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]

Revenue and Profitability - Revenue for the six months ended June 30, 2019, increased by 11.7% to HKD 520.0 million from HKD 465.7 million in the same period last year[20] - Profit attributable to shareholders surged by 1,214.0% to HKD 39.7 million from HKD 3.0 million year-on-year[10] - Basic and diluted earnings per share increased to HKD 4.96 from HKD 0.48, reflecting a growth of 933.3%[10] - The group’s revenue growth was primarily driven by increased operational income from restaurants[20] - Total revenue for the period reached approximately HKD 520.0 million, an increase of 11.7% from HKD 465.7 million in the previous year[22] - The group reported a segment profit of HKD 63,433,000 for the six months ended June 30, 2019, compared to HKD 40,630,000 for the same period in 2018, representing a 56% increase[127] - The profit attributable to shareholders for the six months ended June 30, 2019, was HKD 39,669,000, a substantial increase from HKD 3,019,000 in the same period of 2018, reflecting a growth of approximately 1215.5%[155] Expenses and Costs - The cost of food and beverages increased by approximately 15.6% to about HKD 150.3 million, representing 28.9% of total revenue, compared to 27.9% in the previous year[23] - Employee costs rose by approximately 6.7% to about HKD 161.6 million, driven by an increase in administrative and operational staff[26] - The company reported a decrease in food and beverage costs to HKD 150,344,000 from HKD 130,076,000, which is an increase of 15.6%[80] - Employee benefits expenses totaled HKD 161,581,000, compared to HKD 151,418,000 in the previous year, reflecting an increase of approximately 6.7%[147] Dividends and Shareholder Returns - The interim and special dividends declared were HKD 4.96 and HKD 5.00 per share, respectively[10] - The board declared an interim dividend of HKD 0.0496 per share and a special dividend of HKD 0.0500 per share, payable on September 27, 2019[54] - The company declared an interim dividend of HKD 0.054 per share, totaling HKD 43,200,000, which is a new declaration compared to no dividend in the previous year[159] Strategic Initiatives and Expansion - The company plans to continue opening new restaurants in Hong Kong as part of its expansion strategy[16] - The group plans to expand its restaurant network and enhance its market penetration in Hong Kong[44] - The company plans to continue expanding its market presence and investing in new product development to drive future growth[160] Financial Position and Assets - Total assets as of June 30, 2019, amounted to HKD 875,713,000, compared to HKD 573,757,000 as of December 31, 2018, indicating a growth of 52.7%[83] - Non-current assets increased to HKD 504,571,000 from HKD 202,652,000, representing a growth of 148.5%[83] - The total liabilities of the company amounted to HKD 473,649,000, compared to HKD 163,211,000 in the previous year, indicating a significant increase of about 189.5%[144] Ownership and Control - The company has a significant ownership structure, with key executives holding a combined 75% stake through various entities[64] - Mr. Huang Jielong and Ms. Gao Xiuzhi each hold 600,000,000 shares, representing 75% of the company's equity[70] - The company is controlled by a group of individuals, including Mr. Huang Jielong, Mr. Huang Yaoting, and others, who collectively own 75% of the shares[78] - The ownership structure indicates a high level of consolidation among the major shareholders, with no other significant interests disclosed as of June 30, 2019[78] Operational Performance - The group opened a total of 8 self-owned brand restaurants, including 1 Cantonese restaurant and 7 Asian cuisine restaurants, utilizing HKD 14.83 million and HKD 45.23 million respectively[52] - Restaurant operations contributed HKD 512,493,000 to the revenue, up from HKD 457,586,000, reflecting a growth of 12%[112] - The group operates full-service restaurants primarily serving Cantonese and Asian cuisine, including Japanese and Korean dishes[95] Market Environment and Risks - The group faces uncertainties in the local business environment and consumer spending due to international trade disputes and geopolitical risks[44] - The group will adopt a prudent approach in the second half of the year, closely monitoring developments to adjust business strategies as needed[48] Cash Flow and Financing - Operating cash flow from business activities was HKD 104,690,000, with a net cash flow from operating activities of HKD 104,674,000[93] - Net cash flow from investing activities was a negative HKD 65,393,000, primarily due to purchases of property, plant, and equipment amounting to HKD 16,940,000 and asset acquisitions of HKD 35,008,000[93] - Cash flow from financing activities resulted in a net outflow of HKD 44,542,000, including lease payments of HKD 41,411,000[93] Accounting Standards and Compliance - The financial data presented is unaudited and prepared in accordance with HKFRS, with the latest approval from the board on August 27, 2019[96] - The company adopted HKFRS 16 Leases, resulting in a decrease in property, plant, and equipment by approximately HKD 6,063,000 and an increase in lease liabilities by approximately HKD 284,994,000[102] - The cumulative impact of adopting HKFRS 16 was recognized as an adjustment to retained earnings without restating comparative figures[101]

Financial Performance - For the year ended December 31, 2018, the company reported revenue of HKD 1,004.1 million, an increase of 21.1% compared to HKD 829.2 million in 2017[9] - The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for 2018 was HKD 94.4 million, reflecting a growth of 24.7% from HKD 75.7 million in the previous year[9] - Net profit attributable to shareholders for the year was HKD 35.2 million, representing a significant increase of 57.1% from HKD 22.4 million in 2017[9] - Basic earnings per share for 2018 were HKD 4.90, up 31.4% from HKD 3.73 in 2017[9] - The proposed final dividend per share for the year is HKD 5.40[9] - The profit for the year ended December 31, 2018, increased by approximately 46.3% from about HKD 24.0 million to approximately HKD 35.1 million[37] - The proposed final dividend is HKD 0.054 per share, totaling HKD 43.2 million, subject to shareholder approval[80] - The proposed dividend represents approximately 123% of the profit attributable to shareholders for the reporting year[84] Revenue Growth and Segmentation - Revenue from the Asian cuisine restaurant segment, led by brands like "Gyukaku" and "Onyvasai," increased by approximately 48.4%, accounting for about 47.2% of total revenue for the year[15] - The revenue from Asian cuisine restaurants under franchise brands rose by about HKD 154.6 million or approximately 48.4%, contributing to an increase in total revenue[29] - The revenue contribution from franchise brands increased from approximately 38.6% in 2017 to about 47.2% in 2018[29] Expansion and Development - The company opened eight new restaurants under its franchise and self-owned brands during the year, contributing to a total of 39 restaurants by December 31, 2018[13] - The company plans to expand its traditional Cantonese noodle brand "Yonghua Noodle House" into the Chinese noodle market, identifying suitable locations for its first restaurant[13] - The company plans to continue opening new restaurants in Hong Kong as part of its expansion strategy[24] - The company plans to open a total of eight self-owned brand restaurants, including four Chinese cuisine restaurants and four Asian cuisine restaurants, utilizing approximately 34% of the net proceeds from the IPO[86] Costs and Expenses - Food and beverage costs rose by approximately 25.9% to about HKD 287.9 million, maintaining a stable percentage of about 28.7% of total revenue[31] - Employee costs increased by approximately 17.1% to about HKD 303.9 million, while the percentage of employee costs to revenue decreased to about 30.3%[34] - Property rental and related expenses increased by approximately 19.0% to about HKD 181.5 million, remaining stable at about 18.1% of total revenue[35] Assets and Liabilities - As of December 31, 2018, the group's short-term bank deposits were approximately HKD 148.0 million, and cash and cash equivalents were about HKD 142.3 million, compared to HKD 70.0 million in the previous year[39] - The group's current assets and current liabilities totaled approximately HKD 371.1 million and HKD 147.4 million, respectively, resulting in a current ratio of approximately 2.5 times, up from 1.1 times the previous year[39] - The group had no bank borrowings or finance lease payables as of December 31, 2018[40] Corporate Governance - The company has maintained high standards of corporate governance, adhering to the corporate governance code as per the Stock Exchange listing rules[136] - The board of directors consists of six members, including three executive directors and three independent non-executive directors, ensuring a high level of independence[142] - The company has held two regular board meetings since its listing in May 2018, with full attendance from both executive and non-executive directors[143] - The roles of chairman and CEO are currently held by the same individual, Professor Huang, which the board believes is beneficial for the company's overall interests[146] - The company emphasizes the importance of effective communication with shareholders to enhance investor relations and ensure transparency of company information[183] Risk Management and Compliance - The company has identified several risks that may impact its business performance, including location selection, growth strategy implementation, and food quality incidents[76] - The company has established a three-tier risk management approach to identify, assess, mitigate, and respond to risks, with business units responsible for the first line of defense[188] - The board confirmed its awareness of the responsibilities for preparing the financial statements for the year ended December 31, 2018, and is not aware of any significant uncertainties affecting the company's ability to continue as a going concern[189] Sustainability and Social Responsibility - The group emphasizes the importance of monitoring risks and exploring potential opportunities to balance business needs, social demands, and environmental impacts[194] - The group has adopted a top-down approach to implement sustainability strategies across all levels of management and employees, focusing on environmental sustainability, human rights, employee support, and local community maintenance[194] - The group reported significant ESG issues for the year, including energy conservation, food waste reduction, promoting diversity in the workplace, food safety, and community investment[198] Employee and Director Information - The group had 1,041 employees as of December 31, 2018, a slight decrease from 1,052 employees the previous year[47] - The company provided competitive compensation to attract and motivate employees, regularly reviewing compensation to align with market standards[100] - The company has implemented a board diversity policy, considering measurable objectives such as skills, professional experience, and gender[157] Shareholder Information - The controlling shareholders, including Huang Jielong and Chen Huizhen, each hold 36.67% of the shares in Hequn Holdings, collectively controlling 75% of the company[125] - The company maintains a public float of at least 25% of its issued shares since the listing date[126] - The annual general meeting for shareholders is scheduled for June 19, 2019, with notices sent out 20 business days prior[183]