[Performance Highlights](index=2&type=section&id=Performance%20Highlights) [Financial Summary](index=2&type=section&id=Financial%20Summary) In FY2024, the Group's total revenue decreased by **36.5%** to **RMB 526 million**, with gross profit margin improving to **6.7%**, while the loss for the year was **RMB 348 million**, and net current liabilities surged to **RMB 699 million**, indicating significant liquidity and financial risk Key Financial Performance Indicators | Indicator | 2024 | 2023 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 526 million RMB | 828 million RMB | -36.5% | | Gross Profit | 35.41 million RMB | 26.12 million RMB | +35.6% | | Gross Profit Margin | 6.7% | 3.2% | +3.5pp | | Loss for the Year | (348 million RMB) | (386 million RMB) | -9.8% | | Loss Attributable to Owners of the Company | (334 million RMB) | (382 million RMB) | -12.4% | | Basic Loss Per Share (RMB cents) | (13.495) | (15.362) | -12.2% | Key Financial Position Indicators | Indicator | As at December 31, 2024 | As at December 31, 2023 | | :--- | :--- | :--- | | Total Assets | 5.028 billion RMB | 5.306 billion RMB | | Total Liabilities | 3.582 billion RMB | 3.519 billion RMB | | Net Assets | 1.446 billion RMB | 1.787 billion RMB | | Net Current Liabilities | (699 million RMB) | (96 million RMB) | | Gearing Ratio | 72% | 66% | [Operating and Going Concern Risks](index=6&type=section&id=Operating%20and%20Going%20Concern%20Risks) The Group faces severe going concern challenges, with the auditor highlighting significant uncertainties due to a **RMB 348 million** annual loss and **RMB 699 million** net current liabilities, necessitating successful execution of management's mitigation plans including shareholder support and asset sales - The auditor emphasized in their independent report that the Group's annual loss and net current liabilities constitute a material uncertainty that may cast significant doubt on its ability to continue as a going concern[72](index=72&type=chunk) - As of year-end, the Group recorded a loss of approximately **RMB 348 million**, with current liabilities exceeding current assets by approximately **RMB 699 million**, and cash and cash equivalents of only **RMB 20 million**[9](index=9&type=chunk) - Management's measures to address liquidity pressure include: - The controlling shareholder, Science City Group, agreed to continue providing loan guarantees not exceeding **RMB 2 billion** - Seeking opportunities to dispose of equity interests in associates and subsidiaries - Accelerating collection of sales proceeds and controlling costs[12](index=12&type=chunk) [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss](index=2&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss) In FY2024, Group revenue decreased by **36.5%** to **RMB 526 million**, with gross profit increasing to **RMB 35.41 million**, but high operating and finance costs, coupled with increased expected credit loss provisions, led to a **RMB 432 million** loss before tax, narrowing to **RMB 348 million** after tax credits Consolidated Statement of Profit or Loss | Item | 2024 (thousand RMB) | 2023 (thousand RMB) | | :--- | :--- | :--- | | Revenue | 525,607 | 827,916 | | Gross Profit | 35,411 | 26,117 | | Selling and Distribution Expenses | (100,166) | (165,352) | | Administrative Expenses | (128,942) | (157,194) | | Provision for Expected Credit Losses | (70,115) | (39,545) | | Finance Costs | (171,656) | (144,670) | | Loss Before Income Tax | (431,573) | (419,118) | | Loss for the Year | (348,306) | (385,971) | | Loss Attributable to Owners of the Company | (334,391) | (381,536) | | Basic Loss Per Share (RMB cents) | (13.495) | (15.362) | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) Building on a **RMB 348 million** loss for the year, and incorporating other comprehensive income items like exchange differences and property revaluation surplus, the total comprehensive loss for the year amounted to **RMB 340 million**, a reduction from last year's **RMB 362 million** loss Consolidated Statement of Comprehensive Income | Item | 2024 (thousand RMB) | 2023 (thousand RMB) | | :--- | :--- | :--- | | Loss for the Year | (348,306) | (385,971) | | Other Comprehensive Income, Net of Tax | 7,931 | 24,373 | | Total Comprehensive Income for the Year | (340,375) | (361,598) | [Consolidated Statement of Financial Position](index=4&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of year-end 2024, total assets slightly decreased to **RMB 5.028 billion**, and net assets declined to **RMB 1.446 billion**, with a significant deterioration in liquidity as net current liabilities surged from **RMB 96 million** to **RMB 699 million**, indicating immense short-term repayment pressure Consolidated Statement of Financial Position | Item | 2024 (thousand RMB) | 2023 (thousand RMB) | | :--- | :--- | :--- | | **ASSETS** | | | | Non-current Assets | 3,002,462 | 3,145,022 | | Current Assets | 2,025,611 | 2,160,777 | | **Total Assets** | **5,028,073** | **5,305,799** | | **LIABILITIES AND EQUITY** | | | | Current Liabilities | 2,664,761 | 2,256,885 | | Non-current Liabilities | 917,163 | 1,262,390 | | **Total Liabilities** | **3,581,924** | **3,519,275** | | **Net Assets** | **1,446,149** | **1,786,524** | - The Group's net current liabilities amounted to **RMB 699 million**, compared to **RMB 96 million** in the prior year, indicating a significant deterioration in liquidity[6](index=6&type=chunk)[56](index=56&type=chunk) [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) [Basis of Preparation and Going Concern](index=6&type=section&id=Basis%20of%20Preparation%20and%20Going%20Concern) While financial statements are prepared on a going concern basis, both management and auditors acknowledge significant uncertainties due to substantial losses and severe liquidity shortfalls, with the Group's continued operation highly dependent on controlling shareholder support, successful asset sales, and improved operating performance - As of December 31, 2024, the Group's annual loss was approximately **RMB 348 million**, and current liabilities exceeded current assets by approximately **RMB 699 million**, indicating a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern[9](index=9&type=chunk) - The Group's ability to continue as a going concern depends on: (i) successfully obtaining continued financing from banks and creditors; (ii) timely and successful disposal of equity interests in associates and subsidiaries; and (iii) successful implementation of plans to improve operating performance[13](index=13&type=chunk) - The controlling shareholder, Science City Group, has agreed to continue providing guarantees for bank and other loans to the Group, totaling no more than **RMB 2 billion**, within the next twelve months[12](index=12&type=chunk) [Operating Segment Information](index=10&type=section&id=Operating%20Segment%20Information) The Group operates in four segments, with the core 'Manufacturing and Sales of Furniture' segment contributing the majority of revenue (**RMB 505 million**) and **RMB 43.81 million** in gross profit, while other smaller segments like hotel and property investment are mostly loss-making, and the Group's operations are highly concentrated in mainland China Operating Segment Performance | Segment (2024) | Segment Revenue (thousand RMB) | Segment Results (Gross Profit/Loss) (thousand RMB) | | :--- | :--- | :--- | | Manufacturing and Sales of Furniture | 505,306 | 43,807 | | Development Properties Held for Sale and Property Investment | – | – | | Hotel Business | 15,206 | (8,170) | | Trading of Aluminum Ingots and Rods | 5,095 | (226) | | **Total** | **525,607** | **35,411** | - Geographical segment information is not presented separately as the majority of the Group's revenue and non-current assets are located in mainland China[26](index=26&type=chunk) [Revenue, Other Income and Gains](index=12&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains) Total revenue in 2024 was **RMB 526 million**, primarily from sales of goods (**RMB 408 million**) and installation services (**RMB 103 million**), while other income and gains decreased to **RMB 69.99 million**, mainly due to lower bank interest income and the absence of prior year's fair value gains, with interest from an associate being a key component Revenue Breakdown | Revenue Sources (2024) | Amount (thousand RMB) | | :--- | :--- | | Sales of Goods | 407,825 | | Installation and Other Ancillary Services | 102,576 | | Hotel Business Revenue | 15,206 | | **Total Revenue** | **525,607** | Other Income and Gains Breakdown | Major Other Income and Gains (2024) | Amount (thousand RMB) | | :--- | :--- | | Interest Income from an Associate | 42,503 | | Compensation Income from Controlling Shareholder of an Associate | 9,467 | | Bank Interest Income | 5,023 | | Compensation from Legal Case | 4,000 | [Trade Receivables and Payables](index=16&type=section&id=Trade%20Receivables%20and%20Payables) At year-end, net trade receivables were **RMB 232 million**, but the provision for expected credit losses significantly increased from **RMB 21.94 million** to **RMB 81.57 million**, indicating higher collection risk, with a notable portion of receivables over one year old, while trade payables were **RMB 206 million**, with an increase in amounts over one year - The provision for expected credit losses on trade receivables increased from **RMB 21.94 million** at the beginning of the year to **RMB 81.57 million** at year-end, with a new provision of **RMB 59.63 million** recognized during the year[40](index=40&type=chunk) Trade Receivables Aging Analysis | Aging of Trade Receivables (Net) | 2024 (thousand RMB) | 2023 (thousand RMB) | | :--- | :--- | :--- | | Within One Year | 146,007 | 166,023 | | One to Two Years | 44,320 | 70,355 | | Over Two Years | 41,693 | – | [Management Discussion and Analysis](index=19&type=section&id=Management%20Discussion%20and%20Analysis) [Financial Review](index=19&type=section&id=Financial%20Review) In 2024, revenue significantly decreased by **36.5%** due to a weak consumer market and the termination of commodity trading, while gross profit margin improved to **6.7%**; despite reduced selling and administrative expenses, increased finance costs and expanded losses from associates impacted the year's overall loss - Revenue decreased by **36.5%** to **RMB 526 million**, primarily due to a weak consumer market and the Group's termination of commodity trading business[48](index=48&type=chunk) - The overall gross profit margin increased from **3.2%** to **6.7%**, mainly due to improved gross profit margin in the furniture business and the cessation of low-margin commodity trading business[48](index=48&type=chunk) - Selling and distribution expenses decreased by **39.4%**, and administrative expenses decreased by **18.0%**, primarily benefiting from cost control measures; however, finance costs increased by **18.7%**[50](index=50&type=chunk) [Business Review](index=20&type=section&id=Business%20Review) Facing real estate market adjustments and consumption downgrades, the Group saw reduced dealer orders and closed three direct stores, while engaging a new brand ambassador to attract younger consumers; despite efforts to expand furniture engineering projects, this business experienced a slight decline, though hotel business revenue grew by **30.2%**, showing continuous improvement - Affected by real estate market adjustments and consumption downgrades, dealer orders decreased, and the Group closed three direct stores to cut losses[52](index=52&type=chunk)[53](index=53&type=chunk) - The Group appointed artist Ms. Yao Anna as its new brand ambassador to convey a young and fashionable brand image[53](index=53&type=chunk) - The hotel business continued to improve, with revenue increasing by approximately **30.2%** year-on-year[54](index=54&type=chunk) [Liquidity and Financial Resources](index=21&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's liquidity position is extremely tight, with cash and cash equivalents at only **RMB 20.5 million** at year-end, as the current ratio deteriorated from **0.96** to **0.74**, net current liabilities surged to **RMB 699 million**, and the gearing ratio increased from **66%** to **72%**, reflecting increased debt burden and financial risk Liquidity and Gearing Ratios | Indicator | As at December 31, 2024 | As at December 31, 2023 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 20.50 million RMB | 29.30 million RMB | | Current Ratio | 0.74 | 0.96 | | Net Current Liabilities | 699 million RMB | 96 million RMB | | Gearing Ratio | 72% | 66% | [Outlook](index=21&type=section&id=Outlook) For 2025, the Group anticipates continued economic recovery in China but a gradual consumer market improvement, focusing on its core home furnishing business by leveraging a new brand ambassador to expand sales channels and optimize cost structure, while financially planning to optimize its capital structure through timely asset sales to repay bank loans, reduce finance costs, and improve cash flow - The Group will continue to allocate resources to develop its home furnishing business, utilizing its brand and new brand ambassador to expand sales channels and optimize its cost structure[59](index=59&type=chunk) - The Group plans to continuously optimize its financial structure in 2025, disposing of assets in a timely manner to repay bank loans, aiming to reduce debt size and expenses[60](index=60&type=chunk) [Other Significant Matters](index=22&type=section&id=Other%20Significant%20Matters) [Summary of Independent Auditor's Report](index=25&type=section&id=Summary%20of%20Independent%20Auditor%27s%20Report) The auditor issued an unmodified opinion on the financial statements but highlighted a 'material uncertainty related to going concern,' noting that the Group's losses and liquidity issues raise significant doubt about its ability to continue as a going concern, though the auditor's opinion was not modified in respect of this matter - The auditor believes that the financial statements present a true and fair view of the Group's financial position and performance[71](index=71&type=chunk) - The report specifically draws attention to the "material uncertainty related to going concern" described in Note 2.1 to the financial statements, but the auditor's opinion was not modified in respect of this matter[72](index=72&type=chunk) [Corporate Governance](index=26&type=section&id=Corporate%20Governance) The Company largely complied with the Corporate Governance Code, with one deviation: the roles of Chairman and Chief Executive Officer are not separated, both held by Mr. Lin Ruhai, which the Company believes provides strong and stable leadership, and this structure will be continuously reviewed - The Company deviated from the Corporate Governance Code's provision requiring the separation of the roles of Chairman and Chief Executive Officer[73](index=73&type=chunk) - Mr. Lin Ruhai concurrently holds the positions of Chairman and Chief Executive Officer; the Board believes this structure provides strong and stable leadership and effective execution of business strategies[74](index=74&type=chunk) [Dividend Policy](index=15&type=section&id=Dividend%20Policy) Given the Company's loss-making position and financial pressures, the Board has resolved not to declare a final dividend for the year ended December 31, 2024 - The Board has resolved not to declare a final dividend for the year ended December 31, 2024[79](index=79&type=chunk) - The Company did not declare or pay any dividends in FY2024 and FY2023[35](index=35&type=chunk) [Events After Reporting Period](index=22&type=section&id=Events%20After%20Reporting%20Period) On February 20, 2025, the Company's indirect wholly-owned subsidiary publicly listed its intention to sell a **25%** equity interest in Dongma (Guangzhou Bonded Area) Oil & Chemical Co., Ltd., as part of the Company's asset disposal plan to improve liquidity - The Company's indirect wholly-owned subsidiary intends to sell a **25%** equity interest in Dongma (Guangzhou Bonded Area) Oil & Chemical Co., Ltd. through public listing, with the listing announcement published on February 20, 2025[61](index=61&type=chunk)

Financial Performance - Revenue for the first half of 2024 decreased by 50.1% to approximately RMB 253.2 million, with a gross margin dropping from 19.8% to 7.0%[7] - The company recorded a loss attributable to equity holders of RMB 147.6 million, compared to a loss of RMB 73.1 million in the same period last year[7] - Revenue for the six months ended June 30, 2024, was RMB 253,168,000, a decrease of 50.2% compared to RMB 507,737,000 for the same period in 2023[34] - Gross profit for the same period was RMB 17,726,000, down 82.4% from RMB 100,691,000 in 2023[34] - The company reported a loss before tax of RMB 150,284,000, compared to a loss of RMB 75,608,000 in the previous year, representing a 98.5% increase in losses[34] - The total comprehensive loss for the period was RMB 152,568,000, compared to RMB 70,609,000 in the same period last year, marking a 115.5% increase in comprehensive losses[36] - For the six months ended June 30, 2024, the company reported a loss attributable to equity holders of RMB 147,638,000, compared to a loss of RMB 73,146,000 for the same period in 2023, representing a 101.5% increase in losses year-over-year[67] Assets and Liabilities - Inventory decreased by 4.0% to RMB 290.2 million, while prepayments and other receivables increased by 4.4% to RMB 421.9 million[8] - As of June 30, 2024, the net current liabilities were RMB 206.7 million, up from RMB 96.1 million at the end of 2023[8] - Cash and cash equivalents were approximately RMB 65.8 million, with restricted cash of about RMB 58.0 million, indicating sufficient liquidity for operations[8] - The current ratio (current assets/current liabilities) was 0.91 times as of June 30, 2024, down from 0.96 times as of December 31, 2023[18] - The company reported a net loss of approximately RMB 150 million for the six months ended June 30, 2024, with current liabilities exceeding current assets by approximately RMB 207 million[42] - Total current assets as of June 30, 2024, were RMB 4,710,344,000, while total current liabilities were RMB 2,239,026,000, resulting in a net current liability of RMB (206,656,000)[33][38] Debt and Financing - Interest-bearing bank and other borrowings amounted to RMB 2,307.2 million as of June 30, 2024, compared to RMB 2,389.9 million as of December 31, 2023[18] - The debt-to-equity ratio as of June 30, 2024, was 69%, up from 66% on December 31, 2023[20] - The group has pledged assets totaling approximately RMB 575.5 million in usage rights and RMB 100 million in fixed deposits as collateral for bank loans as of June 30, 2024[20] - The company has bank and other loans amounting to RMB 1,870 million, guaranteed by a related party, with a total guarantee limit of RMB 2,000 million[43] - The company aims to convert high-interest short-term debt into lower-interest long-term debt to reduce financial expenses[9] - The company incurred financing costs of RMB 77,931,000, an increase from RMB 72,172,000 in the previous year[34] Operational Developments - The hotel business saw significant improvement in occupancy rates and revenue following a successful upgrade and repositioning in the market[7] - The company plans to enhance its brand image by signing young artist Yao Anna as a brand ambassador to resonate with younger consumers[9] - The strategic partnership with Science City Group is expected to bolster project cooperation and expand the scale and variety of furniture engineering projects[9] - The company anticipates a recovery in the real estate market, which may positively impact the furniture industry and related sectors[9] - The group has postponed the construction of new production facilities due to slow recovery in consumer demand and a weak real estate market in China[23] - The company has committed to a construction project in Guangdong, with agreements signed for construction services, indicating ongoing expansion efforts[27] Shareholder Information - As of June 30, 2024, the total issued shares of the company were 2,598,561,326, with major shareholders holding 74.86% of the equity[12] - Mr. Xie directly beneficially owned 282,948,047 shares, representing 10.89% of the issued share capital[12] - The company has a performance share award plan in place, with 120,690,000 shares held in the award pool, representing approximately 4.64% of the total issued shares[17] - No shares were purchased under the performance share award plan during the reporting period, and no awards were granted or vested[18] - The company confirmed that its public float exceeds 25%, ensuring compliance with listing rules[26] Employee and Management - The total number of employees as of June 30, 2024, was approximately 1,011, down from 1,358 on December 31, 2023[24] - The total remuneration for key management personnel decreased to RMB 3,912,000 in 2024 from RMB 5,307,000 in 2023, a decline of 26.3%[80] Compliance and Governance - The company has taken remedial actions to prevent future non-compliance with listing rules regarding related transactions[27] - The company has maintained compliance with the standard code of conduct for securities trading by its directors and employees throughout the reporting period[26] - The company has not disclosed any changes in director information that require disclosure under listing rules[27] - The group did not recognize any tax provision for Hong Kong profits tax due to no taxable profits generated in Hong Kong during the period[63]

Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 425.3 million, a decrease of 16.2% compared to RMB 507.7 million for the same period in 2023[2] - Gross profit for the period was RMB 17.7 million, down 82.4% from RMB 100.7 million in the previous year[2] - The company reported a loss of RMB 150.1 million for the period, compared to a loss of RMB 75.6 million in the same period last year, representing a 98.5% increase in losses[2] - Basic loss per share was RMB 5.958, compared to RMB 2.944 in the previous year[2] - Revenue from continuing operations for the six months ended June 30, 2024, was RMB 253,168,000, a decrease of 50% compared to RMB 507,737,000 for the same period in 2023[19] - The group reported a loss before tax from continuing operations of RMB 150,284,000 for the six months ended June 30, 2024[15] - The group recorded a loss attributable to the parent company of RMB 147.6 million, compared to a loss of RMB 73.1 million in the same period last year[33] Assets and Liabilities - Non-current assets totaled RMB 3,083.3 million as of June 30, 2024, a decrease from RMB 3,145.0 million as of December 31, 2023[4] - Current liabilities increased to RMB 2,295.6 million from RMB 2,256.9 million at the end of 2023[4] - Total equity decreased to RMB 1,634.0 million from RMB 1,786.5 million at the end of 2023[6] - The company’s cash and cash equivalents were RMB 27.5 million, down from RMB 29.3 million at the end of 2023[4] - Trade receivables as of June 30, 2024, amounted to RMB 239,635,000, slightly up from RMB 236,378,000 in 2023, showing a marginal increase of about 1.1%[27] - Trade payables as of June 30, 2024, totaled RMB 168,179,000, down from RMB 220,658,000 in 2023, representing a decrease of approximately 23.7%[28] - As of June 30, 2024, net current liabilities were RMB 206.7 million, up from RMB 96.1 million at the end of 2023[35] Financing and Debt - The company’s financing costs increased to RMB 77.9 million from RMB 72.2 million in the previous year[2] - The group has bank and other loans amounting to RMB 1,870 million, guaranteed by Science City, which has agreed to continue providing guarantees for existing and new loans up to RMB 2,000 million over the next twelve months[8] - The group successfully renewed or obtained additional bank and other loans amounting to RMB 163 million after the reporting date[8] - The group aims to reduce debt service costs by converting high-interest short-term debt into lower-interest long-term debt[37] - Interest-bearing bank and other borrowings totaled RMB 2,307.2 million as of June 30, 2024, down from RMB 2,389.9 million as of December 31, 2023[38] - The debt-to-asset ratio was 69% as of June 30, 2024, an increase from 66% as of December 31, 2023[39] Operational Performance - The group aims to enhance operational performance by accelerating the collection of outstanding receivables and controlling costs and expenses[9] - The furniture products segment generated revenue of RMB 239,697,000, while the hotel business segment contributed RMB 8,696,000 for the six months ended June 30, 2024[16] - The group’s hotel business revenue increased to RMB 8,696,000 in 2024 from RMB 5,190,000 in 2023, reflecting a growth of 67.5%[19] - The group’s total segment loss before tax was RMB 98,250,000 for the six months ended June 30, 2024[16] - The group is optimistic about the growth of furniture engineering project revenue for the full year, supported by strategic partnerships[32] - The group plans to adapt to market changes and expand its furniture engineering project scope and variety to enhance revenue and market share[36] Governance and Compliance - The board of directors decided not to declare an interim dividend for the six months ended June 30, 2024, compared to no dividend for the same period in 2023[44] - The audit committee reviewed the financial performance for the six months ended June 30, 2024, but no external independent audit was conducted[45] - The board of directors includes two executive directors and four non-executive directors, ensuring a diverse governance structure[47] - The chairman and CEO of the company is Lin Ru Hai, indicating strong leadership presence[47] Market and Strategic Initiatives - The group signed a contract with young artist Yao Anna as a brand ambassador to enhance its brand image targeting younger consumers[36] - The government’s support for the real estate sector is expected to boost industry recovery and consumer confidence, benefiting the group[36] - The group plans to seek suitable opportunities to sell certain equity interests to improve liquidity[9] Changes in Accounting and Reporting - The presentation currency of the consolidated financial statements has changed from HKD to RMB, with comparative figures restated accordingly[10] - The group has adopted new and revised Hong Kong Financial Reporting Standards, which do not impact its financial position or performance[11] - The company did not recognize any tax provision for Hong Kong profits tax due to no taxable profits generated in the region during the period[22] - The company did not engage in any purchases, sales, or redemptions of its listed securities during the period[46] - The company will distribute its interim report for the six months ending June 30, 2024, to shareholders and publish it on the Hong Kong Stock Exchange website and its own website[47]

Financial Performance - For the fiscal year ending December 31, 2023, the company reported a sales revenue decline of 43.4% to RMB 827.9 million[13]. - The gross profit margin decreased significantly from 14.4% to 3.2% year-on-year[13]. - The company recorded a net loss attributable to shareholders of RMB 381 million for the year[13]. - The company recorded revenue of RMB 827.9 million for the year ended December 31, 2023, a decrease of 43.3% compared to RMB 1,461.0 million in 2022 due to the termination of the merchandise trading business[18]. - The overall gross profit margin fell from 14.4% in 2022 to 3.2% in 2023, with the furniture business gross profit margin decreasing from 24.6% to 7.4%[18]. - The company reported a loss of RMB 386.0 million for the year, a significant decline of 3,727.5% compared to a profit of RMB 10.6 million in 2022[18]. - Selling and distribution expenses increased by 44.9% to approximately RMB 165.4 million, primarily due to increased promotional activities[18]. - Administrative expenses rose by 20.6% to RMB 157.2 million, mainly due to increased consulting and guarantee fees related to bank and other borrowings[18]. - Financing costs increased by 20.8% to RMB 144.7 million due to higher average borrowings and interest rates[18]. - The company reported a pre-tax loss of RMB 419,118 thousand for the year ended December 31, 2023, compared to a loss of RMB 96,334 thousand in the previous year[163]. - The company incurred financing costs of RMB 144,670 thousand, an increase from RMB 119,795 thousand in the previous year[153]. Business Operations - The number of sales outlets increased by 1.7% year-on-year to 1,942[12]. - The company has deepened its collaboration with strategic shareholder Science City Group, leading to significant growth in furniture project sales[12]. - The company has adjusted product pricing and combinations to maintain competitiveness amid a slowdown in the real estate market[12]. - The hotel in Zengcheng, Guangdong, underwent upgrades and re-entered the market, with expectations for improved gross profit margins in the future[12]. - The company has focused on developing a comprehensive range of home products to meet current market demands[12]. - The company has increased discount promotions significantly, impacting gross margins and operating expenses[12]. - The group is focusing on developing a one-stop comprehensive home product line to meet current market demands[20]. - The group has terminated its commodity trading business, resulting in a significant reduction in revenue due to structural changes[21]. - The group has provided guarantees amounting to RMB 333 million during the year, secured by a 40% equity stake in an associate company[27]. - The company plans to actively pursue collaborations with commercial clients and participate in more government-led projects to expand its furniture engineering business[14]. Financial Position and Liquidity - As of December 31, 2023, the group's cash and cash equivalents were RMB 29.3 million, down from RMB 356.8 million in 2022, indicating a significant decrease in liquidity[23]. - The group's current ratio decreased to 0.96 as of December 31, 2023, compared to 1.16 in 2022, reflecting a decline in short-term financial health[23]. - The debt-to-asset ratio increased to 66% as of December 31, 2023, up from 56% in 2022, indicating a higher level of financial leverage[24]. - Current liabilities exceeded current assets by approximately RMB 96 million as of December 31, 2023[60]. - The company has bank and other loans amounting to RMB 1,816 million guaranteed by Science City, which has agreed to continue providing guarantees for existing and new loans up to RMB 2,000 million[60]. - The company successfully renewed or obtained new bank and other loans totaling RMB 356 million after the fiscal year-end[60]. - The company plans to seek opportunities to sell certain equity interests to improve liquidity[171]. - The company aims to improve operational performance and accelerate the collection of outstanding sales proceeds and other receivables[60]. Corporate Governance - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance shareholder value[30]. - The board of directors consists of nine members, including two executive directors, four non-executive directors, and three independent non-executive directors as of December 31, 2023[35]. - The company emphasizes the importance of effective internal controls and risk management measures in its corporate governance practices[30]. - The company has a governance structure that allows for effective decision-making and implementation of business strategies, with the roles of Chairman and CEO currently held by the same individuals[37]. - The board has established procedures to address potential conflicts of interest, ensuring independent directors are present to handle such matters[40]. - The company has a policy of rotating directors at least every three years, in accordance with its articles of association[41]. - The company has arranged appropriate liability insurance to indemnify directors and management against legal claims, with no claims reported during the year[46]. - The Audit Committee consists of three independent non-executive directors and met twice in 2023 to ensure the accuracy of the company's financial statements[51]. - The company has adopted a shareholder communication policy, utilizing various channels including annual general meetings and the company website to maintain effective communication with shareholders[64]. Market Conditions and Strategic Outlook - The company recognizes the challenges in the economic recovery path but believes in its ability to tap into the potential of the entire home furnishing industry in China, developing more effective and flexible business models[29]. - The government has proposed to address real estate risks and maintain economic stability, which is expected to stimulate the recovery of the home furnishing industry and related sectors[28]. - The company adopted a more cautious expansion strategy due to slow recovery in consumer demand and a weak real estate market in China[84]. - The company is focused on diversifying its business to enhance overall competitiveness and maximize shareholder value[29]. - The company will continue to integrate dealer management, tailoring strategies to regional characteristics to enhance resource sharing and improve sales network efficiency and profitability[29]. Shareholder Information - The company will not declare a final dividend for the year ended December 31, 2023, compared to a final dividend of HKD 0.01 per share in 2022[16]. - The board may declare dividends in the future based on the group's operating, profit, financial condition, cash needs, and other relevant factors, with the amount subject to shareholder approval[69]. - The company has a commitment to ensuring compliance with the Cayman Islands company law and its own articles of association regarding dividend payments[69]. - The company’s future dividend declarations may not reflect past practices and will be at the board's discretion[69]. Risk Management - The company has established a comprehensive risk management system, continuously monitoring and assessing risks based on past annual evaluations[62]. - The internal audit department conducts regular independent checks to identify any violations and risks, reporting major findings to management[62]. - The company has implemented measures to prevent non-compliance incidents, including legal consultations and enhanced internal communication policies[63]. - The company has identified various financial and operational risks, particularly related to the performance of the Chinese furniture market[92]. Human Resources - The group employed 1,358 people as of December 31, 2023, a decrease from 1,490 in 2022[122]. - The compensation for senior management (excluding directors) ranged from zero to RMB 2.5 million, with a total of four individuals falling within specified salary ranges[123]. - The company has not set measurable targets for implementing its diversity policy within the board and employee team[59]. - The board consists of 8 male directors and 1 female director, with a gender ratio of approximately 3:2 among employees[59]. Financial Reporting and Compliance - The consolidated financial statements for the year ended December 31, 2023, were audited by Ernst & Young, who will retire at the upcoming annual general meeting[137]. - The company has complied with the disclosure requirements under Chapter 14A of the Listing Rules regarding related party transactions[133]. - The company has adopted new and revised Hong Kong Financial Reporting Standards for the fiscal year ending December 31, 2023, with no significant impact on the financial statements[177]. - The company will recognize any changes in the fair value of contingent consideration at the acquisition date in the profit and loss statement[183].

Financial Performance - Total revenue for the year ended December 31, 2023, was RMB 827,916 thousand, a decrease of 43.3% compared to RMB 1,461,037 thousand in 2022[2] - Gross profit for the year was RMB 26,117 thousand, down 87.6% from RMB 210,812 thousand in the previous year[2] - The company reported a loss for the year of RMB 385,971 thousand, compared to a profit of RMB 10,640 thousand in 2022[2] - The group reported a pre-tax loss from continuing operations of RMB 419,118,000, compared to a loss of RMB 96,334,000 in the previous year[21] - The group reported a loss of RMB 386.0 million for the year, a significant decline of 3,727.5% compared to a profit of RMB 10.6 million in 2022, attributed to decreased gross margin and increased operating expenses[43] - The group reported a pre-tax loss of RMB 186,991,000 in 2023, compared to a loss of RMB 203,719,000 in 2022, reflecting an improvement of approximately 8.2%[29] Assets and Liabilities - Total assets less current liabilities as of December 31, 2023, were RMB 3,048,914 thousand, down from RMB 3,584,510 thousand in 2022[6] - Non-current assets, including property, plant, and equipment, totaled RMB 797,143 thousand, a decrease from RMB 824,154 thousand in the previous year[5] - The company’s total liabilities increased to RMB 2,256,885 thousand from RMB 1,832,442 thousand in 2022, reflecting a significant rise in current liabilities[5] - Current liabilities exceeded current assets by approximately RMB 96 million as of December 31, 2023[10] - Total assets as of December 31, 2023, amounted to RMB 5,305,799,000, while total liabilities were RMB 3,519,275,000[21] Cash Flow and Liquidity - Cash and cash equivalents decreased to RMB 29,270 thousand from RMB 356,829 thousand in the previous year[5] - Cash and cash equivalents amounted to RMB 29 million at the end of the reporting period[10] - As of December 31, 2023, the group's cash and cash equivalents amounted to RMB 29.3 million, a decrease from RMB 356.8 million in 2022[50] - The current ratio as of December 31, 2023, decreased to 0.96 from 1.16 in 2022, with net current liabilities of RMB 96.1 million compared to net current assets of RMB 284.0 million in 2022[50] Financing and Debt - The company’s financing costs rose to RMB 144,670 thousand from RMB 119,795 thousand in 2022, indicating increased borrowing costs[2] - The total amount of interest-bearing bank and other borrowings as of December 31, 2023, was RMB 2,389.9 million, an increase from RMB 2,250.4 million in 2022[50] - The debt-to-asset ratio as of December 31, 2023, was 66%, up from 56% in 2022[51] - The group aims to reduce debt expenses by converting high-interest short-term debt into lower-interest long-term debt[53] Operational Performance - The company is implementing measures to improve operational performance and accelerate the collection of receivables[11] - The group aims to capture market demand by developing a comprehensive range of home furnishing products and optimizing its offline distribution network, resulting in a 1.7% increase in sales points to 1,942[45] - The group is actively collaborating with strategic shareholder Science City Group to expand its furniture engineering project sales, alleviating some of the declines in distributor sales[46] Segment Performance - The furniture manufacturing segment generated revenue of RMB 782,825,000, while the hotel business contributed RMB 12,838,000, and the trading segment accounted for RMB 32,253,000[21] - The group’s total revenue from hotel operations decreased from RMB 36,442,000 in 2022 to RMB 12,838,000 in 2023, indicating a significant decline in this segment[25] - The furniture manufacturing segment's performance showed a gross profit of RMB 57,857,000, while the hotel business reported a loss of RMB 32,847,000[21] Shareholder and Governance - The board has resolved not to declare a final dividend for the year ended December 31, 2023[70] - The company has complied with the corporate governance code except for certain deviations regarding the roles of the chairman and CEO[64] - The audit committee consists of three independent non-executive directors and has reviewed the consolidated financial statements for the year ended December 31, 2023[68] Future Outlook - The group recognizes the challenges in the economic recovery path but believes in its ability to tap into the potential of the Chinese home furnishing industry[53] - The company is committed to continuous investment in the development project, aiming to secure future returns and enhance its market position[58] Employee and Training - The group employed approximately 1,358 employees as of December 31, 2023, and offers competitive compensation packages along with performance-based stock rewards[61] - The company is focused on improving employee skills and professional knowledge through training programs, enhancing overall workforce capability[61]

Financial Performance - For the six months ended June 30, 2023, the group's revenue decreased by 19.3% to approximately HKD 573.4 million, while the gross profit margin increased from 17.2% to 19.8%[8] - The group recorded a loss attributable to equity holders of HKD 82.6 million for the period, compared to a loss of HKD 73.8 million in the same period last year[8] - The gross profit for the same period was HKD 113,718,000, down from HKD 122,158,000, reflecting a decline of 6.0%[47] - The company incurred a loss of HKD 85,384,000 for the six months ended June 30, 2023, compared to a loss of HKD 79,267,000 in the prior year, representing an increase in loss of 7.1%[48] - The total comprehensive loss for the six months ended June 30, 2023, was HKD 184,248,000, compared to a loss of HKD 206,060,000 for the same period in 2022, representing a decrease of approximately 10.5%[49] - The total comprehensive loss attributable to owners of the parent was HKD 175,273,000 for the six months ended June 30, 2023, compared to HKD 194,079,000 for the same period in 2022, indicating an improvement of about 9.7%[49] Assets and Liabilities - As of June 30, 2023, the group's net current assets were HKD 125.3 million, down from HKD 326.8 million as of December 31, 2022[10] - The company's total liabilities decreased to HKD 3,426,043,000 as of June 30, 2023, from HKD 3,707,718,000 as of December 31, 2022, representing a reduction of about 7.6%[51] - The company's equity attributable to owners of the parent decreased to HKD 2,074,855,000 as of June 30, 2023, from HKD 2,281,474,000 as of December 31, 2022, reflecting a decline of approximately 9.1%[51] - The company's interest-bearing bank and other borrowings amounted to HKD 2,315.1 million as of June 30, 2023, down from HKD 2,547.0 million as of December 31, 2022[22] - The debt-to-equity ratio was 59% as of June 30, 2023, an increase from 56% as of December 31, 2022[23] Cash Flow and Liquidity - The group had cash and cash equivalents of approximately HKD 320 million and restricted cash of about HKD 230 million as of mid-August 2023, indicating sufficient liquidity to support operations[10] - The company's cash and cash equivalents decreased to HKD 15,267,000 at the end of the reporting period, down from HKD 127,147,000 at the end of June 30, 2022, indicating a significant reduction in liquidity[53] - The net cash outflow from operating activities was HKD 101,140,000 for the six months ended June 30, 2023, compared to HKD 86,628,000 for the same period in 2022, indicating a decline in cash flow from operations[53] - The company reported a net cash outflow from financing activities of HKD 175,403,000 for the six months ended June 30, 2023, compared to a cash inflow of HKD 55,048,000 in the same period of 2022, highlighting a significant change in financing strategy[53] Business Strategy and Operations - The group plans to optimize its business operations and expand its furniture product sales network, focusing on the younger generation market[11] - The group aims to enhance project cooperation with commercial clients to expand its engineering project business scope[12] - The group will implement a centralized procurement system to better manage and optimize manufacturing costs in the second half of the year[12] - The group is committed to leveraging its established brand and prudent management model to seize market opportunities and enhance overall strength[12] Shareholder Information - The company has a total of 1,945,391,280 shares, representing 74.86% of the issued share capital, held by a group of concert parties including Mr. Xie Jinpeng[19] - Mr. Xie directly beneficially owns 282,948,047 shares, equivalent to 10.89% of the issued share capital[15] - The performance share award plan has a total of 129,928,066 shares authorized for grant, representing 5% of the issued shares[21] - During the reporting period, 2,842,000 shares were purchased under the performance share award plan[21] Employee and Management Information - The total number of employees as of June 30, 2023, was approximately 1,459, a decrease from 1,490 as of December 31, 2022[34] - The total remuneration for key management personnel was 5,994 thousand HKD for the six months ended June 30, 2023, down from 6,290 thousand HKD in the same period of 2022[84] - The chairman and CEO roles are held by the same individual, which the company believes provides strong leadership and effective decision-making[35] Future Outlook and Commitments - The company has a commitment of up to RMB 1.532 billion related to a joint venture for a land acquisition in Guangzhou, with a maximum shareholder loan amount of RMB 732 million[41] - The group has provided guarantees totaling HKD 346,080,000 (equivalent to RMB 320,000,000) during the period[32] - There are no significant future investment or capital asset plans disclosed as of June 30, 2023[28] Market and Segment Performance - The furniture products segment reported a profit before tax of HKD 23,535,000, while the property investment and development segment incurred a loss of HKD 76,155,000 for the same period[61] - The group’s total sales to external customers for the six months ended June 30, 2023, were HKD 573,424,000, with significant contributions from the furniture products and trading segments[61] - The group recorded a total loss before tax from continuing operations of HKD 85,384,000 for the six months ended June 30, 2023[60] - There were no sales to a single customer that accounted for 10% or more of the group's revenue during the reporting period[64]

Financial Performance - Revenue for the six months ended June 30, 2023, was HKD 573,424,000, a decrease of 19.4% compared to HKD 710,995,000 for the same period in 2022[2] - Gross profit for the same period was HKD 113,718,000, down 6.0% from HKD 122,158,000 in 2022[2] - The company reported a loss of HKD 85,384,000 for the six months ended June 30, 2023, compared to a loss of HKD 79,267,000 in the prior year, representing a 7.7% increase in loss[2][3] - Basic loss per share for the period was HKD 3.324, compared to HKD 2.966 in the same period last year, indicating a 12.0% increase in loss per share[2] - The segment performance showed a loss of HKD 70,706,000 for the total operations, compared to a loss of HKD 59,453,000 in the previous year, indicating a worsening performance[14] - The company reported a loss attributable to equity holders of HKD 82,603,000 for the six months ended June 30, 2023, compared to a loss of HKD 73,781,000 in the same period of 2022[19] - The company did not declare an interim dividend for the six months ended June 30, 2023, compared to a special dividend of HKD 0.04 per share in the previous year[21] Assets and Liabilities - Total assets less current liabilities as of June 30, 2023, were HKD 3,740,326,000, down from HKD 4,059,969,000 as of December 31, 2022[5] - Non-current liabilities, including interest-bearing bank and other borrowings, amounted to HKD 1,058,507,000 as of June 30, 2023, compared to HKD 1,303,360,000 at the end of 2022[5] - The company's total equity decreased to HKD 2,205,216,000 as of June 30, 2023, from HKD 2,420,810,000 at the end of 2022, reflecting a decline of 8.9%[6] - Cash and cash equivalents as of June 30, 2023, were HKD 15,267,000, down from HKD 403,863,000 at the end of 2022, indicating a significant liquidity reduction[4] - As of June 30, 2023, the group's net current assets were HKD 125.3 million, a decrease from HKD 326.8 million as of December 31, 2022[32] - The current ratio (current assets/current liabilities) was 1.07 as of June 30, 2023, down from 1.16 as of December 31, 2022[35] Revenue and Income - The company reported a decrease in other income and gains to HKD 27,859,000 from HKD 41,770,000 in the previous year, a decline of 33.4%[2] - Total revenue from external customers for the six months ended June 30, 2023, was HKD 573,424,000, a decrease from HKD 710,995,000 in the same period of 2022, representing a decline of approximately 19.4%[14] - Revenue decreased by 19.3% to approximately HKD 573.4 million, while gross margin increased from 17.2% to 19.8%[30] Operational Strategy - The company plans to focus on market expansion and new product development to improve future performance[1] - The company plans to relaunch a hotel in Guangdong with a new brand image to capture the recovering domestic tourism market[30] - The group aims to optimize its business operations and expand its sales network for furniture products, accelerating store expansion and enhancing operational efficiency[33] - The group plans to strengthen its internal systems and optimize manufacturing costs in response to favorable government policies, focusing on enhancing asset returns[33] - The group will actively pursue commercial customer project collaborations to expand its business scope in engineering projects[33] Accounting and Compliance - The group has adopted new and revised Hong Kong Financial Reporting Standards effective from January 1, 2023, which will impact the accounting policy disclosures in the annual consolidated financial statements[9] - The group has applied the amendments to HKAS 12 regarding deferred tax assets and liabilities related to leases, effective from January 1, 2022, with no cumulative impact on retained earnings[10] - The group has not reported any significant changes in its financial position or performance due to the adoption of the new accounting standards[10] - The group has not disclosed any significant tax risks related to the second pillar income tax as it does not fall under the scope of the new regulations[11] - The company has maintained compliance with the corporate governance code, with no significant deviations reported[37] Employee and Management - The total number of employees as of June 30, 2023, was approximately 1,459, a slight decrease from 1,490 as of December 31, 2022[36] - The group has established a performance share award plan to incentivize eligible employees, although no shares were granted under this plan as of June 30, 2023[36] - The company has appointed Mr. Yang Jun as both Chairman and Chief Executive Officer, effective June 9, 2023, to provide strong and stable leadership[44] Miscellaneous - The group has confirmed deferred tax assets related to all deductible temporary differences associated with lease liabilities as of January 1, 2022[10] - The group’s management monitors the performance of each operating segment to make resource allocation decisions[12] - The group has not engaged in any purchase, sale, or redemption of its securities during the period ending June 30, 2023[41] - The company has proposed amendments to its Articles of Association to establish a dual chairman structure, which was approved at the special general meeting on June 9, 2023[43] - The company will publish its interim report, including the condensed consolidated financial statements, on its website and the stock exchange's website[45]

Shareholder Loan - The maximum principal amount of the shareholder loan is RMB 732,000,000[2] - The annual interest rate for the shareholder loan is 8%[2] - The repayment of the shareholder loan is required upon request[2] - The shareholder loan is unsecured and does not have any collateral[2] - The shareholder loan is part of the company's commitment and responsibilities under the joint venture agreement[4] Joint Venture - The total commitment for the joint venture is RMB 1,532,000,000, with the company holding a 40% stake[4] - The company views the establishment of the joint venture as an excellent investment opportunity[4] Land Acquisition - The target land area purchased for residential and commercial use is approximately 196,435.11 square meters[4] - The company aims to leverage its expertise in the region for the successful development of the target land[4] Share Incentives - The company has not proposed any share incentive or stock option rewards for the year ending December 31, 2022[2]

Financial Performance - For the year ended December 31, 2022, the company recorded a sales revenue of HKD 1,702.9 million, representing an increase of 11.6% year-on-year[14]. - The gross profit margin decreased from 20.8% to 14.4% compared to the previous year[14]. - The net profit attributable to the owners of the parent company was HKD 5.586 million, a significant decline from HKD 76.897 million in the previous year[14]. - Profit for the year was HKD 12.4 million, a decrease of 86.0% from HKD 88.3 million in 2021, with profit attributable to equity holders of the parent down 92.7% to HKD 5.6 million[23]. - Revenue for the year 2022 was HKD 1,702,936 thousand, an increase of 11.5% from HKD 1,526,506 thousand in 2021[198]. - Gross profit decreased to HKD 245,716 thousand from HKD 318,226 thousand, reflecting a decline of 22.7%[198]. - The net profit for the year was HKD 12,403 thousand, down from HKD 88,300 thousand, representing a decrease of 86.0%[200]. - Basic earnings per share for the parent company shareholders dropped to HKD 0.225 from HKD 2.999, a decline of 92.5%[198]. Operational Developments - The number of retail points for the company's distributors increased by 10.2% year-on-year to 1,909 sales points[14]. - The company plans to further enhance its brand influence and expand its sales network for customized furniture and sofas in response to market changes[16]. - The company has successfully entered the list of designated furniture suppliers for Huawei Group and is competing for multiple furniture projects worth billions[16]. - A joint venture project with Kong Lung China Real Estate Group in Guangzhou has begun pre-sales, offering interior design and full-house furniture solutions[16]. - The group anticipates significant improvement in 2023 due to the recovery of the real estate market and the expansion of the consumer market, particularly in the home furnishing sector[39]. - The hotel operated by the group in Guangdong has signed a management cooperation agreement with Junlan Hotel brand and is undergoing property upgrades, expected to re-enter the market in 2023[39]. Financial Stability and Dividends - The board proposed a final dividend of HKD 0.01 per share for the year ended December 31, 2022, consistent with the previous year's final dividend[20]. - The company aims to maintain financial stability and sufficient cash flow while consistently distributing dividends to shareholders[21]. - The board may declare dividends based on the company's operating, financial condition, and other relevant factors, with future dividends not necessarily reflecting past declarations[97]. - The company reported a final dividend of HKD 0.01 per share for the fiscal year, consistent with the previous year's final dividend of HKD 0.01 and a special dividend of HKD 0.04 per share[113]. Governance and Board Structure - The board consists of nine members, including two executive directors, four non-executive directors, and three independent non-executive directors as of December 31, 2022[47]. - The Chairman and CEO roles are held separately by Mr. Xie Jinpeng and Mr. Yang Jun, ensuring clear division of responsibilities[48]. - Independent non-executive director Mr. Liu Zhijie was reappointed for a fixed term of three years on June 6, 2022[55]. - The board has established formal procedures for decision-making and is responsible for overseeing management's identification of opportunities and risks[57]. - The company ensures that all directors receive timely and relevant information to facilitate effective decision-making[50]. - The board meets at least four times a year, with additional meetings as necessary, ensuring active engagement from all members[50]. Audit and Compliance - The audit committee, composed of three independent non-executive directors, met twice in 2022 to ensure the accuracy of the company's financial statements[69]. - The audit committee reviewed the effectiveness of the internal control system, covering financial, operational, and compliance monitoring, and confirmed its adequacy[72]. - The consolidated financial statements for the year ended December 31, 2022, were audited by Ernst & Young, reflecting a true and fair view of the group's financial position[180]. - The company maintains high standards of corporate governance as outlined in its corporate governance report[173]. Shareholder Relations - The company has adopted a shareholder communication policy, utilizing various channels including annual general meetings and the company website to ensure effective communication with shareholders[89]. - Shareholders have the right to request the convening of a special general meeting if they hold at least 10% of the voting rights[93]. - The company encourages inquiries from shareholders and investors through designated contact methods, including email and phone[99]. Market and Strategic Outlook - The company is expanding its market presence in Southeast Asia, targeting a 20% increase in sales in that region over the next year[106]. - A strategic acquisition of a local competitor is anticipated to enhance operational efficiency and is expected to generate $10 million in cost savings annually[105]. - The management team emphasized a commitment to sustainability, with plans to reduce carbon emissions by 25% over the next five years[106]. Employee and Compensation Policies - The group employed 1,490 people as of December 31, 2022, an increase from 1,328 employees in the previous year[161]. - The group’s compensation policy aims to reflect competitive levels to retain high-performing employees, with sufficient flexibility to adapt to future changes in the business environment[76]. - The total amount of shareholder loans and guarantees provided to the joint venture amounted to HKD 1,117.8 million (approximately RMB 987.6 million)[164].

Financial Performance - Total revenue for the year ended December 31, 2022, was HKD 1,702,936,000, representing an increase of 11.5% from HKD 1,526,506,000 in 2021[2] - Gross profit decreased to HKD 245,716,000, down 22.7% from HKD 318,226,000 in the previous year[2] - The company reported a net profit of HKD 12,403,000 for 2022, a significant decline of 86.0% compared to HKD 88,300,000 in 2021[4] - Other income and gains fell to HKD 118,715,000, down 38.3% from HKD 192,562,000 in the prior year[2] - The group reported a total loss before tax from continuing operations of HKD 112,282,000, with the furniture segment alone incurring a loss of HKD 72,421,000[16] - The group reported a tax expense of HKD (124,685,000) in 2022, compared to a tax expense of HKD 29,576,000 in 2021, indicating a significant change in tax position[28] - Basic earnings per share attributable to ordinary shareholders for 2022 were HKD 5,586, compared to HKD 76,897 in 2021, reflecting a significant decrease[30] Assets and Liabilities - Total assets decreased to HKD 6,128,528,000 in 2022 from HKD 6,298,851,000 in 2021, reflecting a reduction of 2.7%[5] - Current liabilities increased to HKD 2,068,559,000 in 2022, up 6.7% from HKD 1,939,383,000 in 2021[5] - The total equity attributable to the owners of the parent decreased to HKD 2,281,474,000 from HKD 2,583,619,000, a decline of 11.7%[7] - Total liabilities were HKD 3,707,718,000[16] - The current ratio decreased to 1.16 as of December 31, 2022, compared to 1.37 in 2021, with net current assets at HKD 326.8 million, down from HKD 714.8 million in 2021[44] - The debt-to-asset ratio increased to 56% as of December 31, 2022, compared to 51% in 2021[45] Revenue Segmentation - The furniture products segment generated revenue of HKD 961,882,000, while the hotel business contributed HKD 42,475,000, and the trading segment accounted for HKD 698,579,000[16] - The company’s trading segment saw a revenue increase from HKD 648,946,000 in 2021 to HKD 698,579,000 in 2022, reflecting a growth of approximately 7.6%[17] - Revenue recognized at a point in time for furniture manufacturing and sales was HKD 961,882,000 in 2022, compared to HKD 837,373,000 in 2021, reflecting a growth of about 14.8%[18][19] - The hotel business generated revenue of HKD 42,475,000 in 2022, up from HKD 40,187,000 in 2021, indicating an increase of approximately 5.7%[18][19] Expenses and Costs - The cost of goods sold for the group was HKD 1,396,969,000 in 2022, compared to HKD 1,166,440,000 in 2021, which is an increase of about 19.7%[24] - Financing costs increased to HKD 139,629,000 in 2022 from HKD 123,532,000 in 2021, marking a rise of approximately 13%[26] - Sales and distribution expenses increased by 36.9% to approximately HKD 133.0 million, driven by a significant increase in promotional activities[39] - Administrative expenses rose by 21.1% to HKD 152.0 million, mainly due to an increase in employee numbers and travel expenses[40] - Research and development expenses for the year were HKD 2,604,000, slightly down from HKD 2,985,000 in 2021, reflecting a decrease of about 12.7%[24] Cash Flow and Dividends - The company's cash and cash equivalents rose to HKD 403,863,000, a significant increase from HKD 146,453,000 in the previous year[5] - The proposed final dividend for 2022 is HKD 25,986,000, compared to HKD 129,928,000 in 2021, indicating a reduction in dividend distribution[28] - The board proposed a final cash dividend of HK$0.01 per share for the year ended December 31, 2022, consistent with the previous year's final dividend of HK$0.01 and a special dividend of HK$0.04 per share[55] - The company aims to maintain financial stability and sufficient cash flow while consistently rewarding shareholders with dividends despite a complex external economic environment[56] Strategic Plans and Market Position - The company plans to focus on expanding its market presence and enhancing product offerings in the upcoming year[8] - The company plans to continue monitoring its operational segments closely to optimize resource allocation and performance evaluation[15] - The group aims to enhance its brand influence and expand its sales network for customized furniture and related products in 2023[46] - The group has successfully entered Huawei's designated furniture supplier list and is competing for several multi-million dollar furniture projects[46] - The hotel business is recovering due to increased inbound and outbound tourist numbers, with a hotel in Guangdong expected to re-enter the market in 2023 after upgrades[47] - The group plans to focus resources on core business development while reducing or ceasing operations in less synergistic areas[47] Governance and Compliance - The financial statements are prepared in accordance with the Hong Kong Financial Reporting Standards, with amounts presented in Hong Kong dollars and rounded to the nearest thousand[9] - The group has adopted revised Hong Kong Financial Reporting Standards for the current financial year, including amendments to HKFRS 3, HKAS 16, and HKAS 37[10] - The group has adhered to corporate governance codes as per the Hong Kong Stock Exchange regulations throughout the year[50] Employee and Operational Metrics - Approximately 1,490 employees were employed as of December 31, 2022, with competitive compensation plans and training programs in place[49] - The retail network of the group grew by 10.2% to 1,909 sales points, despite challenges from the COVID-19 pandemic[41] - The group's inventory increased by 10.9% to approximately HKD 281.9 million, reflecting higher stock levels to meet future contractual demands[42]