Financial Performance - The group's revenue for the fiscal year 2022 was HKD 192.6 million, a decrease from HKD 290.0 million in 2021, representing a decline of approximately 33.6%[78]. - The net profit for the fiscal year 2022 increased by approximately 20.2% to about HKD 75.6 million from approximately HKD 62.9 million in 2021[20]. - The adjusted profit attributable to the company's owners for the fiscal year 2022 was approximately HKD 87.4 million, an increase of about 13.7% from HKD 77.3 million in 2021[19]. - The operating profit decreased by approximately 5.3% to HKD 79.9 million in fiscal year 2022, down from HKD 84.4 million in fiscal year 2021[12]. - The gross profit margin for the group was 36.1% for the fiscal year 2022, down from 54.0% in 2021, indicating a decline in profitability[75]. - The return on equity for the year was 21.5%, a decrease from 41.9% in the previous year, reflecting a reduction in shareholder returns[75]. - The adjusted net profit margin based on non-Hong Kong Financial Reporting Standards was 45.4%, compared to 26.6% in the previous year, showing a significant improvement[78]. Expenses and Costs - Employee benefits expenses for fiscal year 2022 were approximately HKD 65.9 million, accounting for 36.5% of total operating expenses, compared to HKD 61.6 million and 30.8% in fiscal year 2021[5]. - The cost of goods sold was approximately HKD 44.0 million in fiscal year 2022, representing 24.3% of total operating expenses, down from HKD 56.8 million and 28.5% in fiscal year 2021[4]. - Promotional costs were approximately HKD 15.8 million in fiscal year 2022, down from HKD 19.4 million in fiscal year 2021[10]. - Listing expenses were approximately HKD 11.8 million in fiscal year 2022, compared to HKD 14.3 million in fiscal year 2021[9]. - Total expenses for the year were HKD 32,937,000, a decrease from HKD 35,184,000 in 2021[113]. Assets and Liabilities - The company's current assets increased significantly from approximately HKD 126.7 million on December 31, 2021, to approximately HKD 265.6 million on December 31, 2022, primarily due to an increase in cash and cash equivalents by about HKD 65.7 million[23]. - The company's cash and cash equivalents increased from approximately HKD 76.0 million on December 31, 2021, to approximately HKD 141.7 million on December 31, 2022, mainly due to operating cash inflows and funds raised from the listing[34]. - The company's bank borrowings decreased from approximately HKD 38.7 million on December 31, 2021, to zero on December 31, 2022, due to repayment of borrowings during the fiscal year[31]. - Total assets as of December 31, 2022, amounted to HKD 412,948,000, up from HKD 265,760,000 in 2021, representing a growth of 55.4%[87]. - Total equity rose to HKD 351,307,000 from HKD 150,276,000, indicating an increase of 133.5%[87]. Revenue Breakdown - Revenue from licensing services was HKD 87,130,000, down 40.3% from HKD 146,060,000 in the previous year[102]. - Revenue from design consulting services increased to HKD 36,615,000, up 78.2% from HKD 20,534,000 in 2021[102]. - The company's revenue from character licensing decreased from approximately HKD 166.6 million in the 2021 fiscal year to approximately HKD 123.7 million in the 2022 fiscal year, a decline of about 25.8%[147]. - Revenue from merchandise licensing reached HKD 74,814,000 in FY2022, accounting for 60.5% of total licensing revenue, compared to 79.6% in FY2021[154]. - Revenue from e-commerce and other businesses fell from approximately HKD 123.4 million in the 2021 fiscal year to approximately HKD 68.9 million in the 2022 fiscal year, a decrease of about 44.2%[148]. Legal and Compliance - The group was ordered to pay a total of RMB 6,000,000 and RMB 1,000,000 in damages due to unfair competition claims, equivalent to approximately HKD 6,731,060 and HKD 1,122,000 respectively[37]. - The group has made a provision of RMB 1,000,000 (approximately HKD 1,122,000) for potential damages and costs related to the legal case[38]. - The company has initiated an appeal against a court ruling requiring it to pay damages totaling approximately RMB 6 million and RMB 1 million, equivalent to about HKD 6.73 million and HKD 1.12 million respectively[135]. Future Plans and Strategies - The group plans to expand its intellectual property portfolio and recruit new designers to enhance product lines, focusing on fashion brands and trendy toys[47]. - The company aims to develop cross-border e-commerce in Southeast Asia and integrate online and offline operations to increase brand presence overseas[47]. - The group is exploring opportunities in the metaverse to deepen brand positioning and enhance consumer loyalty[47]. - The company aims to leverage potential synergies from its character licensing business to enhance its e-commerce operations[138]. - Overall, the company is focusing on enhancing its design consulting services and exploring new licensing opportunities to drive future growth[154].

Financial Performance - Revenue for the six months ended June 30, 2022, was HKD 91.737 million, a decrease of 26.0% compared to HKD 123.773 million in the same period of 2021[15]. - The company reported a net loss of HKD 18.523 million for the period, compared to a profit of HKD 17.461 million in the previous year[15]. - Adjusted net loss under non-HKFRS financial measures was HKD 6.709 million, down from a profit of HKD 25.606 million in the same period last year[15]. - The adjusted net profit margin was -7.3%, significantly lower than the 20.7% reported in the previous year[15]. - The gross profit margin for the business segments was 48.0%, down from 57.3% in the previous year[20]. - Return on equity was -6.1%, compared to 21.9% in the same period of 2021[20]. - Total asset return rate was -5.2%, a decline from 10.1% in the previous year[20]. - Operating loss for the first half of 2022 was approximately HKD 16.5 million, a decrease of about 160% from an operating profit of HKD 27.4 million in the first half of 2021[65]. - The company recorded a loss attributable to owners of approximately HKD 18.5 million in the first half of 2022, compared to a profit of approximately HKD 17.5 million in the same period of 2021[77]. - The basic and diluted loss per share for the period was HKD (1.87), compared to earnings per share of HKD 2.06 in the previous year[148]. Revenue Breakdown - The company's revenue from character licensing decreased by approximately 17.4% from HKD 59.0 million in the first half of 2021 to HKD 48.7 million in the first half of 2022, primarily due to the impact of COVID-19 on authorized merchants[39]. - Revenue from e-commerce and other businesses fell by approximately 33.6%, from HKD 64.8 million in the first half of 2021 to HKD 43.0 million in the first half of 2022, attributed to reduced sales through e-commerce platforms and logistical challenges[40]. - The B.Duck brand accounted for 77.1% of the total revenue from character licensing in the first half of 2022, generating HKD 37.5 million, a decrease of approximately 13.5% from HKD 43.4 million in the same period of 2021[43]. - Revenue from merchandise licensing reached HKD 35.186 million, accounting for 72.3% of total licensing revenue for the first half of 2022, compared to HKD 39.632 million and 67.2% in the same period of 2021[53]. Impact of COVID-19 - The company faced significant impacts from COVID-19, leading to temporary closures of physical stores and reduced consumer spending[29]. - The logistics efficiency was affected by the pandemic, impacting e-commerce and other business revenues[29]. Cost and Expenses - Cost of goods sold for the first half of 2022 was approximately HKD 22.4 million, representing 23.4% of total operating expenses, down from 29.1% in the first half of 2021[57]. - Employee benefits expenses increased to approximately HKD 35.6 million in the first half of 2022, accounting for 37.2% of total operating expenses, compared to HKD 29.9 million and 31.4% in the same period of 2021[58]. - Listing expenses increased from approximately HKD 8.1 million in the first half of 2021 to HKD 11.8 million in the first half of 2022[61]. - Promotion costs remained stable at approximately HKD 8.1 million for both the first half of 2021 and 2022[62]. - Travel and transportation expenses decreased by 19.3% from HKD 5,514,000 in June 2021 to HKD 4,451,000 in June 2022, representing 25.5% of total expenses[67]. - Legal, audit, and professional fees accounted for 32.1% of total expenses, totaling HKD 5,608,000 in June 2022, down from HKD 6,043,000 in June 2021[67]. - The net financial cost decreased by approximately 36.8% from HKD 0.8 million in the first half of 2021 to HKD 0.5 million in the first half of 2022 due to ongoing repayment of bank loans[69]. - Income tax expenses significantly reduced by 82.8% from HKD 9.1 million in the first half of 2021 to HKD 1.6 million in the first half of 2022, primarily due to a shift from profit to loss before tax[70]. Assets and Liabilities - Total assets increased to HKD 359,380,000 as of June 30, 2022, compared to HKD 265,760,000 as of December 31, 2021, representing a growth of 35.2%[154]. - Current assets increased significantly from approximately HKD 126.7 million on December 31, 2021, to approximately HKD 275.3 million on June 30, 2022, mainly due to an increase in cash and cash equivalents[79]. - Cash and cash equivalents increased from approximately HKD 76.0 million on December 31, 2021, to approximately HKD 183.6 million on June 30, 2022, primarily due to proceeds from the global offering[84]. - Trade receivables and contract assets totaled approximately HKD 72.5 million and HKD 16.8 million, respectively, as of June 30, 2022, with a loss allowance of approximately HKD 14.2 million[80]. - Inventory decreased from approximately HKD 44.4 million on December 31, 2021, to approximately HKD 36.7 million on June 30, 2022, due to ongoing utilization of inventory[83]. - The company had no bank borrowings or overdrafts, having repaid all borrowings in the first half of 2022[89]. - The debt-to-equity ratio was 25.8% as of December 31, 2021, but was not applicable as of June 30, 2022, due to the repayment of borrowings[91]. Future Plans and Strategies - The company aims to expand its digital creative capabilities and invest in potential brands within the value chain, focusing on Southeast Asian markets for cross-border e-commerce[32]. - The company plans to explore the metaverse community based on web 3.0 and build online and offline private traffic pools for its brands[32]. - The overall consumer goods market recovery is expected to enhance the company's profitability as it benefits from a broad licensing network and strong sales performance in previous years[32]. - The company has not engaged in any foreign exchange risk management instruments, relying on regular monitoring of its foreign exchange risks[93]. - The company believes there is substantial growth potential in the licensed character business and the overall Chinese licensing market, which is in its early growth phase[111]. - The company aims to expand its intellectual property portfolio and recruit new designers to enhance product lines, including fashion brands and trendy toys[111]. - The strategy includes exploring the metaverse community and building an online-offline private traffic pool to deepen brand positioning and enhance fan loyalty[111]. - The company plans to develop cross-border e-commerce in Southeast Asia to replicate its success in the Chinese market[112]. Shareholder Information - The company’s major shareholder, Xu Xiaolin, holds 66.32% of the issued share capital through controlled entities[120]. - As of June 30, 2022, 德盈環球投資有限公司 holds 663,200,000 shares, representing approximately 66.32% of the issued share capital[121]. - 林銀珊 holds 670,200,000 shares, accounting for approximately 67.02% of the issued share capital[123]. - The company has not granted any options under the share option scheme since its adoption on December 20, 2021[129]. - No purchases, redemptions, or sales of the company's listed securities have occurred from the listing date until June 30, 2022[130]. - The company confirms it has maintained the required public float since its listing date up to June 30, 2022[131]. Corporate Governance - The company is committed to maintaining high standards of corporate governance to protect shareholder interests and enhance corporate value[113]. - The audit committee has reviewed the unaudited condensed consolidated interim financial information for the six months ended June 30, 2022, and found it compliant with applicable accounting standards[133].

Financial Performance - Total revenue for 2021 was approximately HKD 290.0 million, representing a year-on-year growth of 24.2%[33] - Adjusted net profit for 2021 reached approximately HKD 77.3 million[33] - The adjusted net profit margin for 2021 was 26.6%[25] - The company achieved a gross profit margin of 54.0% in 2021[28] - The return on equity for 2021 was 41.9%[28] - The company's licensing business revenue increased from approximately HKD 98.0 million in the fiscal year 2020 to approximately HKD 166.6 million in the fiscal year 2021, representing a growth of about 69.9%[86] - Total revenue for the company rose from approximately HKD 233.5 million in the fiscal year 2020 to approximately HKD 290.0 million in the fiscal year 2021, marking an increase of about 23.9%[81] - Revenue from the B.Duck character, which is the company's main product category, increased by approximately 48.4% from HKD 75.0 million in the fiscal year 2020 to HKD 111.3 million in the fiscal year 2021[89] - The company's net profit attributable to shareholders increased by approximately 15.4% from about HKD 54.5 million in the fiscal year 2020 to about HKD 62.9 million in the fiscal year 2021[112] - The adjusted net profit under non-Hong Kong Financial Reporting Standards rose from approximately HKD 59.8 million in the fiscal year 2020 to approximately HKD 77.3 million in the fiscal year 2021, reflecting a growth of about 29.1%[111] Liquidity and Financial Position - The current ratio improved to 2.3 in 2021, indicating better liquidity[28] - The company maintained a net cash position, with cash and cash equivalents exceeding total interest-bearing borrowings[31] - The debt-to-equity ratio improved significantly from 53.1% on December 31, 2020, to 25.8% on December 31, 2021, indicating a stronger financial position[122] - The company's bank borrowings decreased from approximately HKD 46.8 million as of December 31, 2020, to approximately HKD 38.7 million as of December 31, 2021, due to loan repayments during the fiscal year 2021[120] - The company's cash and cash equivalents increased to approximately HKD 76.0 million as of December 31, 2021, primarily due to operating cash inflows and investments[115] Business Operations and Strategy - The company made significant progress in online business operations and digital integration of the B.Duck community[33] - The company emphasized product flexibility and online/offline integration as key areas of advancement[33] - Future strategies include building strong partnerships with licensees through high-quality design and collaborative marketing efforts to achieve robust growth[38] - The company plans to accelerate the development of its character licensing business and e-commerce, capitalizing on the growing potential of the Chinese licensing market[135] - The company aims to expand its licensing development into real-life entertainment projects and digital assets, such as NFTs[135] - The company is focused on replicating its successful experience in the Chinese market to overseas markets[135] Market Presence and Community Engagement - B.Duck is the largest domestic character intellectual property company in China by licensing revenue, with a market share of approximately 3.2%[35] - The B.Duck community has attracted over 10.5 million registered members, with content related to the brand generating over 740 million views[35] - The global licensing market is dominated by the US and Japan, with North America accounting for over 60% of global retail sales, while China represented less than 4% in 2021, indicating significant growth potential[36] - The company aims to expand its business internationally, leveraging its unique intellectual property and cultural strengths to enhance its global presence[36] Human Resources and Management - The total employee cost for the fiscal year ending December 31, 2021, was approximately HKD 61.6 million, with a total of 235 employees[128] - The company emphasizes the importance of human resources in maintaining its design capabilities and offers attractive compensation and training opportunities to employees[172] - The management team has a strong background in financial reporting and investor relations, enhancing corporate governance[139] - The board of directors includes members with diverse backgrounds in finance, marketing, and business development, supporting comprehensive strategic oversight[139][141] Risks and Challenges - The company has faced risks related to consumer preference changes and market trends, which could impact its revenue generation capabilities[163] - The company has highlighted potential risks from third-party infringement claims that could adversely affect its business and reputation[163] - The company has a history of generating most of its revenue from the Chinese market, which poses geographical concentration risks[163] Corporate Governance and Compliance - The board of directors is responsible for recommending dividends based on the group's operational and financial conditions, with any proposed final dividends subject to shareholder approval[167] - The company has complied with all applicable laws and regulations in its operations as of the report date[170] - The company has arranged appropriate liability insurance for its directors and senior management against legal actions arising from corporate activities[193] Future Outlook - The company provided a positive outlook for the next quarter, projecting a revenue increase of 20%[137] - New product launches are expected to contribute an additional $5 million in revenue over the next fiscal year[137] - The company is investing in new technology development, allocating $2 million for R&D in the upcoming year[137] - Market expansion plans include entering two new international markets by Q3 2024[137] - The company is considering strategic acquisitions to enhance its market position, with a budget of $10 million for potential deals[137]