Revenue and Profitability - Revenue for the six months ended June 30, 2022, decreased by approximately 27.6% to approximately HK$23,224,000 compared to HK$32,081,000 in 2021[3]. - Gross profit increased by 155.8% to approximately HK$6,199,000, with the money lending operation earning gross profit of approximately HK$8,062,000, up from HK$5,451,000 in 2021[3]. - Loss attributable to owners of the Company for the period was approximately HK$40,992,000, an increase of approximately 99.7% from HK$20,522,000 in 2021[3]. - The apparel operation recorded a gross loss of approximately HK$1,863,000, improved from a loss of HK$3,028,000 in 2021[3]. - For the six months ended June 30, 2022, total revenue was HK$23,224,000, with HK$15,162,000 from apparel design, manufacturing, and trading, and HK$8,062,000 from money lending services[41]. - The segment loss before tax for the apparel segment was HK$10,250,000, while the money lending segment reported a loss of HK$7,395,000, resulting in a total loss before tax of HK$40,967,000[41]. - Revenue from the apparel operation decreased by approximately 43.1% to approximately HK$15,162,000 compared to HK$26,630,000 in 2021, significantly affected by reduced consumer activity[154]. - Revenue from the money lending operation increased by approximately 47.9% to approximately HK$8,062,000 compared to HK$5,451,000 in 2021[159]. Expenses and Losses - Administrative expenses increased significantly to HK$37,838,000 from HK$20,582,000 in 2021[7]. - Provision for expected credit loss on loans and interest receivables rose to HK$9,382,000 from HK$1,106,000 in 2021[7]. - Total comprehensive loss for the period was approximately HK$41,497,000, compared to HK$20,352,000 in 2021[10]. - Basic and diluted loss per share attributable to owners of the Company was HK(2.30) cents, compared to HK(1.21) cents in 2021[10]. - Selling and distribution expenses decreased by approximately 79.4% to HK$929,000 from HK$4,508,000 in 2021, mainly due to reduced transportation costs[171]. - Loss attributable to owners of the Company was approximately HK$40,992,000, an increase of approximately 99.7% from HK$20,522,000 in 2021, driven by decreased revenue from the apparel operation and increased provisions[175]. Cash Flow and Financial Position - For the six months ended June 30, 2022, the net cash used in operating activities was HK$26,346,000, a decrease from HK$54,961,000 in the same period of 2021[18]. - The net cash used in investing activities for the same period was HK$3,708,000, compared to HK$13,457,000 in 2021[18]. - The net cash generated from financing activities was HK$32,784,000, significantly higher than HK$5,054,000 in the previous year[18]. - Cash and cash equivalents at the end of the period increased to HK$17,879,000 from HK$15,087,000 in 2021[18]. - The company's cash and bank balances at the end of the period were HK$15,348,000, down from HK$78,547,000 at the beginning of the period[18]. - The current ratio improved to approximately 5.83 as of June 30, 2022, compared to 4.87 as of December 31, 2021[185]. - The total borrowings and lease liabilities amounted to approximately HKD 19,659,000 as of June 30, 2022, compared to HKD 7,954,000 as of December 31, 2021[188]. - The current margin loan payable decreased to HK$1,479,000 from HK$4,057,000 as of December 31, 2021, representing a reduction of approximately 63.6%[124]. Assets and Liabilities - Net assets decreased to HK$184,846,000 as of June 30, 2022, from HK$196,257,000 at the end of 2021[14]. - As of June 30, 2022, total assets amounted to HK$231,379,000, with segment assets of HK$46,567,000 for apparel and HK$176,028,000 for money lending services[44]. - The company experienced a significant increase in segment liabilities, with total liabilities reaching HK$46,533,000 as of June 30, 2022[44]. - Trade receivables as of 30 June 2022 amounted to HK$20,147,000, with an impairment loss of HK$435,000, resulting in a net trade receivable of HK$19,712,000[100][101]. - The total trade payables as of 30 June 2022 were HK$17,422,000, with significant amounts due within 0 to 30 days (HK$6,772,000) and 31 to 60 days (HK$2,807,000)[121]. - The Group's loans receivables as of 30 June 2022 were HK$151,953,000, with an impairment loss of HK$45,327,000, resulting in a net current loans receivable of HK$115,583,000[110][111]. Shareholder Information - The Board of Directors did not recommend the payment of any interim dividend for the reporting period[3]. - No dividends were paid or proposed during the six months ended June 30, 2022, consistent with the previous year[82]. - The total number of issued and fully paid ordinary shares increased to 1,790,267,378 as of June 30, 2022, up from 1,690,000,000 as of December 31, 2021[135]. - A total of 87,100,000 share options were granted at an exercise price of HK$0.278 per share, with an estimated fair value of approximately HK$8,638,000[140]. - Directors' emoluments increased significantly to HK$6,170,000 in 2022 from HK$2,245,000 in 2021, marking an increase of approximately 174.5%[139]. Compliance and Regulations - The financial statements are prepared in accordance with Hong Kong Accounting Standards 34, ensuring compliance with local regulations[26]. - The company has not indicated any major impact from the adoption of new and revised accounting standards on its interim financial statements[33]. - The Group did not incur any taxation under the British Virgin Islands and the Cayman Islands jurisdictions during the reporting period[77]. - The Hong Kong profits tax is calculated at a rate of 16.5%, with the first HK$2,000,000 of assessable profit taxed at 8.25%[79]. Market and Operational Insights - The company has not reported any significant changes in its business operations during the period[22]. - The company identified design, manufacturing, and trading of apparels and provision of money lending services as its reportable operating segments[36]. - The geographical location of external customers is based on their domicile, with a notable revenue contribution from Mainland China[60]. - Major customers contributing to over 10% of the group's revenue included Customer A with HK$5,666,000, Customer B with HK$3,219,000, and Customer C with HK$2,587,000[63].

Financial Performance - Revenue for 2021 was HK$139,818,000, an increase of 22.2% from HK$114,474,000 in 2020[13] - Gross profit for 2021 was HK$38,699,000, up from HK$24,957,000 in 2020, reflecting a gross margin improvement[13] - Loss before income tax was HK$46,020,000, a reduction from a loss of HK$67,038,000 in 2020[13] - The Group's revenue increased by 22.1% to approximately HK$139,818,000 for the reporting period, compared to HK$114,474,000 in 2020[67] - Revenue from apparel operations rose by 20.7% to approximately HK$129,254,000 for the year ended December 31, 2021, up from HK$107,053,000 in 2020[67] - Revenue from money lending operation increased by approximately 42.3% to approximately HK$10,564,000, accounting for 7.6% of total revenue[69] - The loss attributable to owners of the Company for the year ended 31 December 2021 was approximately HK$46,271,000, representing a decrease in loss of 32.1% compared to HK$68,115,000 in 2020[98] Assets and Liabilities - Total assets decreased to HK$234,832,000 in 2021 from HK$283,700,000 in 2020[13] - Shareholders' equity decreased to HK$196,257,000 in 2021 from HK$238,425,000 in 2020[13] - Current ratio for 2021 was 4.87, down from 5.27 in 2020, indicating a decrease in liquidity[13] - Loans and interest receivables (net of allowances) increased by approximately 5.4% to approximately HK$114,667,000[72] - The Group's inventories decreased by 49.7%, from approximately HK$11,971,000 as at 31 December 2020 to approximately HK$6,016,000 as at 31 December 2021[98] - Trade receivables increased by 43.6%, from approximately HK$19,136,000 as at 31 December 2020 to approximately HK$27,486,000 as at 31 December 2021[100] - Cash and bank balances amounted to approximately HK$15,348,000 as of December 31, 2021, down from HK$78,547,000 in 2020[108] - Total borrowing and lease liabilities increased to approximately HK$7,954,000 as of December 31, 2021, compared to HK$4,975,000 in 2020[108] Operational Efficiency - Inventory turnover days improved to 22 days in 2021 from 49 days in 2020[13] - Trade payables turnover days increased to 72 days in 2021 from 61 days in 2020[13] - Selling and distribution expenses increased by 5.7% to approximately HK$17,197,000, while as a percentage of revenue, these expenses decreased to 12.3% from 14.2%[93] - The Group's financial reporting is overseen by the chief financial officer, who has over 15 years of experience in professional accounting and corporate finance[66] Market and Economic Conditions - China's GDP grew by 8.1% year on year in December 2021, indicating significant economic growth[23] - The US GDP grew by 5.7% in 2021, supported by government fiscal measures and monetary policy[20] - Hong Kong's economy rebounded by 6.4% in 2021, driven by strong global demand and a consumption voucher scheme[24] - The company anticipates that the global economy will recover in 2022, but at a more moderate pace than in 2021 due to ongoing COVID-19 variant threats[34] - The rapid rise in global inflation in 2021 has created cost pressures on the company's product exports, shipping, and logistics activities[38] Strategic Initiatives - The Group plans to expand its apparel business by developing trendy products and diversifying into men's and young adults' markets[29] - The Group aims to enrich its product portfolio by seeking suitable intellectual property rights for apparel production[29] - The company plans to adjust its major women's clothing export business to better align with the Chinese market, expanding its apparel portfolio and entering the sportswear and children's wear markets[39] - The company aims to diversify its business income by exploring opportunities in trendy cultural products closely related to apparel, capitalizing on China's economic development[39] - Recent agreements have been signed by the company to explore further business opportunities in China[40] Corporate Governance - The Board comprises 8 Directors, including 3 independent non-executive Directors, all of whom have appropriate professional qualifications or expertise in accounting or related financial management[150] - The Company has received annual confirmations of independence from each independent non-executive Director, which the Board considers valid[150] - The positions of the chairman and the deputy chief executive officer are held by separate individuals to maintain effective segregation of duties[156] - The Board will continue to review and update its corporate governance practices to ensure compliance with legal and commercial standards[145] - The company emphasizes continuous professional development for directors to maintain informed contributions to the board[171] Management and Leadership - Mr. Li has over 20 years of experience in investment activities and business management, holding directorships in several companies listed on the Hong Kong Stock Exchange[46] - Ms. Tin has extensive experience in fashion apparel, trendy brand promotion, and information technology, having served as an executive director of Carnival Group International Holdings Limited from 2005 to 2011[48] - Mr. Cheung has over 20 years of experience in banking and finance, managing a portfolio with assets under management exceeding USD 300 million in the Greater China region[50] - Mr. Gong has over 13 years of experience at Tencent, where he held senior positions and received multiple awards for his contributions[53] - Mr. Tang is a practicing solicitor and a partner at a law firm with over 70 years of service in Hong Kong[56]

Revenue Performance - Revenue for the six months ended 30 June 2021 increased by approximately 106.4% to approximately HK$32,081,000 compared to HK$15,545,000 in 2020[2] - Revenue from apparel operations was HK$26,630,000, representing a 168.0% increase from HK$9,936,000 in the corresponding period of 2020[2] - Revenue for the six months ended June 30, 2021, was HK$32,081,000, a significant increase from HK$15,545,000 in the same period of 2020, representing a growth of 106.5%[56] - Revenue from the money lending operation was approximately HK$5,451,000, a decrease of approximately 2.8% compared to HK$5,609,000 in 2020[145] - The Group's revenue from external customers in the United States was HK$22,413,000 for the six months ended June 30, 2021, compared to HK$6,581,000 in 2020, indicating a growth of 240.5%[56] - Customer A contributed HK$19,659,000 to the Group's revenue for the six months ended June 30, 2021, up from HK$2,364,000 in 2020, reflecting a growth of 733.5%[59] Profitability and Loss - Gross profit for the period was approximately HK$2,423,000, a significant recovery from a gross loss of HK$33,000 in 2020[2] - The loss attributable to owners of the Company decreased by approximately 28.2% to HK$20,522,000 from HK$28,586,000 in 2020[2] - Total comprehensive income for the period attributable to the owners of the Company was a loss of HK$20,352,000 compared to a loss of HK$28,975,000 in 2020[9] - Basic and diluted loss per share was HK$1.21, an improvement from HK$1.69 in 2020[9] - The Company reported a loss for the period of HK$20,522,000 for the six months ended June 30, 2021, compared to a loss of HK$28,586,000 for the same period in 2020, showing an improvement in loss by about 28.8%[15] - The Group reported a loss attributable to owners of approximately HK$20,522,000 for the six months ended June 30, 2021, compared to a loss of HK$28,586,000 in the same period of 2020, representing a 28.8% improvement[87] Expenses and Cost Management - Selling and distribution expenses decreased to HK$4,508,000 from HK$5,354,000 in 2020[7] - Administrative expenses decreased to HK$21,391,000 from HK$27,004,000 in 2020[7] - Directors' emoluments for the first half of 2021 were HK$2,245,000, down from HK$3,531,000 in 2020[130] - Total staff costs for the six months ended June 30, 2021, were approximately HK$17,749,000, a slight decrease from HK$17,829,000 for the same period in 2020[183] Assets and Liabilities - Inventories increased by approximately 46.9% from HK$11,971,000 as at 31 December 2020 to HK$17,591,000 as at 30 June 2021[4] - As of June 30, 2021, the net current assets decreased to HK$167,142,000 from HK$187,650,000 as of December 31, 2020, representing a decline of approximately 10.5%[13] - The total equity attributable to the owners of the Company as of June 30, 2021, was HK$218,073,000, down from HK$238,425,000 at the end of 2020, indicating a decrease of about 8.5%[15] - The total assets less current liabilities decreased to HK$219,640,000 as of June 30, 2021, from HK$239,746,000 as of December 31, 2020, indicating a reduction of about 8.4%[13] - The total liabilities as of June 30, 2021, were HK$52,164,000, with segment liabilities for apparels at HK$44,105,000 and for money lending services at HK$8,059,000[42] - Trade receivables, net, decreased to HK$15,126,000 as of June 30, 2021, from HK$19,136,000 as of December 31, 2020, indicating a decline of 21.0%[101] Cash Flow and Financing - For the six months ended June 30, 2021, the net cash used in operating activities was HK$54,961,000, compared to HK$27,996,000 for the same period in 2020, reflecting an increase in cash outflow of approximately 96.5%[19] - Cash and cash equivalents at the end of the period were HK$15,087,000, a significant decrease from HK$74,823,000 at the end of June 2020, representing a decline of approximately 79.9%[19] - The Company’s net cash generated from financing activities was HK$5,054,000 for the six months ended June 30, 2021, compared to a cash outflow of HK$2,143,000 in the same period of 2020, indicating a turnaround in financing cash flow[19] - The Group's loans receivables increased to HK$162,483,000 as of June 30, 2021, up from HK$123,763,000 as of December 31, 2020, reflecting a growth of 31.2%[108] Financial Position and Ratios - The current ratio of the Group was approximately 4.19 as of 30 June 2021, down from 5.27 as of 31 December 2020[161] - The gearing ratio of the Group was approximately 4.7% as of 30 June 2021, compared to 2.1% as of 31 December 2020[167] - Total borrowings and lease liabilities amounted to approximately HK$10,151,000 as of 30 June 2021, an increase from HK$4,975,000 as of 31 December 2020[161] Market and Operational Insights - The Group's products are primarily exported to the United States, which is the principal market for its apparel operation[141] - The Group remains cautiously optimistic about the apparel operation for the second half of 2021 due to uncertainties related to the COVID-19 pandemic[142] - The business showed signs of recovery in the first half of 2021, driven by improving global economic conditions, but remains vulnerable to uncertainties such as the COVID-19 pandemic and China-U.S. relations[191] Other Notable Points - The Company did not recommend the payment of any interim dividend[4] - The Group maintained a healthy liquidity position throughout the reporting period, with a focus on prudent financial management and continuous credit assessments to mitigate credit risk[172] - The Group is open to exploring new business and investment opportunities in other sectors to diversify revenue streams[192]

[Corporate Information](index=3&type=section&id=Corporate%20Information) The report details the company's board members, committee chairs and members, and core corporate information including banks, registered office, and auditor - The report details the company's board members, chairs and members of various committees (Audit, Remuneration, Nomination, Corporate Governance), and core corporate information such as principal bankers, registered office, and auditor[5](index=5&type=chunk)[20](index=20&type=chunk)[23](index=23&type=chunk) [Financial Summary](index=6&type=section&id=Financial%20Summary) This section provides a five-year overview of the company's financial performance, position, and key ratios, highlighting trends in revenue, profit, assets, liabilities, and liquidity Five-Year Performance Overview (As of December 31) | Metric (Thousand HKD) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | 114,474 | 158,714 | 203,892 | 325,445 | 368,857 | | **Gross Profit** | 24,957 | 32,196 | 42,480 | 95,589 | 94,079 | | **Loss Before Income Tax** | (67,038) | (71,048) | (62,178) | (13,875) | (17,768) | | **Loss Attributable to Owners of the Company** | (68,115) | (76,680) | (60,032) | (15,632) | (18,769) | Five-Year Financial Position Overview (As of December 31) | Metric (Thousand HKD) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Total Assets** | 283,700 | 351,054 | 427,616 | 525,762 | 397,884 | | **Total Liabilities** | 45,275 | 45,857 | 45,198 | 79,431 | 133,732 | | **Shareholders' Equity** | 238,425 | 305,197 | 382,418 | 446,331 | 264,152 | Key Ratios for FY2020 | Metric | 2020 | 2019 | | :--- | :--- | :--- | | **Current Ratio** | 5.27 | 6.26 | | **Quick Ratio** | 5.00 | 5.91 | | **Return on Assets** | (24.0%) | (21.8%) | | **Return on Equity** | (28.6%) | (25.1%) | | **Debt-to-Equity Ratio** | 2.1% | 2.8% | | **Inventory Turnover Days** | 49天 | 43天 | | **Trade Receivables Turnover Days** | 61天 | 48天 | | **Trade Payables Turnover Days** | 101天 | 30天 | [Chairman's Statement](index=7&type=section&id=Chairman%27s%20Statement) The Chairman's Statement reviews the challenging global economic environment of 2020, the company's performance across its business segments, and its outlook for 2021, emphasizing resilience and diversification strategies [External Environment Review](index=7&type=section&id=External%20Environment) In 2020, the global economy faced severe challenges due to the COVID-19 pandemic, with public health measures causing significant disruption and deep recessions in most major economies outside China, while Hong Kong's economy contracted by 6.1%, its largest annual decline on record and the first consecutive annual contraction - The COVID-19 pandemic led to drastic changes in global economic activity, with many countries implementing lockdown measures causing sustained and significant economic damage[30](index=30&type=chunk) - Hong Kong's economy contracted by **6.1%** in 2020, marking its largest annual decline on record and the first time it experienced economic contraction for two consecutive years[31](index=31&type=chunk) [Performance Review](index=8&type=section&id=Our%20Performance) The company's performance was significantly impacted by the macroeconomic environment, with apparel business revenue decreasing by **27.2%** due to the pandemic's impact on the US market, and loan financing business revenue declining by **36.7%** amidst Hong Kong's weak economy and strict credit controls Revenue Performance by Business Segment | Business Segment | 2020 Revenue (HKD) | 2019 Revenue (HKD) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Apparel Business** | 107,053,000 | 146,995,000 | -27.2% | | **Loan Financing Business** | 7,421,000 | 11,719,000 | -36.7% | - To support clients through the pandemic, the company agreed not to charge interest on outstanding loans for some customers, which also impacted loan business revenue[39](index=39&type=chunk) [Future Outlook](index=9&type=section&id=Future%20Prospects) For 2021, the global economic outlook depends on pandemic control, with a gradual rebound expected as vaccinations progress, particularly in the US market, while US-China tensions are not anticipated to escalate significantly under the new US administration, and the company will manage potential impacts and seek new opportunities for revenue diversification - The company anticipates a gradual rebound in the global economy in 2021, particularly favoring the recovery prospects of the US market supported by accommodative monetary and fiscal policies[42](index=42&type=chunk) - US-China relations remain an operational risk, but tensions are not expected to escalate significantly, potentially providing a more stable environment for business activities[43](index=43&type=chunk) - Facing ongoing uncertainties, the company will take appropriate actions to manage potential impacts and actively seek new business opportunities to diversify revenue streams and create shareholder value[49](index=49&type=chunk) [Biographical Details of Directors and Senior Management](index=11&type=section&id=Biographical%20Details%20of%20Directors%20and%20Senior%20Management) This section provides detailed biographies of the executive directors, independent non-executive directors, and senior management, including their age, positions, professional backgrounds, industry experience, and roles in other listed companies - The report provides detailed biographies of executive directors, independent non-executive directors, and senior management, including information on their age, positions, professional backgrounds, industry experience, and roles in other listed companies[54](index=54&type=chunk)[60](index=60&type=chunk)[86](index=86&type=chunk) [Management Discussion and Analysis](index=17&type=section&id=Management%20Discussion%20and%20Analysis) This section provides a comprehensive review of the company's operational performance, financial position, liquidity, and capital resources for the reporting period, highlighting key drivers and impacts [Business Review and Financial Analysis](index=17&type=section&id=BUSINESS%20REVIEW) In 2020, the Group's total revenue decreased by **27.9%** to **HKD 114.47 million** due to the global pandemic, with apparel business revenue down **27.2%** and loan financing revenue down **36.7%**, yet overall gross margin slightly increased from **20.3%** to **21.8%** due to product mix optimization, despite goodwill impairment of **HKD 22.73 million** and expected credit loss provisions of **HKD 17.02 million** for loan receivables, leading to a narrowed loss attributable to owners of the company by **11.2%** to **HKD 68.12 million** through reduced selling and administrative expenses FY2020 Performance Overview | Metric (Thousand HKD) | 2020 | 2019 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | 114,474 | 158,714 | -27.9% | | **Gross Profit** | 24,957 | 32,196 | -22.5% | | **Gross Profit Margin** | 21.8% | 20.3% | +1.5pp | | **Goodwill Impairment Loss** | (22,734) | (30,290) | N/A | | **Provision for Expected Credit Losses on Loan Receivables** | (17,021) | (989) | +1621.8% | | **Loss Attributable to Owners of the Company** | (68,115) | (76,680) | -11.2% | [Apparel Operation](index=17&type=section&id=APPAREL%20OPERATION) The apparel business, as the Group's primary revenue source (**93.5%** of total revenue), saw a **27.2%** year-on-year decrease in 2020 to **HKD 107.05 million**, with OEM product revenue significantly declining by **46.3%** while own-brand product revenue grew by **20.4%**, leading to an increase in overall gross margin from **13.9%** to **16.4%** due to a shift towards higher-margin own-brand products Apparel Business Performance by Product Category | Product Category | 2020 Revenue (Thousand HKD) | 2019 Revenue (Thousand HKD) | Year-on-Year Change | 2020 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | **OEM Products** | 56,205 | 104,760 | -46.3% | 7.4% | | **Own-Brand Products** | 50,848 | 42,235 | +20.4% | 26.3% | | **Total** | 107,053 | 146,995 | -27.2% | 16.4% | [Money Lending Business](index=18&type=section&id=MONEY%20LENDING%20BUSINESS) Impacted by Hong Kong's economic contraction, loan financing business revenue decreased by **36.7%** to **HKD 7.42 million**, with the company providing interest-free support to some clients during challenging times, and outstanding loan and interest receivables slightly declined by **3.3%** from **HKD 112.5 million** to **HKD 108.8 million** by year-end - Due to Hong Kong's **6.1%** economic contraction and severely dampened business sentiment, loan financing business revenue decreased by **36.7%** to **HKD 7.421 million**[112](index=112&type=chunk) - As of the end of 2020, total loan and interest receivables amounted to **HKD 108.8 million**, a **3.3%** decrease from **HKD 112.5 million** at the end of 2019[112](index=112&type=chunk) [Financial Position Review](index=24&type=section&id=FINANCIAL%20POSITION%20REVIEW) As of year-end 2020, the Group's balance sheet showed goodwill reduced to **HKD 34.63 million** due to impairment, inventory decreased by **20.1%** to **HKD 11.97 million** but turnover days increased from **43** to **49** days, trade receivables decreased by **20.6%** but turnover days increased from **48** to **61** days, and trade payables increased by **7.6%** with turnover days significantly rising from **30** to **101** days, reflecting extended supplier credit terms - Due to negative expectations for Hong Kong's economic outlook, the company recognized a goodwill impairment of **HKD 22.73 million** for its loan business, with the year-end goodwill balance at **HKD 34.63 million**[142](index=142&type=chunk) Changes in Key Working Capital Indicators | Metric | End of 2020 | End of 2019 | Change | | :--- | :--- | :--- | :--- | | **Inventory (Thousand HKD)** | 11,971 | 14,987 | -20.1% | | **Inventory Turnover Days** | 49天 | 43天 | 增加6天 | | **Trade Receivables (Thousand HKD)** | 19,136 | 24,099 | -20.6% | | **Trade Receivables Turnover Days** | 61天 | 48天 | 增加13天 | | **Trade Payables (Thousand HKD)** | 24,651 | 22,900 | +7.6% | | **Trade Payables Turnover Days** | 101天 | 30天 | 增加71天 | [Liquidity and Financial Resources](index=27&type=section&id=LIQUIDITY%20AND%20FINANCIAL%20RESOURCES) As of year-end 2020, the Group held cash and bank balances of **HKD 78.55 million** with a current ratio of **5.27**, indicating ample liquidity, while total lease liabilities were **HKD 4.98 million** and the debt-to-equity ratio (lease liabilities/total equity) decreased from **2.8%** to **2.1%**, reflecting a sound financial position, with no assets pledged, no significant acquisitions or disposals, and no final dividend proposed during the reporting period Liquidity and Capital Structure | Metric | End of 2020 | End of 2019 | | :--- | :--- | :--- | | **Cash and Bank Balances (Thousand HKD)** | 78,547 | 104,723 | | **Current Ratio** | 5.27 | 6.26 | | **Debt-to-Equity Ratio** | 2.1% | 2.8% | - As of the end of 2020, the Group had no pledged assets or significant contingent liabilities[166](index=166&type=chunk)[167](index=167&type=chunk) - The Board does not recommend the payment of a final dividend for the year ended December 31, 2020[207](index=207&type=chunk) [Corporate Governance Report](index=33&type=section&id=Corporate%20Governance%20Report) This report details the company's adherence to corporate governance principles, the structure and operation of its board committees, and its risk management and internal control systems, ensuring compliance and effective oversight [Corporate Governance Structure and Practices](index=33&type=section&id=CORPORATE%20GOVERNANCE%20STRUCTURE) The company largely complied with the Corporate Governance Code during the reporting year, though the composition of the Audit, Remuneration, and Nomination Committees temporarily did not fully meet Listing Rules requirements between September 7 and December 2, 2020, due to an independent non-executive director's resignation, which has since been rectified, and the Board maintains four distinct committees—Audit, Remuneration, Nomination, and Corporate Governance—with the Chairman and Deputy CEO roles held by different individuals to ensure effective segregation of duties - Due to the resignation of an independent non-executive director, the composition of the Audit, Remuneration, and Nomination Committees did not fully comply with Listing Rules 3.21, 3.25, and Corporate Governance Code A.5.1 from September 7 to December 2, 2020, but compliance was restored after December 3[213](index=213&type=chunk) - The Board has established four committees: Audit, Remuneration, Nomination, and Corporate Governance, to assist in fulfilling its oversight functions[222](index=222&type=chunk) [Board Committee Operations](index=38&type=section&id=BOARD%20COMMITTEES) During the reporting period, all committees convened meetings to fulfill their duties, with the Nomination Committee reviewing board structure and director re-election, the Remuneration Committee reviewing director and senior management remuneration policies, the Corporate Governance Committee reviewing governance practices and the ESG report, and the Audit Committee reviewing financial statements, risk management, and internal control systems while recommending the re-appointment of external auditors - The Nomination Committee reviewed the Board's structure, size, and composition, and made recommendations to the Board regarding the appointment and re-election of directors[256](index=256&type=chunk)[263](index=263&type=chunk) - The Remuneration Committee is responsible for formulating and reviewing the remuneration policies for directors and senior management, ensuring no individual determines their own remuneration[275](index=275&type=chunk)[282](index=282&type=chunk) - The Audit Committee, comprising three independent non-executive directors, oversees the integrity of financial reporting, the effectiveness of risk management and internal control systems, and advises the Board on the appointment of external auditors[293](index=293&type=chunk)[294](index=294&type=chunk) [Risk Management and Internal Control](index=46&type=section&id=RISK%20MANAGEMENT%20AND%20INTERNAL%20CONTROL) The Board is responsible for maintaining sound and effective risk management and internal control systems, which the Group assesses through internal oversight by the Corporate Governance Committee and external review by independent bodies, and for the 2020 fiscal year, the Board conducted an annual review and deemed the systems effective and adequate, with established procedures for handling and disseminating inside information to ensure compliance - The Group's risk management and internal control processes integrate internal oversight (executed by the Corporate Governance Committee) and external review (conducted by independent external bodies)[317](index=317&type=chunk)[318](index=318&type=chunk) - The Board conducted an annual review of the risk management and internal control systems for the 2020 fiscal year, deeming them effective and adequate in terms of resources, staff qualifications, and experience[326](index=326&type=chunk)[327](index=327&type=chunk) [Environmental, Social and Governance Report](index=50&type=section&id=Environmental%2C%20Social%20and%20Governance%20Report) This report outlines the Group's commitment to environmental protection, social responsibility, and ethical governance, detailing initiatives in green operations, employee welfare, and responsible business practices [Environmental Protection and Green Operations](index=54&type=section&id=Green%20Operation) The Group is committed to green operations, complying with relevant Chinese environmental laws and regulations, and has established an environmental management system comprising 'planning, implementation, checking, and review,' with total greenhouse gas emissions decreasing year-on-year to **327 tonnes of CO2 equivalent** during the reporting period, implementing various energy-saving, emission reduction, waste management, and resource utilization measures like using energy-efficient equipment, source reduction, and promoting green office practices to minimize operational environmental impact Greenhouse Gas Emissions (Tonnes of CO2 Equivalent) | Scope | 2020 | 2019 | | :--- | :--- | :--- | | **Scope 1: Direct Emissions** | 24 | 45 | | **Scope 2: Energy Indirect Emissions** | 271 | 380 | | **Scope 3: Other Indirect Emissions** | 32 | 90 | | **Total Emissions** | 327 | 515 | | **Emissions Intensity (Tonnes/Employee)** | 1.74 | 1.85 | Waste Generation | Waste Type | 2020 Total Volume | 2020 Intensity (Tonnes/Employee) | | :--- | :--- | :--- | | **Non-Hazardous Waste** | 348噸 | 1.85 | | **Hazardous Waste** | 305公斤 | 1.62公斤 | - The Group implemented various measures such as energy conservation, source reduction, efficient resource utilization, and green office practices to integrate environmental concepts into daily operations[419](index=419&type=chunk) [Social Responsibility and Employee Care](index=62&type=section&id=PEOPLE-ORIENTED) The Group adheres to a 'people-oriented' approach, strictly complying with employment laws, prohibiting child and forced labor, and achieving WRAP Gold certification, while offering competitive compensation and benefits, focusing on employee career development and training, prioritizing 'safety first' with protective equipment and regular training, and establishing a COVID-19 prevention and control team to implement various measures ensuring employee health and safety - The Group strictly complies with labor laws, having received Gold-level certification from the Worldwide Responsible Accredited Production (WRAP) organization, affirming its efforts in upholding labor rights[433](index=433&type=chunk) - To combat the COVID-19 pandemic, the Group established a prevention and control team, implementing various measures including isolation, staggered dining, enhanced disinfection, and providing flexible work arrangements for Hong Kong employees[458](index=458&type=chunk) - During the reporting period, the Group experienced no major safety incidents or casualties, nor any violations of health and safety regulations[457](index=457&type=chunk) [Operating Practices](index=67&type=section&id=Operating%20Practices) The Group prioritizes product quality and supply chain management, establishing stringent supplier evaluation and quality management systems that incorporate 'green procurement,' while striving to enhance customer satisfaction and protect client privacy and intellectual property, and in anti-corruption, the Group has developed employee handbooks and relevant policies promoting an integrity culture with a whistleblowing mechanism, reporting no product recalls due to safety or health reasons, nor any violations of intellectual property or anti-corruption regulations during the period - The Group established standardized supplier evaluation and management policies, integrating 'green procurement' principles into its purchasing process by prioritizing products and services with minimal environmental impact[463](index=463&type=chunk) - The company strictly adheres to anti-corruption regulations, developing employee handbooks and policies to govern staff conduct and promote integrity[482](index=482&type=chunk) - During the reporting year, the company had no products recalled due to safety and health reasons[470](index=470&type=chunk) [Directors' Report](index=76&type=section&id=Directors%27%20Report) This report details the Group's principal activities, key customer and supplier concentrations, dividend policy, and the interests of directors and major shareholders, confirming compliance with public float requirements [Business and Financial Review](index=76&type=section&id=PRINCIPAL%20ACTIVITIES) The Group primarily engages in apparel design, manufacturing, and trading, as well as providing loan financing services, with the largest customer accounting for **44.0%** of sales and the top five customers collectively **76.9%**, while the largest supplier accounted for **10.8%** of purchases and the top five suppliers collectively **40.3%**, and the directors do not recommend any final dividend for 2020, with distributable reserves of approximately **HKD 244 million** at year-end Major Customer and Supplier Concentration (FY2020) | Category | Percentage | | :--- | :--- | | **Largest Customer** | 44.0% | | **Top Five Customers Combined** | 76.9% | | **Largest Supplier** | 10.8% | | **Top Five Suppliers Combined** | 40.3% | - The directors do not recommend the payment of any final dividend for the year ended December 31, 2020[504](index=504&type=chunk) [Directors' and Major Shareholders' Interests](index=83&type=section&id=DIRECTORS%27%20AND%20CHIEF%20EXECUTIVE%27S%20INTERESTS) The report discloses the interests of directors, chief executives, and major shareholders in the company's shares as of December 31, 2020, with New Seres CEFC Investment Fund LP (in liquidation) holding approximately **50.89%** as a major shareholder, and Executive Director Ms. Tin Yat Yu Carol (and her controlled corporations) collectively holding approximately **6.77%**, confirming the company maintained sufficient public float Directors' and Major Shareholders' Shareholdings (As of December 31, 2020) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | **New Seres CEFC Investment Fund LP (in liquidation)** | Beneficial Owner | 860,120,000 | 50.89% | | **Tin Yat Yu Carol** | Beneficial Owner and Interest in Controlled Corporation | 114,362,000 | 6.77% | | **Tang Shu Pui Simon** | Beneficial Owner | 5,000,000 | 0.30% | | **Hua Zhen** | Beneficial Owner | 87,000,000 | 5.15% | - Based on public information and the directors' knowledge, the company maintained a public float of at least **25%** as of the reporting date, complying with Listing Rules requirements[599](index=599&type=chunk) [Independent Auditor's Report](index=92&type=section&id=Independent%20Auditor%27s%20Report) This report presents the independent auditor's opinion on the consolidated financial statements and highlights key audit matters, including significant management estimates and judgments related to asset valuations and recoverability [Audit Opinion](index=92&type=section&id=Opinion) The auditor, BDO Limited, Hong Kong, is of the opinion that the company's consolidated financial statements truly and fairly reflect the Group's consolidated financial position as of December 31, 2020, and its consolidated financial performance and cash flows for the year then ended, in accordance with Hong Kong Financial Reporting Standards, and have been properly prepared in compliance with the disclosure requirements of the Hong Kong Companies Ordinance - The auditor issued an unmodified opinion on the company's 2020 consolidated financial statements, deeming them to present a true and fair view of the company's financial position and operating results[608](index=608&type=chunk) [Key Audit Matters](index=93&type=section&id=Key%20audit%20matters) The auditor identified three key audit matters: 1) inventory valuation, involving significant management estimates for net realizable value; 2) recoverability of trade and loan receivables and interest, requiring subjective judgments on customer creditworthiness and expected credit loss (ECL) estimates; and 3) impairment assessment of non-financial non-current assets, particularly goodwill, where recoverable amounts rely on significant judgments regarding future cash flows, growth rates, and discount rates - **Inventory Valuation**: Inventory is stated at the lower of cost and net realizable value, with its assessment involving significant management estimates of future market conditions and selling prices; approximately **HKD 2.63 million** in inventory impairment was recognized in 2020[614](index=614&type=chunk) - **Recoverability of Receivables**: Management exercised subjective judgment in assessing expected credit losses for trade receivables (**HKD 19.14 million**) and loan and interest receivables (**HKD 108.8 million**)[621](index=621&type=chunk)[622](index=622&type=chunk) - **Impairment Assessment of Non-Current Assets**: The impairment assessment of goodwill and intangible assets relies on calculations of Value in Use (VIU) and Fair Value Less Costs of Disposal (FVLCOD), involving significant estimates of future cash flows and discount rates; approximately **HKD 22.73 million** in goodwill impairment was recognized in 2020[633](index=633&type=chunk)[635](index=635&type=chunk) [Consolidated Financial Statements](index=102&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's comprehensive financial statements, including the statement of comprehensive income, financial position, changes in equity, and cash flows, along with detailed notes explaining accounting policies and key financial items [Consolidated Statement of Comprehensive Income](index=102&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) For the year ended December 31, 2020, the Group's revenue was **HKD 114.47 million**, a **27.9%** year-on-year decrease, and despite significant goodwill and loan receivable impairments, the loss attributable to owners of the company narrowed from **HKD 76.68 million** to **HKD 68.12 million** due to effective cost control, resulting in a total comprehensive loss for the year of **HKD 66.77 million** after accounting for exchange gains Consolidated Statement of Comprehensive Income Summary (For the Year Ended December 31) | Item (Thousand HKD) | 2020 | 2019 | | :--- | :--- | :--- | | **Revenue** | 114,474 | 158,714 | | **Gross Profit** | 24,957 | 32,196 | | **Loss Before Income Tax** | (67,038) | (71,048) | | **Loss for the Year Attributable to Owners of the Company** | (68,115) | (76,680) | | **Total Comprehensive Income for the Year Attributable to Owners of the Company** | (66,772) | (77,221) | | **Basic and Diluted Loss Per Share (HK Cents)** | (4.03) | (4.54) | [Consolidated Statement of Financial Position](index=103&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2020, the Group's total assets were **HKD 284 million**, total liabilities **HKD 45.28 million**, and net assets **HKD 238 million**, with key assets including loan and interest receivables of **HKD 109 million**, cash and bank balances of **HKD 78.55 million**, and goodwill of **HKD 34.63 million**, resulting in net current assets of **HKD 188 million** Consolidated Statement of Financial Position Summary (As of December 31) | Item (Thousand HKD) | 2020 | 2019 | | :--- | :--- | :--- | | **Non-current Assets** | 52,096 | 82,586 | | **Current Assets** | 231,604 | 268,468 | | **Total Assets** | 283,700 | 351,054 | | **Current Liabilities** | 43,954 | 42,878 | | **Non-current Liabilities** | 1,321 | 2,979 | | **Total Liabilities** | 45,275 | 45,857 | | **Net Assets** | 238,425 | 305,197 | | **Total Equity** | 238,425 | 305,197 | [Consolidated Statement of Changes in Equity](index=105&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) As of December 31, 2020, the Group's total equity decreased from **HKD 305 million** at the beginning of the year to **HKD 238 million**, primarily due to a loss of **HKD 68.12 million** for the year, partially offset by an exchange gain of **HKD 1.34 million** Summary of Changes in Equity (Thousand HKD) | Item | Balance as at January 1, 2020 | Loss for the Year | Other Comprehensive Income | Balance as at December 31, 2020 | | :--- | :--- | :--- | :--- | :--- | | **Total Equity** | 305,197 | (68,115) | 1,343 | 238,425 | [Consolidated Statement of Cash Flows](index=106&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In 2020, the Group's net cash outflow from operating activities was **HKD 20.75 million**, primarily due to operating cash outflow before working capital changes and an increase in loan receivables, while investing activities generated a net cash inflow of **HKD 4.42 million**, and financing activities resulted in a net cash outflow of **HKD 6.01 million**, mainly for lease liability repayments, leading to a net decrease in cash and cash equivalents of **HKD 22.34 million** for the year, with an ending balance of **HKD 78.55 million** Consolidated Statement of Cash Flows Summary (For the Year Ended December 31) | Item (Thousand HKD) | 2020 | 2019 | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | (20,746) | (41,911) | | **Net Cash Generated from Investing Activities** | 4,419 | 783 | | **Net Cash Used in Financing Activities** | (6,012) | (10,172) | | **Net Decrease in Cash and Cash Equivalents** | (22,339) | (51,300) | | **Cash and Cash Equivalents at Beginning of Year** | 100,997 | 152,597 | | **Cash and Cash Equivalents at End of Year** | 78,547 | 100,997 | [Notes to the Consolidated Financial Statements](index=108&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes to the financial statements elaborate on the company's accounting policies, key accounting judgments and estimates, and provide in-depth analysis of various statement items, with a focus on segment information, revenue recognition, goodwill impairment testing assumptions, financial instrument risk management, and related party transactions - **Segment Information**: The Group operates in two segments: apparel design, manufacturing, and trading; and loan financing services; in 2020, apparel business revenue was **HKD 107 million** with a segment loss of **HKD 14.65 million**, while loan financing business revenue was **HKD 7.42 million** with a segment loss of **HKD 39.23 million**[955](index=955&type=chunk) - **Goodwill Impairment**: Goodwill for the loan financing cash-generating unit was tested for impairment using a pre-tax discount rate of **15.6%** and a long-term growth rate of **3%**, resulting in a recognized goodwill impairment of **HKD 22.73 million** due to negative outlook[1047](index=1047&type=chunk)[1051](index=1051&type=chunk) - **Loan and Interest Receivables**: As of year-end, total loan and interest receivables amounted to **HKD 108.8 million**, of which **HKD 58.9 million** was unsecured; due to increased credit risk, total impairment provisions significantly increased from **HKD 2.79 million** to **HKD 19.81 million**[1100](index=1100&type=chunk)[1101](index=1101&type=chunk)[1110](index=1110&type=chunk)

Revenue Performance - For the six months ended 30 June 2020, the Group's revenue decreased by approximately 50.9% to approximately HK$15,545,000 from HK$31,673,000 in 2019[2] - Revenue from the apparel operation was HK$9,936,000, representing a decrease of approximately 61.9% compared to HK$26,102,000 in the corresponding period in 2019[2] - Revenue from the money lending operation slightly increased by approximately 0.7% to HK$5,609,000 from HK$5,571,000 in 2019[2] - Revenue for the first half of 2020 decreased by approximately 50.9% or HK$16,128,000 to approximately HK$15,545,000 compared to HK$31,673,000 in 2019[132] - The geographical breakdown of revenue shows HK$8,950,000 from Hong Kong, HK$6,581,000 from the United States, and HK$14,000 from other regions for the six months ended June 30, 2020[59] Financial Losses - The gross loss for the period was approximately HK$33,000, a significant decline from a gross profit of HK$4,386,000 in 2019[2] - The loss attributable to owners of the Company was approximately HK$28,586,000, a decrease of 4.2% from HK$29,839,000 in 2019[5] - The total comprehensive income for the period attributable to the owners of the Company was a loss of HK$28,975,000 compared to a loss of HK$29,814,000 in 2019[9] - The loss before tax for the six months ended June 30, 2020, was HK$29,747,000, compared to a loss of HK$16,561,000 for the same period in 2019[55] - The Company reported a loss for the period of HK$28,586,000 for the six months ended June 30, 2020, compared to a loss of HK$29,839,000 for the same period in 2019, showing a slight improvement[20] Assets and Liabilities - The Group's inventories increased by approximately 112.9% to HK$31,908,000 as at 30 June 2020 from HK$14,987,000 as at 31 December 2019[5] - Total assets as of June 30, 2020, amounted to HK$317,921,000, with segment assets of HK$64,260,000 and other corporate assets of HK$184,319,000[50] - Total liabilities were reported at HK$41,699,000, with segment liabilities of HK$39,800,000[50] - As of June 30, 2020, the net current assets decreased to HK$196,097,000 from HK$225,590,000 as of December 31, 2019, representing a decline of approximately 13%[13] - The total equity attributable to the owners of the Company decreased to HK$276,222,000 as of June 30, 2020, down from HK$305,197,000 at the end of 2019, reflecting a reduction of about 9.5%[13] Cash Flow and Liquidity - The net cash used in operating activities for the six months ended June 30, 2020, was HK$27,996,000, an improvement compared to HK$43,370,000 for the same period in 2019, indicating a decrease of approximately 35%[31] - The cash and cash equivalents at the end of the period were HK$74,823,000, down from HK$106,693,000 at the end of June 2019, marking a decline of about 29.9%[31] - The current liquidity ratio of the Group was approximately 5.79 as of June 30, 2020, compared to 6.26 as of December 31, 2019[161] - The gearing ratio of the Group was approximately 2.4% as of June 30, 2020, down from 2.8% as of December 31, 2019[164] - The Group's liquidity position has been maintained through prudent financial management and ongoing credit assessments of customers[168] Expenses and Cost Management - Selling and distribution expenses decreased by approximately HK$2,438,000, and administrative expenses decreased by approximately HK$1,725,000 during the reporting period[5] - Total staff costs for the six months ended June 30, 2020, were approximately HK$17,829,000, down from approximately HK$25,574,000 for the same period in 2019, reflecting a reduction in employee headcount from 293 to 241[174] - Administrative expenses decreased by approximately 6.0% or HK$1,725,000 to about HK$27,004,000 from HK$28,729,000 in 2019[155] - The company’s directors' emoluments for the first half of 2020 were HK$3,531,000, compared to HK$3,151,000 in 2019[127] Credit Loss Provisions - The provision for expected credit losses (ECL) on trade receivables was HK$52,000, while a reversal of ECL on loans was HK$436,000 for the six months ended June 30, 2020[55] - The expected credit loss provision increased significantly to approximately HK$9,875,000, up about HK$7,087,000 from HK$2,788,000 as of December 31, 2019, due to updated credit risk assessments reflecting the impact of COVID-19[146] - The provision for expected credit losses (ECL) for trade receivables was HK$217,000 as of June 30, 2020, down from HK$653,000 as of December 31, 2019[102] Business Operations and Strategy - The Group continues to focus on its core segments: apparel manufacturing and trading, and money lending services, each requiring different business strategies[50] - The Group has not reported any significant changes in its business operations during the period[35] - The Group's business operations did not experience significant changes during the reporting period[37] - The company expects continued disruption to commercial activity and reduced consumer spending in the second half of 2020 due to the ongoing COVID-19 pandemic[139] Shareholder Information - No dividends were paid or proposed to the owners of the Company during the six months ended June 30, 2020, consistent with 2019[86] - The Board did not recommend any payment of an interim dividend for the six months ended 30 June 2020[194] Future Plans and Investments - The Group's future plans for material investments or capital assets were not specified as of June 30, 2020[181] - The Group has retained unutilised proceeds for working capital purposes due to the lack of suitable merger and acquisition opportunities[190] - The unutilised proceeds amounting to HK$75,288,000 were retained for future acquisitions and business development, with approximately HK$45,000,000 allocated for purchasing raw materials and garments[190]

Financial Performance - Revenue for the year ended December 31, 2019, was HK$158,714,000, a decrease of 22.1% from HK$203,892,000 in 2018[22] - Gross profit for 2019 was HK$32,196,000, down 24.3% from HK$42,480,000 in 2018[22] - The company reported a loss before income tax of HK$71,048,000 in 2019, compared to a loss of HK$62,178,000 in 2018[22] - Loss attributable to the owners of the company was HK$76,680,000 in 2019, an increase from a loss of HK$60,032,000 in 2018[22] - The overall cost of sales decreased by approximately 21.6%, from approximately HK$161,412,000 in 2018 to approximately HK$126,518,000 in 2019[98] - The gross profit margin decreased from approximately 20.8% in 2018 to 20.3% in 2019[100] - The loss attributable to the owners of the Company for the year ended 31 December 2019 was approximately HK$76,680,000, representing an increase in loss of approximately HK$16,648,000 or 27.7% compared to 2018[113] Assets and Liabilities - Total assets as of December 31, 2019, were HK$351,054,000, down 17.9% from HK$427,616,000 in 2018[23] - Shareholders' equity decreased to HK$305,197,000 in 2019 from HK$382,418,000 in 2018, a decline of 20.2%[23] - The current ratio for 2019 was 6.26, slightly down from 6.85 in 2018[23] - The gearing ratio increased to 2.8% in 2019 from 0.3% in 2018, indicating a rise in financial leverage[23] - Loans and interest receivables increased by approximately 6.8%, from approximately HK$105,339,000 as of December 31, 2018, to approximately HK$112,501,000 as of December 31, 2019[98] - The Group's total lease liabilities as of December 31, 2019, were approximately HK$8,547,000, with HK$5,568,000 repayable within one year[138] Inventory and Receivables - Inventory turnover days increased to 43 days in 2019 from 20 days in 2018, reflecting slower inventory movement[23] - The group's inventory increased by approximately HK$5,980,000 or 66.4%, from approximately HK$9,007,000 as of December 31, 2018, to approximately HK$14,987,000 as of December 31, 2019[121] - Trade and bills receivables increased by approximately HK$5,551,000 or 29.9%, from approximately HK$18,548,000 as of December 31, 2018, to approximately HK$24,099,000 as of December 31, 2019[127] Economic Environment - Hong Kong's economy declined by 1.2% in 2019, marking the first annual economic contraction since 2009[25] - The trade disputes between China and the United States are expected to continue impacting the apparel operation in 2020[29] - Trade tensions between China and the United States have negatively impacted demand for apparel products manufactured in China, leading to a slowdown in orders from U.S. customers[90] Management and Governance - The company has a strong leadership team with diverse backgrounds in finance, investment, and corporate governance, enhancing its strategic planning and operational efficiency[46][49][54][57] - The company is focused on ensuring good corporate governance practices, with Mr. Guo leading the corporate governance committee[47] - The company has established four committees under the Board: Audit Committee, Remuneration Committee, Nomination Committee, and Corporate Governance Committee, to assist in overseeing management functions[186] - The company is committed to promoting good corporate governance and managing enterprise-wide risk as a top priority[191] Operational Strategies - The Group plans to adopt further cost-cutting measures to reduce operational costs amid the challenging environment[39] - The Group is dedicated to improving the performance of its existing businesses while cautiously exploring potential business opportunities[39] - The company aims to enhance its market presence through strategic planning and business development initiatives led by its experienced management team[49][54] Impact of COVID-19 - The COVID-19 pandemic may cause severe disruptions to the global economy and affect the Group's business operations[38] - The Group will continue to monitor the impacts of the pandemic on its operations and financial position[38] - The Group anticipates that the temporary suspension of its factory in China will not significantly affect its ability to deliver orders for the whole year[32] Revenue Breakdown - Revenue from the apparel operation for 2019 was approximately HK$146,995,000, a decline of approximately 21.4% from HK$187,041,000 in 2018[25] - Revenue from private label products decreased by approximately 16.3% to approximately HK$104,760,000 in 2019, contributing 71.3% of total apparel revenue[96] - Revenue from own brand products decreased by approximately 31.7% to approximately HK$42,235,000 in 2019, with gross profit decreasing by 26.8% to approximately HK$12,072,000[96] - Revenue from the money lending operation contracted by approximately HK$5,132,000 or approximately 30.5%, from approximately HK$16,851,000 in 2018 to approximately HK$11,719,000 in 2019[98] Expenses and Cost Management - Selling and distribution expenses decreased by approximately HK$8,853,000 or 33.3% to approximately HK$17,698,000 for the year ended 31 December 2019[104] - Administrative expenses decreased by approximately 21.0% or HK$17,401,000 to approximately HK$65,328,000 for the year ended 31 December 2019[110] - Total staff costs for the year ended 31 December 2019 were approximately HK$56,481,000, a decrease from approximately HK$76,044,000 for the year ended 31 December 2018[166]

Revenue Performance - The Group's revenue decreased from approximately HK$39,437,000 for the six months ended 30 June 2018 to approximately HK$31,673,000 for the six months ended 30 June 2019, representing a decrease of approximately HK$7,764,000 or 19.7%[2] - Revenue from the apparel operation was HK$26,102,000 for the reporting period, representing a decrease of approximately HK$4,541,000 or 14.8% compared to the corresponding period in 2018[2] - Revenue from the money lending operation was approximately HK$5,571,000, representing a decrease of approximately HK$3,223,000 or 36.7% compared to the corresponding period in 2018[2] - Revenue from external customers for the six months ended 30 June 2019 was HK$31,673,000, a decrease of 19.7% compared to HK$39,437,000 in 2018[76] Profitability and Loss - Gross profit for the six months ended 30 June 2019 was approximately HK$4,386,000, representing a decrease of approximately HK$2,785,000 or 38.8% compared to the corresponding period in 2018[4] - The gross profit margin for the six months ended 30 June 2019 was approximately 13.8%, down from 18.2% in 2018[4] - The loss for the period attributable to owners of the company was approximately HK$29,839,000, decreased by approximately HK$14,969,000 or 33.4% compared to 2018[4] - The loss before tax for the six months ended 30 June 2019 was HK$49,460,000, reflecting significant financial challenges[82] Assets and Liabilities - Total assets as of June 30, 2019, amounted to HK$271,410,000, a decrease from HK$303,800,000 as of December 31, 2018, representing a decline of approximately 10.6%[10] - Current assets increased significantly to HK$271,410,000 from HK$303,800,000, with inventories rising to HK$35,839,000 from HK$9,007,000, indicating a substantial increase of 297.3%[10] - Total liabilities as of 30 June 2019 were HK$70,537,000, with segment liabilities for apparel design and trading at HK$57,044,000 and money lending services at HK$2,797,000[68] - Interest-bearing borrowings increased to HK$18,776,000 from HK$3,078,000, indicating a significant rise of 509.5%[12] Cash Flow and Liquidity - Cash and cash equivalents at the end of the period were HK$106,693,000, down from HK$152,597,000, marking a decrease of 30.1%[18] - Net cash used in operating activities was HK$43,370,000, compared to HK$40,068,000 in the previous year, indicating an increase in cash outflow of 5.8%[18] - The Group's liquidity position included pledged bank deposits and cash amounting to approximately HK$107,176,000, down from HK$155,911,000 at the end of 2018[165] - The current ratio of the Group was approximately 4.33 as of 30 June 2019, down from 6.85 at the end of 2018[165] Expenses and Cost Management - Selling and distribution expenses decreased by approximately HK$4,838,000, while administrative expenses decreased by approximately HK$16,015,000[4] - Employee benefit expenses for the period were HK$25,574,000, down from HK$36,806,000 in the previous year, indicating cost-cutting measures[83] - Administrative expenses for the six months ended 30 June 2019 were approximately HK$28,729,000, a decrease of approximately 35.8% or HK$16,015,000 compared to HK$44,744,000 in 2018[158] Shareholder Returns - The Board did not recommend the payment of any interim dividend[4] - No dividends were paid or proposed during the six months ended June 30, 2019, consistent with 2018[97] Financial Reporting and Compliance - The Group's unaudited condensed consolidated financial statements for the six months ended June 30, 2019, were prepared in accordance with Hong Kong Financial Reporting Standards (HKFRS) [22] - The financial statements are presented in Hong Kong dollars (HK$), rounded to the nearest thousand [24] - The accounting policies used in the preparation of the financial statements are consistent with those used in the previous year's annual financial statements, except for the adoption of new standards [23] Business Operations - There were no significant changes in the Group's business operations during the period [20] - The Group is primarily engaged in the design, manufacture, and trading of apparels, as well as the provision of money lending services [20] - The Group's operations are primarily based in Hong Kong and the PRC, with management determining Hong Kong as the principal operating location[74] Employee Information - As of June 30, 2019, the Group had 313 employees, with total staff costs of approximately HK$25,574,000, down from HK$36,806,000 for the same period in 2018, indicating a reduction of about 30%[187] - The Group's employee remuneration is determined based on market norms and individual performance, qualifications, and experience[187] Capital Expenditures and Investments - The Group's capital expenditures for property, plant, and equipment were nil for the six months ended June 30, 2019, down from HK$326,000 in 2018[104] - There were no significant capital commitments or plans for material investments as of June 30, 2019, consistent with the previous year[181][188] Currency and Economic Factors - The Group's revenue is primarily in US dollars, while most costs are in Renminbi, leading to potential profit margin decreases if RMB appreciates against USD without corresponding price increases[179] - The appreciation of RMB against foreign currencies could adversely affect the purchasing power of the Group's future financing[179] - The exchange rates between RMB and USD are influenced by PRC Government policies and international economic conditions[180]

香港華信金融投資有限公司 CEFC HONG KONG FINANCIAL INVESTMENT COMPANY LIMITED (於開曼群島註冊成立之有限公司) (Incorporated in the Cayman Islands with limited liability) 股份代號 Stock Code：1520 O O O O O ANNUAL O ○ Contents 目錄 | --- | --- | --- | |---------------------------------------------------------|--------------------------|--------| | | | Page | | Corporate Information | 公司資料 | 頁次 2 | | Financial Summary | 財務概要 | 5 | | Chairman's Statement | 主席報告書 | 6 | | Biographical Details of Directors and Senior Management | 董事及高級管理層履歷詳情 | 9 ...