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].

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