% of total revenue, compared to 5.6% in 2022[43] - The total employee cost for the year was HKD 99 million, accounting for 7.0% of revenue, compared to HKD 106 million and 4.9% in 2022[52] - The group reported a loss attributable to equity holders of approximately HKD 695 million as of December 31, 2023[68] Production and Capacity - The production capacity for upstream slaughtering and downstream deep-processed meat products remained stable at approximately 3.35 million heads and 56,000 tons, respectively[18] - The domestic live pig output was 727 million heads in 2023, an increase of 3.8% year-on-year, while pork production reached 57.94 million tons, up 4.6%[10] - The average procurement price of live pigs was RMB 15.35 per kilogram, a year-on-year decrease of 19.3%[34] - The average procurement price of live pigs fluctuated between RMB 14.26 and 17.14 per kilogram during the review period[140] - The company has established a management mechanism to negotiate with at least three suppliers for the supply of live pigs and meat[138] Strategic Focus and Innovation - The company plans to continue focusing on innovation and quality management to enhance operational efficiency and competitiveness in 2024[8] - The company aims to develop new products that cater to changing consumer demands and trends, driving new growth points for performance[29] - The company is cautious in new product development, gradually introducing products that meet consumer demand through trial phases[142] Environmental and Social Responsibility - The group is committed to green low-carbon production methods and has increased investment in environmental protection and R&D[54] - The group aims to integrate energy-saving and green production concepts into its corporate culture for sustainable development[54] - The company is focused on reducing waste emissions during production processes to promote green transformation[54] - The group recognizes its responsibility as a public company and actively implements environmental protection measures[74] - The company has measures in place to minimize the impact of animal diseases or other epidemics on its business operations[130] Governance and Compliance - The company has adhered to the corporate governance code as per the Hong Kong Stock Exchange rules during the review year[78] - The board is responsible for approving and monitoring the overall strategy and policies of the group, including annual budgets and business plans[79] - The audit committee reviewed the group's annual and interim financial statements before submission to the board for approval[93] - The company has implemented a risk management and internal control system to ensure effective governance and compliance with the corporate governance code[89] - The company has established an audit committee, remuneration committee, and nomination committee to ensure compliance with the corporate governance code[88] Financial Risks and Debt Management - The company is currently in a net debt position as of December 31, 2023, with risks of failing to meet financial obligations[144] - The company has two overdue bank loans from state-owned commercial banks in China, and it is actively communicating with these banks to negotiate repayment plans and reduce penalties[196] - The board believes that the action plan to address overdue bank loans, if implemented as expected, will eliminate the auditor's uncertainty regarding the company's going concern status[198] - The company believes it has sufficient financial resources to support its operations and meet financial obligations due within the next twelve months[192] Shareholder Communication and Transparency - The company aims to provide high levels of information disclosure and financial transparency to shareholders and potential investors[158] - The company has adopted a shareholder communication policy to ensure shareholders can conveniently and timely access fair and understandable information[179] - The board of directors has reviewed the effectiveness of the shareholder communication policy, deeming it reasonable and effectively implemented[159] Quality Control and Supply Chain Management - The company has implemented a comprehensive quality control system with 21 inspection and quarantine processes for its products[148] - The company conducts regular assessments of supplier production sites to ensure the quality and supply capacity of raw materials[140] - The company emphasizes the quality and supply of raw materials, implementing measures to ensure supply chain stability, including contractual guarantees with suppliers[122] - The company has developed different strategies to cope with fluctuations in raw material prices, such as adjusting pig inventory based on expected price changes[124] Board Diversity and Effectiveness - The board consists of five members, including three independent non-executive directors, ensuring a diverse range of expertise in accounting, legal, and food engineering[96] - The board's gender diversity includes two female directors and three male directors, highlighting the company's commitment to gender representation[96] - The company emphasizes the importance of board diversity, considering factors such as gender, age, cultural background, and professional experience in its selection process[95] - The board has established a policy to review its diversity and effectiveness annually, ensuring continuous improvement in governance practices[95] Crisis Management - The company has established a crisis response procedure to quickly address any incidents that may affect consumer confidence[153] - The company has the capability to ensure product distribution and sales during disease outbreaks due to its nationwide layout[147]

Financial Performance - For the fiscal year ending December 31, 2023, the company reported total revenue of HKD 1,410,943,000, a decrease of 34.6% compared to HKD 2,162,440,000 in 2022[4] - The net loss for the year was HKD 201,293,000, significantly higher than the loss of HKD 25,329,000 reported in 2022, indicating a deterioration in financial performance[4] - The company’s total comprehensive loss for the year was HKD 194,786,000, compared to a loss of HKD 24,974,000 in the prior year[6] - The total reported segment revenue for 2023 was HKD 1,424,788,000, compared to HKD 2,166,027,000 in 2022, indicating a decrease of about 34.2%[31] - The total revenue for the fresh and frozen meat segment in 2023 was HKD 966,400,000, a decrease of 42% from HKD 1,666,115,000 in 2022[28] - The processed meat products segment generated revenue of HKD 444,543,000 in 2023, down from HKD 496,325,000 in 2022, representing a decline of approximately 10.4%[28] - The group reported other net losses of approximately HKD 105 million, primarily due to the write-off of non-productive assets and expected VAT recoveries[88] - The group reported an operating loss of approximately HKD 170 million, compared to a profit of approximately HKD 18 million in the previous year[91] Assets and Liabilities - As of December 31, 2023, the total equity attributable to the company's shareholders was HKD (689,379,000), a decline from HKD (494,593,000) in 2022[11] - The company’s current liabilities amounted to HKD 1,617,367,000, with a net current liability of HKD (979,241,000)[10] - The company’s non-current assets, including property, plant, and equipment, decreased to HKD 326,449,000 from HKD 449,037,000 in 2022[10] - The company’s total liabilities increased to HKD 1,170,268,000 in 2023 from HKD 1,122,566,000 in 2022, indicating a rise of approximately 4.2%[53] - The company’s accounts payable decreased to HKD 171,617,000 in 2023 from HKD 191,633,000 in 2022, a decline of about 10.5%[53] - The group’s total liabilities increased to HKD 1.701 billion as of December 31, 2023, up by HKD 30 million from HKD 1.672 billion on December 31, 2022[114] - The group’s property, plant, and equipment decreased to HKD 326 million from HKD 449 million the previous year, primarily due to an impairment loss of HKD 56 million[105] Cash Flow and Financing - The company’s cash and cash equivalents stood at HKD 39,298,000, an increase from HKD 33,210,000 in the previous year[10] - The company plans to actively negotiate with banks to update financing terms and seek additional funding sources to alleviate liquidity pressure[17] - The company had bank borrowings totaling HKD 437,069,000 as of December 31, 2023, slightly down from HKD 443,381,000 in 2022[55] - The group’s current and non-current bank borrowings amounted to HKD 446,196,000 and HKD 22,029,000, respectively, with cash and cash equivalents of only HKD 39,298,000[61] - The group is involved in a lawsuit with a bank for immediate repayment of HKD 437,069,000, with a judgment requiring repayment of HKD 506,208,000 including interest[62] - The group successfully negotiated a debt settlement with a bank for an outstanding debt of HKD 43,434,000 and interest of HKD 19,347,000, resulting in a debt settlement gain of HKD 12,713,000[60] - The group has two overdue bank loans from state-owned commercial banks in China and is negotiating for installment repayments and waivers on penalties[144] Shareholder Returns - The company did not recommend the distribution of dividends for the year ended December 31, 2023, consistent with the previous year[46] - The group will not declare a final dividend for the year ending December 31, 2023[66] Operational Insights - The group’s pig production volume for 2023 was 727 million heads, an increase of 3.8% year-on-year, while pork production reached 57.94 million tons, up 4.6% year-on-year[68] - The group is focusing on product quality and research and development to adapt to market changes[70] - The group anticipates steady growth in pork consumption driven by rising incomes and demand for processed meat products[68] - The group maintained an annual production capacity of approximately 3.35 million heads for upstream slaughtering and 56,000 tons for downstream deep-processed meat products as of December 31, 2023[79] Employee and Operational Costs - As of December 31, 2023, the group employed approximately 1,000 staff in mainland China and Hong Kong, a decrease from approximately 1,400 staff as of December 31, 2022[136] - Total employee costs for the year amounted to HKD 99 million, representing 7.0% of revenue, compared to HKD 106 million or 4.9% of revenue in 2022[136] Future Outlook and Strategic Plans - The board is optimistic about returning to a net asset position as the economic environment improves and management continues to enhance operational profitability[116] - The board anticipates that the "disclaimer of opinion" in the auditor's report may be removed by December 31, 2024, depending on the success of the action plan[121] - The company plans to exercise caution in capital expenditures for 2024, with an initial budget of approximately RMB 15 million primarily for ongoing projects and maintenance[132] - The group is committed to green low-carbon production methods and has increased investments in environmental protection and R&D[138] - The group aims to integrate energy-saving and green production concepts into its corporate culture for sustainable development[138] Audit and Compliance - The independent auditor's report indicated "unable to express an opinion" regarding the group's ability to continue as a going concern due to various uncertainties[139] - The audit committee has rigorously reviewed the financial statements and aligned its views with the board regarding the going concern basis[142] Challenges and Risk Management - The group is actively addressing challenges, including business losses and overdue bank loans, while maintaining regular communication with banks[141] - The communication process with banks involves multiple approval levels, which can extend the timeline for reaching a resolution[144]

Financial Performance - In the first half of 2023, the group's revenue was HKD 770 million, a decrease of 21.4% compared to HKD 979 million in the same period of 2022[35]. - The group recorded a loss attributable to equity holders of approximately HKD 20 million, compared to a loss of HKD 11 million in the first half of 2022[35]. - Fresh meat sales amounted to HKD 443 million, a decrease of 31.3% from HKD 644 million in the first half of 2022, accounting for approximately 57% of total revenue before internal sales[35]. - The sales revenue of deep-processed meat products was HKD 232 million, a decrease of approximately 10.2% compared to HKD 258 million in the first half of 2022[18]. - Revenue from low-temperature meat products was HKD 140 million, a decrease of approximately 3.1% compared to HKD 145 million in the same period last year, accounting for about 18% of total revenue before internal sales[65]. - Revenue from high-temperature meat products was HKD 92 million, down from HKD 113 million in the same period last year, representing approximately 12% of total revenue before internal sales[65]. - For the six months ended June 30, 2023, the company reported total revenue of HKD 549,207,000, a decrease of 24% compared to HKD 721,623,000 for the same period in 2022[173]. - Total revenue for the six months ended June 30, 2023, was HKD 780,918,000, a decrease of 20.2% compared to HKD 979,630,000 for the same period in 2022[194]. Profitability and Loss - The overall gross profit increased by 4.2% to HKD 69 million, with the overall gross margin rising by 2.2 percentage points to 9.0% compared to 6.8% in the same period last year[19]. - The gross margin for downstream processed meat products increased to 25.8%, up 6.9 percentage points from 18.9% in the same period last year[41]. - The operating loss for the review period was approximately HKD 28 million, compared to a profit of approximately HKD 9 million in the same period last year[71]. - The company incurred a total comprehensive loss of HKD 22,313,000 for the six months ended June 30, 2023[138]. - The consolidated loss for the period was HKD 39,149,000, compared to a loss of HKD 16,135,000 in the previous year, indicating a significant increase in losses[194]. - Basic and diluted loss per share for the period was HKD 0.011, compared to HKD 0.006 in the previous year[150]. Operating Expenses - The operating expenses for the period were HKD 99 million, which included a provision for impairment losses of HKD 36 million, compared to HKD 62 million in the first half of 2022[24]. - The overall operating expenses, excluding impairment losses, were HKD 63 million, which is comparable to the previous year, accounting for 8.2% of total revenue[24]. - Employee costs for the review period totaled HKD 51 million, representing 6.6% of revenue, compared to HKD 55 million and 5.6% of revenue in the first half of 2022[113]. - The company’s total personnel expenses for the six months ended June 30, 2023, were HKD 50,616,000, a decrease of 8.2% from HKD 54,998,000 in the previous year[197]. Assets and Liabilities - Total assets as of June 30, 2023, were HKD 1.139 billion, a decrease of HKD 38 million from HKD 1.177 billion as of December 31, 2022[53]. - Total liabilities decreased by HKD 32 million to HKD 1.640 billion as of June 30, 2023, compared to HKD 1.672 billion at the end of 2022[53]. - As of June 30, 2023, the company's outstanding bank loans amounted to HKD 469 million, a decrease of HKD 15 million from HKD 484 million at the end of the previous year[72]. - As of June 30, 2023, the company's current liabilities and total liabilities were HKD 982,359,000 and HKD 500,934,000, respectively[188]. - The company has approximately HKD 572 million in non-current assets to support daily operations despite being in a net debt position[55]. Strategic Focus and Management - The company plans to focus on high-margin products and adjust its product structure to balance profit and market demand[18]. - The company aims to leverage its core competitiveness in resources, strategy, and branding to capture opportunities in the evolving meat market[30]. - The company has established a systematic quality management system to ensure product quality meets high standards[10]. - The company has established a risk management and internal control system to safeguard assets and manage business risks[107]. - The company is actively communicating with banks regarding the renewal and waiver of loan covenants and is implementing operational plans to enhance profitability and generate sufficient cash flow[83]. Corporate Governance - The company has maintained a high standard of corporate governance, with a board composed of experienced individuals and a majority of independent non-executive directors[130]. - The company has adopted a set of comprehensive corporate governance measures to enhance shareholder value[129]. - No new share options were granted under the new share option scheme since its adoption[99]. - The company has not entered into any arrangements that would allow directors to benefit from purchasing shares or debt securities of the company or any other corporate body during the review period[105]. Market Conditions and Trends - The total number of live pigs slaughtered in China reached 375.48 million, an increase of 2.6% year-on-year, with pork production at 30.32 million tons, up 3.2% year-on-year[30]. - The company noted that its operations are affected by seasonal fluctuations, with demand for processed meat products peaking around the Lunar New Year[174]. - The company experienced a significant increase in litigation provisions, with approximately HKD 229,000 related to patent infringement claims in China for the six months ended June 30, 2023[175].

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告的內容概不負責， 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告全部或任何 部份內容而產生或因依賴該等內容而引致之任何損失承擔任何責任。 CHINA YURUN FOOD GROUP LIMITED * 中 國 雨 潤 食 品 集 團 有 限 公 司 （於百慕達註冊成立之有限公司） （股份代號：1068） 截至二零二三年六月三十日止六個月 中期業績公佈 中國雨潤食品集團有限公司（「本公司」或「雨潤食品」）董事會（「董事會」或「董事」） 公佈本公司及其附屬公司（統稱「本集團」）截至二零二三年六月三十日止六個月（「回 顧期」）之未經審核綜合中期業績。回顧期的中期財務報告雖未經審核，但已由本 公司的審核委員會審閱。 ...

Financial Performance - The company's revenue for 2022 was HKD 2.162 billion, with a net loss attributable to equity holders of HKD 15 million. The loss from main business operations was HKD 34 million, a significant reduction of 91.8% year-on-year[26] - Revenue for 2022 was HKD 2.162 billion, a significant decrease from HKD 8.440 billion in 2021, primarily due to the exclusion of subsidiaries from consolidation and a one-time gain of HKD 3.491 billion recognized in 2021[61] - Net loss attributable to equity holders in 2022 was HKD 15 million, compared to a net profit of HKD 3.060 billion in 2021, with a core business loss of HKD 34 million[61] - The group's overall gross profit decreased from HKD 398 million in 2021 to HKD 113 million in 2022, but the gross margin improved by 0.5 percentage points to 5.2% due to a focus on higher-margin products[65] - The group's operating profit for 2022 was HKD 18 million, a significant decrease from HKD 3.076 billion in 2021, primarily due to the absence of a one-time gain from the exclusion of subsidiaries from consolidation[94] Debt and Liabilities - The company's outstanding bank loans as of December 31, 2022, were HKD 484 million, a decrease of HKD 60 million compared to HKD 544 million on December 31, 2021. HKD 453 million of the bank loans are due within one year[6] - The company's equity attributable to shareholders was a loss of approximately HKD 543 million as of December 31, 2022, making it unsuitable to calculate the capital-to-debt ratio[19] - The group's total assets decreased by HKD 130 million to HKD 1.177 billion, while total liabilities decreased by HKD 105 million to HKD 1.672 billion as of December 31, 2022[75] - The company's net current liabilities were HKD 1.038 billion as of December 31, 2022, compared to HKD 1.193 billion in the previous year[106] - Current bank borrowings amounted to HKD 453 million as of December 31, 2022, down from HKD 544 million in the previous year[106] - The group is in discussions with banks to resolve litigation related to HKD 443 million in overdue bank loans as of December 31, 2022[80] - Accounts receivable of approximately HKD 12 million were used as collateral for bank loans totaling HKD 41 million as of December 31, 2022[104] Cash Flow and Capital Expenditures - The group's cash and cash equivalents decreased by HKD 47 million to HKD 33 million as of December 31, 2022, with 79% denominated in RMB and 15% in USD[71] - Cash and cash equivalents stood at approximately HKD 33 million as of December 31, 2022, a decrease from HKD 80 million in the previous year[106] - Capital expenditures for 2022 were HKD 5 million, significantly lower than the HKD 148 million spent in 2021[73] - The group plans to allocate approximately RMB 15 million for capital expenditures in 2023, primarily for ongoing construction projects, factory maintenance, and equipment updates[78] - No significant investments or acquisitions of capital assets were made during the year, and no such plans exist as of the reporting date[105] Business Operations and Strategy - The company's restructuring plan was approved at a creditors' meeting on January 28, 2022, and officially entered the implementation phase, focusing on the production and operation of the "Ha Lian" brand products[29] - The company's restructuring plan was approved by creditors and the Nanjing Intermediate People's Court on January 28, 2022, leading to improved operating performance[38] - The company plans to continue implementing its restructuring plan to improve debt structure and enhance profitability, aiming for a new development phase[49] - In 2023, the company plans to expand its product range, including Chinese-style marinated products, European-style sausages, local specialties, and pre-made dishes, while upgrading the operational model of its "Ha Da Zhong" hot marinated fresh smoked new model chain stores[31] - The company plans to implement operational strategies to improve profitability, control costs, and generate sufficient operating cash flow[106] - The Board believes the company has sufficient financial resources to support its operations and meet financial obligations for the next 12 months[106] Product and Market Performance - The average purchase price of live pigs in 2022 decreased by approximately 30.4% compared to 2021, and the slaughter volume decreased to approximately 620,000 heads (2021: 1.64 million heads) due to changes in the scope of consolidation[15] - The gross profit margin for low-temperature meat products increased by 0.4 percentage points to 18.0%, while the gross profit margin for high-temperature meat products decreased by 1.3 percentage points to 18.8%. The overall gross profit margin for downstream products increased slightly by 0.1 percentage points to 18.4%[16] - The upstream business revenue decreased to HKD 1.670 billion in 2022 from HKD 6.810 billion in 2021, with chilled meat accounting for 68% of total revenue and 88% of upstream revenue[62] - Low-temperature meat products generated revenue of HKD 285 million, accounting for 57% of the deep-processed business revenue, while high-temperature meat products contributed HKD 211 million, representing 10% of the group's total revenue and 43% of the deep-processed business revenue[65] - The company's "Ha Rou Lian" brand, established in 1913, focuses on low-temperature meat products, with key products including Harbin red sausage, canned meat, and marinated products[46] - The company's "Ha Rou Lian" brand has received numerous awards and certifications, including ISO9001, ISO14001, OHSAS18001, and ISO22000, reflecting strong market recognition[40] - The company's subsidiary, Harbin Dazhong Rou Lian Food Co., Ltd., was recognized as a "China 3.15 Integrity Enterprise" in 2022, highlighting its commitment to product quality[57] Industry and Economic Context - The national pig inventory at the end of 2022 was 452.56 million heads, a year-on-year increase of 0.7%, while pig slaughter reached 699.95 million heads, up 4.3% year-on-year[45] - China's GDP in 2022 was RMB 121.0207 trillion, a 3.0% increase from the previous year, with the CPI rising by 2.0% and catering revenue declining by 6.3% to RMB 4.3941 trillion[54] - The annual production capacity of the group's upstream slaughtering and downstream deep-processed meat products businesses remained consistent at approximately 3.35 million heads and 56,000 tons, respectively, as of December 31, 2022[64] Cost Management and Efficiency - Operating expenses decreased to HKD 121 million, representing 5.6% of the group's revenue, down from HKD 836 million (9.9% of revenue) in 2021, primarily due to cost control measures and changes in consolidation scope[67] - The company has implemented a management mechanism to negotiate with at least three or more suppliers for the supply of live pigs, raw meat, or other key raw materials, ensuring a reasonable procurement ratio from each supplier[164] - The company has established safety stock for different raw materials based on sales market forecasts to handle emergencies[182] - The company's average procurement price for live pigs in 2022 fluctuated between RMB 11.9 to RMB 26.7 per kilogram[184] - The company has formulated different strategies for upstream and downstream businesses to mitigate cost pressures from raw material price fluctuations[166] Risk Management and Compliance - The company maintains a risk management and internal control system to manage risks and provide reasonable assurance against material misstatements or losses[160] - The company has adopted a cautious strategy for new product development and promotion, involving small-scale trials, medium-scale trials, and production stages[167] - The company has diversified its market penetration across different regions to reduce the impact of economic fluctuations and reliance on specific markets[163] - The company has signed cooperation agreements with suppliers that include clauses ensuring stable supply and quality safety[164] - The company regularly visits supplier production sites to assess the quality and supply capacity of raw materials[166] - The company continuously analyzes product sales and eliminates low-performing products while innovating and improving to maintain product quality[167] - The company's business is susceptible to fluctuations in raw material prices, particularly live pigs and raw meat, which may impact profitability if cost increases cannot be fully passed on to consumers[184] - Strategic raw material reserves to control costs and gain time for price adjustments in the sales market, potentially leading to decreased demand for the company's products[185] - Dependence on understanding and adapting to changing consumer tastes and dietary habits for sustained success in the deep-processed meat products market[185] - Significant costs associated with developing and marketing new products or expanding existing production lines, with no guarantee of market acceptance, sales, or profit[185] - Requirement for multiple licenses and permits to operate, including slaughter permits for fresh and frozen meat production facilities and industrial product production permits for deep-processed meat products facilities[187] - Regular inspections by regulatory authorities to ensure compliance with applicable hygiene and food safety standards, with potential business disruptions if inspections are failed or licenses are not renewed[187] - Impact of financial risks including market, liquidity, and credit risks on the company's financial condition, operating performance, and business[188] - Potential adverse effects on the company's business and revenue due to the impact of COVID-19 on retail markets and the possibility of severe animal diseases such as African swine fever[192] - Enhanced disease monitoring by the company's pig procurement and quality management departments to increase inspection and quarantine in areas with outbreaks and reduce or stop purchases from affected regions[193] - Implementation of a nationwide production base network for local procurement, production, and sales, with temperature-controlled delivery vehicles equipped with GPS and temperature monitoring systems[198] - Internal audit department's role in identifying major risk areas and establishing appropriate monitoring measures and management strategies to reduce overall business and operational risks[199] Corporate Governance and Human Resources - The Board consists of five members, including two executive directors and three independent non-executive directors[116] - The Board of Directors is responsible for approving and overseeing the group's overall strategy, annual budget, and business plans[138] - The company has purchased appropriate insurance for directors and executives to cover liabilities arising from the group's business, with annual reviews of the coverage[145] - The Board of Directors includes five members, with three being independent non-executive directors, ensuring diversity in gender, age, education, and professional experience[158] - The company employed approximately 1,400 employees in mainland China and Hong Kong as of December 31, 2022, compared to 1,500 employees in the previous year[133] - Total employee costs for the year amounted to HKD 106 million, accounting for 4.9% of the group's revenue, consistent with the previous year's percentage[133] - The company provides competitive compensation and benefits, including performance-based bonuses and employee stock option plans[109] - The company is committed to environmental protection and aims to improve measures to reduce waste generation in the future[134]

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告的內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任 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。 CHINA YURUN FOOD GROUP LIMITED * 中 國 雨 潤 食 品 集 團 有 限 公 司 （於百慕達註冊成立之有限公司） （股份代號：1068） 截至二零二二年十二月三十一日止財政年度 全年業績公佈 業績摘要 中國雨潤食品集團有限公司（「雨潤食品」或「本公司」）董事會（「董事會」）公佈本 公司及其附屬公司（統稱「本集團」）截至二零二二年十二月三十一日止年度（「回顧 年度」）之綜合業績，連同二零二一年相對期間之比較數字如下： ...

Revenue Performance - In the first half of 2022, the company's revenue from fresh meat sales was HKD 644 million, a decrease from HKD 5.276 billion in the same period of 2021, accounting for approximately 66% of total revenue before internal sales offset[16]. - The revenue from frozen meat products was HKD 145 million, down from HKD 1.091 billion in the first half of 2021, representing about 15% of total revenue before internal sales offset[16]. - The group's revenue for the first half of 2022 was HKD 979 million, a significant decrease from HKD 7.179 billion in the same period of 2021[20]. - Overall sales revenue from upstream operations decreased to HKD 722 million, down from HKD 5.856 billion in the previous year, with fresh meat accounting for approximately 66% of total revenue[22]. - Sales of deep-processed meat products were HKD 258 million, a decline from HKD 1.441 billion in the first half of 2021, with low-temperature meat products generating HKD 145 million[23]. - The group reported external revenue of HKD 721,459,000 for fresh and frozen meat, a significant decrease from HKD 5,765,205,000 in the previous year, representing a decline of approximately 87.5%[109]. - Processed meat products generated external revenue of HKD 258,007,000, down from HKD 1,413,427,000, indicating a decrease of about 81.8%[109]. - Total reported segment revenue for the group was HKD 979,630,000, compared to HKD 7,297,447,000 in the previous year, reflecting a decline of approximately 86.6%[111]. Financial Performance - The overall gross profit decreased from HKD 387 million in the first half of 2021 to HKD 66 million, while the overall gross margin improved to 6.8% from 5.4% year-on-year[24]. - Operating expenses for the period were HKD 62 million, down from HKD 638 million in the previous year, representing 6.4% of total revenue[29]. - The group's operating profit was approximately HKD 9 million, a significant drop from HKD 3.308 billion in the same period of 2021[30]. - The loss attributable to equity holders was approximately HKD 11 million, compared to a profit of HKD 3.288 billion in the first half of 2021[33]. - The group reported a net loss attributable to equity holders of approximately HKD 540 million as of June 30, 2022[42]. - The group recorded a reported segment loss of HKD 16,391,000, a significant improvement from a loss of HKD 166,725,000 in the previous year[109]. - The net loss attributable to equity holders for the period was HKD 16,135,000, compared to a profit of HKD 3,286,680,000 in the prior year[83]. - Total comprehensive loss for the period was HKD 22,313,000, compared to a comprehensive income of HKD 2,967,742,000 in the same period last year[83]. Operational Challenges - The average price of live pigs in China dropped by approximately 44% in the first half of 2022 due to increased supply, with pig production rising by 8.4% year-on-year to 366 million heads[7]. - The average procurement price of live pigs dropped by approximately 43.6% compared to the first half of 2021, with the slaughter volume decreasing to about 360,000 heads from 1.29 million heads[21]. - The company aims to improve its financial performance and profitability through a series of measures implemented since last year, despite ongoing impacts from African swine fever and COVID-19, resulting in a continuous reduction in losses[58]. - The company anticipates that the expected effects of its measures may be delayed by at least three to six months due to the stringent pandemic control policies affecting production and business activities[58]. - The group has acknowledged significant uncertainties regarding its ability to continue as a going concern if planned measures do not yield expected results[104]. Corporate Governance and Compliance - The company has maintained a high standard of corporate governance, with a board consisting of five directors and various committees overseeing financial and business strategies[74]. - The company has established a risk management and internal control system to safeguard its assets and manage business risks effectively[74]. - The board believes that having the chairman and CEO roles combined enhances business strategy formulation and execution[75]. - The company has confirmed compliance with the standard code of conduct for securities trading by all directors during the review period[77]. Shareholder Information - Major shareholders hold significant stakes, with Willie Holdings Limited and associated individuals collectively owning approximately 25.82% of the issued shares, totaling 470,699,900 shares[65]. - Willie Holdings Limited is primarily owned by Willie Holdings, with 93.41% held by former executive director and chairman Mr. Zhu and 6.59% by his spouse Ms. Wu[66]. - As of June 30, 2022, a total of 16,275,000 share options were granted under the old scheme, with 14,350,000 remaining unexercised[69]. - The new share option scheme was adopted on August 7, 2015, and no options have been granted under this scheme since its adoption[67]. Cash Flow and Liquidity - As of June 30, 2022, the group's cash and cash equivalents amounted to HKD 60 million, a decrease of HKD 20 million from HKD 80 million as of December 31, 2021[36]. - The group had outstanding bank borrowings of HKD 509 million as of June 30, 2022, down from HKD 544 million as of December 31, 2021[37]. - The company experienced a cash inflow from operating activities of HKD 11,990,000 for the six months ended June 30, 2022, compared to a cash outflow of HKD 13,006,000 in the same period of 2021[98]. - The company incurred a cash outflow of HKD 5,085,000 from investing activities for the six months ended June 30, 2022, compared to HKD 223,663,000 in the previous year[98]. - The company recorded a cash outflow of HKD 12,034,000 for the repayment of bank loans during the financing activities[98]. Employee and Personnel Information - The group employed approximately 1,100 staff as of June 30, 2022, down from approximately 1,500 staff as of December 31, 2021[49]. - Personnel expenses for the six months ended June 30, 2022, amounted to HKD 54,998,000, a decrease of 84.4% from HKD 352,280,000 in the same period of 2021[120]. - The total remuneration for key management personnel was HKD 1,649,000 for the first half of 2022, up from HKD 1,271,000 in the same period of 2021, representing a growth of 29.7%[157]. Legal and Regulatory Matters - The group is currently involved in litigation with domestic banks in China, seeking immediate repayment of HKD 508,544,000 in bank loans[118]. - The group has not recorded any litigation losses for the current period, contrasting with HKD 3,000,000 in litigation losses recorded in the previous year[114]. - The company has no significant pending litigation or claims that could materially affect its financial position or performance as of June 30, 2022[152]. - The company has not recognized any significant contingent liabilities related to ongoing legal proceedings as of the reporting date[152].

Financial Performance - The company achieved a revenue of HKD 8.44 billion for the year, with a profit attributable to equity holders of HKD 3.06 billion, and a significant reduction in operating loss of approximately 56.6% to HKD 416 million[14]. - The group recorded a revenue of HKD 8.44 billion in 2021, a decrease of 44.5% compared to HKD 15.21 billion in 2020[35]. - Fresh meat sales amounted to HKD 6.11 billion, representing a 47.5% decline from HKD 11.64 billion in the previous year, accounting for approximately 72% of total revenue[33][38]. - The gross profit decreased by 48.5% to HKD 398 million, with a gross margin of 4.7%, down from 5.1% in the previous year[40]. - The group’s loss from core operations was HKD 416 million, a reduction of approximately 56.6% compared to a loss of HKD 957 million in 2020[35]. - Other net income for the year was approximately HKD 23 million, a decrease from HKD 137 million in 2020, primarily due to reduced gains from the sale of non-current assets and increased litigation loss provisions[42]. - The company reported a loss of HKD 416 million for the fiscal year ending December 31, 2021, which is a 56.6% reduction in losses compared to the previous year[163]. - The company has not declared a final dividend for the year[168]. Market and Production Insights - The national pig inventory reached 449 million heads by the end of 2021, representing a year-on-year increase of 10.5%, while the total pig output was 671 million heads, a substantial year-on-year increase of 27.4%[11]. - The average price of pork fell by 30.3% throughout the year due to an oversupply in the market[11]. - In 2021, the national pig slaughter volume reached approximately 265 million heads, a year-on-year increase of 62.9%, marking the highest slaughter volume in five years[26]. - The national pork production in 2021 was approximately 53 million tons, up 28.8% year-on-year, while the average pork price dropped by 30.3%[26]. - The average procurement price of live pigs decreased by approximately 25.7% compared to 2020, leading to a 43.0% drop in slaughter volume to about 1.64 million heads[36]. - The company’s major business remains focused on providing various types of fresh and frozen meat products, with no significant changes reported[167]. Strategic Initiatives and Restructuring - The company plans to focus on deep processing and slaughtering as core business areas, with deep processing expected to be the profit center and slaughtering serving as the cost center[16]. - The restructuring plan was approved and is expected to optimize the overall debt structure and reduce financial costs, enhancing profitability for long-term sustainable returns to shareholders[19]. - The restructuring process involved significant support from various stakeholders, including government and creditors, enabling the company to embark on a new development chapter[24]. - The company is targeting a strategic cooperation model with regional partners and franchisees to expand its market presence in first and second-tier cities in Heilongjiang Province over the next four years[16]. - The company aims to enhance product quality and optimize production to drive sales recovery, alongside developing convenience store channels and strategic partnerships for national market expansion[16]. E-commerce and Sales Channels - E-commerce sales have increased significantly, rising from 3% in 2016 to 20% in 2020, indicating a strong growth in online sales channels[16]. - The company has focused on expanding e-commerce and dining channels to increase sales[154]. - The company aims to implement operational strategies to improve profitability and cash flow, including enhancing product quality and expanding sales channels, particularly in e-commerce and dining sectors[160]. Governance and Management - The company has adhered to the Corporate Governance Code as per the Hong Kong Stock Exchange rules during the review year, with the exception of the separation of roles between the Chairman and CEO[72]. - The board consists of five members, including two executive directors and three independent non-executive directors, ensuring a balance of power[74]. - The independent non-executive directors have confirmed their independence in accordance with the relevant rules, contributing to the strategic development of the group[77]. - The board is responsible for approving and monitoring the overall strategy and policies of the group, as well as evaluating its performance[74]. - The company has established clear terms of reference for the audit, remuneration, and nomination committees in compliance with the Corporate Governance Code[84]. Risk Management and Compliance - The group faces significant financial risks, including market, liquidity, and credit risks, with a net debt status as of December 30, 2021, and potential risks of failing to meet financial obligations[124]. - The group is subject to strict government regulations in the pig slaughtering and processed meat industry, which could impact its business if compliance is not met[125]. - The company has established a comprehensive food safety control system with 21 inspection and quarantine processes to ensure product quality and safety[129]. - The company has implemented a management mechanism to negotiate with at least three suppliers for the supply of key raw materials to ensure stability and quality[117]. Environmental and Social Responsibility - The company is committed to environmental protection and aims to reduce waste generation in its production processes[64]. - The company has established an underground sewage treatment station to reduce odor emissions and improve the surrounding environment[172]. - The company has adopted a clean production audit mechanism and implemented a circular economy approach to minimize environmental impact[172]. - The company has established an employee mutual aid fund to support employees facing difficulties in their lives[174]. Employee and Workforce Management - The total employee cost for the year was HKD 416 million, accounting for 4.9% of revenue, a decrease from HKD 722 million and 4.7% of revenue in the previous year[67]. - The group employed approximately 1,500 staff as of December 31, 2021, down from approximately 10,400 staff in the previous year due to restructuring[67]. - The company actively recruits young employees to develop new products and sales channels targeting modern consumer groups[176].

Financial Performance - The group recorded revenue of HKD 7.179 billion, a decrease of 4.7% compared to HKD 7.536 billion in the same period last year[20]. - The profit attributable to equity holders was HKD 3.288 billion, a significant improvement from a loss of HKD 408 million in the same period last year[20]. - Fresh meat sales amounted to HKD 5.276 billion, down 6.5% from HKD 5.642 billion in the previous year, accounting for approximately 72% of total revenue[17][22]. - The sales of processed meat products increased by 25.1% to HKD 1.441 billion, with low-temperature meat products contributing HKD 1.091 billion, a 15.7% increase year-on-year[23]. - The overall gross profit decreased by 12.8% to HKD 387 million, with a gross margin of 5.4%, down 0.5 percentage points from the previous year[24]. - The group’s overall sales revenue from upstream operations decreased by 8.9% to HKD 5.856 billion, influenced by changes in the consolidation scope[22]. - The group recorded a cash outflow from operating activities of HKD 13 million, compared to a cash inflow of HKD 163 million in the same period last year[40]. - Revenue for the six months ended June 30, 2021, was HKD 7,178,632, a decrease of 4.76% from HKD 7,536,316 in 2020[71]. - Gross profit for the same period was HKD 387,091, down 12.87% from HKD 444,155 in 2020[71]. - Operating profit for the business was HKD 3,308,154, a significant recovery from a loss of HKD 139,411 in the previous year[71]. - Net profit for the period was HKD 3,286,680, compared to a loss of HKD 404,735 in 2020[74]. - Basic and diluted earnings per share for the period were HKD 1.804, recovering from a loss of HKD 0.224 in the previous year[71]. - Total comprehensive income for the period was HKD 2,967,742, compared to a loss of HKD 544,390 in 2020[74]. Operational Challenges - The company has initiated the restructuring process for 44 subsidiaries under court supervision, with the first creditors' meeting held on June 23, 2021[12]. - The group has 44 subsidiaries with overdue bank loans totaling RMB 4.581 billion, which ceased accruing interest as of November 16, 2020[14]. - The group confirmed a one-time non-cash gain of approximately HKD 3.491 billion due to the exclusion of certain subsidiaries from the consolidation scope[15]. - The group faced litigation from banks for repayment of approximately HKD 441 million in bank loans[45]. - The group has not met certain bank loan covenants totaling HKD 535,032,000, which raises substantial doubt about its ability to continue as a going concern[103]. - The group recorded a provision for litigation losses of HKD 3,000,000 for the six months ended June 30, 2021, compared to HKD 34,914,000 in the same period of 2020[112]. Market and Industry Trends - In the first half of 2021, the company's average procurement price for live pigs decreased by approximately 27.3% compared to the same period last year[7]. - The national pork production increased by 35.9% year-on-year, with a total output of 2.715 million tons in the first half of 2021[5]. - The total national catering revenue reached RMB 2,171.2 billion, representing a year-on-year growth of 48.6%[5]. - The management is focused on stabilizing pork supply and prices through government policies aimed at balancing production and sales[6]. Financial Position - As of June 30, 2021, the group's cash and bank deposits totaled HKD 95 million, down from HKD 308 million as of December 31, 2020[34]. - The total assets of the group as of June 30, 2021, were HKD 1.342 billion, a decrease from HKD 9.156 billion as of December 31, 2020[37]. - The total liabilities of the group as of June 30, 2021, were HKD 1.581 billion, down from HKD 12.401 billion as of December 31, 2020[37]. - The total debt to total capital ratio as of June 30, 2021, was 261.8%, an increase from 189.4% as of December 31, 2020[41]. - The company reported a net asset value of HKD (238,129) compared to HKD (3,244,557) in the previous year[83]. - The company’s total liabilities increased significantly, with cumulative losses reaching HKD (10,450,233,000) as of June 30, 2021[97]. Governance and Compliance - The company has established a risk management and internal control system to safeguard its assets and ensure proper management of business risks[64]. - The board of directors consists of five members, with various committees established to oversee governance, financial strategies, and management performance[64]. - The company has complied with all applicable code provisions of the Corporate Governance Code, except for the separation of the roles of Chairman and CEO, which are held by the same individual[65]. - The audit committee reviewed the group's accounting standards and practices, as well as internal controls and financial reporting matters during the review period[69]. - The company maintains high transparency in governance by timely releasing information to shareholders and investors through multiple communication channels[64]. Employee and Operational Costs - The total employee cost for the review period was HKD 352 million, accounting for 4.9% of revenue, compared to HKD 305 million and 4.0% in the same period of 2020[48]. - The group employed approximately 1,400 staff as of June 30, 2021, a decrease from approximately 10,400 staff as of December 31, 2020, due to the exclusion of a restructured company from consolidation[48]. - Personnel expenses increased to HKD 352,280,000 in the first half of 2021, up from HKD 305,112,000 in the same period of 2020, representing a growth of approximately 15.4%[118]. Cash Flow and Investments - The company incurred a net cash outflow of HKD 146,720,000 from subsidiaries no longer included in the consolidation scope[141]. - The company’s investment activities resulted in a net cash outflow of HKD (223,663,000) for the six months ended June 30, 2021, compared to HKD (118,569,000) in the prior year[97]. - The company’s cash flow from financing activities generated HKD 12,944,000 in the first half of 2021, down from HKD 99,176,000 in the same period of 2020[97]. Environmental and Social Responsibility - The group aims to improve waste reduction measures and participate in environmental protection initiatives as part of its long-term environmental policy[49].