Financial Performance - For the six months ended June 30, 2023, the company's revenue increased by approximately 65.1% to HKD 660.5 million, compared to HKD 400.0 million in the same period last year[12][23]. - The profit attributable to shareholders for the same period was HKD 47.6 million, a significant increase from HKD 6.8 million in the previous year[12]. - Basic and diluted earnings per share for the period were HKD 5.94, compared to HKD 0.85 in the previous year[12]. - The group reported a pre-tax profit of HKD 56,207 thousand, compared to only HKD 930 thousand in the previous year, indicating a substantial improvement in profitability[87]. - Net profit attributable to shareholders for the period was HKD 47,550 thousand, up from HKD 6,788 thousand in the same period last year, reflecting a growth of approximately 600%[87]. - Operating cash flow for the period was HKD 154,073 thousand, compared to HKD 50,170 thousand in the previous year, showing a strong increase in cash generation[95]. Revenue Breakdown - Franchise brand revenue rose by approximately 64.6% to HKD 483.4 million, accounting for about 73.2% of total revenue[24]. - Revenue from self-owned brands increased by approximately 67.9% to HKD 174.0 million[24]. - Restaurant operations generated revenue of HKD 657,367,000, up from HKD 397,354,000, indicating a growth of 65.4%[114]. - The company's external revenue from self-owned brands was HKD 103,658,000, while franchise brands generated HKD 293,696,000[124]. Operational Expansion - The number of restaurants operated by the company increased from 50 to 55, with 16 under its own brands and 39 under franchise brands[16][19]. - The increase in revenue was primarily driven by the recovery from the COVID-19 pandemic and the expansion of the restaurant network[23]. - The company has introduced new brands, including "The Matcha Tokyo" and "好呷台灣火鍋," which have shown stable performance and are aimed at enhancing customer dining experiences[55]. Cost and Expenses - The group's food and beverage costs rose by approximately 55.7% or about HKD 72.0 million to approximately HKD 201.2 million, with food and beverage costs accounting for about 30.5% of revenue, down from approximately 32.3% in the same period last year[35]. - Employee costs increased by approximately 55.1% or about HKD 72.2 million to approximately HKD 203.2 million, with employee costs as a percentage of revenue decreasing by 1.9 percentage points to approximately 30.8%[35]. - The group's depreciation, rent, and related expenses for right-of-use assets increased by approximately 30.1% or about HKD 22.8 million to approximately HKD 98.4 million due to an increase in the number of restaurants from 50 to 55[36]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 4.75 per share and a special dividend of HKD 12.50 per share[12]. - The board has declared an interim dividend of HKD 0.0475 per share, totaling HKD 38 million, and a special dividend of HKD 0.125 per share, totaling HKD 100 million, to reward shareholders[59]. - The company maintains over HKD 200 million in reserves for operations and future development after the dividend payouts, with no financial debt impacting its operations[59]. Governance and Management - The company has established a professional management team to navigate future challenges and drive the next phase of development[58]. - The audit committee has been established, consisting of three independent non-executive directors, to oversee financial reporting and internal controls[72]. - The company maintains a strong governance structure with an independent audit committee overseeing financial practices[72]. Market Outlook - The Hong Kong government has lifted entry restrictions and mask mandates, which is expected to boost local consumption and tourism, leading to increased business opportunities for the company in the second half of 2023[54]. - The management team is optimistic about the economic recovery in Hong Kong despite challenges such as inflation and geopolitical instability, and is focused on strengthening brand presence and expanding store networks[58]. Assets and Liabilities - The group's cash and cash equivalents were approximately HKD 147.5 million as of June 30, 2023, down from approximately HKD 196.5 million as of December 31, 2022[39]. - The company's total assets as of June 30, 2023, amounted to HKD 869,885 thousand, up from HKD 846,592 thousand at the end of 2022[99]. - The company's total liabilities increased to HKD 474,993,000 as of June 30, 2023, compared to HKD 437,090,000 as of December 31, 2022[126]. Employee and Workforce - The group had 1,919 employees as of June 30, 2023, an increase from 1,768 employees as of December 31, 2022[48]. - The company's short-term employee benefits for the six months ended June 30, 2023, were HKD 4,806,000, compared to HKD 7,778,000 for the same period in 2022, indicating a decrease of approximately 38.3%[177].

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) The company reported significant growth in revenue and profit, with interim and special dividends declared Financial Highlights | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Revenue | 660.5 HKD Million | 400.0 HKD Million | | Profit Attributable to Shareholders | 47.6 HKD Million | 6.8 HKD Million | | Earnings Per Share (Basic and Diluted) | 5.94 HK Cents | 0.85 HK Cents | | Interim Dividend | 4.75 HK Cents | Nil | | Special Dividend | 12.50 HK Cents | Nil | [Consolidated Financial Statements](index=2&type=section&id=Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including comprehensive income, financial position, and changes in equity [Unaudited Condensed Consolidated Statement of Comprehensive Income](index=2&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2023, group revenue surged 65.1% to HKD 660 million, with profit attributable to shareholders increasing over sixfold to HKD 47.55 million, driven by market recovery and cost control Unaudited Condensed Consolidated Statement of Comprehensive Income | Item | 2023 (HKD Thousand) | 2022 (HKD Thousand) | | :--- | :--- | :--- | | Revenue | 660,509 | 400,023 | | Profit Before Tax | 56,207 | 930 | | Profit for the Period Attributable to Shareholders | 47,550 | 6,788 | | Earnings Per Share (Basic and Diluted) | 5.94 HK Cents | 0.85 HK Cents | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, total assets were HKD 870 million and total liabilities were HKD 475 million, showing slight growth from year-end 2022, while total equity decreased slightly to HKD 395 million due to dividend payments Condensed Consolidated Statement of Financial Position | Item | As at June 30, 2023 (HKD Thousand) | As at December 31, 2022 (HKD Thousand) | | :--- | :--- | :--- | | **Total Assets** | **869,885** | **846,592** | | Non-current Assets | 451,080 | 418,403 | | Current Assets | 418,805 | 428,189 | | **Total Liabilities** | **474,993** | **437,090** | | Non-current Liabilities | 166,235 | 149,025 | | Current Liabilities | 308,758 | 288,065 | | **Total Equity** | **394,892** | **409,502** | [Unaudited Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=Unaudited%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2023, total shareholders' equity decreased from HKD 409.5 million to HKD 394.9 million, primarily due to dividend payments of HKD 62.16 million exceeding the period's profit of HKD 47.55 million Unaudited Condensed Consolidated Statement of Changes in Equity | Item (HKD Thousand) | Share Capital | Share Premium | Retained Earnings | Other Reserves | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | As at January 1, 2023 | 80,000 | 122,781 | 179,102 | 27,619 | 409,502 | | Profit for the period | — | — | 47,550 | — | 47,550 | | Dividends | — | — | (62,160) | — | (62,160) | | **As at June 30, 2023** | **80,000** | **122,781** | **164,492** | **27,619** | **394,892** | [Notes to the Financial Statements](index=6&type=section&id=Notes%20to%20the%20Financial%20Statements) This section provides detailed notes on the financial statements, covering general information, revenue, key income statement and balance sheet items, and dividends [General Information and Basis of Preparation](index=6&type=section&id=General%20Information%20and%20Basis%20of%20Preparation) The company is an investment holding company registered in the Cayman Islands, with subsidiaries primarily operating Asian cuisine restaurants in Hong Kong, and these interim financial statements are prepared under HKAS 34 - The company is an investment holding company, with its principal business being the operation of full-service restaurants in Hong Kong, offering Asian cuisine, particularly Japanese and Cantonese dishes[93](index=93&type=chunk) - The unaudited interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' and the applicable disclosure requirements of the Listing Rules[94](index=94&type=chunk) [Revenue and Segment Information](index=8&type=section&id=Revenue%20and%20Segment%20Information) The group's total revenue primarily stems from Hong Kong restaurant operations, segmented into 'Own Brands' and 'Franchised Brands', with franchised brands contributing over **70%** of total revenue and profit, and all non-current assets and revenue sources located in Hong Kong Revenue Sources | Revenue Source | 2023 (HKD Thousand) | 2022 (HKD Thousand) | | :--- | :--- | :--- | | Restaurant Operations | 657,367 | 397,354 | | Sale of Food Ingredients and Others | 3,142 | 2,669 | | **Total** | **660,509** | **400,023** | Business Segment Performance | Business Segment | Revenue (HKD Thousand) | Segment Profit/(Loss) (HKD Thousand) | | :--- | :--- | :--- | | Own Brands | 173,993 | 14,897 | | Franchised Brands | 483,374 | 73,227 | | Sale of Food Ingredients and Others | 3,142 | (1,749) | | **Total** | **660,509** | **86,375** | - All of the Group's operating entities, sources of revenue, and non-current assets are located in Hong Kong[84](index=84&type=chunk) [Key Income Statement Items](index=12&type=section&id=Key%20Income%20Statement%20Items) Other income and gains significantly decreased due to lower government grants, while finance income rose sharply from increased bank deposit interest, and income tax shifted from a credit to an expense Other Income and Gains | Other Income and Gains (HKD Thousand) | 2023 | 2022 | | :--- | :--- | :--- | | Government grants | 249 | 17,766 | | Credit card company promotion income | 1,650 | 1,650 | | Miscellaneous income | 613 | 790 | | **Total** | **2,512** | **20,206** | Finance Income and Costs | Finance Income and Costs (HKD Thousand) | 2023 | 2022 | | :--- | :--- | :--- | | Finance income | 6,662 | 470 | | Finance costs | (4,608) | (3,225) | Tax | Tax (HKD Thousand) | 2023 | 2022 | | :--- | :--- | :--- | | Current income tax | 10,760 | 1,253 | | Deferred income tax | (2,103) | (7,111) | | **Income tax expense/(credit)** | **8,657** | **(5,858)** | [Earnings Per Share](index=15&type=section&id=Earnings%20Per%20Share) Basic earnings per share significantly increased to **5.94 HK Cents** from **0.85 HK Cents** due to substantial profit growth, with diluted EPS remaining the same as no potential dilutive ordinary shares were outstanding Earnings Per Share Calculation | Item | 2023 | 2022 | | :--- | :--- | :--- | | Profit attributable to shareholders (HKD Thousand) | 47,550 | 6,788 | | Number of ordinary shares in issue (Thousand shares) | 800,000 | 800,000 | | **Earnings Per Share** | **5.94 HK Cents** | **0.85 HK Cents** | [Dividends](index=15&type=section&id=Dividends) The Board declared an interim dividend of **4.75 HK Cents** and a special dividend of **12.50 HK Cents** per share for the six months ended June 30, 2023, totaling **HKD 138 million**, with no interim dividend declared in the prior period - The Board declared an interim dividend of **4.75 HK Cents** per share (totaling **HKD 38 million**) and a special dividend of **12.50 HK Cents** per share (totaling **HKD 100 million**)[46](index=46&type=chunk) - No interim dividend was declared for the corresponding period last year (six months ended June 30, 2022)[46](index=46&type=chunk) [Key Balance Sheet Items](index=16&type=section&id=Key%20Balance%20Sheet%20Items) Trade receivables primarily consist of credit card settlements, mostly within 30 days, while trade payables typically have 30 to 60-day payment terms, and other payables include accrued employee benefits and contract liabilities Ageing Analysis of Trade Receivables | Ageing Analysis of Trade Receivables | As at June 30, 2023 (HKD Thousand) | As at December 31, 2022 (HKD Thousand) | | :--- | :--- | :--- | | Within 30 days | 5,404 | 7,747 | | 31 to 60 days | 304 | 223 | | 61 to 180 days | 546 | 568 | | **Total** | **6,254** | **8,538** | Ageing Analysis of Trade Payables | Ageing Analysis of Trade Payables | As at June 30, 2023 (HKD Thousand) | As at December 31, 2022 (HKD Thousand) | | :--- | :--- | :--- | | Within 30 days | 39,419 | 37,727 | | 31 to 60 days | 15,437 | 20,208 | | Over 61 days | 634 | 375 | | **Total** | **55,490** | **58,310** | [Management Discussion and Analysis](index=20&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the group's business and financial performance, liquidity, employee policies, and future outlook, highlighting strong recovery and strategic initiatives [Business Review](index=20&type=section&id=Business%20Review) The group, a leading full-service, multi-brand Asian cuisine restaurant operator in Hong Kong, expanded to **55 restaurants** as of June 30, 2023, demonstrating strong resilience and rapid revenue rebound post-pandemic restrictions - The Group operates **55 restaurants** in Hong Kong, comprising **16 own-brand restaurants** and **39 franchised-brand restaurants**[27](index=27&type=chunk) Number of Restaurants by Brand Type | Brand Type | As at June 30, 2023 | As at June 30, 2022 | | :--- | :--- | :--- | | Own Brands | 16 | 16 | | Franchised Brands | 39 | 34 | | **Total** | **55** | **50** | - Following the relaxation of social distancing measures in late April 2022, the Group's business demonstrated strong resilience, with a rapid rebound in turnover[7](index=7&type=chunk) [Financial Review](index=21&type=section&id=Financial%20Review) Revenue increased by **65.1%** to **HKD 660 million** due to eased social distancing and network expansion, with profit surging over **600%** to **HKD 47.6 million**, and improved cost control reflected in lower food and beverage costs as a percentage of revenue - Revenue increased by **65.1%** from **HKD 400 million** in the prior period to **HKD 660 million**, primarily due to the lifting of social distancing measures and an increase in the number of restaurants from **50 to 55**[148](index=148&type=chunk) - Franchised brand revenue grew by **64.6%**, accounting for **73.2%** of total revenue, while own-brand revenue increased by **67.9%**[148](index=148&type=chunk) - Food and beverage costs as a percentage of revenue decreased from **32.3% to 30.5%**, and staff costs as a percentage of revenue decreased from **32.7% to 30.8%**[175](index=175&type=chunk)[176](index=176&type=chunk) - Profit for the period significantly increased by **600.5%** from **HKD 6.8 million** to **HKD 47.6 million**[177](index=177&type=chunk) [Liquidity and Financial Resources](index=23&type=section&id=Liquidity%20and%20Financial%20Resources) The group maintains a robust financial position, primarily funded by internal cash flow, with **zero interest-bearing bank borrowings** and a healthy current ratio of approximately **1.4 times**, indicating ample liquidity - As at June 30, 2023, the Group held short-term bank deposits of approximately **HKD 212.5 million** and cash and cash equivalents of approximately **HKD 147.5 million**[12](index=12&type=chunk) - The Group had no outstanding interest-bearing bank borrowings, resulting in a **zero gearing ratio**[13](index=13&type=chunk) - The current ratio was approximately **1.4 times** (current assets of **HKD 418.8 million** / current liabilities of **HKD 308.8 million**)[153](index=153&type=chunk) [Employees and Remuneration Policy](index=25&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2023, the group's employee count increased to **1,919**, with a market-driven remuneration policy and an employee share option scheme in place, though no options were granted during the period - As at June 30, 2023, the Group had **1,919 employees**, an increase from **1,768** as at December 31, 2022[119](index=119&type=chunk) - The company has a share option scheme, but no share options have been granted, exercised, or lapsed since its adoption[157](index=157&type=chunk) [Outlook](index=25&type=section&id=Outlook) The group is optimistic about Hong Kong's economic recovery and increased tourism, planning to counter rising costs and labor shortages through menu improvements, automation, brand strengthening, network expansion, and digital marketing - With the full resumption of cross-border travel between Hong Kong and mainland China and government tourism promotion, an increase in visitor arrivals is expected, creating development opportunities for the catering industry[19](index=19&type=chunk) - The Group is optimistic about Hong Kong's economic recovery and has established a professional management team to address future challenges and development[20](index=20&type=chunk) - To address rising food costs and labor shortages, the Group will actively seek cost-effective suppliers and introduce more automation systems and artificial intelligence[146](index=146&type=chunk) - Future strategies include strengthening existing brands, introducing new brands, expanding the store network, enhancing digital marketing, and continuously launching innovative products[20](index=20&type=chunk)[185](index=185&type=chunk) [Corporate Governance and Other Information](index=27&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers dividend declarations, corporate governance practices, and other disclosures, including compliance with the Corporate Governance Code and review of interim results [Declaration of Dividends](index=27&type=section&id=Declaration%20of%20Dividends) To commemorate its fifth listing anniversary and acknowledge shareholder support, the Board declared an interim dividend of **4.75 HK Cents** and a special dividend of **12.50 HK Cents** per share, retaining over **HKD 200 million** for operations and development post-payout - An interim dividend of **4.75 HK Cents** per share (totaling **HKD 38 million**) and a special dividend of **12.50 HK Cents** per share (totaling **HKD 100 million**) were declared[21](index=21&type=chunk) - The special dividend was distributed to thank shareholders for their support during the pandemic and to celebrate the Group's fifth listing anniversary[161](index=161&type=chunk) - To qualify for the dividends, shareholders must submit transfer documents by 4:30 p.m. on September 15, 2023[162](index=162&type=chunk) [Corporate Governance Practices](index=28&type=section&id=Corporate%20Governance%20Practices) The group is committed to high corporate governance standards, complying with all code provisions except for the combined roles of Chairman and CEO, which the Board believes serves the group's and shareholders' best interests - The company has adopted the Corporate Governance Code as set out in Appendix 14 of the Listing Rules[23](index=23&type=chunk) - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Wong Kit Lung, a deviation from the Corporate Governance Code, which the Board believes ensures continuity in business planning and serves the overall interests of the company and its shareholders[28](index=28&type=chunk) [Other Disclosures](index=24&type=section&id=Other%20Disclosures) During the period, the group had no significant acquisitions or disposals, nor any purchases, sales, or redemptions of its listed securities, and the interim results were reviewed by the Audit Committee but not audited by the company's auditor - There were no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the period[14](index=14&type=chunk)[180](index=180&type=chunk) - Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period[29](index=29&type=chunk) - The interim results have not been audited or reviewed by the company's auditor but have been reviewed by the Audit Committee[25](index=25&type=chunk)[165](index=165&type=chunk)

Financial Performance - The group's profit for the year ended December 31, 2022, decreased by approximately 13.7% to about HKD 77.7 million from HKD 90.1 million in 2021, primarily due to impairment provisions totaling approximately HKD 11.3 million[8]. - The group's total revenue for the year 2022 increased by approximately 6.5% or about HKD 65.2 million to approximately HKD 1 billion compared to 2021[23]. - The company's revenue for the year ended December 31, 2022, was HKD 1,063.2 million, an increase of 6.5% from HKD 997.9 million in 2021[52]. - Profit attributable to shareholders for 2022 was HKD 77.7 million, down 13.4% from HKD 90.1 million in 2021[52]. - Other income and gains decreased by approximately 19.5% from about HKD 28.8 million to approximately HKD 23.2 million, primarily due to a reduction in net gains from lease modifications[35]. Revenue Sources - Franchise brand revenue rose by about 8.4%, from approximately HKD 724.3 million to approximately HKD 784.9 million, attributed to an increase in the number of franchise restaurants from 30 to 37[31]. - The franchise brands accounted for approximately 73.8% of total revenue in 2022, up from 72.6% in 2021[31]. - The revenue from self-owned brands slightly increased by about 1.4%, from approximately HKD 269.3 million to approximately HKD 273.0 million[31]. Restaurant Operations - The number of restaurants increased from 45 at the end of 2021 to 53 by the end of 2022, reflecting a growth strategy despite the pandemic[6]. - The group opened nine new restaurants in 2022, including six franchises from Japan and one new self-developed brand, enhancing its market presence[20]. - The total number of restaurants operated increased from 45 in 2021 to 53 in 2022, with self-owned brands operating 16 restaurants and franchise brands operating 37[26]. - The company opened a total of eight self-owned brand restaurants and 19 franchised brand restaurants during the reporting year[151][155]. Cost Management - Food and beverage costs increased by approximately 6.6% from about HKD 314.2 million to approximately HKD 334.8 million, maintaining a stable percentage of revenue at around 31.5%[36]. - Employee costs rose by approximately 1.5% from about HKD 292.5 million to approximately HKD 296.8 million, with the percentage of employee costs to revenue decreasing to about 27.9% from 29.3%[37]. Dividends and Shareholder Returns - The proposed final dividend per share for 2022 is HKD 7.77, an increase of 28.4% compared to HKD 6.05 in 2021, with a payout ratio of approximately 80%[60]. - The proposed final dividend accounts for approximately 80% of the profit attributable to shareholders and total comprehensive income after tax for the reporting year[153]. - The company has adopted a dividend policy that aims to declare dividends of no less than 50% of the profit attributable to shareholders and after-tax comprehensive income, subject to review[173]. Strategic Initiatives - The group plans to leverage the upcoming government consumption voucher scheme in April 2023 to boost local consumer spending and drive business growth[20]. - The management team is focused on optimizing operations and enhancing digital marketing to support future growth initiatives[21]. - The company aims to continue expanding its restaurant network and enhancing its brand portfolio to capture diverse customer preferences in the market[28]. - The management plans to accelerate the opening of new stores in strategic locations to attract a diverse customer base in 2023[56]. - The company aims to enhance digital marketing and continuously launch innovative products to accelerate business growth and strengthen market leadership[81]. Market Conditions - The overall economic recovery in Hong Kong is expected to boost consumer sentiment, although challenges such as inflation and labor shortages remain[72]. - The company anticipates business growth in the second half of 2023 due to increased tourism and promotional activities in Hong Kong[80]. - The Hong Kong government will launch a new round of consumption voucher schemes in April 2023, expected to boost local consumer spending and accelerate market recovery[80]. Management and Governance - The management team has extensive experience, with the CEO having over 25 years in the restaurant management industry[131]. - The management team is focused on building a more professional management structure to execute the company's growth strategies[58]. - The board regularly reviews the company's dividend policy to ensure alignment with the group's sustainable development plans[121]. Challenges and Risks - The company faces risks related to opening new restaurants, which may lead to fluctuations in financial performance and negatively impact existing restaurant sales[117]. - The company faced challenges in renewing existing leases and obtaining necessary licenses and permits due to factors beyond its control[169]. Sustainability and Compliance - The company is committed to creating a sustainable future by addressing environmental, social, and governance issues and minimizing operational impacts[170]. - The company has complied with all relevant laws and regulations that may significantly impact its business and operations during the reporting year[147].

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。 LH GROUP LIMITED （於開曼群島註冊成立的有限公司） （股份代號：1978） 截至二零 二二年十二月三十一日止年度的 年度 業績公告 財務摘要 截至十二月三十一日止年度 二零二二年 二零二一年 百萬港元 百萬港元 收入 1,063.2 997.9 ...

Financial Performance - Revenue for the six months ended June 30, 2022, decreased by approximately 5.4% to HKD 400.0 million from HKD 422.9 million in the same period last year[12] - Profit attributable to shareholders for the same period dropped to HKD 6.8 million, down from HKD 25.6 million, representing a decline of approximately 73.5%[12] - The company reported a pre-tax profit of HKD 930,000, a significant decline of 96.8% compared to HKD 28,824,000 in the prior year[80] - The company reported a net loss of HKD 6,788,000 for the six months ended June 30, 2022, compared to a profit of HKD 25,638,000 for the same period in 2021[90] - Basic and diluted earnings per share were HKD 0.85, a decrease of 73.4% from HKD 3.20 in the previous year[80] Revenue Breakdown - Revenue from franchised brands accounted for approximately 73.4% of total revenue, slightly up from 71.9% in the previous year, despite a revenue decrease of about 3.4%[21] - Revenue from self-owned brands was HKD 103,658, while franchise brands generated HKD 293,696, and sales of ingredients and others contributed HKD 45,957, totaling HKD 443,311[111] Cost Management - Food and beverage costs decreased by approximately 3.3% to HKD 129.2 million, with the cost as a percentage of revenue increasing to approximately 32.3% from 31.6% in the previous year[27] - Employee costs decreased by approximately 3.5% to about HKD 131.0 million, accounting for approximately 32.7% of revenue[28] - The total cash outflow for leases during the period was approximately HKD 29,781,000, a significant decrease of 42.0% compared to HKD 51,336,000 in the same period last year[142] Government Support - Other income and gains increased by approximately 32.2% to HKD 20.2 million, primarily due to government subsidies rising to HKD 17.8 million from HKD 9.7 million in the previous year[26] - The group received government subsidies totaling HKD 17,766 in the first half of 2022, an increase from HKD 9,727 in the same period of 2021[118] Business Expansion - The number of self-owned brands increased from 14 to 16, while franchised brands rose from 26 to 34, resulting in a total of 50 restaurants operated as of June 30, 2022, compared to 40 in the previous year[17] - The group opened five new restaurants in the first half of 2022, including two franchise tea shops from Japan and a new Taiwanese hot pot brand, which received positive customer feedback[52] - The company plans to leverage its diverse brand portfolio to capture a wider market segment, targeting both mid-to-high-end and mass-market customers[14] Future Outlook - The group expects consumer sentiment to improve in the second half of the year, driving revenue growth[49] - The company remains optimistic about its financial performance in the second half of 2022, assuming no tightening of local social distancing measures[52] - The group anticipates significant business growth opportunities due to local consumption voucher plans and high vaccination rates[48] Financial Position - Cash and cash equivalents were approximately HKD 201.2 million, down from HKD 241.9 million at the end of the previous year[33] - Total assets as of June 30, 2022, were HKD 778,853,000, a slight decrease from HKD 783,859,000 as of December 31, 2021[84] - Total liabilities increased to HKD 440,268,000 as of June 30, 2022, from HKD 403,662,000 as of December 31, 2021, indicating a rise of approximately 9%[87] Corporate Governance - The company has adopted the corporate governance code and believes it has complied with most of its best practices during the reporting period[58] - The audit committee, composed of three independent non-executive directors, reviewed the group's financial reporting and internal control systems[63] Shareholder Information - The board decided not to declare any interim dividends for the period[56] - As of June 30, 2022, the major shareholders, including Mr. Huang and Ms. Gao, collectively hold 75% of the company's shares[68] - The company maintained a sufficient public float of at least 25% of its issued shares during the reporting period[57]

Financial Performance - Revenue for the year ended December 31, 2021, was HKD 997.9 million, an increase of 24.2% from HKD 802.9 million in 2020[17] - Profit attributable to shareholders for 2021 was HKD 90.1 million, a decrease of 35.8% compared to HKD 140.3 million in 2020[17] - Basic and diluted earnings per share for 2021 were HKD 11.26, down from HKD 17.54 in 2020[17] - The group reported a core profit before tax of approximately HKD 88.1 million for the year ended December 31, 2021, representing a significant increase of about 222.8% compared to approximately HKD 27.3 million in the previous year[43] - Profit for the year ended December 31, 2021, decreased by approximately 35.8% or about HKD 50.2 million to approximately HKD 90.1 million[59] - Other income and gains decreased by approximately 69.7% or about HKD 66.2 million to approximately HKD 28.8 million for the year ended December 31, 2021[54] - Food and beverage costs increased by approximately 24.6% or about HKD 62.0 million to approximately HKD 314.2 million, maintaining a stable percentage of revenue at about 31.5%[56] - Employee costs rose by approximately 36.8% or about HKD 78.6 million to approximately HKD 292.5 million, with the percentage of revenue increasing to about 29.3%[57] Business Expansion - The company opened a total of 8 new restaurants in 2021, including 2 new self-operated brands in the second half of the year[20] - The company plans to accelerate the opening of new stores in strategic locations and introduce more new brands in 2022, including emerging hot pot concepts[20] - The group operated a total of 45 restaurants as of December 31, 2021, compared to 38 restaurants in the previous year, reflecting an expansion in operations[46] - The group introduced the franchise brand "The Matcha Tokyo" in January 2022, expanding its business into local specialty restaurants and high-end casual cafes[73] Government Support and Market Conditions - The company received support from the Hong Kong government through the fourth round of anti-epidemic fund measures during challenging times[19] - The group anticipates significant business growth opportunities due to the rising local vaccination rate and the introduction of a new consumption voucher scheme[22] - The group expressed optimism about its financial performance for the second half of 2022, contingent on the local pandemic situation remaining stable[22] - The group has been adversely affected by the Omicron outbreak, leading to a suspension of all restaurant operations starting February 28, 2022[158] - The impact of the Omicron outbreak on the group's 2022 performance is still being assessed, and a quantitative estimate is currently unavailable[159] Dividend and Shareholder Information - Proposed final dividend per share for 2021 is HKD 6.05, down from HKD 13.16 in 2020[17] - The total dividend proposed for the year is HKD 8.45 per share, with a total payout ratio of approximately 75%[23] - The company expects to pay a final dividend of HKD 0.0605 per share for the year ending December 31, 2021, down from HKD 0.1316 per share in 2020, with a total dividend payout ratio of approximately 75%[96] - As of December 31, 2021, the distributable reserves of the company amounted to approximately HKD 332,540,000[115] Employee and Operational Challenges - The company has faced challenges in recruiting and retaining employees, which may impact operational performance[92] - The group had 1,499 employees as of December 31, 2021, compared to 1,344 employees in the previous year[65] - The company provided competitive compensation to attract and motivate employees, regularly reviewing and adjusting salaries to meet market standards[120] Corporate Governance - The company is committed to maintaining high standards of corporate governance to protect shareholder interests[162] - The board consists of five members, including two executive directors and three independent non-executive directors, ensuring a high level of independence[171] - The board has adopted a diversity policy, emphasizing the importance of diverse perspectives in decision-making and aiming for gender balance among directors[176][177] - The company has established appropriate insurance for directors and senior management against legal claims arising from corporate activities[167] - The board's decision-making includes approving and supervising all policy matters, overall strategy, and significant financial and operational transactions[167] Risk Management and Future Outlook - The company has faced several risks, including the impact of COVID-19 on the Hong Kong economy and consumer sentiment, which may continue to affect operations[92] - The management is confident in the group's ability to navigate future challenges better than ever before[73] - The management believes that the global economy is expected to recover as countries gradually reopen their international borders[71] - The company has consolidated its plans for opening new restaurants to respond more flexibly to changing customer demands and the COVID-19 pandemic[107] Supplier and Procurement Information - The largest supplier accounted for 27.7% of the total procurement amount for the reporting year, compared to 24.8% in 2020[119] - The top five suppliers collectively represented 52.5% of the total procurement amount for the reporting year, down from 54.4% in 2020[119] - There were no significant disputes with suppliers or customers during the reporting year[120] Miscellaneous - The company has not engaged in any off-balance-sheet transactions or significant capital commitments as of December 31, 2021[70] - The company has not purchased, sold, or redeemed any of its listed securities during the year ending December 31, 2021[111] - The company has not disclosed any new product or technology developments in the current report[141] - There are no reported mergers or acquisitions in the current reporting period[141]

Financial Performance - For the six months ended June 30, 2021, the company's revenue increased by 4.6% to approximately HKD 422.9 million, compared to HKD 404.2 million in the same period last year[11]. - The profit attributable to shareholders rose by 5.7% to HKD 25.6 million, up from HKD 24.3 million year-on-year[11]. - The earnings per share increased to HKD 3.20, a 5.7% rise from HKD 3.03 in the previous year[11]. - Revenue for the six months ended June 30, 2021, was HKD 422,881,000, an increase of 4.1% compared to HKD 404,234,000 in 2020[85]. - The company's profit before tax increased to HKD 28,824,000, up 9.8% from HKD 26,245,000 in the previous year[85]. - Net profit attributable to shareholders rose to HKD 25,638,000, compared to HKD 24,255,000, reflecting a growth of 5.7%[85]. - Basic and diluted earnings per share improved to HKD 3.20, up from HKD 3.03, indicating a 5.6% increase[85]. - Profit for the period increased by approximately 5.7% from about HKD 24.3 million to about HKD 25.6 million, with core profit rising significantly by approximately 140.2% to about HKD 17.6 million from about HKD 7.3 million in the previous period[31]. Revenue Sources - The number of Asian cuisine restaurants operated increased to 39, up from 36 in the previous year, with a notable rise in franchise brands[15][18]. - Revenue from Asian cuisine restaurants under franchise brands grew by 14.0% to approximately HKD 304.1 million, accounting for 71.9% of total revenue[22][25]. - Revenue from self-owned Asian cuisine restaurants increased by 4.5% to approximately HKD 98.9 million, while revenue from self-owned Cantonese restaurants decreased to HKD 18.1 million from HKD 40.4 million[23][25]. - The overall restaurant operations accounted for 99.6% of total revenue, with minimal contributions from other sales[25]. - Restaurant operations generated revenue of HKD 421,092,000, up from HKD 401,832,000 in 2020, indicating a growth of about 4.8%[113]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 2.40 per share, which is a new introduction as there was no dividend declared in the previous year[11]. - The interim dividend declared for the period is HKD 0.024 per share, totaling HKD 19.2 million, compared to no dividend in the same period last year[59]. - The company paid dividends totaling HKD 105,280,000 during the period[101]. Costs and Expenses - Food and beverage costs increased by approximately 6.9% from about HKD 125.1 million to about HKD 133.7 million, representing about 31.6% of revenue, up from approximately 30.9% in the previous period[29]. - Employee costs rose by approximately 5.9% from about HKD 128.3 million to about HKD 135.8 million, with employee costs accounting for about 32.1% of revenue, slightly up from approximately 31.7% in the previous period[30]. - Other income and gains decreased by approximately 63.9% from about HKD 42.3 million to about HKD 15.3 million due to the absence of net gains from lease modifications recorded in the previous period[28]. Liquidity and Financial Position - As of June 30, 2021, the group had short-term bank deposits of approximately HKD 102.7 million and cash and cash equivalents of about HKD 182.9 million, indicating a stable liquidity position[34]. - The group maintained a current ratio of approximately 1.4 times as of June 30, 2021, down from about 1.8 times at the end of the previous year[34]. - Total assets decreased to HKD 676,892,000 from HKD 747,497,000, a decline of 9.4%[89]. - Cash and cash equivalents at the end of the period were HKD 182,942,000, slightly up from HKD 179,148,000[101]. - The total equity attributable to shareholders decreased to HKD 334,959,000 from HKD 414,601,000, a drop of 19.2%[92]. Management Outlook and Strategy - The company continues to focus on expanding its franchise operations and enhancing its market presence in the Asian cuisine sector[22]. - Management expects significant business growth opportunities due to the large-scale vaccination program and the recently launched consumption voucher scheme[49]. - Management remains optimistic about recovery in the restaurant industry as COVID-19 restrictions ease in Hong Kong[22]. - Management remains optimistic about the financial performance for the second half of 2021, expecting to achieve better results under stable pandemic conditions in Hong Kong[50]. - The board believes that the change in the use of proceeds will allow for more agile and flexible business expansion in developing its restaurant network and brand portfolio[54]. Shareholding Structure - As of June 30, 2021, the directors and key executives collectively hold 600,000,000 shares, representing 75% of the company's equity[71]. - Mr. Huang Jielong and Ms. Gao Xiuzhi each hold 600,000,000 shares, accounting for 75% of the equity in the controlled corporation[71]. - The major shareholders, including 叙福樓控股, collectively own 600,000,000 shares, which is 75% of the equity[80]. - The company is controlled by a group of individuals, including Mr. Huang Jielong and Ms. Gao Xiuzhi, who are considered acting in concert under the takeover code[83]. Compliance and Governance - The company has adopted the corporate governance code and believes it has complied with all significant aspects of the code during the reporting period[61]. - The audit committee, composed of three independent non-executive directors, has reviewed the unaudited interim results for the period[67]. - The company has not purchased, sold, or redeemed any of its listed securities during the reporting period[66].

[Chairman's Statement](index=6&type=section&id=Chairman's%20Statement) The Chairman's statement reviews the challenging year 2020, highlighting the Group's resilience, multi-brand strategy, and full-year profitability despite the pandemic, while expressing optimism for 2021's market recovery - Despite severe business impact in 2020 due to the pandemic and social distancing measures, the Group gained customer trust through effective prevention measures and showed strong recovery in months with eased restrictions, ultimately achieving full-year profitability[9](index=9&type=chunk) - The Group maintained its multi-brand strategy, adjusted its store portfolio during the year, successfully opened its second "Gyu-Kaku Buffet," and plans to continue opening new stores and introducing emerging F&B concepts[11](index=11&type=chunk) - Looking ahead to 2021, the local consumer market is expected to recover rapidly, driven by controlled epidemic, vaccine rollout, and government e-consumption vouchers, presenting growth opportunities for the Group[12](index=12&type=chunk) Proposed Final Dividend | Dividend Type | Amount (per share) | | :--- | :--- | | Proposed Final Dividend | **13.16 HK cents** | [Management Discussion and Analysis](index=9&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the Group's business operations, financial performance, liquidity, human resources, and future prospects [Business Review](index=13&type=section&id=Business%20Review) The Group operates 38 full-service, multi-brand restaurants in Hong Kong, specializing in Asian and Cantonese cuisine, serving diverse market segments Restaurant Portfolio | Restaurant Type | 2020 Number | 2019 Number | | :--- | :--- | :--- | | **Cantonese Restaurants** | | | | — Proprietary Brands | 1 | 2 | | **Asian Restaurants** | | | | — Proprietary Brands | 13 | 14 | | — Franchised Brands | 24 | 22 | | **Total** | **38** | **38** | [Financial Review](index=13&type=section&id=Financial%20Review) The Group's 2020 revenue declined by 20.2% to HKD 803 million due to the pandemic, but one-off government subsidies and lease gains led to a significant turnaround to HKD 140 million profit Key Financial Metrics | Financial Metric | 2020 (HKD million) | 2019 (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | **Revenue** | **802.9** | **1,005.8** | -20.2% | | **Profit/(Loss) for the Year** | **140.3** | **(11.3)** | Turnaround to Profit | | **Core Profit Before Tax** | **27.3** | **64.0** | -57.3% | - Monthly revenue charts for comparable restaurants show the most significant declines during the strictest social distancing months (e.g., July, August, December) and strong sales recovery when measures eased (e.g., May, June, October)[46](index=46&type=chunk)[48](index=48&type=chunk) - Other income and gains increased over **20 times**, primarily from one-off government subsidies of approximately **HKD 43.8 million** and net gains from lease modifications of approximately **HKD 46 million**[49](index=49&type=chunk) - Staff costs decreased by **29.1%** year-on-year, mainly due to government "Employment Support Scheme" wage subsidies of approximately **HKD 43.1 million** and reduced salaries from the disposal of some Cantonese restaurants[51](index=51&type=chunk) [Liquidity and Financial Resources](index=16&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains a robust financial position, relying on internal cash flow and IPO proceeds, with ample cash, an improved current ratio of 1.8x, and no interest-bearing debt Liquidity Indicators | Metric | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Short-term Bank Deposits | **HKD 159.6 million** | **HKD 132.4 million** | | Cash and Cash Equivalents | **HKD 179.1 million** | **HKD 130.8 million** | | Current Ratio | Approx. **1.8x** | Approx. **1.1x** | | Debt-to-Equity Ratio | Not Applicable | Not Applicable | [Employees and Remuneration Policy](index=17&type=section&id=Employees%20and%20Remuneration%20Policy) The Group's employee count increased to 1,344 by year-end 2020, with remuneration based on market levels and performance, and no share options granted during the year - As of December 31, 2020, the Group had **1,344 employees**, an increase from **930** in 2019[61](index=61&type=chunk) - The company has a share option scheme, but no share options were granted or remained unexercised during the year ended December 31, 2020[61](index=61&type=chunk) [Prospects](index=18&type=section&id=Prospects) Management is cautiously optimistic about 2021, expecting rapid market recovery driven by pandemic control and government initiatives, while planning to expand online services and introduce new restaurant concepts - Management expects the local consumer market to recover rapidly, presenting opportunities for the Group, driven by a stable pandemic situation in Hong Kong, widespread vaccination, and government e-consumption vouchers[66](index=66&type=chunk) - Future strategies include: - Enhancing food delivery and takeaway services, expanding online business - Strengthening online and digital system management to improve efficiency - Timely adjusting store and brand portfolio, developing more promising brands - Planning to launch new concept hotpot restaurants and all-day casual dining restaurants in the local market[67](index=67&type=chunk) [Biographies of Directors and Senior Management](index=19&type=section&id=Directors%20and%20Senior%20Management) This section provides detailed biographies of the executive directors, independent non-executive directors, and senior management, highlighting their roles and contributions to the Group's governance and operations - Mr. Wong Kit Lung, Chairman and Chief Executive Officer, is responsible for the Group's overall management, strategic planning, and business development, and holds various public positions in Hong Kong[70](index=70&type=chunk)[71](index=71&type=chunk) - Ms. Ko Sau Chi, Vice Chairman, is primarily responsible for strategic planning, business development, procurement, and human resources management[73](index=73&type=chunk) - The independent non-executive director team comprises Mr. Sin Yat Kin, Ms. Hung Lo Shan, and Mr. Hung Wai Man, who possess deep backgrounds in public disciplinary services, accounting and taxation, and information technology, respectively[75](index=75&type=chunk)[76](index=76&type=chunk)[80](index=80&type=chunk) [Directors' Report](index=24&type=section&id=Directors'%20Report) This report outlines the Group's business activities, key risks, financial results, dividend policy, use of IPO proceeds, and interests of directors and major shareholders [Business Review and Principal Risks](index=24&type=section&id=Business%20Review%20and%20Principal%20Risks) The report outlines the Group's restaurant operations in Hong Kong and identifies key business risks, including site selection, growth strategy, licensing, brand reputation, food safety, and human resources - Principal business risks faced by the Group include: - Limited restaurant site selection, failure to renew leases, or rent increases - Inability to effectively implement growth strategies - Uncertainty in obtaining or renewing operating licenses - Volatile impact of new restaurants on financial performance - Damage to brand reputation - Food and service quality incidents - Fluctuations in food ingredient supply, quality, or cost - Difficulties in recruiting and retaining employees[90](index=90&type=chunk) [Results and Dividends](index=25&type=section&id=Results%20and%20Dividends) The Board recommends a final dividend of 13.16 HK cents per share, totaling HKD 105 million, representing approximately 75% of profit attributable to shareholders Dividend Information | Item | Amount/Ratio | | :--- | :--- | | Proposed Final Dividend | **13.16 HK cents per share** | | Total Proposed Dividend | **HKD 105,280,000** | | Dividend Policy Target | Not less than **50%** of profit attributable to shareholders | | Proposed Payout Ratio for the Year | Approx. **75%** | [Use of Net Proceeds from Listing](index=26&type=section&id=Use%20of%20Net%20Proceeds%20from%20Listing) As of April 26, 2021, approximately HKD 98.13 million (54.9%) of the HKD 179 million IPO net proceeds have been used for new restaurant openings IPO Proceeds Utilization | Item | Amount (HKD thousand) | | :--- | :--- | | Net Proceeds from IPO | **178,610** | | Utilized Proceeds as of Latest Practicable Date | **98,131** | | Unutilized Proceeds as of Latest Practicable Date | **80,479** | | **Percentage of Utilized Proceeds** | Approx. **54.9%** | [Major Customers and Suppliers](index=28&type=section&id=Major%20Customers%20and%20Suppliers) The Group has a diversified customer base, but supplier concentration is higher, with the largest supplier accounting for 24.8% of total purchases - The largest supplier accounted for **24.8%** of total purchases, and the top five suppliers collectively accounted for **54.4%**[116](index=116&type=chunk) [Directors' and Chief Executives' Interests in Shares](index=31&type=section&id=Directors'%20and%20Chief%20Executives'%20Interests%20in%20Shares) This section discloses the interests of directors and major shareholders, with executive directors Mr. Wong Kit Lung and Ms. Ko Sau Chi, through Fulum Group Holdings Limited, collectively holding 75% of the company's shares Directors' Shareholding | Director Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Mr. Wong Kit Lung | Interest in controlled corporation, etc. | **600,000,000** | **75%** | | Ms. Ko Sau Chi | Interest in controlled corporation, etc. | **600,000,000** | **75%** | - Controlling shareholder Fulum Group Holdings Limited beneficially owns **600,000,000 shares**, representing **75%** of the company's total share capital[142](index=142&type=chunk) [Share Option Scheme](index=35&type=section&id=Share%20Option%20Scheme) The company adopted a ten-year share option scheme in May 2018 to incentivize talent, but no options were granted or remained unexercised during the reporting period - No share options have been granted under the share option scheme since its adoption. As of December 31, 2020, there were no unexercised share options[153](index=153&type=chunk) [Corporate Governance Report](index=38&type=section&id=Corporate%20Governance%20Report) This report details the Group's corporate governance practices, board structure, committee functions, auditor's remuneration, and risk management and internal control systems [Corporate Governance Practices](index=38&type=section&id=Corporate%20Governance%20Practices) The Group maintained high corporate governance standards, complying with all code provisions except for the combined Chairman and CEO roles, which the Board deems beneficial - During the reporting period, the company deviated from Corporate Governance Code provision A.2.1, where the roles of Chairman and Chief Executive Officer are held by the same person, Mr. Wong Kit Lung, an arrangement the Board considers beneficial with balanced power[160](index=160&type=chunk)[170](index=170&type=chunk) [Board and Committees](index=38&type=section&id=Board%20and%20Committees) The Board, comprising two executive and three independent non-executive directors, oversees company affairs through its Nomination, Remuneration, and Audit Committees, ensuring effective corporate governance Board Committees and Responsibilities | Committee | Chairman | Primary Responsibilities | | :--- | :--- | :--- | | **Nomination Committee** | Mr. Wong Kit Lung | Reviews Board structure, size, composition, and diversity, and makes recommendations on director appointments | | **Remuneration Committee** | Mr. Sin Yat Kin | Advises the Board on remuneration policies and structures for directors and senior management | | **Audit Committee** | Ms. Hung Lo Shan | Assists the Board in overseeing the effectiveness of financial reporting processes, internal controls, and risk management systems | - All Board members maintained excellent meeting attendance records during the reporting year, with **100%** attendance at all regular Board meetings[169](index=169&type=chunk) [Auditor's Remuneration](index=45&type=section&id=Auditor's%20Remuneration) Total fees paid to the auditor, PricewaterhouseCoopers, amounted to HKD 3.032 million, covering both audit and non-audit services Auditor Fees | Service Type | Fees (HKD thousand) | | :--- | :--- | | Audit Services | **2,100** | | Non-Audit Services | **932** | | **Total** | **3,032** | [Risk Management and Internal Control](index=47&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board is responsible for the Group's risk management and internal control systems, which are deemed effective, with the Board directly overseeing internal audit functions - The Board is solely responsible for the Group's risk management and internal control systems, which it considers adequately effective during the reporting year[206](index=206&type=chunk)[208](index=208&type=chunk) - The company has no internal audit function, with related responsibilities directly performed by the Board[208](index=208&type=chunk) [Environmental, Social and Governance Report](index=49&type=section&id=Environmental,%20Social%20and%20Governance%20Report) This report details the Group's commitment to environmental protection, responsible employment practices, ethical operations, and community investment initiatives [Environmental Matters](index=56&type=section&id=Environmental%20Matters) The Group is committed to environmental protection through energy-saving, waste reduction, and eco-friendly dining initiatives, with detailed disclosures on key environmental performance indicators Energy and Resource Consumption | Energy/Resource Consumption | Unit | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Gas Fuel Consumption | kg | **4,563,365** | **4,761,685** | | Electricity Consumption | kWh | **8,460,002** | **9,956,427** | | Water Consumption | cubic meters | **230,590** | **286,829** | - The Group implemented various waste reduction measures, including no longer proactively providing plastic straws, charging for disposable cutlery, and offering discounts to customers who bring their own takeaway containers to encourage eco-friendly consumption habits[263](index=263&type=chunk)[264](index=264&type=chunk) - The Group promotes eco-friendly dining, collaborating with GreenMonday to offer vegetarian options and including sustainable seafood on its menus, in response to the "Say No to Shark Fin" policy[270](index=270&type=chunk)[272](index=272&type=chunk) - During the reporting year, the Group collected and recycled **8,315 liters** of waste cooking oil for conversion into industrial products such as biodiesel[274](index=274&type=chunk) [Social — Employment and Labor Practices](index=62&type=section&id=Social%20%E2%80%94%20Employment%20and%20Labor%20Practices) The Group fosters a caring culture, offering diverse benefits, extensive training, and performance incentives, while prioritizing employee physical and mental well-being, diversity, and inclusion Employee Statistics (End of 2020) | Employee Statistics (End of 2020) | Data | | :--- | :--- | | Total Number | **1,344 employees** | | Gender Distribution | **Male 51%**, **Female 49%** | | Employment Type | **Full-time 58%**, **Part-time 42%** | | Age Distribution | Under **25 years old** accounts for **30%** as the largest group | - The Group provides benefits exceeding statutory requirements, including **5 days** of full-pay paternity leave, paid birthday leave, and volunteer leave[283](index=283&type=chunk)[284](index=284&type=chunk)[285](index=285&type=chunk) - In response to the pandemic, the Group provided employees with anti-epidemic supplies and required participation in online infection prevention courses, while also addressing employee mental health by signing the "Happy@Healthy Workplace" charter[312](index=312&type=chunk)[316](index=316&type=chunk) - During the reporting year, the Group provided **3,494 hours** of employee training and established an online Learning Management System (LMS)[306](index=306&type=chunk) [Social — Operating Practices](index=70&type=section&id=Social%20%E2%80%94%20Operating%20Practices) The Group prioritizes supply chain management, customer experience through digital innovation, and strict adherence to food safety regulations, while maintaining a zero-tolerance policy on corruption - The Group collaborates with approximately **255** Hong Kong-based suppliers and conducts annual assessments of key suppliers to ensure product quality and social responsibility[320](index=320&type=chunk)[322](index=322&type=chunk) - Customer dining experience and convenience are enhanced through innovations such as the launch of the "Kabu App" and the introduction of robot staff "Niku"[324](index=324&type=chunk)[325](index=325&type=chunk) - The Group has a Quality and Safety Department ensuring compliance with **ISO 9001** and **ISO 22000** standards, and tracks food sources to guarantee food safety[335](index=335&type=chunk)[336](index=336&type=chunk) - The Group maintains a zero-tolerance stance on corruption and has established whistleblowing procedures to uphold corporate integrity[341](index=341&type=chunk) [Social — Community Investment](index=75&type=section&id=Social%20%E2%80%94%20Community%20Investment) The Group actively engages in social responsibility, implementing early anti-epidemic measures and continuously participating in charitable activities, with total donations of HKD 0.381 million - Before regulatory requirements, the Group proactively implemented anti-epidemic measures in restaurants, such as installing partitions, designating "table sanitizers," and ensuring hourly air changes, earning "Hygiene Anti-Epidemic Measures Certification" from the Hong Kong Quality Assurance Agency[344](index=344&type=chunk) Charitable Donations | Item | 2020 | 2019 | | :--- | :--- | :--- | | Charitable Donations (HKD) | **381,000** | **438,000** | [Independent Auditor's Report](index=84&type=section&id=Independent%20Auditor's%20Report) PricewaterhouseCoopers issued an unqualified opinion on the Group's consolidated financial statements, highlighting the impairment assessment of underperforming restaurant outlets as a key audit matter - The auditor believes the consolidated financial statements fairly and truly reflect the Group's financial position and performance in accordance with Hong Kong Financial Reporting Standards, issuing an unqualified opinion[417](index=417&type=chunk) - A key audit matter is the "Impairment assessment of your Group's underperforming restaurant outlets," which the auditor focused on due to the significant estimates and judgments required from management in forecasting revenue growth, operating costs, and discount rates[429](index=429&type=chunk)[430](index=430&type=chunk) [Consolidated Financial Statements](index=90&type=section&id=Consolidated%20Financial%20Statements) This section presents the Group's consolidated financial statements, including the statement of comprehensive income, financial position, cash flows, and a five-year financial summary [Consolidated Statement of Comprehensive Income](index=90&type=section&id=Consolidated%20Statement%20of%20Comprehensive%20Income) This statement shows the Group's 2020 operating results, with revenue of HKD 803 million and a significant turnaround to HKD 140 million profit for the year Consolidated Statement of Comprehensive Income Summary | Item (HKD thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | **802,852** | **1,005,776** | | Profit/(Loss) Before Tax | **143,747** | **(948)** | | **Total Profit/(Loss) for the Year** | **140,328** | **(11,268)** | | Basic Earnings/(Loss) Per Share (HK cents) | **17.54** | **(1.40)** | [Consolidated Statement of Financial Position](index=91&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) This statement reflects the Group's financial position as of December 31, 2020, showing total assets of HKD 747 million, total liabilities of HKD 333 million, and total equity of HKD 415 million Consolidated Statement of Financial Position Summary | Item (HKD thousand) | December 31, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Total Assets | **747,497** | **742,215** | | Total Liabilities | **332,896** | **467,942** | | **Total Equity** | **414,601** | **274,273** | [Consolidated Statement of Cash Flows](index=94&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) This statement summarizes cash flows, showing HKD 178 million net cash inflow from operations, net outflows from investing and financing, and a net increase of HKD 48.39 million in cash and cash equivalents Consolidated Statement of Cash Flows Summary | Item (HKD thousand) | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash Flows from Operating Activities | **178,094** | **244,972** | | Net Cash Flows Used in Investing Activities | **(42,828)** | **(33,639)** | | Net Cash Flows Used in Financing Activities | **(86,877)** | **(222,863)** | | **Net Increase/(Decrease) in Cash and Cash Equivalents** | **48,389** | **(11,530)** | [Financial Summary](index=161&type=section&id=Financial%20Summary) This summary presents key financial data for the past five fiscal years, showing a strong profit rebound in 2020 and resumed equity growth after a 2019 loss Five-Year Financial Summary | As at December 31 (HKD thousand) | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **802,852** | **1,005,776** | **1,004,105** | **829,152** | **743,046** | | **Profit/(Loss) for the Year** | **140,328** | **(11,268)** | **35,160** | **23,997** | **40,551** | | **Total Assets** | **747,497** | **742,215** | **573,757** | **346,959** | **428,867** | | **Total Liabilities** | **(332,896)** | **(467,942)** | **(163,211)** | **(145,457)** | **(169,152)** |

Revenue and Profit Performance - Revenue for the six months ended June 30, 2020, decreased by 22.3% to HKD 404.2 million from HKD 520.0 million in the same period last year[10]. - Profit attributable to shareholders dropped by 38.9% to HKD 24.3 million compared to HKD 39.7 million in the previous year[11]. - The decline in revenue was significantly impacted by COVID-19, with restaurant closures and restrictions affecting operations[19]. - The company did not declare an interim dividend for the period, compared to HKD 4.96 per share in the previous year[11]. - Basic and diluted earnings per share were HKD 3.03, down from HKD 4.96, representing a decline of 38.9%[71]. - The total comprehensive income for the period was HKD 24,255,000, a decrease of 38.8% compared to HKD 39,627,000 in 2019[71]. - The company reported a profit before tax of HKD 26,245,000, down 41.0% from HKD 44,519,000 in the previous year[71]. Cost Management - Food and beverage costs decreased by 16.8% to HKD 125.1 million, representing 30.9% of revenue, up from 28.9% in the previous year[24]. - Employee costs fell by 20.6% to HKD 128.3 million, maintaining a stable percentage of 31.7% of revenue compared to 31.1% in the previous year[25]. - Property rental and related expenses decreased by approximately 59.5% to about HKD 18.1 million from approximately HKD 44.6 million in the same period last year[26]. - The company is focusing on cost control, with food and beverage costs reduced to HKD 125,089,000 from HKD 150,344,000, a decrease of 16.7%[71]. Operational Changes - The number of restaurants operated increased to 38 in 2020 from 36 in 2019, with 36 Asian cuisine restaurants including 14 owned brands and 22 franchised brands[16]. - The company operated two owned Cantonese restaurants and 36 Asian cuisine restaurants as of June 30, 2020[13]. - The group operates primarily in Hong Kong, with all revenue generated from this market, and all non-current assets located in Hong Kong as of June 30, 2020[106]. - The group operates several restaurant brands, including "煲仔王" and "叙福樓金閣" for Cantonese cuisine, and franchise brands such as "牛角" and "溫野菜" for Asian cuisine[102][103]. Financial Position - As of June 30, 2020, the group's cash and cash equivalents were approximately HKD 193.4 million, an increase from approximately HKD 130.8 million as of December 31, 2019[30]. - The current ratio improved to approximately 1.3 times as of June 30, 2020, compared to approximately 1.1 times as of December 31, 2019[30]. - Total equity attributable to shareholders increased to HKD 298,528,000 as of June 30, 2020, up from HKD 274,273,000 as of December 31, 2019, representing an increase of approximately 8.8%[77]. - The total liabilities decreased to HKD 422,463,000 as of June 30, 2020, from HKD 467,942,000 as of December 31, 2019, indicating a reduction of approximately 9.7%[77]. - The company's total assets amounted to HKD 720,991,000 as of June 30, 2020, down from HKD 742,215,000 as of December 31, 2019, reflecting a decrease of approximately 2.9%[77]. Governance and Management - The company has adopted the corporate governance code as per the Stock Exchange Listing Rules, ensuring high standards of governance to protect shareholder interests[47]. - Mr. Huang serves as both Chairman and CEO, a decision supported by the board due to his leadership and strategic direction[47]. - The audit committee, composed of three independent non-executive directors, oversees financial reporting and internal controls[50]. - The board consists of three executive directors and three independent non-executive directors, ensuring a high level of independence[47]. - The company has complied with all provisions of the corporate governance code except for the separation of the roles of Chairman and CEO[47]. Impact of COVID-19 - The COVID-19 pandemic is expected to continue to adversely impact the business for the remainder of the year due to social distancing regulations and low consumer sentiment[41]. - The group recognized COVID-19 related rent concessions amounting to HKD 8,319,000 as variable lease payments, which were accounted for in the consolidated comprehensive income statement for the six months ended June 30, 2020[98]. - The estimated annual revenue growth rate for restaurants during the remaining lease term ranged from -20% to 13% as of June 30, 2020[138]. Future Outlook - The company plans to continue focusing on its diverse brand portfolio to cater to various customer preferences in the mid to high-end market[13]. - The company plans to explore market expansion opportunities and enhance product offerings in the upcoming quarters[66].

Financial Performance - Revenue for the year ended December 31, 2019, was HKD 1,005.8 million, a slight increase of 0.2% compared to HKD 1,004.1 million in 2018[7] - The company reported a loss attributable to shareholders of HKD 11.2 million for 2019, a significant decline of 131.9% from a profit of HKD 35.2 million in 2018[7] - Basic and diluted loss per share was HKD 1.40, down 128.6% from earnings of HKD 4.90 per share in the previous year[7] - For the year ended December 31, 2019, the total revenue of the company was approximately HKD 1,005.8 million, a slight increase of about 0.2% or HKD 1.7 million compared to the previous year[32] - The Asian cuisine restaurant segment contributed approximately 83.7% of total revenue, with franchised brands and owned brands contributing about 56.3% and 27.4% respectively[32] - Revenue from the Asian cuisine restaurant segment increased by approximately HKD 92.0 million or 19.4% compared to the previous year, while revenue from the Cantonese restaurant segment decreased by approximately HKD 124.7 million or 45.6%[32] - The company recorded a loss attributable to shareholders of approximately HKD 11.2 million for the year ended December 31, 2019[15] - The food and beverage cost increased by approximately HKD 4.9 million or 1.7% to about HKD 292.8 million, maintaining a percentage of approximately 29.1% of total revenue[35] - Employee costs slightly decreased by approximately HKD 2.5 million or 0.8% to about HKD 301.4 million, representing approximately 30.0% of total revenue[36] - The company reported a loss of approximately HKD 11.3 million for the year ended December 31, 2019, a decline of about 132.0% from a profit of approximately HKD 35.2 million for the previous year[39] Impact of COVID-19 - The ongoing COVID-19 pandemic has created significant challenges for the global economy and the restaurant industry, affecting the company's financial outlook[11] - The company is enhancing hygiene controls and implementing various health measures in response to the pandemic[14] - The company plans to adjust its operational model to address declining consumer sentiment and dining demand[14] - The company anticipates significant adverse impacts on its business due to the COVID-19 outbreak and ongoing macroeconomic risks, affecting its performance in 2020[51] - The company plans to negotiate rent reductions and adjust restaurant operating hours to optimize resources in response to the challenging business environment[51] - The group experienced a decrease in overall revenue compared to the same period in 2019 due to the adverse effects of the COVID-19 outbreak[137] - The group is currently assessing the impact of the COVID-19 outbreak on its 2020 performance, with no quantifiable impact estimated at this time[138] Business Strategy and Expansion - The company aims to strategically expand its business when appropriate conditions arise[10] - The company plans to continue opening new restaurants in Hong Kong as part of its expansion strategy, identifying suitable opportunities for new openings[29] - The number of Asian cuisine restaurants operated increased from 34 in 2018 to 36 in 2019, while the number of Cantonese restaurants decreased from 5 to 2[28] - The management emphasized the importance of flexibility and adaptability to changing market conditions and macroeconomic risks in the coming months and years[16] Corporate Governance - The board consists of six members, including three executive directors and three independent non-executive directors, complying with the listing rules regarding board composition[147] - The company has adopted the corporate governance code and has complied with all provisions except for a deviation related to the roles of the chairman and CEO[141] - The independent non-executive directors confirmed their independence, and the company believes all independent non-executive directors are independent[148] - The company has established three committees: Nomination, Remuneration, and Audit, each with specific written terms of reference[162] - The audit committee is responsible for monitoring the relationship between the company and external auditors[176] - The company has confirmed compliance with the corporate governance code during the reporting year[178] - The board has implemented appropriate procedures to safeguard the company's assets and ensure compliance with relevant laws and regulations[189] Shareholder Information - The company reported a total dividend of HKD 9.96 per share for the year ended December 31, 2019, which includes an interim dividend of HKD 4.96 and a special dividend of HKD 5.00[79] - The board proposed a dividend policy of at least 50% of the profit attributable to shareholders and after-tax comprehensive income for the fiscal year[85] - The company has ensured a minimum of 25% public float of its issued shares throughout the reporting year[133] - The major shareholders, including Xufu Holdings, collectively own 600,000,000 shares, which is 75% of the total[129] Risk Management - The company faces several business risks, including limited attractive locations, potential inability to implement growth strategies, and fluctuations in food supply and costs[73] - The company has a risk management and internal control system in place to minimize risks and ensure efficient operations[189] - A three-tier risk management approach is adopted to identify, assess, mitigate, and respond to risks, with business units responsible for the first line of defense[192] Sustainability Initiatives - The company is committed to sustainable development and has implemented measures to control environmental and social impacts[76] - The company emphasizes the importance of effective risk management and internal control systems for long-term business development[191] - The company is committed to pursuing environmental sustainability, respecting human rights, supporting employees, and maintaining local communities as part of its sustainability strategy[197]