Core Viewpoint - The company expects a decrease of approximately 30% to 35% in profit attributable to the owners of the parent company for the six months ending June 30, 2025, compared to the same period in 2024 [1] Group 1 - The anticipated profit decline is primarily due to the absence of one-time gains from asset sales during the reporting period, whereas the same period in 2024 recorded a gain of approximately HKD 12.4 million from asset sales [1] - Another contributing factor to the profit decrease is the reduction in gross profit margin, attributed to increased procurement costs resulting from rising coffee bean commodity prices [1]

Financial Performance - The financial year ended 31 December 2024, with the annual report presented to shareholders[17] - The company reported a consolidated profit of HK$XX million, representing a YY% increase compared to the previous year[9] - For the year ended December 31, 2024, the Group's total revenue was HK$721.1 million, a decrease of HK$7.8 million or 1.1% compared to HK$728.9 million for the year ended December 31, 2023[49] - Gross profit for the year ended December 31, 2024, was HK$246.0 million, an increase of HK$5.4 million or 2.2% from HK$240.6 million for the year ended December 31, 2023[51] - The Group's profit for the year increased by HK$10.4 million, or 21.4%, from HK$48.7 million for the year ended 31 December 2023 to HK$59.1 million for the year ended 31 December 2024[63] - The Group's net profit margin increased from 6.7% for the year ended 31 December 2023 to 8.2% for the year ended 31 December 2024[68] Revenue Breakdown - Revenue generated in Hong Kong increased by HK$11.4 million, or 2.3%, from HK$492.3 million in 2023 to HK$503.7 million in 2024[34] - Revenue generated in Mainland China decreased by HK$18.8 million, or 8.6%, from HK$219.3 million in 2023 to HK$200.5 million in 2024[35] - Revenue from other markets slightly decreased by HK$0.4 million, or 2.3%, from HK$17.3 million in 2023 to HK$16.9 million in 2024[36] - Revenue from Hong Kong increased by HK$11.4 million or 2.3% to HK$503.7 million for the year ended December 31, 2024, driven by higher sales of coffee, tea, and dairy products[38] - Revenue from Mainland China decreased by HK$18.8 million or 8.6% to HK$200.5 million for the year ended December 31, 2024, primarily due to reduced sales of tea and instant products[39] Cost Management - The Group's cost of sales decreased by HK$13.2 million or 2.7% to HK$475.2 million for the year ended December 31, 2024, attributed to lower procurement costs of various raw materials[50] - General and administrative expenses increased by HK$1.5 million or 1.9% to HK$80.8 million for the year ended December 31, 2024, primarily due to higher staff costs[59] - Financing costs increased by HK$0.8 million or 80.0% to HK$1.8 million for the year ended December 31, 2024, mainly due to increased lease liabilities[66] - Tax expenses increased by HK$4.7 million or 45.6% to HK$15.0 million for the year ended December 31, 2024, resulting in an effective tax rate increase from 17.5% to 20.2%[67] Strategic Initiatives - The company anticipates a revenue growth of BB% for the upcoming financial year, driven by new product launches and market expansion[9] - Research and development efforts have led to the introduction of CC new products, enhancing the company's competitive edge[9] - The company is exploring strategic acquisitions to bolster its market presence and diversify its product offerings[9] - The Group plans to strengthen its cost management framework while maximizing the operational benefits of the new coffee production line[24] - The Group will focus on optimizing production capabilities, enhancing operational efficiency, and exploring growth opportunities in Hong Kong and Mainland China[44] Market Conditions - Coffee bean prices increased from US$1.90 per lb to US$3.20 per lb, representing a 68% rise during 2024[18] - The Group anticipates significant challenges in 2025 due to high global coffee commodity prices and market volatility, requiring careful navigation of the business landscape[42] - The Hong Kong food service market experienced a marginal decline of approximately 0.1% in overall sales, yet the Group maintained its leading position in the B2B coffee market[30] - The group adopted a prudent approach to market expansion in the PRC, focusing on enhanced credit risk management and strict oversight of accounts receivable[31] Governance and Management - The company emphasizes high standards of corporate governance, focusing on transparency, independence, accountability, and fairness[129] - The company recognizes the importance of integrity and ethical conduct, which are essential for long-term growth and sustainability[130] - The Board comprises eight directors, including three executive directors, two non-executive directors, and three independent non-executive directors[144] - The Company has mechanisms in place for Directors to seek independent professional advice at the Company's expense to ensure they can fulfill their duties[165] - The Company has established effective mechanisms to ensure independent views and input are available to the Board[149] Board Diversity and Composition - Independent non-executive directors represent 37.5% of the Board, exceeding the Listing Rules requirement of one-third[146] - The Board has adopted a Board Diversity Policy, reviewed annually, to enhance diversity in terms of gender, age, cultural background, and professional experience[151] - The Board's diversity policy, adopted in May 2018, emphasizes the importance of various factors such as gender, culture, and professional experience in board composition[156] - As of December 31, 2024, the gender ratio in the workforce is 59% male and 41% female, indicating a balanced gender diversity within the Group[160] Committees and Meetings - The Company has established a Remuneration Committee, an Audit Committee, and a Nomination Committee, with specific terms of reference for each[167] - The Audit Committee met three times in-person during the financial year 2024, with attendance records also available in the Annual Report[186] - The Remuneration Committee reviewed the remuneration policies, including KPI Policy, Performance Management Policy, Salary Review Policy, and Annual Performance Policy for the financial year 2024[180] - The Nomination Committee held one in-person meeting during the financial year of 2024[199] - The Committee is responsible for identifying measurable objectives for achieving board diversity and monitoring progress[197]

Financial Performance - Revenue for the year ended December 31, 2024, was HKD 721.1 million, a decrease of 1.1% compared to HKD 728.9 million for the year ended December 31, 2023[4] - Gross profit for the year ended December 31, 2024, was HKD 246.0 million, an increase of 2.2% from HKD 240.6 million for the year ended December 31, 2023[4] - Profit for the year ended December 31, 2024, was HKD 59.1 million, representing a 21.4% increase from HKD 48.7 million for the year ended December 31, 2023[4] - Total customer contract revenue for 2024 was HKD 721,117,000, a decrease of 1.5% from HKD 728,930,000 in 2023[23] - Revenue from Hong Kong increased to HKD 503,715,000 in 2024, up 2.9% from HKD 492,303,000 in 2023[19] - Revenue from Mainland China decreased to HKD 200,455,000 in 2024, down 8.6% from HKD 219,344,000 in 2023[19] - Overall group revenue decreased by HKD 7.8 million or 1.1% to HKD 721.1 million for the year ending December 31, 2024, mainly due to reduced demand in mainland China[55] Profitability Metrics - Gross margin improved from 33.0% for the year ended December 31, 2023, to 34.1% for the year ended December 31, 2024[4] - Net profit margin increased from 6.7% for the year ended December 31, 2023, to 8.2% for the year ended December 31, 2024[4] - Other income and net gains increased by HKD 11.4 million to HKD 17.3 million, primarily due to gains from the sale of assets[59] - The total tax expense for the year was HKD 14,950,000, an increase from HKD 10,287,000 in 2023[28] Assets and Liabilities - Non-current assets as of December 31, 2024, totaled HKD 227.5 million, an increase from HKD 217.7 million as of December 31, 2023[9] - Current assets decreased from HKD 517.5 million as of December 31, 2023, to HKD 452.7 million as of December 31, 2024[9] - Total liabilities increased from HKD 125.9 million as of December 31, 2023, to HKD 144.7 million as of December 31, 2024[10] - Equity attributable to owners of the parent decreased from HKD 590.4 million as of December 31, 2023, to HKD 509.7 million as of December 31, 2024[10] Cash Flow and Capital Expenditure - The group acquired property, plant, and equipment amounting to HKD 24,885,000 in 2024, down from HKD 30,839,000 in 2023[34] - Capital expenditure for the year was HKD 24.9 million, with significant investments in coffee and tea machines, production machinery, and facility upgrades[67] Dividends - The proposed final dividend for 2024 is HKD 2.16 per share, compared to HKD 2.22 per share in 2023, totaling HKD 15,563,000[30] - The special dividend for 2023 was HKD 13.87 per share, totaling HKD 100,000,000, which will not be paid in 2024[30] Employee and Operational Metrics - The group employed 198 staff in Hong Kong and 176 in mainland China as of December 31, 2024, compared to 195 and 203 respectively in 2023[78] - The group reported a decrease in short-term employee benefits to HKD 15,330,000 in 2024 from HKD 15,499,000 in 2023[47] Market Conditions and Strategic Outlook - The company anticipates a challenging business environment in 2025 due to high global coffee prices and market volatility, while focusing on sustainable growth and operational efficiency[54] - The company has implemented a strategic restructuring in mainland China to enhance operational efficiency and has successfully upgraded its SAP system[54] Governance and Compliance - The company has adhered to corporate governance codes, ensuring transparency and accountability to enhance investor confidence[91] - The chairman and CEO roles are held by the same individual, which the board believes aids in executing business strategies efficiently[91] - The board consists of three independent non-executive directors, ensuring a balance of power and adequate protection of shareholder interests[92] - The company has adopted a securities trading code that meets the standards set out in the listing rules, confirming compliance by all directors for the fiscal year ending December 31, 2024[93] Risk Management - The group closely monitors foreign exchange risks, primarily from transactions conducted in currencies other than the functional currency, with most foreign currency procurement transactions denominated in USD[73] - The group has implemented a cash pooling system to manage liquidity risk, ensuring sufficient funds to meet both short-term and long-term liquidity needs[77] Miscellaneous - The group has maintained sufficient public float, with at least 25% of issued shares held by the public as of the announcement date[87] - The group has not engaged in any purchase, sale, or redemption of its listed securities from January 1, 2024, to the announcement date[86] - The group has not identified any significant events that require disclosure from December 31, 2024, to the announcement date[88] - The annual performance announcement and annual report for the fiscal year ending December 31, 2024, will be published on the Hong Kong Stock Exchange and the company's website[95] - The board expresses gratitude to shareholders, customers, and business partners for their unwavering support and contributions to the group's progress[96]

[Corporate Information](index=2&type=section&id=Corporate%20Information) This section provides basic corporate information for Jierong International Holdings Limited, including board members, committee structures, company secretary, registered address, principal place of business, auditor, and principal bankers - Executive Directors include **Mr. Wong Tat Tong** (Chairman), **Ms. Fan Yee Man**, and **Mr. Kam Chun Pong**[3](index=3&type=chunk) - Chairmen of the Audit, Nomination, and Remuneration Committees are **Mr. Tang Kwai Cheung**, **Mr. Wong Tat Tong**, and **Mr. Wong Man Fai** respectively[7](index=7&type=chunk)[9](index=9&type=chunk)[10](index=10&type=chunk) - The company's registered public interest entity auditor is **Ernst & Young**[13](index=13&type=chunk) [Management Discussion and Analysis](index=5&type=section&id=Management%20Discussion%20and%20Analysis) [Business Review](index=5&type=section&id=Business%20Review) For the six months ended June 30, 2024, the Group's total revenue was HKD 349.4 million, a 2.8% year-on-year decrease, primarily due to reduced revenue from mainland China; however, gross profit margin significantly improved from 32.3% to 35.7% due to lower raw material costs for coffee products 2024 H1 Key Performance Indicators (million HKD) | Indicator | 2024 H1 | 2023 H1 | YoY Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | 349.4 | 359.4 | -2.8% | | **Gross Profit** | 124.8 | 116.1 | +7.5% | | **Gross Profit Margin** | 35.7% | 32.3% | +3.4pp | - The main reason for the revenue decrease was reduced revenue from the mainland China market[16](index=16&type=chunk)[17](index=17&type=chunk) - The improvement in gross profit margin was primarily attributed to lower raw material costs for coffee products[16](index=16&type=chunk)[17](index=17&type=chunk) [Business Prospect](index=6&type=section&id=Business%20Prospect) Facing global economic changes, a persistent downturn in the Hong Kong retail market, and rising restaurant closures, the Group will focus on strengthening cash flow and risk management, including closely monitoring trade receivables recoverability and implementing effective cost-saving measures to sustain business growth - Major challenges include a decline in Hong Kong retail sales (**6.6% YoY decrease** from Jan-Jun 2024) and an increase in restaurant closures (approximately **2,200** in H1)[21](index=21&type=chunk) - To address market complexities, the Group will prioritize robust cash flow and enhanced risk management, particularly monitoring trade receivables, and implementing cost-saving measures[21](index=21&type=chunk) [Financial Review](index=7&type=section&id=Financial%20Review) During the reporting period, the Group's revenue decreased by 2.8% year-on-year to HKD 349.4 million, mainly due to changes in demand for instant products in mainland China; despite the revenue decline, gross profit increased by 7.5% to HKD 124.8 million due to lower raw material costs, raising the gross profit margin to 35.7%; a HKD 12.2 million gain from asset disposal significantly boosted net other income, resulting in a 63.3% surge in profit for the period to HKD 36.1 million and an improved net profit margin from 6.1% to 10.3% [Revenue](index=7&type=section&id=Revenue) Group revenue decreased by 2.8% from HKD 359.4 million in the prior period to HKD 349.4 million, primarily due to reduced sales volume from mainland China customers' changing demand for instant products Revenue Change (million HKD) | Period | Revenue (million HKD) | | :--- | :--- | | 2024 H1 | 349.4 | | 2023 H1 | 359.4 | | **YoY Change** | **-2.8%** | [Cost of Sales and Gross Profit](index=7&type=section&id=Cost%20of%20Sales%20and%20Gross%20Profit) Cost of sales decreased by 7.7% year-on-year to HKD 224.6 million, primarily benefiting from lower procurement prices of key raw materials, leading to a 7.5% increase in gross profit to HKD 124.8 million and an improvement in gross profit margin from 32.3% to 35.7% Cost and Gross Profit Change (million HKD) | Indicator | 2024 H1 | 2023 H1 | YoY Change | | :--- | :--- | :--- | :--- | | **Cost of Sales** | 224.6 | 243.3 | -7.7% | | **Gross Profit** | 124.8 | 116.1 | +7.5% | | **Gross Profit Margin** | 35.7% | 32.3% | +3.4pp | [Other Income and Expenses](index=8&type=section&id=Other%20Income%20and%20Expenses) Net other income and gains significantly increased by 533.3% to HKD 15.2 million, mainly due to a HKD 12.2 million gain from asset disposal; sales and distribution expenses decreased by 2.3% in line with revenue decline; general and administrative expenses rose by 6.2% due to increased staff costs; and net other expenses increased by 73.7% due to higher exchange losses from RMB depreciation Other Income and Expenses Overview (million HKD) | Item | 2024 H1 | 2023 H1 | YoY Change | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | **Net Other Income and Gains** | 15.2 | 2.4 | +533.3% | Gain from asset disposal of HKD 12.2 million | | **Sales and Distribution Expenses** | 49.9 | 51.1 | -2.3% | Reduced marketing and promotion expenses | | **General and Administrative Expenses** | 40.9 | 38.5 | +6.2% | Increased staff costs | | **Net Other Expenses** | 3.3 | 1.9 | +73.7% | Increased exchange losses due to RMB depreciation | [Profit for The Period](index=10&type=section&id=Profit%20for%20The%20Period) As a result of the combined factors, the Group's profit for the period significantly increased by 63.3% from HKD 22.1 million in the prior period to HKD 36.1 million, with the net profit margin improving from 6.1% to 10.3% Profit and Net Profit Margin Change | Indicator | 2024 H1 | 2023 H1 | YoY Change | | :--- | :--- | :--- | :--- | | **Profit for the Period (million HKD)** | 36.1 | 22.1 | +63.3% | | **Net Profit Margin** | 10.3% | 6.1% | +4.2pp | [Liquidity and Financial Resources](index=10&type=section&id=Liquidity%20and%20Financial%20Resources) The Group maintains a robust financial position with ample resources to support operations; as of June 30, 2024, cash and cash equivalents stood at HKD 197.8 million, total interest-bearing bank borrowings decreased to HKD 4.5 million, and net current assets reduced to HKD 307.7 million due to special dividend payments, while the gearing ratio declined from 1.2% to a very low 0.9%, with no significant investment plans for the coming year Capital and Liquidity Status (million HKD) | Indicator | 2024 June 30 | 2023 Dec 31 | Change | | :--- | :--- | :--- | :--- | | **Capital Expenditure (H1)** | 13.6 | 16.7 (2023 H1) | -18.6% | | **Capital Commitments** | 9.0 | 3.9 | +130.8% | | **Interest-bearing Bank Borrowings** | 4.5 | 7.1 | -36.6% | | **Net Current Assets** | 307.7 | 391.5 | -21.4% | | **Cash and Cash Equivalents** | 197.8 | 253.8 | -22.1% | | **Gearing Ratio** | 0.9% | 1.2% | -0.3pp | - The decrease in net current assets was primarily due to a reduction in cash from special dividend payments[38](index=38&type=chunk)[41](index=41&type=chunk) - The Group has no specific plans for significant investments or capital assets in the coming year[39](index=39&type=chunk)[42](index=42&type=chunk) [Risk Management](index=13&type=section&id=Risk%20Management) The Group faces foreign currency, interest rate, credit, and liquidity risks, implementing corresponding monitoring measures; foreign currency risk primarily stems from USD purchases and RMB sales, closely monitored with hedging considered when necessary; interest rate risk relates to floating-rate bank borrowings; credit risk is controlled through transactions with reputable parties and credit review procedures; and liquidity risk is managed via a cash pooling system to ensure sufficient funds - **Foreign Currency Risk**: Primary risk arises from USD purchases and HKD/RMB sales; management closely monitors and considers hedging policies when significant risks arise[48](index=48&type=chunk)[50](index=50&type=chunk) - **Interest Rate Risk**: Risk is mainly associated with floating-rate bank borrowings; the Group monitors interest rate exposure and considers hedging when needed[48](index=48&type=chunk)[51](index=51&type=chunk) - **Credit Risk**: The Group transacts only with reputable third parties, employing credit verification procedures and continuous monitoring, resulting in non-significant bad debt risk[49](index=49&type=chunk)[52](index=52&type=chunk) - **Liquidity Risk**: The Group manages liquidity through an internal cash pooling system, ensuring sufficient funds to meet short-term and long-term needs[53](index=53&type=chunk) [Human Resources](index=14&type=section&id=Human%20Resources) As of June 30, 2024, the Group employed 192 staff in Hong Kong and 193 in mainland China, a slight decrease from the end of 2023; the company's remuneration references market levels and includes a share option scheme to incentivize employees; during the period, the Group provided various training programs covering operational skills and professional knowledge Employee Count Change | Region | 2024 June 30 | 2023 Dec 31 | | :--- | :--- | :--- | | **Hong Kong** | 192 | 195 | | **Mainland China** | 193 | 203 | - The Group provides various training, including occupational safety, machine control, management systems, and business knowledge, to ensure effective implementation of business strategies[53](index=53&type=chunk) [Financial Statements](index=15&type=section&id=Financial%20Statements) [Independent Review Report](index=15&type=section&id=Independent%20Review%20Report) Ernst & Young reviewed the Group's interim financial information for the six months ended June 30, 2024, in accordance with Hong Kong Standard on Review Engagements 2410, concluding that nothing came to their attention suggesting the interim financial information was not prepared in all material respects according to Hong Kong Accounting Standard 34 "Interim Financial Reporting" - The review was conducted by **Ernst & Young**, covering the interim financial information for the six months ended **June 30, 2024**[54](index=54&type=chunk)[55](index=55&type=chunk) - The review concluded that no material matters were found to be non-compliant with **Hong Kong Accounting Standard 34**[61](index=61&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=18&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) For the six months ended June 30, 2024, the company's revenue was HKD 349.4 million, a 2.8% year-on-year decrease; however, due to increased gross profit and a significant gain from asset disposal, profit before tax surged to HKD 45.1 million, with profit for the period reaching HKD 36.1 million, a 63.3% year-on-year increase, and basic earnings per share at HKD 5.02 cents Condensed Consolidated Statement of Profit or Loss Summary (thousand HKD) | Item | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | **REVENUE** | 349,437 | 359,382 | | **Gross profit** | 124,808 | 116,106 | | **PROFIT BEFORE TAX** | 45,124 | 26,548 | | **PROFIT FOR THE PERIOD** | 36,146 | 22,090 | | **Basic earnings per share (HK cents)** | 5.02 | 3.06 | [Condensed Consolidated Statement of Comprehensive Income](index=19&type=section&id=Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) Building on the HKD 36.1 million profit for the period, and considering a HKD 3.0 million exchange loss from translating overseas operations, total comprehensive income for the six months ended June 30, 2024, was HKD 33.1 million, a significant increase from HKD 17.8 million in the prior period Condensed Consolidated Statement of Comprehensive Income Summary (thousand HKD) | Item | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | **PROFIT FOR THE PERIOD** | 36,146 | 22,090 | | **OTHER COMPREHENSIVE LOSS** | (3,025) | (4,253) | | **TOTAL COMPREHENSIVE INCOME** | 33,121 | 17,837 | [Condensed Consolidated Statement of Financial Position](index=20&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2024, the Group's total assets were HKD 678.2 million, total liabilities HKD 170.6 million, and net assets HKD 507.6 million; compared to the end of 2023, net current assets decreased due to cash reduction from special dividend payments, leading to a decline in total equity from HKD 590.4 million to HKD 507.6 million Condensed Consolidated Statement of Financial Position Summary (thousand HKD) | Item | 2024 June 30 | 2023 Dec 31 | | :--- | :--- | :--- | | **Total non-current assets** | 229,133 | 217,654 | | **Total current assets** | 449,101 | 517,463 | | **Total current liabilities** | 141,373 | 125,926 | | **Net current assets** | 307,728 | 391,537 | | **Net assets** | 507,591 | 590,436 | | **Total equity** | 507,591 | 590,436 | [Condensed Consolidated Statement of Changes in Equity](index=22&type=section&id=Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) As of June 30, 2024, the Group's total equity decreased from HKD 590.4 million at the beginning of the period to HKD 507.6 million, primarily due to dividend payments totaling HKD 116 million, which exceeded the HKD 33.1 million total comprehensive income recorded during the period Equity Movement Summary (thousand HKD) | Item | Amount | | :--- | :--- | | **Equity at beginning of period (2024 Jan 1)** | 590,436 | | **Total comprehensive income for the period** | 33,121 | | **Dividends paid** | (115,966) | | **Equity at end of period (2024 June 30)** | 507,591 | [Condensed Consolidated Statement of Cash Flows](index=24&type=section&id=Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) In H1 2024, net cash generated from operating activities was HKD 63.8 million; investing activities shifted from a net outflow to a net inflow of HKD 6.2 million, mainly due to proceeds from asset disposal; financing activities saw a significant net outflow of HKD 125.3 million, primarily due to HKD 116 million in dividend payments; ultimately, cash and cash equivalents decreased by HKD 55.3 million Cash Flow Statement Summary (thousand HKD) | Item | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | **Net cash generated from operating activities** | 63,845 | 85,559 | | **Net cash generated from/(used in) investing activities** | 6,223 | (22,477) | | **Net cash used in financing activities** | (125,345) | (25,497) | | **Net (decrease)/increase in cash and cash equivalents** | (55,277) | 37,585 | | **Cash and cash equivalents at beginning of period** | 253,752 | 189,789 | | **Cash and cash equivalents at end of period** | 197,781 | 225,875 | [Notes to the Condensed Consolidated Financial Statements](index=27&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) [3. OPERATING SEGMENT INFORMATION](index=34&type=section&id=3.%20OPERATING%20SEGMENT%20INFORMATION) Starting from 2024, due to a decreased proportion of the food segment, the Group revised its operating segments, no longer presenting them separately but evaluating performance and allocating resources for the entire Group as a whole; geographically, Hong Kong remains the primary revenue source, accounting for approximately 70% of total revenue, but its growth has slowed, while mainland China revenue has declined - Starting from **2024**, the Group changed its internal reporting structure, consolidating the former “Catering Planning Services” and “Food” segments, and no longer presenting operating segment information[99](index=99&type=chunk)[100](index=100&type=chunk) Revenue from External Customers by Geographical Location (thousand HKD) | Region | 2024 H1 | 2023 H1 | YoY Change | | :--- | :--- | :--- | :--- | | **Hong Kong** | 244,279 | 238,586 | +2.4% | | **Mainland China** | 99,187 | 113,940 | -13.0% | | **Others** | 5,971 | 6,856 | -12.9% | | **Total** | **349,437** | **359,382** | **-2.8%** | [4. REVENUE AND OTHER INCOME AND GAINS, NET](index=37&type=section&id=4.%20REVENUE%20AND%20OTHER%20INCOME%20AND%20GAINS%2C%20NET) The Group's total revenue primarily derives from the sale of coffee, tea, and related ancillary products, accounting for 95.7% of total revenue; net other income and gains amounted to HKD 15.2 million, with the vast majority (HKD 12.3 million) stemming from gains on disposal of assets classified as held for sale and items of property, plant, and equipment Revenue Analysis by Goods or Service Category (thousand HKD) | Category | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Sale of coffee, tea and other related ancillary products | 334,534 | 342,514 | | Sale of frozen food | 4,103 | 6,492 | | Revenue from provision of coffee machine and tea machine planning services | 10,800 | 10,376 | | **Total** | **349,437** | **359,382** | - The largest component of net other income and gains was the gain on disposal of assets and property, plant and equipment items, totaling **HKD 12,273 thousand**[123](index=123&type=chunk) [8. DIVIDENDS](index=44&type=section&id=8.%20DIVIDENDS) During the reporting period, the company recognized and paid a final dividend of HKD 2.22 cents per share and a special dividend of HKD 13.87 cents per share for 2023, totaling HKD 116 million in dividends; additionally, the Board declared an interim dividend of HKD 2.76 cents per share for the six months ended June 30, 2024, an increase from HKD 1.84 cents per share in the prior period Dividend Distribution (thousand HKD) | Dividend Type | 2024 H1 Recognized Distribution | 2023 H1 Recognized Distribution | | :--- | :--- | :--- | | 2022 Final Dividend | — | 15,784 | | 2023 Final Dividend | 16,000 | — | | Special Dividend | 99,966 | — | | **Total** | **115,966** | **15,784** | - The Board declared a 2024 interim dividend of **HKD 2.76 cents per ordinary share**, totaling approximately **HKD 19,892 thousand**, representing a **50% increase** from HKD 1.84 cents per share in the prior period[139](index=139&type=chunk) [12. TRADE RECEIVABLES](index=48&type=section&id=12.%20TRADE%20RECEIVABLES) As of June 30, 2024, the Group's net trade receivables were HKD 95.0 million, a decrease from HKD 115.2 million at the end of 2023; aging analysis shows that the vast majority (approximately 87%) of receivables are within 30 days, indicating good collection performance, with credit terms generally ranging from 30 to 120 days Trade Receivables Aging Analysis (after impairment allowance, thousand HKD) | Aging | 2024 June 30 | 2023 Dec 31 | | :--- | :--- | :--- | | Within 30 days | 82,776 | 100,546 | | 31 to 60 days | 5,396 | 7,614 | | 61 to 90 days | 4,669 | 4,844 | | Over 91 days | 2,179 | 2,165 | | **Total** | **95,020** | **115,169** | [17. CONTINGENT LIABILITIES](index=53&type=section&id=17.%20CONTINGENT%20LIABILITIES) The Group has two warehouses in mainland China lacking necessary construction permits and completion reports, thus unable to obtain property ownership certificates, potentially facing demolition orders and fines up to RMB 1.3 million (approximately HKD 1.4 million); however, the Board, after legal consultation, believes the likelihood of penalties is low and demolition costs are not material, hence no provision has been made - The Group faces a risk of demolition orders and fines up to **RMB 1.3 million** (approximately **HKD 1.4 million**) for two warehouses in mainland China due to incomplete documentation[162](index=162&type=chunk)[163](index=163&type=chunk) - Management assessed that the likelihood of penalties being imposed by relevant authorities is low, and potential costs would not be material to the Group, thus no provision was made[162](index=162&type=chunk)[163](index=163&type=chunk) [19. RELATED PARTY TRANSACTIONS](index=55&type=section&id=19.%20RELATED%20PARTY%20TRANSACTIONS) During the period, the Group engaged in various transactions with companies controlled by its major shareholders, including procurement of goods, payment for logistics and warehousing services, and provision of OEM processing services; the report also disclosed the total remuneration for key management personnel, including directors Major Related Party Transactions (thousand HKD) | Transaction Content | Related Party | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | :--- | | Purchase of goods | Supply chain service provider | 9,960 | 2,829 | | Purchase of goods | Distributor | 1,038 | 762 | | Logistics and warehousing costs | Warehousing and logistics service provider | 667 | — | | OEM processing income | Coffee and tea producer | 662 | — | Key Management Personnel Remuneration (thousand HKD) | Item | 2024 H1 | 2023 H1 | | :--- | :--- | :--- | | Short-term employee benefits | 7,803 | 8,323 | | Pension scheme contributions | 455 | 435 | | **Total** | **8,258** | **8,758** | [Other Information](index=61&type=section&id=Other%20Information) [INTERIM DIVIDEND AND CLOSURE OF REGISTER OF MEMBERS](index=61&type=section&id=INTERIM%20DIVIDEND%20AND%20CLOSURE%20OF%20REGISTER%20OF%20MEMBERS) The Board declared an interim dividend of HKD 2.76 cents per share for the six months ended June 30, 2024, a significant increase from HKD 1.84 cents per share in the prior period; the dividend will be paid on September 13, 2024, to shareholders registered on August 30, 2024 - An interim dividend of **HKD 2.76 cents per share** for 2024 was declared[178](index=178&type=chunk) - The record date for entitlement is **August 30, 2024**, with the dividend payment date on **September 13, 2024**[178](index=178&type=chunk)[179](index=179&type=chunk) [DIRECTORS' INTERESTS AND SUBSTANTIAL SHAREHOLDERS' INTERESTS](index=64&type=section&id=DIRECTORS%27%20INTERESTS%20AND%20SUBSTANTIAL%20SHAREHOLDERS%27%20INTERESTS) As of June 30, 2024, Mr. Wong Tat Tong, the company's Chairman, is deemed to hold 71.41% of the company's shares through his controlled corporations and acting-in-concert agreements, making him the controlling shareholder; other substantial shareholders, including Dah Chong Hong Food and CITIC Pacific Limited, are also deemed to hold the same proportion of shares due to acting-in-concert agreements - Executive Director and Chairman **Mr. Wong Tat Tong** is deemed to hold **514,667,312 shares**, representing **71.41%** of the company's issued share capital[191](index=191&type=chunk)[192](index=192&type=chunk) Substantial Shareholders' Interests (as at June 30, 2024) | Shareholder Name | Nature of Interest | Number of Shares Held (Long Position) | Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | | Hero Asia Company Limited | Beneficial owner; acting in concert | 514,667,312 | 71.41% | | Dah Chong Hong Food International Holdings Limited | Beneficial owner; acting in concert | 514,667,312 | 71.41% | | CITIC Pacific Limited | Interest in controlled corporation; acting in concert | 514,667,312 | 71.41% | | CITIC Group Corporation Limited | Interest in controlled corporation; acting in concert | 514,667,312 | 71.41% | [CORPORATE GOVERNANCE PRACTICES](index=74&type=section&id=CORPORATE%20GOVERNANCE%20PRACTICES) The company complied with most provisions of the Corporate Governance Code during the reporting period, with one deviation: the roles of Chairman and Chief Executive Officer are combined and held by Mr. Wong Tat Tong; the Board believes this arrangement, given Mr. Wong's long-standing responsibility for overall Group management since 1978, facilitates business strategy execution and maximizes operational efficiency, while the independent non-executive directors provide sufficient checks and balances - The company deviated from Corporate Governance Code provision C.2.1, where the roles of Chairman and Chief Executive Officer are combined and held by the same person, **Mr. Wong Tat Tong**[217](index=217&type=chunk)[219](index=219&type=chunk) - The Board believes this arrangement facilitates business strategy execution and enhances operational efficiency, and the current Board structure ensures a balance of power and safeguards shareholders' interests[219](index=219&type=chunk)[220](index=220&type=chunk)

Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 349.4 million, a decrease of 2.8% compared to HKD 359.4 million for the same period in 2023[1] - Gross profit for the six months ended June 30, 2024, was HKD 124.8 million, an increase of 7.5% from HKD 116.1 million in the same period of 2023[1] - Profit for the six months ended June 30, 2024, was HKD 36.1 million, representing a 63.3% increase from HKD 22.1 million in the same period of 2023[1] - Total comprehensive income for the period was HKD 33.1 million, compared to HKD 17.8 million for the same period in 2023[4] - The group's profit before tax for the six months ended June 30, 2024, was HKD 36,146,000, compared to HKD 22,090,000 for the same period in 2023, representing a year-on-year increase of 63.7%[21] - The group's net profit increased by HKD 14.0 million or 63.3% to HKD 36.1 million, with the net profit margin rising from 6.1% to 10.3%[45] Revenue Breakdown - Total customer contract revenue for the six months ended June 30, 2024, was HKD 349,437,000, a decrease of 2.6% compared to HKD 359,382,000 for the same period in 2023[13] - Revenue from coffee, tea, and related products sales was HKD 334,534,000, down from HKD 342,514,000 year-over-year[13] - Revenue from frozen food sales decreased significantly to HKD 4,103,000 from HKD 6,492,000, representing a decline of 36.7%[13] - Revenue from coffee and tea machine planning services was HKD 10,800,000, slightly up from HKD 10,376,000, indicating a growth of 4.1%[13] - Revenue from Hong Kong for the six months ended June 30, 2024, was HKD 244,279,000, an increase of 2.9% from HKD 238,586,000 in 2023[13] - Revenue from Mainland China decreased to HKD 99,187,000 from HKD 113,940,000, a decline of 13.0%[13] Costs and Expenses - The cost of goods sold for the six months ended June 30, 2024, was HKD 224,629,000, a decrease from HKD 243,276,000 for the same period in 2023, representing a reduction of 7.6%[6] - The cost of sales decreased by HKD 18.7 million or 7.7% to HKD 224.6 million, mainly due to a reduction in raw material costs for coffee products[37] - The group incurred employee benefit expenses of HKD 60,728,000 for the six months ended June 30, 2024, compared to HKD 57,766,000 for the same period in 2023, an increase of 5.1%[6] Assets and Liabilities - Non-current assets as of June 30, 2024, totaled HKD 229.1 million, an increase from HKD 217.7 million as of December 31, 2023[5] - Current assets as of June 30, 2024, were HKD 449.1 million, down from HKD 517.5 million as of December 31, 2023[5] - Total liabilities as of June 30, 2024, were HKD 141.4 million, compared to HKD 125.9 million as of December 31, 2023[5] - Equity attributable to owners of the parent as of June 30, 2024, was HKD 507.6 million, down from HKD 590.4 million as of December 31, 2023[6] - Trade receivables amounted to HKD 101,001,000 as of June 30, 2024, down from HKD 126,252,000 as of December 31, 2023, showing a decrease of 20.0%[23] - Trade payables as of June 30, 2024, amounted to HKD 77.1 million, an increase from HKD 63.4 million as of December 31, 2023[26] Taxation - The total tax expense for the six months ended June 30, 2024, was HKD 8,978,000, up from HKD 4,458,000 in the same period of 2023, indicating a 101.5% increase[19] - The actual tax rate increased from 16.8% to 19.9%, with tax expenses rising by 100% to HKD 9.0 million due to increased pre-tax profits[44] Dividends and Shareholder Returns - The group recognized a special dividend of HKD 99,966,000 for the 2023 financial year, compared to HKD 15,784,000 for the previous year, marking a significant increase[20] - The company declared an interim dividend of HKD 2.76 per share for the six months ending June 30, 2024, compared to HKD 1.84 for the same period in 2023[57] Market Environment and Challenges - The company is facing significant challenges due to a 9.7% decline in retail sales value in Hong Kong in June 2024 compared to the same month in 2023[35] - Approximately 2,200 restaurants are estimated to have closed in the first half of 2024, indicating a challenging market environment for the company[35] - The company emphasizes the importance of robust cash flow and risk management in response to the complex market environment[35] - The company remains confident in its ability to adapt to market dynamics and protect shareholder interests[35] Corporate Governance - The audit committee, consisting of three independent non-executive directors, reviewed the unaudited condensed consolidated financial statements for the six months ending June 30, 2024[58] - The company adhered to corporate governance practices, with a noted deviation regarding the roles of the chairman and CEO, which are held by the same individual[62] - The board consists of three independent non-executive directors, ensuring a balance of power and accountability[63] - The company has adopted a securities trading code that meets the standards required by the listing rules[64]

Financial Performance - The company reported a significant increase in revenue, achieving a total of HK$1.2 billion, representing a year-on-year growth of 15%[12] - Total revenue for the Group in 2023 was HK$728,930,000, an increase from HK$695,938,000 in 2022[36] - The Group's revenue increased by HK$33.0 million, or 4.7%, from HK$695.9 million in 2022 to HK$728.9 million in 2023[65] - Revenue from Beverage Solutions segment was HK$717,431,000, accounting for 98.4% of total revenue in 2023[36] - Revenue generated in Hong Kong increased by HK$33.1 million, or 7.2%, from HK$459.2 million in 2022 to HK$492.3 million in 2023[53] - Revenue from the food products segment decreased by HK$4.4 million, or 27.7%, from HK$15.9 million in 2022 to HK$11.5 million in 2023[48] - Revenue generated in Mainland China decreased by HK$4.9 million, or 2.2%, from HK$224.2 million in 2022 to HK$219.3 million in 2023[54] - Revenue from other markets increased by HK$4.8 million, or 38.4%, from HK$12.5 million in 2022 to HK$17.3 million in 2023[55] Profitability and Margins - The gross profit margin improved to 40%, up from 35% in the previous year, reflecting better cost management[12] - Gross profit for the year ended 31 December 2023 amounted to HK$240.6 million, representing an increase of HK$5.8 million, or 2.5%, compared to HK$234.8 million in 2022[44] - The gross profit margin slightly decreased from 33.7% in 2022 to 33.0% in 2023[44] - The rise in coffee bean prices continued to affect the Group's gross profit despite hedging measures[31] - Profit for the year increased by HK$1.3 million, or 2.7%, from HK$47.4 million in 2022 to HK$48.7 million in 2023, with a slight decrease in net profit margin from 6.8% to 6.7%[85] Market Expansion and Strategy - The company is expanding its market presence in Mainland China, targeting a 25% increase in market share over the next two years[12] - New product launches are expected to contribute an additional HK$200 million in revenue, with a focus on innovative technology solutions[12] - The Group is optimistic about a full recovery from the impact of the COVID-19 pandemic and plans to enhance profitability by adjusting business strategies[62] - The Group implemented cost control and production optimization initiatives to improve operational efficiency in response to challenges in the PRC market[20] Corporate Governance - The Company is committed to high standards of corporate governance, emphasizing transparency, independence, accountability, responsibility, and fairness[167] - The Board has established various committees to manage and oversee specific affairs of the Company[171] - The Company has complied with the code provisions set out in the CG Code for the year ended 31 December 2023, except for code provision C.2.1 regarding the separation of roles of chairman and chief executive[170] - The Board has satisfied itself that the Company's culture aligns with its established purpose, values, and strategy[169] - The Company recognizes the importance of integrity, ethical conduct, and responsible business practices, which are reinforced across the Group[168] Leadership and Management - The Group's strategic planning and business development are overseen by Mr. Kam Chun Pong Bernard, who has over 30 years of experience in marketing and business development[137] - Ms. Fan Yee Man, the Group CFO, has 20 years of experience in finance and accounting management[136] - The Group's chairman and CEO, Mr. Wong Tat Tong, has been with the Group for over 40 years, focusing on strategic planning and development[131] - Timothy John Collins appointed as non-executive director with over 25 years of experience in FMCG and healthcare sectors[142] - Chiu Kar Kid promoted to Chief Operating Officer for China, responsible for B2B and B2C sales strategies[158] Financial Position and Investments - The Group had cash and cash equivalents of HK$253.8 million as of December 31, 2023, compared to HK$189.8 million in 2022, indicating a robust financial position[97] - As of December 31, 2023, the Group's net current assets increased to HK$391.5 million, up HK$16.9 million from HK$374.6 million as of December 31, 2022[96] - Capital expenditure for the year was HK$30.8 million, down from HK$66.4 million in 2022, with significant spending on coffee and tea machines[86] - The Group's total remaining balance as of January 1, 2023, was HK$232,610,000, with no unutilized amounts reported[128] Risk Management - The Group's exposure to foreign currency risk arises mainly from transactions in currencies other than the functional currencies, with significant purchases in US dollars[112] - The Group's credit risk is limited as it trades only with recognized and creditworthy third parties, and all customers are subject to credit verification procedures[114] Diversity and Inclusion - As of December 31, 2023, the gender ratio in the workforce is 58% male and 42% female, indicating a balanced gender diversity[198] - The Company has adopted a Board Diversity Policy, reviewed annually, to enhance diversity in the Board composition[188]

Financial Performance - For the fiscal year ending December 31, 2023, the company reported total revenue of HKD 728.9 million, an increase of HKD 33.0 million or 4.7% compared to the previous year[1]. - The gross profit for the same period was HKD 240.6 million, up HKD 5.8 million or 2.5%, with a slight decrease in gross margin from 33.7% to 33.0%[1]. - The group reported a pre-tax profit of HKD 48.7 million for the year ended December 31, 2023, compared to HKD 47.4 million for the year ended December 31, 2022[38]. - Profit for the year ended December 31, 2023, was HKD 48.7 million, an increase of 2.7% from HKD 47.4 million for the previous year[55]. - The group's annual profit increased by HKD 1.3 million or 2.7% to HKD 48.7 million for the year ended December 31, 2023, compared to HKD 47.4 million for the previous year[110]. - Total comprehensive income for the year amounted to HKD 44,245,000, compared to HKD 24,627,000 in the previous year, showing a significant increase of 79.5%[58]. Revenue Breakdown - The revenue from the catering planning services segment increased by HKD 37.4 million or 5.5% to HKD 717.4 million, primarily due to increased sales of coffee and tea products following the end of the COVID-19 pandemic[2]. - The food segment's revenue decreased by HKD 4.4 million or 27.7% to HKD 11.5 million, mainly due to reduced income from Hong Kong[4]. - Revenue generated in Hong Kong increased by HKD 33.1 million or 7.2% to HKD 492.3 million, driven by higher sales of coffee, tea, and dairy products[5]. - Revenue from other markets rose by HKD 4.8 million or 38.4% to HKD 17.3 million, attributed to partial economic recovery post-COVID-19[6]. - Revenue generated from mainland China decreased by HKD 4.9 million or 2.2% to HKD 219.3 million for the year ended December 31, 2023, down from HKD 224.2 million for the year ended December 31, 2022, primarily due to a decline in tea product sales[18]. Cost and Expenses - The group's cost of sales increased by HKD 27.2 million or 5.9% to HKD 488.4 million for the year ended December 31, 2023, compared to HKD 461.2 million for the year ended December 31, 2022, mainly due to increased raw material costs for catering planning services[22]. - Sales and distribution expenses decreased by HKD 1.6 million or 1.5% to HKD 102.8 million for the year ended December 31, 2023, primarily due to reduced marketing and promotion expenses and lower employee costs[77]. - General and administrative expenses remained stable, slightly increasing by HKD 0.1 million or 0.1% to HKD 79.3 million for the year ended December 31, 2023[88]. - The group's financing costs increased by HKD 0.1 million or 11.1% to HKD 1.0 million for the year ended December 31, 2023, primarily due to rising average interest rates on bank borrowings[90]. Dividends and Shareholder Returns - The company proposed a final dividend of HKD 2.22 per share, up from HKD 2.19 per share in the previous year, with a special dividend of HKD 13.87 per share[8]. - The company declared a special dividend of HKD 0.1387 per share, totaling HKD 100 million, to be paid on March 11, 2024[102]. - A special dividend of HKD 0.1387 per share was declared on February 16, 2024, amounting to around HKD 100 million, which was paid on March 11, 2024[136]. Assets and Liabilities - Total non-current assets increased to HKD 217.7 million in 2023 from HKD 212.7 million in 2022[39]. - Current assets decreased slightly to HKD 517.5 million in 2023 from HKD 517.9 million in 2022[39]. - Total current liabilities decreased to HKD 125.9 million in 2023 from HKD 143.3 million in 2022[39]. - The company's total assets as of December 31, 2023, were HKD 730,571,000, with total liabilities amounting to HKD 155,335,000[69]. - The total interest-bearing bank borrowings decreased to HKD 7.1 million as of December 31, 2023, from HKD 10.6 million in 2022[92]. - The group's asset-liability ratio improved to 1.2% as of December 31, 2023, down from 1.8% in 2022, primarily due to a reduction in outstanding interest-bearing bank borrowings[95]. Corporate Governance - The board of directors includes eight members, with three independent non-executive directors ensuring adequate governance and oversight[127]. - The company emphasizes good corporate governance practices to enhance investor confidence[139]. - The chairman and CEO positions are held by the same individual, which the board believes aids in executing business strategies efficiently[140]. - The company established an audit committee consisting of three independent non-executive directors to review accounting policies and financial reporting matters[133]. Future Outlook - The group plans to adjust its business strategies flexibly to enhance profitability and improve financial performance in the coming year, despite a challenging business environment[20]. - The group remains optimistic about achieving a full recovery post-COVID-19 and is focused on adapting to changing consumer habits[20]. - The company plans to continue expanding its market presence and investing in new product development to drive future growth[61]. Employee and Operational Efficiency - The group employed 195 and 203 employees in Hong Kong and mainland China, respectively, as of December 31, 2023, compared to 209 and 198 in 2022[99]. - The group has implemented several improvement measures to enhance operational efficiency in response to challenges faced in the mainland China market[17]. Miscellaneous - The company experienced a foreign exchange loss of HKD 4,466,000 related to the translation of overseas operations[58]. - The company completed the sale of assets classified as held for sale for HKD 17.2 million, generating a gain of approximately HKD 12.4 million[123]. - The company maintains sufficient public float, with at least 25% of issued shares held by the public as per listing rules[135]. - The annual report for the year ending December 31, 2023, will be distributed to shareholders and published on the company's website and the stock exchange website[143]. - The annual general meeting is scheduled for June 12, 2024, pending shareholder approval[130].

Revenue and Profitability - For the six months ended June 30, 2023, the Group recorded total revenue of HK$359.4 million, an increase of HK$30.4 million or 9.2% from HK$329.0 million for the same period in 2022[12]. - Revenue from the beverage solutions segment increased by HK$31.2 million or 9.7% to HK$352.9 million, primarily due to growth in Hong Kong and Mainland China[12]. - Revenue from the food products segment decreased by HK$0.8 million or 11.0% to HK$6.5 million, attributed to a decline in revenue from Hong Kong[12]. - The Group's revenue increased by HK$30.4 million, or 9.2%, from HK$329.0 million for the six months ended June 30, 2022, to HK$359.4 million for the six months ended June 30, 2023[22]. - The increase in revenue was primarily due to higher sales volume of coffee and tea products following the resumption of normalcy in Hong Kong and Mainland China after the COVID-19 pandemic[25]. - Profit for the period was HK$22,090,000, representing a 5.1% increase from HK$21,027,000 in 2022[92]. - Profit before tax increased slightly to HK$26,548,000, compared to HK$26,188,000 in the previous year, indicating a growth of 1.4%[92]. - The Group's profit for the period increased by HK$1.1 million, or 5.2%, from HK$21.0 million to HK$22.1 million, with a slight decrease in net profit margin from 6.4% to 6.1%[43]. Costs and Expenses - Gross profit margin slightly decreased from 34.3% in the first half of 2022 to 32.3% in the first half of 2023, mainly impacted by rising raw material costs[12]. - The Group's cost of sales rose by HK$27.0 million, or 12.5%, from HK$216.3 million to HK$243.3 million during the same period, mainly due to increased raw material costs for beverage solutions[23]. - Selling and distribution expenses increased by HK$5.2 million, or 11.3%, from HK$45.9 million to HK$51.1 million, driven by higher marketing and logistics expenses[30]. - General and administrative expenses decreased by HK$3.3 million, or 7.9%, from HK$41.8 million to HK$38.5 million, mainly due to reduced staff costs[31]. - Other income and gains, net, decreased by HK$2.1 million, or 46.7%, from HK$4.5 million to HK$2.4 million, primarily due to the absence of government subsidies during the period[29]. Financial Position - Cash and cash equivalents stood at HK$225.9 million as of June 30, 2023, indicating a robust financial position[51][56]. - The Group's net current assets were HK$372.0 million, reflecting a slight decrease of HK$2.6 million compared to HK$374.6 million as of December 31, 2022[50][55]. - The Group's total interest-bearing bank borrowings amounted to HK$7.7 million as of June 30, 2023, down from HK$10.6 million as of December 31, 2022[49][54]. - The Group's gearing ratio was 1.3% as of June 30, 2023, down from 1.8% as of December 31, 2022, primarily due to a reduction in outstanding borrowings[63][67]. - Current assets decreased to HK$481,539,000 from HK$517,854,000, representing a decline of about 7.0%[95]. - Total current liabilities decreased significantly from HK$143,264,000 to HK$109,582,000, a reduction of approximately 23.5%[96]. - The company's net assets increased to HK$577,289,000 from HK$575,236,000, indicating a growth of approximately 0.4%[96]. Capital Expenditures and Investments - Capital expenditures amounted to HK$16.7 million, down from HK$51.7 million in the previous period, primarily for coffee and tea machines and production machinery[44]. - As of June 30, 2023, the Group had capital commitments of HK$5.4 million, a decrease from HK$14.2 million at the end of 2022, mainly related to production machinery contracts[45]. - The Group has no concrete plans for material investments or capital assets for the upcoming year[53][58]. Strategic Developments - In April 2023, Dah Chong Hong Food International Holdings Limited became a strategic substantial shareholder, aiming to leverage competitive strengths for growth and operational synergy[16]. - The collaboration with DCH is focused on four strategic dimensions, with an implementation roadmap being designed[19]. - The partnership is expected to enhance the Group's business foundation in the PRC, improving overall income and profitability[20]. Employee and Training - The Group employed 200 and 197 employees in Hong Kong and the PRC, respectively, as of June 30, 2023[77][80]. - The Group provided various training programs to employees, focusing on operational skills and professional knowledge to support business strategy implementation[78]. Segment Performance - Segment revenue for the Beverage Solutions segment was HK$352,890,000, while the Food Products segment generated HK$6,492,000, totaling HK$359,382,000 for the six months ended June 30, 2023[133]. - The adjusted profit before tax for the Group was HK$26,548,000, with segment results showing a profit of HK$31,675,000 for Beverage Solutions and a loss of HK$621,000 for Food Products[133]. - Total segment assets amounted to HK$491,252,000, with Beverage Solutions contributing HK$479,719,000 and Food Products contributing HK$11,533,000 as of June 30, 2023[135]. Compliance and Regulatory Matters - The Group adopted new and revised Hong Kong Financial Reporting Standards (HKFRSs) for the first time in the current period's financial statements[116]. - Amendments to HKAS 1 require the disclosure of material accounting policy information, which is expected to affect the Group's annual consolidated financial statements[117]. - The Group was unable to obtain real estate ownership certificates for two warehouses in Mainland China, with costs of HK$0.7 million and HK$0.6 million respectively[198]. - The directors believe it is not probable that the relevant authorities will impose the penalty, considering current practices and legal advice[199].

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。 TSIT WING INTERNATIONAL HOLDINGS LIMITED 捷 榮 國 際 控 股 有 限 公司 * （根據百慕達法例註冊成立的有限公司） （股份代號：2119） 截至2023年6月30日止六個月的 中期業績公告 財務摘要 • 截至2023年6月30日止六個月的收入為359.4百萬港元，較2022年同期的329.0百萬 港元增加9.2%。 • 截至2023年6月30日止六個月的毛利為116.1百萬港元，較2022年同期的112.7百萬 港元增加3.0%。 • 毛利率由截至2022年6月30日止六個月的34.3%減至截至2023年6月30日止六個月 的32.3%。 • 截至2023年6月30日止六個月的溢利為22.1百萬港元，較2022年同期的21.0百萬港 ...

Sales Revenue Performance - The Group's sales revenue in Hong Kong decreased by 3.1% in 2022 compared to 2021, aligning with the overall market trend where the restaurant sector revenue fell by 6.4%[15]. - The Group's sales revenue in Mainland China dropped by over 15% in 2022 due to significant pandemic-related restrictions and lockdowns[34]. - The Group recorded total revenue of HK$695.9 million for the year ended December 31, 2022, a decrease of HK$70.9 million, or 9.2%, compared to HK$766.8 million in 2021[62]. - Revenue from the beverage solutions segment decreased by HK$70.0 million, or 9.3%, from HK$750.0 million in 2021 to HK$680.0 million in 2022[64]. - Revenue from food products decreased from HK$16.8 million in 2021 to HK$15.9 million in 2022, a decline of 5.2%[45]. - Revenue generated in Hong Kong decreased by HK$14.6 million, or 3.1%, from HK$473.8 million for the year ended 31 December 2021 to HK$459.2 million for the year ended 31 December 2022[73]. - Revenue generated in Mainland China decreased by HK$57.6 million, or 20.4%, from HK$281.8 million for the year ended 31 December 2021 to HK$224.2 million for the year ended 31 December 2022[74]. - Revenue from other markets increased by HK$1.3 million, or 11.6%, from HK$11.2 million for the year ended 31 December 2021 to HK$12.5 million for the year ended 31 December 2022[79]. Cost Control and Operational Efficiency - The Group implemented strict cost control measures in 2022, resulting in a decrease in sales costs compared to 2021[1]. - The Group's operational efficiency was enhanced through various initiatives, including the consolidation of routing systems and upgrading of internal procedures[22]. - The cost of sales decreased by HK$6.6 million, or 1.4%, from HK$467.8 million in 2021 to HK$461.2 million in 2022, mainly due to lower raw material costs resulting from decreased overall sales volume[105][106]. - The Group implemented stringent cost control measures in 2022, which contributed to a reduction in the cost of sales compared to 2021[39]. - The Group will implement stringent cost control measures, including commodities hedging and sourcing from competitive suppliers, in 2023[95]. Gross Profit and Margin - Gross profit for the year ended December 31, 2022, amounted to HK$234.8 million, representing a decrease of HK$64.2 million, or 21.5%, compared to HK$298.9 million in 2021[62]. - The gross profit margin decreased from 39.0% in 2021 to 33.7% in 2022[62]. - The increase in raw material costs, particularly for coffee beans, negatively impacted the gross profit margin, despite some relief from commodity hedging[57]. - Gross profit fell by HK$64.2 million, or 21.5%, from HK$299.0 million in 2021 to HK$234.8 million in 2022, with the gross profit margin decreasing from 39.0% to 33.7%[106]. - Gross profit decreased by HK$1.5 million or 60.0% from HK$2.5 million for the year ended 31 December 2021 to HK$1.0 million for the year ended 31 December 2022, with gross profit margin decreasing from 14.9% to 6.3%[70]. Market Outlook and Strategic Initiatives - The Group is optimistic about the recovery of its Hong Kong market business in 2023, supported by a robust customer network[19]. - The Group is preparing for a rebound in business following the expected relaxation of pandemic control measures in 2023[33]. - The management expressed confidence in the Group's prospects following the relaxation of pandemic measures in early 2023, anticipating opportunities for economic recovery[50]. - The Group is keen to explore opportunities to bring in potential strategic partners in Mainland China to strengthen its market presence[96]. - The Group aims to expand product penetration to current customers and under-developed channels, as well as enhance its pre-cooked product portfolio[83]. - The Group will focus on business development in the Greater Bay Area and Greater Shanghai, targeting key food service channels such as tea bistros and hotels[87]. - The management is focusing on improving its marketing strategies and smart pricing policies to adapt to the changing market conditions[33]. Shareholder and Corporate Governance - As of December 31, 2022, the Company had 720,731,512 shares issued[163]. - Mr. Wong and Ms. Li are deemed to be interested in 514,667,312 shares as of December 31, 2022[163]. - No continuing connected transactions were entered by the Group during the year ended December 31, 2022[171]. - The Company has maintained the prescribed public float under the Listing Rules as of the date of the Annual Report[166]. - There were no significant transactions involving Directors or their close associates during the year[167]. - The Group's consolidated financial statements were audited in accordance with Hong Kong Standards on Auditing[190]. Environmental and Employee Initiatives - The Group strives to minimize its environmental impacts through effective air emissions control and superior water and energy efficiency[175]. - The Company has adopted a share option scheme to incentivize outstanding employees[172]. - Remuneration packages for employees are structured based on qualifications, experience, performance, and market terms[200]. - The Company has adopted share option schemes to motivate valued employees, as detailed in the Prospectus[200]. Product Development and Supply Chain - The Group upgraded its coffee plant in China to reduce manpower needs and further automated the production line to achieve quality standardization[22]. - The launch of tea machines has been delayed due to supply chain issues related to the Pandemic, affecting the utilization of remaining Net Proceeds[197]. - The expected timeline for utilizing the remaining Net Proceeds for product customization and development has been extended to December 31, 2023[197]. - The Group has applied the Net Proceeds according to previously disclosed plans and continues to monitor market conditions[198]. - Unutilized Net Proceeds have been placed as bank balances/time deposits with licensed banks in Hong Kong as of the date of the Annual Report[198].