Group 1 - The company, Xinghe Holdings (01891.HK), announced that it will hold a board meeting on August 30, 2025 [1] - The meeting will review and approve the group's interim results for the six months ending June 30, 2025, and discuss the proposal for an interim dividend distribution, if any [1]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不就因本公告全部或任何部分內容而產生或因依 賴該等內容而引致的任何損失承擔任何責任。 香港，二零二五年八月十八日 於本公告日期，執行董事為Sia Kok Chin拿督、Sia Keng Leong拿督、Sia Kok Chong先生、Sia Kok Seng先生及Sia Kok Heong先生；及獨立非執行董事為Sai Shiow Yin女士、Puar Chin Jong先生及Chu Kheh Wee先生。 董事會會議日期 興合控股有限公司（「本公司」）董事（「董事」）會（「董事會」）謹此宣佈，本公司將 於二零二五年八月三十日（星期六）舉行董事會會議，藉以（其中包括）考慮並批准 本公司及其附屬公司截至二零二五年六月三十日止六個月中期業績及其發佈，並 考慮派發中期股息（如有）。 承董事會命 興合控股有限公司 主席兼行政總裁 Sia Kok Chin拿督 Heng Hup Holdings Limited 興合控股有限公司 （於開曼群島註冊成立之有限公司） （股份代號：1891） ...

FF301 股份發行人及根據《上市規則》第十九B章上市的香港預託證券發行人的證券變動月報表 截至月份: 2025年7月31日 狀態: 新提交 致：香港交易及結算所有限公司 公司名稱: 興合控股有限公司（於開曼群島註冊成立之有限公司） 呈交日期: 2025年8月6日 FF301 II. 已發行股份及/或庫存股份變動 | 1. 股份分類 | 普通股 | 股份類別 | 不適用 | | 於香港聯交所上市 (註1) | 是 | | | --- | --- | --- | --- | --- | --- | --- | --- | | 證券代號 (如上市) | 01891 | 說明 | | | | | | | | | 已發行股份（不包括庫存股份）數目 | | 庫存股份數目 | | 已發行股份總數 | | | 上月底結存 | | | 1,000,000,000 | | 0 | | 1,000,000,000 | | 增加 / 減少 (-) | | | 0 | | 0 | | | | 本月底結存 | | | 1,000,000,000 | | 0 | | 1,000,000,000 | 第 2 頁 共 10 頁 v 1.1. ...

Financial Performance - The company reported a significant revenue increase of approximately 26.7%, rising from 1.35 billion MYR in the previous fiscal year to 1.71 billion MYR in the fiscal year ending December 31, 2024[21]. - The company's profit before tax surged to 32.86 million MYR, nearly tripling from 8.54 million MYR in the previous fiscal year[21]. - The gross profit for the fiscal year 2024 was reported at 125.96 million MYR, showing a substantial improvement from 77.08 million MYR in the previous year[9]. - The company achieved a post-tax profit of 21.54 million MYR in fiscal year 2024, a significant increase of approximately 161% from 8.24 million MYR in fiscal year 2023[65]. - The profit attributable to the owners of the company for the fiscal year 2024 is 25.46 million MYR, an increase from 8.54 million MYR in 2023[76]. - The total equity attributable to the owners of the company as of December 31, 2024, is 238.44 million MYR, up from 213.30 million MYR in 2023[79]. - The current ratio improved to 2.3 times in 2024 from 2.0 times in 2023, indicating better liquidity[78]. - The debt-to-equity ratio decreased to 0.35 times in 2024 from 0.48 times in 2023, reflecting reduced borrowings[79]. - The total borrowings as of December 31, 2024, are 76.93 million MYR, down from 98.40 million MYR in 2023[79]. Sales and Production - The total sales volume of ferrous scrap metal reached 949,634 tons, an increase of about 30.9% compared to 725,577 tons in the previous fiscal year[21]. - In the fiscal year 2023, the company sold 725,577 tons of black scrap metal, accounting for 93.4% of total revenue, and is projected to sell 949,634 tons in fiscal year 2024, accounting for 93.2% of total revenue[26]. - The average trading price of black scrap metal decreased by approximately 4.6% from 1,711 MYR per ton in fiscal year 2023 to 1,633 MYR per ton in fiscal year 2024[64]. Operational Efficiency - The company operates multiple scrap yards across Malaysia, covering approximately 61,000 square meters, strategically located to ensure a steady supply of ferrous scrap metal[25]. - The company has a fleet of 95 owned trucks, with 59 trucks having a capacity of 20 tons or more, enabling efficient logistics support for suppliers[25]. - The company remains focused on optimizing procurement strategies and improving operational efficiency to ensure sustainable profit growth[65]. Environmental and Social Responsibility - The company aims to enhance its focus on environmental management, social responsibility, and good governance in response to increasing awareness of sustainable practices[22]. - The company has implemented various energy-saving measures to minimize its carbon footprint and is committed to achieving net-zero emissions in the future[192]. - The company encourages employees to participate in environmental activities to raise awareness about sustainability[184]. - The company has established a waste recycling program, including the collection of paper, metals, and plastics, to enhance waste reuse[181]. - The company is actively monitoring and managing climate-related risks as part of its governance and strategic planning[193]. Governance and Board Structure - The board consists of five executive directors and three independent non-executive directors, with a gender ratio of 7:1 among employees as of December 31, 2024[100]. - The company has fully complied with the corporate governance code, except for the deviation regarding the roles of the chairman and CEO, which are held by Sia Kok Chin since 2001[92]. - The board has established three committees: Audit and Risk Management Committee, Remuneration Committee, and Nomination Committee to oversee specific areas of the company's affairs[95]. - The company emphasizes the importance of independent directors in providing oversight and strategic guidance[51]. - The board will review and consider separating the roles of chairman and CEO at an appropriate time[92]. Risk Management - The company emphasizes the importance of regular risk assessments and continuous improvement of safety protocols to manage risks in the scrap metal industry[22]. - The board is responsible for maintaining adequate risk management and internal control systems to protect shareholder investments and company assets[139]. - The company has implemented various internal control and risk management policies, including asset depreciation provision management and inventory management policies[139]. ESG Reporting - The company released its seventh ESG report, highlighting sustainability measures and stakeholder concerns for the year 2024[162]. - The report covers the period from January 1, 2024, to December 31, 2024, focusing on the environmental and social impacts of the company's operations in Malaysia[163]. - The board has identified 11 significant ESG-related issues for the reporting period, focusing on energy efficiency, environmental compliance, and corporate governance[171]. Emissions and Energy Consumption - Total greenhouse gas emissions reached 9,683.85 tons of CO2 equivalent in 2024, up from 4,041.07 tons in 2021, representing an increase of 139.5%[200]. - Scope 1 direct emissions from trucks increased to 8,232.39 tons in 2024, compared to 3,057.79 tons in 2021, marking a rise of 169.5%[200]. - Scope 2 indirect emissions from electricity rose to 1,451.46 tons in 2024, up from 983.28 tons in 2021, reflecting an increase of 47.5%[200]. - CO2 emissions per thousand Malaysian Ringgit revenue increased from 0.0028 in 2021 to 0.0057 in 2024, indicating a growth of 103.6%[200].

Financial Performance - For the fiscal year ending December 31, 2024, the company's revenue was 1,706.66 million MYR, an increase of approximately 26.7% compared to 1,346.98 million MYR in the fiscal year 2023[2] - The gross profit for the fiscal year 2024 was 125.96 million MYR, representing a 63.4% increase from 77.08 million MYR in the fiscal year 2023[2] - The profit attributable to the owners of the company for fiscal year 2024 was 25.46 million MYR, a significant increase of 198.1% from 8.54 million MYR in fiscal year 2023[2] - The operating profit for fiscal year 2024 was 37.89 million MYR, up from 17.88 million MYR in fiscal year 2023[3] - The basic and diluted earnings per share for the fiscal year 2024 were 2.55 sen, compared to 0.85 sen in fiscal year 2023[3] - The net profit attributable to the company's owners for fiscal year 2024 was 25,464 thousand MYR, a significant increase from 8,540 thousand MYR in fiscal year 2023[24] - The total tax expense for fiscal year 2024 was 11,320 thousand MYR, up from 6,111 thousand MYR in fiscal year 2023[21] - The company achieved a post-tax profit of 21.54 million MYR in fiscal year 2024, a significant increase of approximately 161% from 8.24 million MYR in fiscal year 2023[32] Assets and Liabilities - Total assets as of December 31, 2024, were 380.35 million MYR, slightly down from 382.11 million MYR in 2023[4] - Total liabilities decreased to 145.69 million MYR in 2024 from 169.52 million MYR in 2023[5] - The total borrowings as of December 31, 2024, decreased to 76.93 million MYR from 98.40 million MYR in the previous year, primarily due to loan repayments[45] - The asset-to-equity ratio improved to 0.35 times in fiscal year 2024 from 0.48 times in fiscal year 2023[45] Equity and Dividends - As of December 31, 2024, the equity attributable to the owners of the company was 238.44 million MYR, an increase of 11.8% from 213.30 million MYR in 2023[2] - The company decided not to recommend a final dividend for the fiscal year 2024, compared to zero in 2023[2] - The company did not recommend a final dividend for the fiscal year 2024, consistent with the previous year[58] Revenue Sources and Operations - The company primarily engages in the trading of ferrous scrap metal, used batteries, waste paper, iron ore, and other scrap materials in Malaysia[6] - The group's total revenue for the fiscal year 2024 was 1,706,659 thousand MYR, an increase of 26.6% from 1,346,983 thousand MYR in fiscal year 2023[16] - Major customer 1 contributed 1,129,562 thousand MYR to total revenue in fiscal year 2024, up 56.5% from 722,142 thousand MYR in fiscal year 2023[17] - The group primarily operates in Malaysia, with most of its revenue generated from this market[16] Costs and Expenses - The cost of goods sold for fiscal year 2024 was 1,556,104 thousand MYR, representing an increase of 25.0% from 1,246,843 thousand MYR in fiscal year 2023[19] - The group incurred total administrative expenses of 1,667,113 thousand MYR in fiscal year 2024, compared to 1,330,139 thousand MYR in fiscal year 2023[19] - Distribution and sales expenses increased to 55.31 million MYR in fiscal year 2024, up approximately 74.6% from 31.68 million MYR in fiscal year 2023[39] - Administrative expenses rose to 31.11 million MYR in fiscal year 2024, a 9.0% increase from 28.55 million MYR in fiscal year 2023[40] - Total employee costs and related expenses for the fiscal year 2024 amounted to 32.44 million MYR, a 25.4% increase from 25.87 million MYR in fiscal year 2023[55] Trade Receivables and Payables - Trade receivables decreased from 187.01 million MYR in fiscal year 2023 to 167.88 million MYR in fiscal year 2024, reflecting a reduction of approximately 10.2%[29] - Trade payables decreased from 43.39 million MYR in fiscal year 2023 to 31.38 million MYR in fiscal year 2024, a decline of approximately 27.7%[30] - The expected loss rate for trade receivables increased to 1.7% in fiscal year 2024 from 0.6% in fiscal year 2023, with provisions for trade receivables amounting to 2.92 million MYR[52] Corporate Governance and Compliance - The company maintained public float in compliance with the Hong Kong Stock Exchange listing rules as of the announcement date[60] - The audit and risk management committee reviewed the consolidated financial data for fiscal year 2024, confirming consistency with the audited financial statements[64] - The company has adopted a code of conduct for securities trading by directors and senior management, with all directors confirming compliance during the review year[63] - The company is committed to high standards of corporate governance and will continue to review its governance practices[62] Future Outlook - The company anticipates challenges in fiscal year 2025, particularly regarding overcapacity and environmental pressures[31] - The group expects the adoption of new and revised international financial reporting standards will not have a significant impact on its financial performance[13] Employee Information - Employee count increased to 371 in Malaysia as of December 31, 2024, up from 323 in 2023, representing a growth of 14.8%[55] Other Information - The group reported other income of 1,436 thousand MYR in fiscal year 2024, a decrease from 1,605 thousand MYR in fiscal year 2023[18] - Other income decreased from 1.61 million MYR in fiscal year 2023 to 1.44 million MYR in fiscal year 2024, primarily due to a reduction in rental and miscellaneous income[37] - The group's net other losses for the fiscal year 2024 amounted to 1.21 million MYR, an increase of 0.45 million MYR compared to the fiscal year 2023[38] - The capital commitments for the acquisition of property, plant, and equipment as of December 31, 2024, were 28.56 million MYR, compared to 11.76 million MYR in the previous year[49] - The group had no contingent liabilities as of December 31, 2024, consistent with the previous year[48] - There were no purchases, sales, or redemptions of the company's listed securities during the fiscal year 2024[57] - The company has not disclosed any significant events that occurred after the end of the fiscal year 2024 up to the date of this announcement[54] - The company will hold its annual general meeting on June 14, 2025, with a registration suspension period from June 10 to June 14, 2025[59]

Financial Performance - For the six months ended June 30, 2024, the company reported revenue of 865.2 million MYR, a significant increase of approximately 50.5% compared to 574.8 million MYR for the same period in 2023[14]. - The company achieved a net profit of 10.1 million MYR for the first half of 2024, a substantial increase of about 312% compared to 2.5 million MYR in the first half of 2023[16]. - The gross profit increased from 29.6 million MYR in the first half of 2023 to 61.8 million MYR in the first half of 2024, marking a growth of approximately 109.1%, with the gross margin improving from 5.1% to 7.1%[22]. - Operating profit rose to 18,897 thousand MYR, up from 5,843 thousand MYR, marking an increase of 223.5%[55]. - Net profit for the period was 10,114 thousand MYR, compared to 2,452 thousand MYR in 2023, reflecting a growth of 312.5%[55]. - Basic and diluted earnings per share increased to 1.15 sen from 0.25 sen, representing a growth of 360%[55]. Sales and Revenue - The sales volume of black scrap metal reached 471,580 tons in the first half of 2024, representing an increase of about 52.7% from 308,891 tons in the first half of 2023[19]. - In the first half of 2024, the company sold 471,580 tons of black scrap metal, generating revenue of 787,399 thousand MYR, compared to 308,891 tons and 538,630 thousand MYR in the same period of 2023, representing an increase of approximately 52.6% in sales volume and 46.2% in revenue[20][21]. Assets and Equity - Total assets increased to 408.7 million MYR as of June 30, 2024, compared to 382.1 million MYR in the previous year[15]. - The company's equity attributable to owners rose to 224.8 million MYR, up from 213.3 million MYR in the previous year[15]. - As of June 30, 2024, the total equity attributable to owners was 224.7 million MYR, up from 213.3 million MYR as of December 31, 2023, including retained earnings of 140.7 million MYR[31]. Expenses - Distribution and selling expenses surged by approximately 130.9% to 26 million MYR in the first half of 2024, up from 11.3 million MYR in the same period of 2023, primarily due to increased transportation costs related to higher scrap metal sales and new iron ore trading activities[23]. - Administrative expenses rose by 24.8% to 16.7 million MYR in the first half of 2024, compared to 13.4 million MYR in the first half of 2023, mainly due to an increase in office and operational staff and salary adjustments[24]. - The total costs for sales, distribution, and administrative expenses reached 864,191 thousand MYR, up from 569,944 thousand MYR, reflecting a 51.6% increase year-over-year[72]. Liabilities and Borrowings - The company's total borrowings increased to 108.6 million MYR as of June 30, 2024, from 98.4 million MYR as of December 31, 2023, primarily used for the procurement of black scrap metal and capital expenditures[31]. - The asset-to-liability ratio as of June 30, 2024, was 0.50, compared to 0.48 as of December 31, 2023[31]. - Total liabilities rose to 186,041 thousand MYR from 169,516 thousand MYR, an increase of 9.7%[57]. Market Conditions and Challenges - The company anticipates challenges in the global steel industry due to ongoing supply-demand imbalances and geopolitical tensions affecting market conditions[16]. - The Malaysian steel industry continues to face structural challenges, including overcapacity and weak local demand, prompting the establishment of an independent committee to assess the industry's outlook[16]. - The company remains committed to enhancing operational efficiency and maintaining a strong market position despite current market volatility[16]. - The company is focused on strategic initiatives to drive sustainable growth and create value for stakeholders[16]. Employee and Shareholder Information - The total employee cost and related expenses for the six months ended June 30, 2024, amounted to 16.7 million MYR, a 51.8% increase from 11.0 million MYR in the same period last year[47]. - The company employed 374 staff as of June 30, 2024, up from 227 staff a year earlier[47]. - Directors and senior executives collectively hold 681,680,000 shares, representing approximately 68.17% of the company[39]. Cash Flow and Investments - Operating cash flow generated net cash of 25,996 thousand MYR for the six months ended June 30, 2024, compared to a net cash used of (3,525) thousand MYR in the same period of 2023[60]. - The net cash used in investing activities was (5,584) thousand MYR for the six months ended June 30, 2024, compared to (3,273) thousand MYR in the prior year[60]. - The group has committed capital expenditures of 28,576 thousand MYR for the purchase of two adjacent vacant land plots as of June 30, 2024, up from 11,757 thousand MYR as of December 31, 2023, reflecting an increase of approximately 143.5%[106].

[Performance Announcement Overview](index=1&type=section&id=Performance%20Announcement%20Overview) [Financial Highlights](index=1&type=section&id=Financial%20Highlights) Heng Hup Holdings Limited achieved significant performance growth in H1 2024, with substantial increases in revenue, gross profit, and profit attributable to owners of the Company, but no dividend was declared by the Board | Indicator | H1 2024 (MYR '000) | H1 2023 (MYR '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 865.2 | 574.8 | +50.5% | | Gross Profit | 61.8 | 29.6 | +109.1% | | Profit attributable to owners of the Company | 11.5 | 2.5 | +367.2% | | Equity attributable to owners of the Company (2024/06/30 vs 2023/12/31) | 224.7 | 213.3 | +5.4% | - The Board of Directors did not declare any dividend for the six months ended June 30, 2024[1](index=1&type=chunk) [Board Statement](index=1&type=section&id=Board%20Statement) The Board is pleased to announce the Group's unaudited condensed consolidated interim results for the six months ended June 30, 2024, which have been reviewed by the Board and the Audit and Risk Management Committee - The Board has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2024[2](index=2&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) [Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) In H1 2024, the Company's revenue and gross profit grew significantly, with substantial increases in operating profit and profit for the period, and both basic and diluted earnings per share rose | Indicator | H1 2024 (MYR '000) | H1 2023 (MYR '000) | | :--- | :--- | :--- | | Revenue | 865,207 | 574,808 | | Cost of sales | (803,407) | (545,253) | | Gross Profit | 61,800 | 29,555 | | Operating Profit | 18,897 | 5,843 | | Profit for the period | 10,114 | 2,452 | | Profit for the period attributable to owners of the Company | 11,456 | 2,452 | | Basic earnings per share (Sen) | 1.15 | 0.25 | | Diluted earnings per share (Sen) | 1.15 | 0.25 | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Company's total assets and total equity increased, along with non-current and current liabilities, maintaining a stable overall financial structure | Indicator | 2024/06/30 (MYR '000) | 2023/12/31 (MYR '000) | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 84,091 | 81,455 | | Current assets | 324,654 | 300,651 | | Total assets | 408,745 | 382,106 | | **Equity and Liabilities** | | | | Equity attributable to owners of the Company | 224,753 | 213,297 | | Non-controlling interests | (2,049) | (707) | | Total equity | 222,704 | 212,590 | | Non-current liabilities | 21,878 | 19,538 | | Current liabilities | 164,163 | 149,978 | | Total liabilities | 186,041 | 169,516 | | Total equity and liabilities | 408,745 | 382,106 | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [1 General Information](index=5&type=section&id=1%20General%20Information) Heng Hup Holdings Limited, registered in the Cayman Islands, primarily trades ferrous scrap metal, used batteries, waste paper, iron ore, and other scrap materials in Malaysia, with the Sia brothers as ultimate controlling parties - The Company is an investment holding company primarily engaged in the trading of ferrous scrap metal, used batteries, waste paper, iron ore, and other scrap materials in Malaysia[7](index=7&type=chunk) - The Company's ultimate holding company is 5S Holdings (BVI) Limited, with the ultimate controlling parties being the Sia brothers, including Dato' Sia Kok Chin[7](index=7&type=chunk) [2. Basis of Preparation](index=5&type=section&id=2.%20Basis%20of%20Preparation) The Group's condensed consolidated financial statements are prepared in accordance with IAS 34, the disclosure requirements of the HKEX Listing Rules, and the Hong Kong Companies Ordinance, and should be read in conjunction with the annual consolidated financial statements - The financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting", the disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, and the disclosure requirements of the Hong Kong Companies Ordinance (Chapter 622)[8](index=8&type=chunk) [3. Significant Accounting Policies and Disclosures](index=5&type=section&id=3.%2E%20Significant%20Accounting%20Policies%20and%20Disclosures) This section discloses the amendments to existing standards adopted by the Group in preparing interim financial information and lists new standards and amendments not yet effective, which are not expected to have a significant impact on financial position [3.1 Adoption of Amendments to Existing Standards](index=5&type=section&id=3%2E1%20Adoption%20of%20Amendments%20to%20Existing%20Standards) Amendments to standards first mandatorily adopted for the financial year beginning January 1, 2024, have no significant impact on the Group's financial position and performance for the current and prior periods - Amendments to International Accounting Standard 1, International Financial Reporting Standard 16, and International Accounting Standard 7 were first mandatorily adopted for the financial year beginning January 1, 2024[6](index=6&type=chunk)[9](index=9&type=chunk) - The adoption of these new and revised standards had no significant impact on the Group's financial position and performance and/or disclosures for the current and prior periods[9](index=9&type=chunk) [3.2 New Standards and Amendments Not Yet Adopted](index=6&type=section&id=3%2E2%20New%20Standards%20and%20Amendments%20Not%20Yet%20Adopted) Several issued but not yet effective amendments to standards are listed, including IAS 21, IFRS 9, 7, 18, 19, 10, and IAS 28, which the Board expects will not have a significant impact upon adoption | Standard Amendments | Effective Date | | :--- | :--- | | International Accounting Standard 21 (Amendments) | January 1, 2025 | | International Financial Reporting Standards 9 and 7 (Amendments) | January 1, 2026 | | International Financial Reporting Standard 18 | January 1, 2027 | | International Financial Reporting Standard 19 | January 1, 2027 | | International Financial Reporting Standard 10 and International Accounting Standard 28 (Amendments) | To be determined | - The Board believes that the adoption of the above amendments to existing standards will not have a significant impact on the Group's current or future reporting periods and foreseeable future transactions[10](index=10&type=chunk) [4 Revenue and Segment Information](index=6&type=section&id=4%20Revenue%20and%20Segment%20Information) The Group primarily engages in the trading of recycled materials, operating a single business segment, with major revenue and non-current assets located in Malaysia - The Group is primarily engaged in the trading of ferrous scrap metal, used batteries, waste paper, iron ore, other scrap materials, and providing logistics services, operating a single business segment, which is the trading of recycled materials[11](index=11&type=chunk) [4.1 Revenue by Location of Goods Delivery](index=6&type=section&id=4%2E1%20Revenue%20by%20Location%20of%20Goods%20Delivery) The Group primarily conducts transactions in Malaysia, with most revenue generated from Malaysia, and all revenue recognized upon delivery - The Group primarily conducts transactions in Malaysia, and the majority of its revenue is generated from Malaysia[12](index=12&type=chunk) [4.2 Non-current Assets](index=6&type=section&id=4%2E2%20Non-current%20Assets) As of June 30, 2024, all of the Group's non-current assets are located in Malaysia - As of June 30, 2024, all non-current assets are located in Malaysia[13](index=13&type=chunk) [5 Other Income](index=7&type=section&id=5%20Other%20Income) Other income for H1 2024 was MYR 577 thousand, primarily comprising rental income and other income, a decrease from the prior period | Indicator | H1 2024 (MYR '000) | H1 2023 (MYR '000) | | :--- | :--- | :--- | | Compensation received | 1 | 3 | | Rental income | 233 | 275 | | Others | 343 | 645 | | **Total** | **577** | **923** | [6 Other (Losses)/Gains, Net](index=7&type=section&id=6%20Other%20%28Losses%29%2FGains%2C%20Net) Other (losses)/gains, net for H1 2024 was a loss of MYR 696 thousand, mainly due to write-off of advances to suppliers and gain/loss on disposal of property, plant and equipment, compared to a gain of MYR 56 thousand in the prior period | Indicator | H1 2024 (MYR '000) | H1 2023 (MYR '000) | | :--- | :--- | :--- | | Net foreign exchange gain | 184 | 73 | | Write-off of advances to suppliers | (1,153) | – | | Gain/(loss) on disposal of property, plant and equipment | 274 | (17) | | Write-off of bad debts | (1) | – | | **Total** | **(696)** | **56** | [7 Expenses by Nature](index=7&type=section&id=7%20Expenses%20by%20Nature) Total cost of sales, distribution and selling expenses, and administrative expenses for H1 2024 amounted to MYR 864,191 thousand, a significant increase from MYR 569,944 thousand in the prior period | Indicator | H1 2024 (MYR '000) | H1 2023 (MYR '000) | | :--- | :--- | :--- | | Total cost of sales, distribution and selling expenses and administrative expenses | 864,191 | 569,944 | [8 Net Finance Costs](index=8&type=section&id=8%20Net%20Finance%20Costs) Net finance costs for H1 2024 were MYR 2,830 thousand, a significant increase from MYR 1,396 thousand in the prior period, primarily due to a substantial rise in interest expense on borrowings | Indicator | H1 2024 (MYR '000) | H1 2023 (MYR '000) | | :--- | :--- | :--- | | Interest income from bank deposits | 217 | 232 | | Interest expense on borrowings | (2,784) | (1,455) | | Interest expense on hire purchase liabilities | (168) | (129) | | Interest expense on lease liabilities | (88) | (35) | | Interest expense on bank overdrafts | (7) | (9) | | **Net finance costs** | **(2,830)** | **(1,396)** | [9 Income Tax Expense](index=8&type=section&id=9%20Income%20Tax%20Expense) Income tax expense for H1 2024 was MYR 5,953 thousand, a significant increase from MYR 1,995 thousand in the prior period, primarily comprising Malaysian corporate income tax and deferred income tax | Indicator | H1 2024 (MYR '000) | H1 2023 (MYR '000) | | :--- | :--- | :--- | | Current tax: Malaysian corporate income tax | 5,781 | 1,614 | | Under-provision in prior years | (30) | – | | Deferred income tax | 202 | 381 | | **Income tax expense** | **5,953** | **1,995** | - Malaysian corporate income tax is provided at a rate of **24%** on the estimated assessable profit[19](index=19&type=chunk) [10 Interim Dividend](index=8&type=section&id=10%20Interim%20Dividend) The Board of Directors did not declare any dividend for the six months ended June 30, 2024 - The Board of Directors did not declare any dividend for the six months ended June 30, 2024[20](index=20&type=chunk) [11 Earnings Per Share](index=9&type=section&id=11%20Earnings%20Per%20Share) Basic and diluted earnings per share for H1 2024 were both **1.15 Sen**, a significant increase from **0.25 Sen** in the prior period, primarily due to a substantial rise in profit attributable to owners of the Company | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company (MYR '000) | 11,456 | 2,452 | | Weighted average number of ordinary shares in issue | 1,000,000,000 | 1,000,000,000 | | Basic earnings per share (Sen) | 1.15 | 0.25 | | Diluted earnings per share (Sen) | 1.15 | 0.25 | - As of June 30, 2024, and June 30, 2023, the Company had no outstanding potential dilutive ordinary shares[22](index=22&type=chunk) [12 Trade and Other Receivables](index=9&type=section&id=12%20Trade%20and%20Other%20Receivables) As of June 30, 2024, total trade and other receivables amounted to MYR 202,052 thousand, slightly lower than end-2023, with the highest proportion in the 0-30 days aging category, but receivables over 120 days significantly increased | Indicator | 2024/06/30 (MYR '000) | 2023/12/31 (MYR '000) | | :--- | :--- | :--- | | Non-current: Deposits for acquisition of freehold land | 17,636 | 17,636 | | Current: Trade receivables (net of allowance for loss) | 178,824 | 185,967 | | Other receivables | 3,506 | 2,201 | | Deposits and prepayments | 8,613 | 5,128 | | Advances to suppliers | 11,011 | 10,630 | | Other recoverable taxes | 98 | 98 | | **Total** | **202,052** | **204,024** | | Aging of trade receivables | 2024/06/30 (MYR '000) | 2023/12/31 (MYR '000) | | :--- | :--- | :--- | | 0 to 30 days | 97,424 | 139,127 | | 31 to 60 days | 20,021 | 16,261 | | 61 to 120 days | 25,081 | 29,671 | | Over 120 days | 37,337 | 1,947 | | **Total** | **179,863** | **187,006** | - The allowance for loss on trade receivables remained at **MYR 1,039 thousand** in H1 2024[26](index=26&type=chunk) [13 Trade and Other Payables](index=11&type=section&id=13%20Trade%20and%20Other%20Payables) As of June 30, 2024, total trade and other payables amounted to MYR 72,194 thousand, an increase from end-2023, mainly due to higher trade payables, accrued staff costs, and directors' loans | Indicator | 2024/06/30 (MYR '000) | 2023/12/31 (MYR '000) | | :--- | :--- | :--- | | Trade payables | 44,948 | 43,391 | | Accrued staff costs | 9,031 | 8,642 | | Directors' loans | 7,207 | 5,652 | | Other payables and accrued expenses | 11,008 | 9,209 | | **Total** | **72,194** | **66,894** | | Aging of trade payables | 2024/06/30 (MYR '000) | 2023/12/31 (MYR '000) | | :--- | :--- | :--- | | 0 to 30 days | 35,203 | 37,735 | | 31 to 60 days | 2,564 | 1,634 | | 61 to 120 days | 1,667 | 2,669 | | Over 120 days | 5,514 | 1,353 | | **Total** | **44,948** | **43,391** | [Management Discussion and Analysis](index=12&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review and Outlook](index=12&type=section&id=Business%20Review%20and%20Outlook) Heng Hup Holdings saw substantial revenue and net profit growth in H1 2024, driven by strong ferrous scrap metal sales and improved operational efficiency; future profitability may be affected by global steel industry volatility and domestic challenges, which the company plans to address through enhanced efficiency and risk management - Revenue for H1 2024 was **MYR 865.2 million**, a **50.5%** year-on-year increase, primarily driven by a **52.7%** increase in ferrous scrap metal sales volume[30](index=30&type=chunk) - Profit after tax for H1 2024 was **MYR 10.1 million**, a **312%** year-on-year increase, mainly due to improved procurement and operational efficiency, leading to better gross profit margins[30](index=30&type=chunk) - Looking ahead, the global steel industry faces challenges such as price volatility, slow demand recovery, geopolitical tensions, and US-China trade conflicts, while Malaysia's domestic steel industry also confronts overcapacity and competition from low-cost imports[30](index=30&type=chunk) - The Company will focus on enhancing operational efficiency, strengthening market position, implementing strategic initiatives, and maintaining a proactive risk management approach to navigate market volatility and drive sustainable growth[30](index=30&type=chunk) [Financial Review](index=13&type=section&id=Financial%20Review) This section provides a detailed review of the performance of various financial indicators for H1 2024, including revenue, gross profit, expenses, tax, and profit attributable to owners of the Company, along with key financial ratios [Revenue](index=13&type=section&id=Revenue) Revenue for H1 2024 reached **MYR 865.2 million**, a **50.5%** year-on-year increase, primarily driven by a **52.7%** increase in ferrous scrap metal sales volume, despite a **4.0%** decrease in average selling price | Indicator | H1 2024 | H1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Revenue (MYR million) | 865.2 | 574.8 | +50.5% | | Ferrous scrap metal sales volume (Metric Tons) | 471,580 | 308,891 | +52.7% | | Ferrous scrap metal average selling price (MYR/Metric Ton) | 1,670.00 | 1,740.00 | -4.0% | - In H1 2024, ferrous scrap metal accounted for **93.5%** of total revenue, used batteries **0.3%**, iron ore **1.9%**, waste paper **4.0%**, and others **0.3%**[31](index=31&type=chunk) [Gross Profit](index=13&type=section&id=Gross%20Profit) Gross profit for H1 2024 increased to **MYR 61.8 million**, a **109.1%** year-on-year growth, with gross margin improving from **5.1%** to **7.1%**, primarily due to increased sales volume and lower procurement costs | Indicator | H1 2024 (MYR million) | H1 2023 (MYR million) | Change (%) | | :--- | :--- | :--- | :--- | | Gross Profit | 61.8 | 29.6 | +109.1% | | Gross Margin | 7.1% | 5.1% | +2.0pp | - The significant increase in gross profit was primarily attributable to the increased sales volume of ferrous scrap metal and lower procurement costs incurred[33](index=33&type=chunk) [Distribution and Selling Expenses](index=14&type=section&id=Distribution%20and%20Selling%20Expenses) Distribution and selling expenses for H1 2024 surged by **130.9%** to **MYR 26 million**, mainly due to increased domestic transportation costs from higher scrap metal sales volume and new iron ore trading activities | Indicator | H1 2024 (MYR million) | H1 2023 (MYR million) | Change (%) | | :--- | :--- | :--- | :--- | | Distribution and selling expenses | 26.0 | 11.3 | +130.9% | - The increase was mainly due to higher domestic transportation costs (such as diesel costs, vehicle repair and maintenance costs, etc.) resulting from increased scrap metal sales volume and new iron ore trading activities[34](index=34&type=chunk) [Administrative Expenses](index=14&type=section&id=Administrative%20Expenses) Administrative expenses for H1 2024 increased to **MYR 16.7 million**, a **24.8%** year-on-year growth, primarily due to an increase in office and operational staff headcount and salary adjustments | Indicator | H1 2024 (MYR million) | H1 2023 (MYR million) | | :--- | :--- | :--- | | Administrative expenses | 16.7 | 13.4 | - The increase was mainly due to an increase in the number of office and operational staff and salary adjustments[35](index=35&type=chunk) [Tax](index=14&type=section&id=Tax) The effective tax rate for H1 2024 was **37.1%**, down from **42.8%** in the prior period, but still higher than the **24%** corporate income tax rate, mainly attributable to non-deductible expenses | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Effective tax rate | 37.1% | 42.8% | | Corporate income tax rate | 24% | 24% | - The high effective tax rate was mainly attributable to the existence of non-deductible expenses[36](index=36&type=chunk) [Profit Attributable to Owners of the Company](index=14&type=section&id=Profit%20Attributable%20to%20Owners%20of%20the%20Company) Profit attributable to owners of the Company for H1 2024 was **MYR 11.5 million**, a substantial increase from **MYR 2.5 million** in the prior period, consistent with the trend of increasing profit before tax | Indicator | H1 2024 (MYR million) | H1 2023 (MYR million) | | :--- | :--- | :--- | | Profit attributable to owners of the Company | 11.5 | 2.5 | [Key Financial Ratios](index=14&type=section&id=Key%20Financial%20Ratios) As of June 30, 2024, the Company's current ratio remained at **2.0 times**, gearing ratio slightly increased to **0.50 times**, inventory and trade receivables turnover days remained stable, while trade payables turnover days extended | Indicator | 2024/06/30 | 2023/12/31 | | :--- | :--- | :--- | | Current ratio | 2.0 times | 2.0 times | | Gearing ratio | 0.50 | 0.48 | | For the six months ended June 30 | 2024 | 2023 | | Inventory turnover days | 16 days | 16 days | | Trade receivables turnover days | 38 days | 38 days | | Trade payables turnover days | 10 days | 4 days | [Working Capital](index=15&type=section&id=Working%20Capital) In H1 2024, the Group's inventory and trade receivables turnover days remained stable, while trade payables turnover days increased to **10 days** due to extended payment terms from suppliers - Inventory turnover days remained at **16 days**, and trade receivables turnover days remained at **38 days**[39](index=39&type=chunk) - Trade payables turnover days increased from **4 days** in H1 2023 to **10 days** in H1 2024, primarily due to extended payment terms from suppliers[39](index=39&type=chunk) [Liquidity and Financial Resources](index=15&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2024, the Group's total equity and working capital increased, cash and bank balances significantly rose, total borrowings increased, and the gearing ratio slightly improved, yet the Group maintains sufficient liquidity for operations and expansion needs | Indicator | 2024/06/30 (MYR million) | 2023/12/31 (MYR million) | | :--- | :--- | :--- | | Total equity attributable to owners of the Company | 224.7 | 213.3 | | Retained earnings | 140.7 | 129.3 | | Working capital | 160.5 | 150.7 | | Cash and bank balances, pledged bank deposits and fixed deposits | 52.9 | 25.3 | | Total borrowings | 108.6 | 98.4 | | Gearing ratio | 0.50 | 0.48 | - Borrowings are primarily used to finance the procurement of ferrous scrap metal and capital expenditures[40](index=40&type=chunk) - The Board believes that the Group has sufficient liquidity and financial resources to meet its working capital requirements and to fund its budgeted expansion plans for the next twelve months[40](index=40&type=chunk) [Significant Acquisitions and Disposals of Subsidiaries, Associates or Joint Ventures](index=15&type=section&id=Significant%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20or%20Joint%20Ventures) For the six months ended June 30, 2024, the Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures - For the first six months ended June 30, 2024, the Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures[40](index=40&type=chunk) [Pledged Assets](index=16&type=section&id=Pledged%20Assets) As of June 30, 2024, the Group had pledged assets totaling **MYR 30,284 thousand** to banks, including property, plant and equipment, right-of-use assets, investment properties, and pledged bank deposits, to secure bank borrowings and general banking facilities | Category of Pledged Assets | 2024/06/30 (MYR '000) | 2023/12/31 (MYR '000) | | :--- | :--- | :--- | | Property, plant and equipment | 494 | 533 | | Right-of-use assets | 18,870 | 19,017 | | Investment properties | 5,291 | 5,320 | | Pledged bank deposits | 5,629 | 5,561 | | **Total** | **30,284** | **30,431** | [Contingent Liabilities](index=16&type=section&id=Contingent%20Liabilities) As of June 30, 2024, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities as of June 30, 2024[42](index=42&type=chunk) [Capital Commitments](index=16&type=section&id=Capital%20Commitments) As of June 30, 2024, the Group's capital commitments for the acquisition of property, plant and equipment amounted to **MYR 28.6 million**, a significant increase from **MYR 11.8 million** at end-2023 | Indicator | 2024/06/30 (MYR million) | 2023/12/31 (MYR million) | | :--- | :--- | :--- | | Capital commitments (acquisition of property, plant and equipment) | 28.6 | 11.8 | [Risk Management](index=16&type=section&id=Risk%20Management) The Group faces market risks (foreign exchange, interest rate), credit risk, and liquidity risk, managed through management oversight and strategic measures; foreign exchange risk is minimal, interest rate risk primarily stems from floating-rate borrowings, and credit risk from cash, receivables, and related party balances is managed through transactions with reputable banks and simplified expected credit loss calculations - The Group is exposed to market risks (e.g., foreign exchange risk and interest rate risk), credit risk, and liquidity risk, which are managed and monitored by management[44](index=44&type=chunk) - As most operations are conducted in Malaysian Ringgit, the Group's significant foreign exchange risk is minimal, and there is currently no foreign currency hedging policy[44](index=44&type=chunk) - Interest rate risk primarily arises from borrowings obtained at floating rates[45](index=45&type=chunk) - Credit risk primarily arises from cash and bank balances, trade and other receivables, and is managed through transactions with reputable banks and applying the simplified approach under IFRS 9 for expected credit losses[45](index=45&type=chunk) - As of June 30, 2024, **86%** of total trade receivables were due from steel mills and ferrous metal trading companies, and the Directors consider the inherent credit risk to be low[45](index=45&type=chunk) [Other Information](index=18&type=section&id=Other%20Information) [Events After the Reporting Period](index=18&type=section&id=Events%20After%20the%20Reporting%20Period) From the end of the reporting period on June 30, 2024, to the date of this announcement, the Board is not aware of any significant events requiring disclosure - The Board is not aware of any significant events affecting the Group that occurred after June 30, 2024, and up to the date of this announcement, which require disclosure[47](index=47&type=chunk) [Staff and Remuneration Policy](index=18&type=section&id=Staff%20and%20Remuneration%20Policy) As of June 30, 2024, the Group had **374** employees, with total staff costs and related expenses amounting to **MYR 16.7 million**, a **51.8%** year-on-year increase, mainly due to increased headcount and salary adjustments | Indicator | 2024/06/30 | 2023/06/30 | | :--- | :--- | :--- | | Number of employees | 374 | 227 | | Total staff costs and related expenses (MYR million) | 16.7 | 11.0 | - The increase in staff costs was mainly due to an increase in the number of employees and salary adjustments[48](index=48&type=chunk) - The Company provides regular training to employees to enhance their skills and knowledge[48](index=48&type=chunk) [Pre-emptive Rights](index=18&type=section&id=Pre-emptive%20Rights) Neither the Company's articles of association nor Cayman Islands law provides for pre-emptive rights, thus not requiring new shares to be offered to existing shareholders pro-rata to their holdings - Neither the Company's articles of association nor the laws of the Cayman Islands provide for pre-emptive rights[49](index=49&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=18&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) In H1 2024, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, nor did they hold any treasury shares - For the six months ended June 30, 2024, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[50](index=50&type=chunk) [Interim Dividend](index=19&type=section&id=Interim%20Dividend) The Board of Directors did not declare any dividend for H1 2024 - The Board of Directors did not declare any dividend for H1 2024[51](index=51&type=chunk) [Sufficiency of Public Float](index=19&type=section&id=Sufficiency%20of%20Public%20Float) As of H1 2024 and the announcement date, the Company's public float has consistently exceeded the minimum **25%** required by the HKEX Listing Rules - The public has consistently held at least **25%** of the Company's total issued share capital, complying with the minimum public float requirement of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[52](index=52&type=chunk) [Compliance with Corporate Governance Code](index=19&type=section&id=Compliance%20with%20Corporate%20Governance%20Code) The Company is committed to high standards of corporate governance and has fully complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, except for the combined roles of Chairman and Chief Executive Officer held by Dato' Sia Kok Chin - The Company has adopted the principles and code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[53](index=53&type=chunk) - There is a deviation from Code Provision C.2.1 of the Corporate Governance Code, where the roles of Chairman and Chief Executive Officer are combined and held by Dato' Sia Kok Chin, which the Board believes benefits the Group's management and business development[53](index=53&type=chunk) [Standard Code for Securities Transactions](index=19&type=section&id=Standard%20Code%20for%20Securities%20Transactions) The Company has adopted the "Standard Code for Securities Transactions by Directors of Listed Issuers" as set out in Appendix C3 of the Listing Rules, and all Directors confirmed compliance with the code during the review period - The Company has adopted the "Standard Code for Securities Transactions by Directors of Listed Issuers" as set out in Appendix C3 of the Listing Rules as a code of conduct for Directors and senior management[54](index=54&type=chunk) - All Directors confirmed their compliance with the Standard Code throughout the review period[54](index=54&type=chunk) [Audit and Risk Management Committee and Review of Financial Statements](index=19&type=section&id=Audit%20and%20Risk%20Management%20Committee%20and%20Review%20of%20Financial%20Statements) The Audit and Risk Management Committee has reviewed the H1 2024 condensed consolidated financial information with management, including accounting principles, practices, internal controls, and financial reporting matters - The Audit and Risk Management Committee has reviewed the H1 2024 condensed consolidated financial information with management and discussed internal controls and financial reporting matters[55](index=55&type=chunk) [Publication of Interim Results Announcement and Interim Report](index=20&type=section&id=Publication%20of%20Interim%20Results%20Announcement%20and%20Interim%20Report) This announcement has been published on the HKEX website and the Company's website, and the interim report will be published in due course - This announcement is published on the HKEX website (www.hkexnews.hk) and the Company's website (www.henghup.com)[56](index=56&type=chunk) - The Company's H1 2024 interim report will be published on the aforementioned websites in due course[56](index=56&type=chunk)

Financial Performance - The company's revenue for the fiscal year 2023 decreased by approximately 4.1% to MYR 1.35 billion from MYR 1.4 billion in the previous fiscal year, primarily due to a drop in average selling prices of ferrous scrap metal [23]. - The net profit attributable to the company's owners surged to MYR 8.24 million in fiscal year 2023, a fivefold increase from MYR 1.48 million in fiscal year 2022, driven by improved procurement and operational efficiency [23]. - The sales volume of ferrous scrap metal reached 725,577 tons, an increase of about 7.5% compared to 675,062 tons in fiscal year 2022, which helped mitigate the revenue decline [23]. - The group’s gross profit increased from 52.33 million MYR in FY2022 to 77.08 million MYR in FY2023, representing a growth of 47.3% due to higher sales of ferrous scrap and reduced procurement costs [80]. - The company achieved a post-tax profit of 8.24 million MYR in fiscal year 2023, a significant increase of approximately 459% from 1.48 million MYR in fiscal year 2022 [74]. - The revenue breakdown for fiscal year 2023 shows that black scrap metal accounted for 93.4% of total revenue, compared to 92.8% in fiscal year 2022 [79]. Assets and Liabilities - Total assets increased to MYR 382.1 million in fiscal year 2023, up from MYR 278.5 million in fiscal year 2022 [8]. - Total liabilities rose significantly to MYR 169.5 million in fiscal year 2023, compared to MYR 74.7 million in fiscal year 2022 [8]. - Total borrowings increased to 98.4 million MYR in FY2023 from 52.3 million MYR in FY2022, primarily used for procurement and capital expenditures [92]. - The current ratio decreased from 3.5 times in FY2022 to 2.0 times in FY2023, while the debt-to-equity ratio increased from 0.27 times to 0.48 times [89]. Corporate Governance - The company has a strong board of directors with diverse backgrounds in finance, accounting, and corporate governance, enhancing its strategic decision-making capabilities [56]. - The board consists of eight members, with three independent non-executive directors, representing one-third of the board [113]. - The company has adopted a board diversity policy, considering various factors such as gender, age, and professional experience in board member selection [112]. - The company has maintained a strong focus on corporate governance to enhance shareholder value and accountability [104]. - The roles of chairman and CEO are held by Sia Kok Chin, which deviates from the corporate governance code, but the board believes this arrangement benefits the group's management [124]. Environmental, Social, and Governance (ESG) Initiatives - The company will continue to focus on environmental, social, and governance (ESG) matters to enhance its sustainable value [24]. - Heng Hup Holdings reported its sixth ESG report, highlighting sustainability measures and stakeholder concerns for 2023 [167]. - The report period covers January 1, 2023, to December 31, 2023, focusing on the environmental and social impacts of the group's operations in Malaysia [168]. - The company aims to minimize negative impacts on the environment and natural resources during operations, ensuring a balance between business development and environmental protection [181]. - The company encourages employee participation in environmental activities to enhance awareness and commitment to sustainability [194]. Operational Efficiency and Market Position - The company plans to focus on optimizing operational efficiency to maintain its market leadership in the Malaysian black scrap metal trade amid ongoing industry challenges [75]. - The company expanded its geographical coverage by establishing a new waste yard in Kedah, enhancing its market position in northern Malaysia [74]. - The company entered the steel slag recycling and iron ore trading business through two new subsidiaries, which contributed to higher profit margins, particularly in iron ore trading [74]. Shareholder Communication - The company emphasizes effective communication with shareholders, providing opportunities for direct interaction during the annual general meeting [156]. - The company has adopted a shareholder communication policy to enhance relationships and ensure timely disclosure of information [158]. - The company ensures that all resolutions at the annual general meeting are voted on independently, with results published promptly [159].

Financial Performance - For the fiscal year ending December 31, 2023, the revenue was 1,346.98 million MYR, a decrease of approximately 4.1% compared to 1,404.58 million MYR in the fiscal year 2022[3] - The gross profit for the fiscal year 2023 was 77.08 million MYR, an increase of approximately 47.3% from 52.33 million MYR in the fiscal year 2022[3] - The profit attributable to owners of the company for fiscal year 2023 was 8.54 million MYR, representing a significant increase of 258.7% compared to 2.38 million MYR in fiscal year 2022[3] - The operating profit for fiscal year 2023 was 17.88 million MYR, compared to 6.47 million MYR in fiscal year 2022[4] - The basic and diluted earnings per share for fiscal year 2023 were 0.85 sen, up from 0.24 sen in fiscal year 2022[4] - The company achieved a post-tax profit of 8.24 million MYR in fiscal year 2023, a significant increase of approximately 459% from 1.48 million MYR in fiscal year 2022[33] Assets and Liabilities - As of December 31, 2023, the equity attributable to owners of the company was 213.30 million MYR, an increase of 4.2% from 204.76 million MYR in 2022[3] - The total assets as of December 31, 2023, amounted to 382.11 million MYR, up from 278.46 million MYR in 2022[5] - The total liabilities increased to 169.52 million MYR in 2023 from 74.68 million MYR in 2022[6] - Total borrowings increased to 98.4 million MYR from 52.3 million MYR year-over-year, primarily for procurement and capital expenditures[48] Revenue Sources - The company generated revenue of 722,142 thousand MYR from its largest customer in 2023, up from 627,551 thousand MYR in 2022, an increase of 15.1%[20] - Total revenue from logistics services was approximately 6.2 million MYR for the fiscal year ended December 31, 2023, as part of the company's regular activities[20] - Black metal sales volume increased to 725,577 tons in fiscal year 2023, up about 7.5% from 675,062 tons in fiscal year 2022, indicating signs of demand recovery[32] Costs and Expenses - The cost of goods sold decreased to 1,246,843 thousand MYR in 2023 from 1,337,299 thousand MYR in 2022, a reduction of 6.8%[22] - The company incurred a net financial expense of 3,528 thousand MYR in 2023, compared to 2,197 thousand MYR in 2022, indicating an increase of 60.6%[22] - The company’s employee benefits expenses rose to 25,868 thousand MYR in 2023 from 20,502 thousand MYR in 2022, an increase of 26.2%[22] - Distribution and selling expenses increased by approximately 23% to 31.68 million MYR in fiscal year 2023, driven by higher domestic transportation costs due to increased sales volume[41] - Administrative expenses rose by approximately 14.4% to 28.55 million MYR in fiscal year 2023, primarily due to increased employee costs and depreciation[42] Dividends - The company decided not to recommend a final dividend for the fiscal year 2023, compared to zero in 2022[3] - The company did not declare any dividends for the fiscal year ended December 31, 2023, compared to 4,467 thousand MYR paid in dividends for the previous year[24] Operational Developments - The company expanded its geographical coverage by establishing a new waste yard in Kedah, enhancing its market position in northern Malaysia[33] - The company entered the steel slag recycling and iron ore trading business through two new subsidiaries in the second half of fiscal year 2023, contributing to higher profit margins[33] - A new waste facility is being established on the east coast of Peninsular Malaysia with an allocation of 4.55 million MYR[59] Financial Ratios - Current ratio decreased to 2.0 from 3.5 year-over-year[46] - Debt-to-equity ratio increased to 0.46 from 0.27 year-over-year[48] - Inventory turnover period increased to 17 days from 14 days year-over-year due to additional inventory purchases[47] - Trade receivables turnover period increased to 40 days from 32 days year-over-year, attributed to increased revenue in the last quarter[47] - Trade payables turnover period increased to 8 days from 4 days year-over-year due to extended payment terms to suppliers[47] Employee Information - The company employed 323 employees in Malaysia as of December 31, 2023, up from 209 employees in 2022[60] - Employee costs and related expenses totaled 25.86 million MYR for the fiscal year 2023, an increase of 26.1% compared to 20.50 million MYR in fiscal year 2022[60] Compliance and Governance - The audit and risk management committee reviewed the consolidated financial information for the fiscal year 2023, confirming consistency with the audited financial statements[71] - The company has adopted a standard code for securities trading by directors and senior management, ensuring compliance throughout the review period[69] - The board of directors includes both executive and independent non-executive members[72] Miscellaneous - No significant events requiring disclosure occurred after the end of the fiscal year 2023[57] - The annual report for the fiscal year 2023 will be printed and sent to shareholders by April 30, 2024, upon request[72] - The announcement is published on the Hong Kong Stock Exchange and the company's website[72]

Financial Performance - The total revenue for the first half of 2023 was 574.8 million MYR, a significant decrease of approximately 33.8% compared to 868.0 million MYR in the same period of 2022[9]. - The net profit for the first half of 2023 was 2.5 million MYR, down about 68.1% from 7.7 million MYR in the first half of 2022[9]. - The sales volume of black scrap metal decreased to 308,891 tons in the first half of 2023 from 384,646 tons in the same period of 2022, representing a decline of approximately 20%[9]. - The average selling price of black scrap metal per ton was approximately 1,740 MYR in the first half of 2023, down about 17% from 2,095 MYR in the same period of 2022[14]. - Gross profit for the first half of 2023 was 29.6 million MYR, a decrease of 16.1% from 35.3 million MYR in the first half of 2022[18]. - Operating profit decreased significantly to MYR 5,843 thousand, a decline of 55.5% from MYR 13,117 thousand in the prior year[71]. - Net profit for the period was MYR 2,452 thousand, representing a 68.1% decrease from MYR 7,690 thousand in the same period last year[71]. - Basic and diluted earnings per share were MYR 0.25, down from MYR 0.78 in the previous year, reflecting a decline of 67.9%[71]. Expenses and Costs - Distribution and selling expenses decreased to 11.3 million MYR in the first half of 2023, down approximately 14.4% from 13.2 million MYR in the first half of 2022[19]. - Administrative expenses increased to 13.4 million MYR in the first half of 2023, up 15.5% from 11.6 million MYR in the same period of 2022[20]. - Employee costs and related expenses for the six months ended June 30, 2023, amounted to 11.0 million MYR, an increase of 18.3% compared to 9.3 million MYR for the same period in 2022[55]. - The cost of goods sold decreased to 537,908 thousand MYR in 2023 from 824,170 thousand MYR in 2022, representing a reduction of approximately 34.8%[100]. Assets and Liabilities - Total assets as of June 30, 2023, were 315.1 million MYR, an increase from 278.5 million MYR as of December 31, 2022[7]. - Total liabilities increased to MYR 108,902 thousand from MYR 74,676 thousand, a rise of 45.7%[76]. - The total borrowings as of June 30, 2023, amounted to 75.4 million MYR, an increase from 52.3 million MYR as of December 31, 2022[28]. - The debt-to-equity ratio increased to 37.6% as of June 30, 2023, from 26.6% as of December 31, 2022[28]. - Total receivables and other receivables increased to 166,987 thousand MYR as of June 30, 2023, compared to 142,727 thousand MYR at the end of 2022, an increase of about 17.0%[110]. Cash Flow - The net cash used in operating activities was MYR (3,525) thousand, an improvement from MYR (7,717) thousand in the same period of 2022[82]. - The total cash flow from operating activities was 9,367 thousand MYR for the six months ended June 30, 2023, compared to 15,862 thousand MYR in the same period of 2022[136]. - The net cash generated from financing activities was MYR 21,014 thousand, up from MYR 14,659 thousand in the prior year, reflecting increased borrowing[82]. - The total cash and cash equivalents at the end of the period increased to MYR 39,448 thousand from MYR 29,116 thousand year-over-year, representing a growth of 35.5%[82]. Shareholder Information - The total issued shares as of June 30, 2023, amount to 1,000,000,000 ordinary shares[43]. - Major shareholders, including the Sia brothers, collectively hold 581,680,000 shares, representing 58.17% of the total shares[41]. - 5S Holdings, a related entity, holds 341,680,000 shares, accounting for 34.17% of the total shares[47]. - The company has not established any arrangements that would allow directors to benefit from purchasing shares or debt securities in the last six months[46]. Risk and Governance - The company has a robust monitoring system for overdue receivables, with historical trends indicating low default risk as long as credit ratings remain stable[39]. - The company has adhered to the corporate governance code, with no deviations reported except for the combined roles of the Chairman and CEO[53]. - There are no significant adverse changes expected in the business, financial, or economic conditions affecting the ability of receivables to meet obligations[39]. Capital Expenditures and Investments - The company has committed 6,389 thousand MYR for the expansion of its Selangor waste facility, with 5,349 thousand MYR already utilized[61]. - The group has committed capital expenditures of 11,757 thousand MYR for the purchase of two adjacent vacant land parcels as of June 30, 2023[138]. - The total cost of property, plant, and equipment acquisitions was 3,525,247 thousand MYR in 2023, compared to 2,656,854 thousand MYR in 2022, an increase of approximately 32.7%[108]. Taxation - The actual tax rate for the first half of 2023 was 42.8%, up from 36.7% in the first half of 2022, primarily due to an increase in non-deductible expenses[22]. - Income tax expense decreased to 1,995 thousand MYR in 2023 from 4,453 thousand MYR in 2022, a decline of approximately 55.2%[102].