Revenue Performance - The reported total revenue for the six months ended June 30, 2023, was HKD 246.7 million, an increase of 36.2% compared to HKD 181.1 million for the same period in 2022[18]. - The increase in total revenue was primarily due to the rise in income from providing casino management services in Macau as travel restrictions were eased[18]. - Revenue from the management of the gaming tables at the Casino Grand Lisboa was HKD 240,000,000, an increase of 55.8% compared to HKD 154,000,000 for the same period in 2022[27]. - The total gaming revenue for the group reached HKD 439.5 million for the six months ended June 30, 2023, up from HKD 283.1 million in the same period of 2022, indicating an overall increase of approximately 55.2%[49]. - The group reported segment revenue of HKD 240,052,000 from casino management services for the six months ended June 30, 2023, compared to HKD 154,041,000 for the same period in 2022, representing a growth of 55.8%[136]. - The company recorded a total of HKD 243,733,000 in revenue from Macau for the six months ended June 30, 2023, up from HKD 158,838,000 in the same period of 2022[174]. Profitability and Loss - The company reported a loss of HKD 3.0 million for the six months ended June 30, 2023, a significant improvement from a loss of HKD 96.7 million in the same period of 2022[7]. - For the six months ended June 30, 2023, the group reported a loss of HKD 3,000,000, significantly reduced from a loss of HKD 96,700,000 for the same period in 2022[21]. - The group incurred a pre-tax loss of HKD 2,978,000 for the six months ended June 30, 2023, compared to a pre-tax loss of HKD 96,494,000 for the same period in 2022, indicating a significant improvement[136]. - The company reported a loss before tax of HKD 2,978,000, a substantial reduction from a loss of HKD 96,494,000 in the prior year[103]. - For the six months ended June 30, 2023, the company reported a profit attributable to shareholders of HKD 680,000, compared to a loss of HKD 87,930,000 for the same period in 2022[165]. Cost Management - Adjusted EBITDA for the gaming segment in Macau was HKD 55.8 million for the six months ended June 30, 2023, compared to a loss of HKD 23.3 million for the same period in 2022, indicating a significant turnaround[8]. - Adjusted EBITDA for the six months ended June 30, 2023, was HKD 31,000,000, compared to a negative HKD 64,400,000 for the same period in 2022[20]. - The adjusted EBITDA for the electronic entertainment equipment and systems segment was a loss of HKD 17.5 million for the six months ended June 30, 2023, compared to a loss of HKD 30.4 million for the same period in 2022, reflecting a significant reduction in losses due to effective cost-saving strategies implemented in response to the COVID-19 pandemic[47]. - Operating and administrative expenses decreased to HKD 67,321,000 from HKD 88,164,000 year-on-year, reflecting improved cost management[103]. - Research and development expenses for the six months ended June 30, 2023, were HKD 15,070,000, down from HKD 28,783,000 for the same period in 2022, reflecting a reduction of 47.6%[144]. Financial Position - As of June 30, 2023, the group had bank deposits of HKD 47,300,000, including HKD 46,500,000 in fixed deposits[30]. - The company’s net assets as of June 30, 2023, were HKD 153,647,000, a decrease from HKD 157,690,000 as of December 31, 2022[81]. - Cash and cash equivalents amounted to HKD 56,145,000, with net current liabilities of HKD 28,091,000 as of June 30, 2023[85]. - The total assets less current liabilities amounted to HKD 335,304,000 as of June 30, 2023, compared to HKD 297,637,000 as of December 31, 2022, representing an increase of approximately 12.7%[106]. - Cash and cash equivalents increased to HKD 56,145,000 as of June 30, 2023, from HKD 20,179,000 as of December 31, 2022, marking a significant increase of approximately 178.5%[109]. Employee and Operational Metrics - The group has approximately 700 employees, including about 440 gaming business employees managed by a subsidiary[37]. - The group managed 40 gaming tables as of June 30, 2023, down from 47 tables as of December 31, 2022, with all 40 tables operational[22]. - The average number of traditional gaming tables increased to 104.8 in 2023 from 65.8 in 2022, while live mixed gaming tables rose to 124.6 from 81.9[11]. - The average number of traditional gaming tables decreased to 32 for the six months ended June 30, 2023, down from 46 in the same period of 2022, reflecting a strategic adjustment in operations[49]. Governance and Compliance - The company has maintained compliance with the corporate governance code, with a review of its governance structure planned for the future[72]. - The company continues to ensure a balanced distribution of power and authority within its governance structure, with experienced independent non-executive directors overseeing key decisions[72]. - The company has adopted a cash flow forecast based on expected revenues and expenses for at least the next twelve months, considering market conditions and growth rates[85]. Market and Strategic Developments - The company plans to continue expanding its entertainment management services in Macau, focusing on enhancing operational efficiency and customer engagement[151]. - The group has renewed its service agreement with 澳娛綜合 for casino management services, effective from January 1, 2023, to December 31, 2025[127]. - The group has a new gaming license contract granted by the Macau government, effective from January 1, 2023, to December 31, 2032, for a duration of ten years[127].

Financial Performance - The total comprehensive income attributable to the owners of the company for the period was HKD 2,317,000, compared to a loss of HKD 85,082,000 in the previous year[14]. - The company reported revenue from customer contracts of HKD 245,219,000, an increase from HKD 177,884,000 year-over-year[25]. - The reported total revenue for the six months ended June 30, 2023, was HKD 246,700,000, an increase of 36.2% compared to HKD 181,100,000 for the same period in 2022[62]. - The company reported a loss attributable to owners of the company of HKD 680,000 for the six months ended June 30, 2023, compared to a loss of HKD 87,930,000 in the same period last year[40]. - The gross profit for the period was HKD 114,903,000, significantly up from HKD 20,261,000 in the previous year, indicating a substantial improvement in profitability[166]. - The company incurred a loss of HKD 3,022,000 for the six months ended June 30, 2023, a significant reduction from a loss of HKD 96,678,000 in the same period of 2022, reflecting improved operational efficiency[185]. - The total comprehensive expenses for the period amounted to HKD 1,343,000, a significant decrease from HKD 93,550,000 in the prior year, indicating better cost management[167]. Revenue Sources - Customer A in the entertainment venue management services segment generated revenue of HKD 240,052,000, up from HKD 154,041,000 in the previous year[32]. - The increase in total revenue was primarily due to higher income from providing entertainment venue management services in Macau, following the easing of travel restrictions[62]. - Total revenue from the gaming management services at the Casino Grand Lisboa for the six months ended June 30, 2023, was HKD 240,000,000, an increase of 55.8% from HKD 154,000,000 for the same period in 2022[90]. - The total gaming revenue for the Kwan Tai Casino managed by the group reached HKD 439.5 million, an increase of 55.2% from HKD 283.1 million for the six months ended June 30, 2022[69]. - The group reported gaming revenue of HKD 439.5 million for the six months ended June 30, 2023, up from HKD 283.1 million in the same period last year[106]. Assets and Liabilities - Non-current assets totaled HKD 363,395,000 as of June 30, 2023, with property, plant, and equipment valued at HKD 231,696,000[3]. - The net asset value of the company decreased to HKD 153,647,000 from HKD 157,690,000[17]. - The company’s total liabilities include bank borrowings due within one year amounting to HKD 9,330,000, up from HKD 6,087,000[15]. - As of June 30, 2023, the total outstanding debt of the group was HKD 230,900,000, an increase from HKD 188,300,000 as of December 31, 2022[135]. - The group's asset-to-liability ratio as of June 30, 2023, was 150.3%, up from 119.4% as of December 31, 2022, primarily due to an increase in shareholder loans and bank borrowings[137]. Cash Flow and Liquidity - The company’s cash and bank balances increased to HKD 56,145,000 from HKD 20,179,000 year-over-year[15]. - The company had cash and cash equivalents of HKD 56,145,000 as of June 30, 2023, with net current liabilities of HKD 28,091,000, suggesting a stable liquidity position[171]. - The company expects to maintain sufficient liquidity to meet its financial obligations over the next twelve months, supported by cash on hand and anticipated operational cash flows[193]. - The company has adopted a prudent financial management approach to maintain a healthy liquidity position as of June 30, 2023[93]. Operational Efficiency - Research and development expenses for the six months ended June 30, 2023, were HKD 15,070,000, a decrease from HKD 28,783,000 for the same period in 2022[50]. - The adjusted EBITDA for the six months ended June 30, 2023, was a profit of HKD 31 million, compared to a loss of HKD 64.4 million for the same period in 2022, indicating a significant turnaround[80]. - The adjusted EBITDA from the group's other businesses was a loss of HKD 700,000 for the six months ended June 30, 2023, an improvement from a loss of HKD 3.6 million in the same period of 2022[81]. - The adjusted EBITDA for the electronic entertainment equipment and systems segment was a loss of HKD 17.5 million for the six months ended June 30, 2023, compared to a loss of HKD 30.4 million for the same period in 2022, reflecting a significant improvement due to effective cost-saving strategies implemented in response to the COVID-19 pandemic[102]. Business Developments - The company has a new gaming license contract granted by the Macau government, effective from January 1, 2023, to December 31, 2032, for a duration of ten years[19]. - The company plans to invest more resources in developing innovative electronic entertainment equipment and systems for overseas markets, particularly North America[88]. - The company aims to become a comprehensive solution provider for smart charging stations and related equipment for electric vehicles in mainland China[91]. - The group has initiated a new business supplying smart charging stations and equipment for electric motorcycles, bicycles, and cars in mainland China[109]. - The group plans to continue investing in high-tech entertainment products and leveraging cutting-edge technology to enhance its core competitiveness in the electronic entertainment equipment and systems sector[112]. Corporate Governance - The company’s interim report for the six months ended June 30, 2023, has been reviewed by the audit committee and independent auditor[155]. - The roles of the chairman and CEO have been separated, with Dr. Chan serving as co-chairman and managing director, while Mr. Zhang has been appointed as co-chairman[152]. - The board believes the current structure provides strong and consistent leadership while ensuring a balance of power and protecting shareholder interests[153]. - The company has adopted a standard code for directors' securities trading behavior, ensuring compliance by all directors as of June 30, 2023[148]. Market Conditions - The number of customers at the managed casinos in Macau increased significantly due to the recovery of cross-border travel[62]. - The total number of visitors to Macau for the six months ended June 30, 2023, was approximately 11,600,000, a 236.1% increase compared to the same period in 2022[89]. - Macau's total gaming revenue for the first half of 2023 was MOP 80,100,000,000, a year-on-year increase of 204.6% from MOP 26,300,000,000 in the same period of 2022[89].

Financial Performance - The total reported revenue for the group for the year ended December 31, 2022, was HKD 297.8 million, a decrease of 39.7% compared to HKD 494.1 million for the year ended December 31, 2021[39]. - The group reported a loss of HKD 166.3 million for the year, compared to a loss of HKD 88.4 million in the previous year[14]. - Adjusted EBITDA for the year ended December 31, 2022, was a loss of HKD 109 million, compared to a loss of HKD 18.4 million for the previous year[149]. - The total gaming revenue for the Golden Sands Casino was HKD 490.9 million, a decrease of 35.6% compared to HKD 761.7 million for the previous year[189]. - Adjusted EBITDA for the casino management segment turned to a loss of HKD 38 million in 2022, compared to a profit of HKD 42.3 million in 2021, indicating a significant shift in performance[198]. Revenue Sources - The group’s share of total revenue from the gaming operations at the managed casino was HKD 266.9 million, a decrease of 35.8% from HKD 415.7 million in the previous year[32]. - Revenue from the overseas market (primarily from North America) for the sale/lease of electronic gaming equipment and systems was HKD 21.3 million, an increase of 95.4% from HKD 10.9 million in the previous year[33]. - Revenue from the sale of slot machines was HKD 20.3 million, significantly up from HKD 6.5 million in the previous year, reflecting a strong market demand[33]. - Revenue from the sale/rental of electronic gaming equipment and systems in Macau dropped by 88.6% to HKD 7.4 million in 2022 from HKD 64.7 million in 2021[58]. - Total revenue from electronic gaming equipment and systems sales/rentals in Macau and overseas dropped to HKD 30.9 million in 2022 from HKD 78.4 million in 2021, reflecting a decrease of about 60%[196]. Operational Insights - The average number of gaming tables, live hybrid gaming machines, and slot machines operated by the group at the managed casino was reported, indicating operational scale[18]. - The total number of gaming tables managed by the company decreased to 47 in 2022 from 49 in 2021, with only 33 tables operational[45]. - The average number of traditional gaming tables decreased from 39 to 31, while the average number of live mixed gaming tables decreased from 10 to 8[175]. Strategic Outlook - The group anticipates an increase in Macau visitor numbers and spending as borders reopen, which is expected to benefit the gaming industry[37]. - The group remains optimistic about the medium to long-term outlook following the new gaming law and the issuance of new gaming licenses[37]. - The company remains cautiously optimistic about the Macau gaming industry, anticipating a recovery as travel restrictions are lifted[61]. - The company is prepared to seize new cooperation opportunities and business prospects under the new gaming regulatory framework in Macau[193]. Investment and Development - The company invested HKD 37.4 million in research and development and other costs during the year, down from HKD 52.6 million in the previous year, to enhance product specifications and competitive advantages[16]. - The company is actively seeking investment opportunities in industries that provide innovative new energy or renewable energy solutions[148]. - The company has a capital commitment of HKD 6,600,000 for the acquisition of properties, plants, and equipment, up from HKD 4,800,000 in 2021[74]. Financial Management - The company aims to maintain a prudent financial management approach to ensure healthy liquidity and support strategic investments[64]. - The company has secured a three-year loan of HKD 70 million from Dr. Chen, with an annual interest rate of 12.5%[68]. - As of December 31, 2022, the total outstanding loans amounted to HKD 188,300,000, an increase from HKD 131,400,000 in 2021[93]. - The company's operational funding needs are primarily met through internal resources, bank loans, and shareholder loans[88]. - The group's debt-to-equity ratio as of December 31, 2022, was 119.4%, a significant increase from 41.2% in 2021, primarily due to shareholder loans and a decrease in net assets[117]. Challenges and Market Conditions - The company is facing challenges due to the ongoing impact of the COVID-19 pandemic and geopolitical tensions affecting the macroeconomic environment[149]. - Macau's total gaming revenue for 2022 was MOP 42.2 billion, a decrease of 51.4% from 2021, representing only 14.4% of pre-pandemic levels[150]. - The number of visitors to Macau in 2022 was 5.7 million, down 26.0% from 2021, and only 14.5% of pre-pandemic levels[150]. Management Changes - The company has appointed Mr. Zhang Jianjun as Executive Director and Co-Chairman to enhance its strategic direction in emerging business opportunities[63]. - The company has appointed Mr. Zhang Jianjun as Executive Director and Co-Chairman of the Board to enhance its diversified business strategy[193].

Financial Performance - For the year ended December 31, 2022, the group recorded a loss of HKD 166.3 million, compared to a loss of HKD 88.4 million for the year ended December 31, 2021[19]. - The adjusted EBITDA from the gaming segment managed by the group was a loss of HKD 38 million for the year ended December 31, 2022, down from a profit of HKD 42.3 million for the year ended December 31, 2021[18]. - The group reported a net loss of HKD 166,330,000 for the year ended December 31, 2022, compared to a loss of HKD 88,367,000 in the previous year[111]. - Total comprehensive expenses for the year amounted to HKD 161,908,000, up from HKD 87,032,000 in the prior year[112]. - The gross loss for the year was HKD 170,962,000, compared to a loss of HKD 87,992,000 in the previous year, indicating a significant increase in losses[125]. - The basic loss per share for the year was HKD (14.7), compared to HKD (8.2) in 2021, reflecting a worsening financial performance[125]. - The group reported a loss before tax of HKD 170,962,000 for the year ended December 31, 2022, compared to a loss of HKD 87,992,000 in 2021, indicating a significant increase in losses[164]. Revenue Decline - The total gaming revenue from traditional gaming tables decreased to HKD 207.5 million in 2022 from HKD 341.4 million in 2021, representing a decline of approximately 39.2%[22]. - The group reported a total of HKD 490.9 million in gaming revenue for the year ended December 31, 2022, down from HKD 761.7 million in 2021, reflecting a decrease of approximately 35.5%[22]. - The group's revenue from the gaming sector for the year ended December 31, 2022, was HKD 266.9 million, representing a decline of 35.8% compared to HKD 415.7 million in the previous year[46]. - Revenue from the sale/rental of electronic gaming equipment and systems in Macau for the year ended December 31, 2022, was HKD 7.4 million, down 88.6% from HKD 64.7 million in 2021[46]. - The company reported a total revenue of HKD 297,820,000 for the year ended December 31, 2022, compared to HKD 494,126,000 in 2021, representing a decrease of approximately 39.7%[125]. - Revenue from customer contracts was HKD 292,998,000, down from HKD 486,768,000 in the previous year, indicating a decrease of about 39.7%[141]. - The entertainment systems segment generated revenue of HKD 30,916,000, a significant drop from HKD 78,414,000 in 2021, reflecting a decline of approximately 60.5%[158]. Debt and Liquidity - As of December 31, 2022, the total outstanding debt of the group was HKD 188.3 million, an increase from HKD 131.4 million in 2021[39]. - The group has drawn down HKD 64.96 million from a loan facility of HKD 120 million as of December 31, 2022, which was established to strengthen liquidity[9]. - The group has secured a new three-year loan facility of HKD 70 million at an annual interest rate of 12.5%[34]. - The group has extended the maturity date of a loan agreement from December 31, 2023, to March 31, 2024, and has repaid HKD 30 million of the loan[32]. - The group reported a total of HKD 34.96 million in outstanding shareholder loans as of December 31, 2022[179]. - The company has sufficient cash and cash equivalents of HKD 20,179,000 as of December 31, 2022, to meet its financial obligations for the next twelve months[134]. - The company expects to have adequate liquidity to fulfill its financial responsibilities due to available cash and financing arrangements[119]. Employee Costs and Operations - The total employee costs for the year ended December 31, 2022, amounted to HKD 219.6 million, a decrease of 13.9% from HKD 255.2 million in 2021[30]. - The total employee costs amounted to HKD 116,807,000, down from HKD 139,608,000 in 2021, which is a reduction of about 16.3%[148]. - As of December 31, 2022, the group had approximately 660 employees, including about 360 gaming business employees hired by the gaming operator[108]. Future Outlook and Strategy - The group remains cautiously optimistic about the future of the Macau gaming industry, despite facing global economic challenges and geopolitical tensions[28]. - The new gaming legislation and ten-year gaming license contracts are expected to provide a clearer outlook for the Macau gaming industry[27]. - The group is focusing on core business development and improving operational efficiency to navigate market uncertainties[28]. - The company plans to continue its market expansion efforts and invest in new technologies to enhance its product offerings[142]. Capital Expenditures and Commitments - The group had capital commitments of HKD 6,600,000 for the acquisition of properties, plants, and equipment as of December 31, 2022, up from HKD 4,800,000 in 2021[54]. - Capital expenditures for the year were HKD 52,671,000, compared to HKD 33,152,000 in the previous year, reflecting an increase of approximately 58.9%[164]. - The group’s capital expenditures included HKD 31,449,000 in management services and HKD 20,661,000 in entertainment systems for the year ended December 31, 2022[163]. Financial Management - The group did not use any financial instruments for hedging purposes during the fiscal year ending December 31, 2022[53]. - The group had no significant unrealized exchange differences recognized in the financial results for the year ending December 31, 2022[51]. - The aging analysis of trade receivables as of December 31, 2022, showed HKD 4.4 million in receivables aged 0 to 30 days, down from HKD 24.68 million in 2021[192]. - The group did not declare any dividends for the years ended December 31, 2022, and 2021[190].

Revenue Performance - For the six months ended June 30, 2022, the total reported revenue was HKD 181.1 million, a decrease of 29.8% compared to HKD 257.9 million for the same period in 2021[4] - Revenue from the casino managed in Macau, specifically the Golden Paradise Casino, was HKD 154.0 million, down from HKD 227.7 million in the previous year[5] - Revenue from the sale/rental of electronic gaming equipment and systems in Macau was HKD 4.8 million, significantly down from HKD 25.7 million in the previous year[5] - Overseas sales/rentals of electronic gaming equipment and systems increased to HKD 21.3 million from HKD 2.7 million in the previous year[5] - The total gaming revenue generated by the group’s managed casino for the six months ended June 30, 2022, was HKD 283.1 million, a decrease of 32.1% from HKD 416.9 million for the same period in 2021[15] - Revenue from the sale/rental of electronic entertainment equipment and systems in Macau for the six months ended June 30, 2022, was HKD 4.8 million, a decrease of 81.3% from HKD 25.7 million for the same period in 2021[18] - Revenue from overseas sales/rentals of electronic entertainment equipment and systems for the six months ended June 30, 2022, was HKD 21.3 million, an increase of 688.9% from HKD 2.7 million for the same period in 2021[19] - Revenue for the six months ended June 30, 2022, was HKD 181,138,000, a decrease of 29.6% compared to HKD 257,866,000 for the same period in 2021[80] - Revenue from entertainment management services was HKD 154,041, down 32.4% from HKD 227,727 in the previous year[101] - Revenue from electronic entertainment systems sales in Macau dropped to HKD 2,502, a decline of 89.8% from HKD 24,557[101] Financial Losses - Adjusted EBITDA for the six months ended June 30, 2022, was a loss of HKD 64.4 million, compared to a profit of HKD 5.1 million for the same period in 2021[7] - The adjusted EBITDA from the casino segment was a loss of HKD 23.3 million, down from a profit of HKD 39.1 million in the previous year[9] - The group reported a net loss of HKD 96.7 million for the six months ended June 30, 2022, compared to a loss of HKD 21.5 million in the same period of 2021[7] - The adjusted EBITDA for the electronic entertainment equipment and systems segment for the six months ended June 30, 2022, was a loss of HKD 30.4 million, compared to a loss of HKD 14.3 million for the same period in 2021, indicating a significant increase in losses[10] - The total loss recorded for the group for the six months ended June 30, 2022, was HKD 96.7 million, compared to a loss of HKD 21.5 million for the same period in 2021[11] - The company reported a loss before tax of HKD 96,494,000, compared to a loss of HKD 21,344,000 in the previous year, representing an increase in loss of 352.5%[80] - Total comprehensive loss for the period was HKD 93,550,000, compared to HKD 21,036,000 in the previous year, reflecting a substantial increase in losses[82] - The basic loss per share for the period was HKD (8.4), compared to HKD (2.0) in the prior year, indicating a significant decline in performance[80] - The company experienced a net loss of HKD 87,930,000 for the period, with total comprehensive loss amounting to HKD 93,550,000[89] - The basic loss attributable to the company's owners for the six months ended June 30, 2022, was HKD 87,930,000, compared to a loss of HKD 20,774,000 for the same period in 2021[124] Operational Challenges - The group’s total income from the management of casinos and electronic gaming systems was impacted by a decrease in gaming revenue from the Golden Paradise Casino[9] - The company plans to focus on expanding overseas markets to offset the decline in Macau revenue[4] - The average number of traditional gaming tables managed by the group decreased from 39 in 2021 to 37 in 2022[13] - The average net win per gaming table per day decreased from HKD 26.7 thousand in 2021 to HKD 17.9 thousand in 2022[15] - The company is closely monitoring the performance of the gaming market and potential business risks, particularly from the Omicron variant and the new gaming law[28] - The company continues to rely on existing service agreements and contracts with the Macau government for its operations, indicating a focus on maintaining operational stability amid market challenges[95] Financial Position - As of June 30, 2022, the group's consolidated net assets amounted to HKD 226 million, a decrease of HKD 93 million or 29.2% compared to HKD 319 million on December 31, 2021, primarily due to a loss of HKD 96.7 million during the six months ended June 30, 2022[30] - The total outstanding debts of the group as of June 30, 2022, amounted to HKD 156.4 million, an increase from HKD 131.4 million on December 31, 2021[35] - The group's debt-to-equity ratio as of June 30, 2022, was 69.2%, up from 41.2% on December 31, 2021, mainly due to the acquisition of shareholder loans and a decrease in consolidated net assets[42] - The group held pledged bank deposits of HKD 31.2 million, cash and bank balances of HKD 36.7 million, and readily available funds of HKD 11.3 million as of June 30, 2022[31] - The company reported a total cash and cash equivalents of HKD 36,665,000, a decrease from HKD 114,336,000 as of June 30, 2021[93] - The company’s total equity as of June 30, 2022, was HKD 226,047,000, down from HKD 319,027,000 as of December 31, 2021[89] - The company’s accumulated losses reached HKD 848,365,000 as of June 30, 2022, an increase from HKD 760,435,000 as of December 31, 2021[89] Cost Management and Investments - The company has implemented various cost control measures, including streamlining operations and reducing marketing expenses, to enhance efficiency[24] - The company plans to adopt a cautious investment policy in the development of electronic entertainment equipment and systems amid ongoing market uncertainties[28] - The group invested HKD 22 million in research and development and other costs for electronic entertainment equipment and systems for the six months ended June 30, 2022, compared to HKD 27.9 million for the same period in 2021[10] - The company incurred a total comprehensive loss of HKD 20,244,000 for the six months ended June 30, 2022, compared to a loss of HKD 21,036,000 in the previous year[93] - The company’s investment activities resulted in a net cash outflow of HKD 4,180,000 for the six months ended June 30, 2022, compared to HKD 14,134,000 in the previous year[93] Regulatory and Governance - The new gaming law in Macau was passed on June 21, 2022, which will impact the operations of the company as a gaming management service provider[26] - The company confirmed its commitment to provide effective gaming management services until December 31, 2022, despite the expiration of existing gaming contracts[26] - The company has complied with the corporate governance code during the six months ended June 30, 2022, with some deviations noted regarding the roles of the chairman and CEO[72] - The company has adopted a standard code for securities trading by directors, and all directors confirmed compliance for the six months ended June 30, 2022[73] - The group is closely monitoring changes in laws and regulations that may impact its business strategy and operations[97] Employee and Operational Metrics - The total employee cost for the six months ended June 30, 2022, was HKD 125,500,000, a decrease from HKD 131,800,000 for the same period in 2021[53] - The group has approximately 720 employees, including about 380 gaming business employees hired by a subsidiary[53] - The employee compensation policy is based on qualifications, performance, industry experience, and market trends[53] - The company reported a total employee cost of HKD 68,612,000, a decrease of 4.5% from HKD 71,942,000 in the previous year[116] - Research and development expenses amounted to HKD 28,783,000, down 22.3% from HKD 37,045,000 in the same period of 2021[116]

Tourism and Gaming Industry Impact - In 2021, the number of tourists in Macau decreased by approximately 80.4% and 85.0% compared to pre-pandemic levels in 2019, significantly impacting the tourism and gaming industries[18]. - Revenue from the management of casinos in Macau was HKD 415.7 million, up from HKD 303.1 million in the previous year, reflecting a significant recovery in the gaming sector[29]. - The total gaming revenue from live mixed gaming machines in Macau increased by 48.4% to HKD 1.37 billion for the year ended December 31, 2021, compared to HKD 923 million for the previous year[22]. - The proposed amendments to the gaming law in Macau are expected to promote sustainable development in the gaming industry, focusing on the diversification of the mid-market customer base[25]. - The company emphasizes the importance of providing affordable minimum betting amounts to attract a diverse and loyal customer base in the competitive market[13]. Company Innovation and Development - The company aims to become a leading supplier of entertainment equipment and systems, focusing on the development of automated gaming tables and innovative technologies to enhance gaming efficiency[14]. - LT Game has successfully launched self-developed gaming machines in local, North American, and other overseas markets, with plans to introduce more new gaming machines to expand market presence[14]. - The company continues to invest in innovation and development of electronic entertainment equipment and systems, aiming to provide comprehensive solutions for future market needs[14]. - The company has developed and launched smart wearable products that utilize AI technology to collect, track, and monitor real-time health data, improving users' health management[15]. - The company continues to invest in the development of AI and high-tech products related to health and wellness, showcasing its latest products at the China International Import Expo[23]. Financial Performance - The total revenue reported for the year ended December 31, 2021, was HKD 494.1 million, an increase of 40.5% compared to HKD 351.7 million for the year ended December 31, 2020[28]. - The adjusted EBITDA for the year ended December 31, 2021, was a loss of HKD 18.4 million, compared to a loss of HKD 101.1 million for the year ended December 31, 2020, indicating a significant improvement[32]. - The total loss for the year ended December 31, 2021, was HKD 88.4 million, compared to a loss of HKD 192.1 million for the year ended December 31, 2020, reflecting improved financial performance[39]. - The electronic gaming equipment and systems segment reported an adjusted EBITDA loss of HKD 21.2 million for the year ended December 31, 2021, an improvement from a loss of HKD 71.6 million in the prior year, driven by increased demand in Macau and overseas markets[35]. - The company reported a total revenue of approximately HKD 317,051,000 available for distribution to shareholders as of December 31, 2021[110]. Market Expansion and Strategy - The company aims to expand its overseas market presence despite challenges posed by the pandemic and global economic fluctuations[21]. - The company plans to continue expanding into suitable overseas markets while remaining cautious due to ongoing uncertainties, particularly related to U.S.-China relations[61]. - The company aims to identify new business opportunities in Macau and overseas markets to enhance profitability and shareholder value[58]. - The company remains cautiously optimistic about the performance of its live hybrid gaming machines, which are expected to continue to perform well, especially as they address health and safety concerns in casinos[62]. Corporate Governance and Compliance - The company is committed to compliance with all relevant laws and regulations, having implemented internal compliance and risk management policies[148]. - The board believes that corporate governance is key to the company's success and has implemented various measures to ensure high standards[179]. - The company has disclosed deviations from the corporate governance code in its annual report[179]. - The board has established a nomination policy to ensure suitable candidates are nominated for director positions, including procedures for election and appointment[193]. - The independent auditor provided an unqualified opinion on the group's disclosure of continuing connected transactions[156]. Employee and Operational Management - The total employee cost, including director remuneration, was HKD 255.2 million, a decrease of 13.2% from HKD 293.9 million in 2020[81]. - The company employs approximately 740 employees, including about 370 gaming business employees[81]. - The company is focused on cost control measures, including streamlining operations and reducing marketing expenses, to enhance efficiency and maintain sustainability amid the pandemic[58]. - The company has maintained a public float of at least 25% of its issued shares, complying with listing rules[175]. Shareholder and Financial Structure - The total equity attributable to shareholders was approximately HKD 1,042,083,000, offset by accumulated losses of HKD 725,032,000[110]. - The company's asset-to-liability ratio as of December 31, 2021, was 41.2%, an increase from 34.1% in 2020[73]. - The company has capital commitments for the acquisition of property, plant, and equipment amounting to HKD 4.8 million as of December 31, 2021, compared to HKD 1.1 million on December 31, 2020[75]. - Approximately 97.3% of the company's total revenue was generated from its top five customers, with the largest customer accounting for about 90.3% of total revenue[147]. Legal and Regulatory Considerations - The company is closely monitoring legal and regulatory changes in Macau's gaming laws, which may significantly impact the operations of satellite casinos[65]. - The company has not entered into any significant transactions with directors or related entities during the year ending December 31, 2021[162]. - The company did not engage in any significant acquisitions, disposals, or major investments during the year ended December 31, 2021[79].

Paradise PARADISE ENTERTAINMENT LIMITED 滙 彩 控 股 有 限 公 司 * (於百慕遮註冊成立之有限公司) (股份代號：1180) 2021 中期報告 MIX Paper from ponsible sourc F8C" C111999 FSC * 僅供識別 公司資料 2 管理層討論及分析 3 企業管治及其他資料 13 簡明綜合財務報表審閱報告 17 簡明綜合損益表 18 簡明綜合損益及其他全面收益表 19 簡明綜合財務狀況表 20 簡明綜合權益變動表 21 簡明綜合現金流量表 22 簡明綜合財務報表附註 23 釋義 47 目錄 頁次 公司資料 | --- | --- | |--------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------ ...

Business Segments and Strategy - Paradise Entertainment Limited focuses on two main business segments: casino management services and the development, sales, and leasing of electronic gaming equipment and systems[10]. - The company aims to become a leading supplier of gaming equipment and systems globally, emphasizing the development of innovative technologies to enhance gaming efficiency[10]. - LT Game, a subsidiary, has established a dominant position in the Macau ETG market and continues to invest in the development of new gaming machines for both local and overseas markets[10]. - Paradise Entertainment Limited is committed to providing high-quality integrated solutions in smart health, smart sports, smart home, and wireless communication products[10]. - The company has established a significant customer base by offering affordable minimum betting amounts, attracting a diverse and loyal clientele[10]. - The company is positioned to leverage synergies between its two main business segments to enhance its competitive advantage in the gaming market[10]. - The company has increased investment in AI and high-tech products, launching the "Big麦客 AI Watch" with various health monitoring features[19]. - The group is increasing R&D investment to innovate in artificial intelligence and high-tech products, aiming to meet the demand for professional solutions in education, sports, and lifestyle[58]. Financial Performance - The total revenue for the year ended December 31, 2020, was HKD 351.7 million, a decrease of 70.2% compared to HKD 1,181.8 million for the year ended December 31, 2019[29]. - The adjusted EBITDA for the year ended December 31, 2020, was a loss of HKD 101.1 million, compared to a profit of HKD 87.0 million for the year ended December 31, 2019[33]. - The group incurred a loss of HKD 192.1 million for the year ended December 31, 2020, compared to a profit of HKD 10.6 million for the year ended December 31, 2019[36]. - The total gaming revenue in Macau for the year ended December 31, 2020, was HKD 60.4 billion, a decline of 79.3% from HKD 292.4 billion in 2019[25]. - The sales of electronic gaming equipment and systems decreased to HKD 20.9 million in 2020 from HKD 169.9 million in 2019[30]. - The adjusted EBITDA from the managed casinos was a loss of HKD 60.5 million for the year ended December 31, 2020, compared to a profit of HKD 114.0 million for the year ended December 31, 2019[35]. - The group’s total revenue from the managed gaming venues was HKD 326.4 million for the year ended December 31, 2020, a decrease of 67.5% from HKD 1,004.2 million for the year ended December 31, 2019[44]. Impact of COVID-19 - The COVID-19 pandemic has significantly impacted the group's operations, leading to a reduction in customer numbers at managed casinos due to government restrictions[51]. - The company has adjusted its operational strategies to address the challenges posed by the pandemic[17]. - The Macau government received praise for its effective response to the pandemic, which helped mitigate the impact on the local economy[17]. - The group faced significant challenges due to government restrictions on casino operations, including limits on the number of gaming tables and machines[35]. - The group has implemented various cost control measures, including reducing marketing expenses and negotiating lower rents, to mitigate the adverse effects of the pandemic[54]. Market Conditions and Recovery - Macau's gaming revenue decreased by 79.3% from MOP 292.4 billion in 2019 to MOP 60.4 billion in 2020[14]. - The number of visitors to Macau dropped by 85.0%, from 39.4 million in 2019 to 5.9 million in 2020[14]. - Future economic recovery in Macau is expected to be driven by the tourism sector, with gradual lifting of travel restrictions[21]. - The group maintains a cautious outlook for 2021 due to geopolitical and economic challenges, while remaining optimistic about the long-term prospects in Macau[59]. Corporate Governance and Compliance - The company has adopted various measures to ensure high levels of corporate governance, which is considered key to its success[166]. - The board believes it has complied with the corporate governance code, with some deviations disclosed in the report[166]. - The independent auditor provided an unqualified opinion on the company's related party transactions for the year ended December 31, 2020[138]. - The company has implemented internal compliance and risk management policies to ensure adherence to regulatory requirements[131]. - The board regularly receives updates on regulatory developments to ensure compliance with corporate governance standards[185]. Shareholder and Financial Structure - The company did not recommend a final dividend for the year ended December 31, 2020, compared to zero in 2019[92]. - As of December 31, 2020, the company's distributable reserves amounted to approximately HKD 404,617,000, including retained earnings of about HKD 1,042,083,000, offset by accumulated losses of approximately HKD 637,466,000[97]. - The total number of shares held by the executive director Mr. Chan Kit has a beneficial interest of 124,160 shares, and he holds 630,836,720 shares through a controlled corporation, representing 59.95% of the total shares[105]. - The company has no management or administrative contracts related to its significant business operations for the year ended December 31, 2020[101]. - The company has maintained a sufficient public float, with at least 25% of issued shares held by the public as of the report date[162]. Employee and Management Information - The total employee costs for the year ended December 31, 2020, were HKD 293,900,000, a decrease from HKD 452,600,000 in 2019, including HKD 137,400,000 payable to employees hired by third parties[71]. - The group has a total of approximately 770 employees as of December 31, 2020, including about 380 gaming staff employed by a third party[71]. - The monthly salary for executive directors was revised from HKD 1,000,000 to HKD 200,000 and from HKD 20,000 to HKD 10,000 as of July 1, 2020[158]. - The board of directors held a total of 8 meetings and 1 annual general meeting during the year ended December 31, 2020[172]. Research and Development - The group continued to invest in electronic entertainment equipment and systems, with research and development costs amounting to HKD 64 million for the year ended December 31, 2020[36]. - The company has invested F million in research and development to drive technological advancements in gaming equipment[86].

Revenue Performance - For the six months ended June 30, 2020, the total reported revenue was HKD 177.3 million, a decrease of 70.1% compared to HKD 592.0 million for the same period in 2019[9]. - Revenue from the managed casinos was HKD 165.9 million, down from HKD 499.2 million in the previous year, with specific declines in the Golden Dragon Casino and the Grand Lisboa Casino[12]. - The sales of electronic gaming equipment and systems generated revenue of HKD 11.4 million, a significant drop from HKD 92.8 million in the prior year[12]. - Total gaming revenue for the group was HKD 262.4 million for the six months ended June 30, 2020, a decrease of 58.8% compared to HKD 636.5 million for the same period in 2019[24]. - The group reported a total revenue of HKD 165.9 million for the six months ended June 30, 2020, down 66.8% from HKD 499.2 million for the same period in 2019[25]. - The electronic gaming equipment and systems segment reported an adjusted EBITDA loss of HKD 44.2 million for the six months ended June 30, 2020, compared to a profit of HKD 12.1 million in 2019[17]. Impact of COVID-19 - The Macau government announced the suspension of all casinos starting February 5, 2020, which significantly impacted customer confidence and consumption patterns in the gaming industry[7]. - The total gaming revenue in Macau for the first half of 2020 decreased by 77.4% compared to the same period last year, reflecting the broader economic impact of the COVID-19 pandemic[7]. - The decline in gaming revenue was primarily due to the temporary closure of the Golden Sands and Huadu casinos during the COVID-19 pandemic[16]. - The group reported a significant decrease in gaming revenue due to restrictions imposed by the Macau government to curb the spread of COVID-19[16]. - The number of visitors to Macau fell by 83.7%, from approximately 20.3 million in the six months ended June 30, 2019, to 3.3 million in the same period of 2020[31]. Financial Losses - Adjusted EBITDA for the six months ended June 30, 2020, was a loss of HKD 53.5 million, compared to a profit of HKD 63.3 million for the same period in 2019[13]. - The group recorded a loss of HKD 111.3 million for the six months ended June 30, 2020, compared to a profit of HKD 23.8 million for the same period in 2019[17]. - The adjusted EBITDA from the group's managed casinos was a loss of HKD 35.9 million for the six months ended June 30, 2020, down from a profit of HKD 66.3 million in 2019[16]. - The company reported a loss attributable to owners of the company of HKD 109,446,000, compared to a profit of HKD 19,446,000 for the same period in 2019[81]. - The net loss for the period was HKD 111,336,000, a significant decrease from the profit of HKD 23,793,000 reported in the same period last year[86]. Cost Control Measures - The group has implemented various cost control measures, including reducing marketing expenses and negotiating lower rents[32]. - The group decided not to renew the service contract for the Grand Lisboa Casino after it expired on February 29, 2020, as part of its cost control strategy[32]. - The total employee cost for the six months ended June 30, 2020, was HKD 171,700,000, a decrease of 19.6% from HKD 213,500,000 for the same period in 2019[49]. Business Strategy and Opportunities - The company is exploring other business opportunities in response to the pandemic's challenges[8]. - The group utilized its extensive network in China to provide procurement services for overseas clients, contributing positively to its performance during the pandemic[8]. - The group plans to continue exploring new business opportunities during the economic downturn[36]. - The group is investing in R&D for high-tech products, including 5G, AI, and smart devices, to position itself for sustainable growth post-pandemic[33]. Asset and Equity Management - The group's total assets decreased by HKD 119.5 million or 19.6%, from HKD 608.5 million as of December 31, 2019, to HKD 489 million as of June 30, 2020[38]. - The company's total assets amounted to HKD 626,737,000, with net current assets of HKD 234,739,000 as of June 30, 2020[88]. - The total equity attributable to the owners of the company was HKD 446,111,000, reflecting the company's financial stability despite recent losses[88]. - The company's total liabilities increased to HKD 594,614,000 as of June 30, 2020, compared to HKD 466,736,000 in the previous year[92]. Shareholder Information - Major shareholder August Profit Investments Limited held 630,836,720 shares, representing 59.95% of the company's equity[58]. - The group has not declared an interim dividend for the six months ending June 30, 2020[37]. - The company did not purchase, sell, or redeem any of its listed securities during the six months ended June 30, 2020[65].

Company Overview - The company operates as a leading provider of casino management services and electronic gaming equipment, focusing on the Macau gaming market since 2007[9]. - As of December 31, 2019, the company was the exclusive casino management service provider for two independent satellite casinos in Macau[9]. - The company’s major business involves providing casino management services and developing, selling, and leasing electronic gaming equipment and systems[94]. Product Development and Innovation - The company has developed a patented live mixed gaming machine system, dominating the ETG market in Macau[10]. - The company is investing in high-tech electronic gaming equipment and systems, including 5G and artificial intelligence technologies, to enhance customer experience[10]. - The company aims to simplify gaming processes and reduce labor costs through innovative product development[10]. - The company is committed to creating innovative products that optimize gaming productivity and enhance player experiences[10]. - The flagship product, the live hybrid gaming machine, saw increased sales due to strong demand for upgrades and new technical standards issued by the gaming authority[20]. - The company believes there is ample room for expansion in the live hybrid gaming machine business as the trend towards mass market gaming continues[20]. - The company has increased investments in R&D for high-tech products, including 5G and artificial intelligence, which are expected to generate new revenue streams in the coming years[20]. Financial Performance - The total revenue for the year ended December 31, 2019, was HKD 1,181.8 million, an increase of 1.5% compared to HKD 1,164.2 million for the year ended December 31, 2018[28]. - Adjusted EBITDA for the year ended December 31, 2019, was HKD 87 million, a decrease of 27.9% from HKD 120.7 million for the year ended December 31, 2018[31]. - The adjusted EBITDA from the group's managed casinos was HKD 114 million, a decrease of 42.3% compared to HKD 197.6 million for the previous year[34]. - The group recorded a profit of HKD 10.6 million, down 80.1% from HKD 53.2 million in the previous year[35]. - Sales of electronic gaming equipment and systems generated an adjusted EBITDA of HKD 88.1 million, compared to HKD 10.5 million in the previous year[35]. - The group reported a consolidated asset value of HKD 608.5 million as of December 31, 2019, a decrease of HKD 20.2 million or 3.2% from HKD 628.7 million on December 31, 2018[61]. - The group aims to invest in high-tech and pioneering entertainment products to explore more opportunities in the entertainment technology sector and expand its market share globally[60]. Market Trends - The mass gaming segment accounted for 53.8% of Macau's total gaming revenue in 2019, up from 45.2% in 2018, indicating a shift from VIP to mass market gaming[28]. - The total gaming revenue in Macau decreased by 3.4% to HKD 292,500,000,000, while the number of visitors increased by 10.1% to 39,400,000[53]. Customer and Supplier Relationships - The group reported that the top five customers accounted for approximately 98.4% of total revenue, with the largest customer contributing about 58.6%[145]. - The top five suppliers represented around 70.2% of total sales and service costs, with the largest supplier accounting for approximately 29.9%[145]. Employee and Compensation - As of December 31, 2019, the group had approximately 1,210 employees, including about 730 gaming business employees hired by 澳博 or 銀娛[73]. - Total employee costs for the year ended December 31, 2019, amounted to HKD 452.6 million, an increase from HKD 412.7 million in 2018[73]. - Compensation paid or payable to gaming business employees hired by 澳博 or 銀娛 was HKD 265.9 million for the year, compared to HKD 241.1 million in 2018[73]. - The company's compensation policy is based on qualifications, performance, industry experience, and market trends[74]. Corporate Governance and Compliance - The company believes that corporate governance is key to its success and has adopted various measures to ensure high levels of governance[200]. - The independent auditor has issued an unqualified opinion regarding the group's disclosed continuing connected transactions[158]. - The company has complied with the corporate governance code during the year ended December 31, 2019, with some deviations noted[200]. COVID-19 Impact - The group is cautious about the impact of the COVID-19 pandemic on operations, particularly in the casinos it manages, and is committed to taking protective measures for customers and employees[59]. - The company suspended operations at its gaming venues due to the COVID-19 outbreak, with the Golden Sands Casino reopening on February 20, 2020, and the Grand Lisboa Casino on February 24, 2020[188]. - The ongoing global health crisis may significantly impact the company's operations, cash flow, and financial condition, although the extent of the impact remains uncertain[188]. Strategic Agreements and Contracts - A strategic agreement with IGT was established in April 2016, allowing the company to receive non-refundable advance payments for patent rights and related technologies[10]. - The group will not renew or extend the service contract for the management of the Huadu Casino, which expired on February 29, 2020, and will focus on maximizing returns from the Golden Sands Casino operations[58]. - The management service contract for the Grand Lisboa Casino expired on February 29, 2020, and the company will no longer provide management services from March 1, 2020[189].