Group 1 - The company has established a wholly-owned subsidiary in China, which is permitted to engage in various business activities including industrial park management and property management services [1][2] - The establishment of the subsidiary is part of the company's strategy to diversify its business portfolio and broaden revenue sources, particularly in the Chinese market, which presents attractive prospects due to long-term structural trends and supportive government policies [1] - The company is actively seeking opportunities to participate in the industrial park management sector, focusing on the market in Ganzhou, Jiangxi Province [1][2] Group 2 - Although the subsidiary has not commenced operations, the management is considering potential projects, including management services for properties related to gold and luxury goods trading [2] - The board is in discussions with independent private investors regarding a bond subscription, with a proposed issuance of bonds by Jinning Capital with a one-year term and an 8% coupon rate, totaling up to HKD 40 million [2]

Group 1 - The core point of the article is that Fengcheng Holdings has established a wholly-owned subsidiary in Jiangxi Province, China, to diversify its business and expand revenue sources, particularly in the industrial park management sector [1] - The newly formed subsidiary will focus on various management services, including enterprise headquarters management, industrial park management, commercial complex management, and property management [1] - The company aims to leverage the structural trends and supportive government policies in the Chinese market to capitalize on attractive opportunities [1] Group 2 - The board of directors announced discussions with independent private investors regarding a bond subscription, with a proposed issuance of bonds totaling up to HKD 40 million at an interest rate of 8% [2] - The net proceeds from the bond issuance are intended to support the company's strategic entry into the industrial park management industry in China, specifically targeting Jiangxi Province [2] - The funds will be allocated to the newly established subsidiary for preliminary preparations and trial operations within its licensed business scope [2]

Financial Performance - For the fiscal year ending December 31, 2024, the company reported revenue of approximately HKD 205.8 million, an increase of about HKD 37.6 million or 22.3% compared to HKD 168.2 million for the fiscal year ending December 31, 2023[10] - The profit attributable to equity holders for the year was HKD 8.7 million, a decrease of approximately HKD 5.2 million or 37.3% from HKD 13.9 million in the previous year[10] - The group's revenue increased from approximately HKD 168.2 million for the year ended December 31, 2023, to approximately HKD 205.8 million for the year ended December 31, 2024, representing a growth of about 22.3% or approximately HKD 37.6 million[18] - Gross profit decreased from approximately HKD 20.7 million to approximately HKD 17.7 million, a decline of about 14.4%, with the gross profit margin dropping from approximately 12.3% to 8.6%[21] - Other income and net other (losses)/gains decreased by approximately HKD 2.9 million or 67.5%, from approximately HKD 4.3 million to approximately HKD 1.4 million, mainly due to a reduction in bank interest income[22] - The total comprehensive income for the year ended December 31, 2024, was approximately HKD 8.7 million, a decrease of about HKD 5.2 million or 37.3% compared to HKD 13.9 million for the year ended December 31, 2023[27] Cash and Assets - As of December 31, 2024, the company's cash and bank balances were approximately HKD 63.4 million, a decrease of about HKD 51.1 million or 44.7% from HKD 114.6 million as of December 31, 2023[10] - Cash and bank balances decreased by approximately HKD 51.2 million or 44.7%, from approximately HKD 114.6 million to approximately HKD 63.4 million, primarily due to dividend payments of approximately HKD 70.0 million during the year[30] - The debt-to-equity ratio increased from approximately 0.5% to approximately 1.4% due to a decrease in equity attributable to the company's shareholders[35] - The current ratio decreased from approximately 7.0 times to approximately 3.6 times, with net current assets dropping from approximately HKD 137.2 million to approximately HKD 74.9 million[36] Contracts and Operations - The company secured 20 contracts during the fiscal year, with a total contract value of approximately HKD 806.1 million, of which 3 contracts valued at HKD 47.1 million were completed[16] - There are currently 17 ongoing contracts with a total value of approximately HKD 759.0 million as of December 31, 2024[16] - The company is focused on expanding its operations in slope engineering, which includes various services such as installing protective nets and drainage systems[17] - Four new clients contributed to five engineering project contracts with an estimated total value of HKD 287.7 million, addressing the risk of limited customer numbers[38] Market and Economic Conditions - The company remains cautious about future business prospects due to uncertainties in labor and material costs influenced by macroeconomic conditions[12] - The company has experienced challenges due to geopolitical tensions and economic uncertainties, impacting its overall performance outlook[12] - The Hong Kong government plans to increase spending on landslide prevention from HKD 1 billion to HKD 1.3 billion in 2025, which is expected to benefit the company's operations[12] - The government plans to increase spending on landslide prevention from HKD 1 billion to HKD 1.3 billion in 2025, indicating potential growth opportunities for the group[54] Corporate Governance - The company is committed to high standards of corporate governance, having adopted the principles and code provisions of the Corporate Governance Code since its GEM listing on December 13, 2019[75] - The company maintains a focus on compliance and governance through its independent directors and committees[62] - The board consists of six members, with four being independent non-executive directors, exceeding one-third of the board as per listing rules[78] - The company has established three board committees: the audit committee, the remuneration committee, and the nomination committee, each with defined written terms of reference[91] - The board is responsible for approving financial statements and annual budgets, as well as monitoring business performance[82] Risk Management - The company has established a risk management and internal control system to ensure the accuracy and reliability of presented data[134] - The board is responsible for maintaining effective risk management and internal control systems to protect the company's assets and shareholder interests[130] - The independent auditor is responsible for auditing and confirming the financial statements of the group, reporting any control deficiencies to management[135] Environmental, Social, and Governance (ESG) - The ESG report outlines the company's commitment to sustainable development and responsible environmental, social, and governance management for the fiscal year ending December 31, 2024[157] - The board of directors is responsible for establishing ESG goals, developing sustainable strategies, and reviewing performance[158] - The company identifies 15 key ESG issues through a comprehensive materiality assessment to focus on areas with significant impact on long-term sustainability and value creation[166] - The company has achieved ISO 14001:2015 certification for its environmental management system, demonstrating compliance with internationally recognized standards[169] Employee and Management - As of December 31, 2024, the group had 150 employees, an increase from 119 employees in 2023, with total employee costs approximately HKD 57.1 million, unchanged from 2023[41] - The company’s management team regularly reviews employee compensation policies to ensure competitiveness and compliance[82] - The company emphasizes gender diversity at all levels and is taking measures to promote it through recruitment and career development opportunities for women[118] Shareholder Communication - The company emphasizes effective communication with shareholders to enhance investor relations and understanding of business performance and strategy[153] - The company has established a shareholder communication policy to provide balanced and comprehensible information to shareholders and investors[153] - Shareholders have the right to convene special general meetings if they hold at least 10% of the voting rights[149]

Revenue and Profitability - The group's revenue increased from approximately HKD 168.2 million for the year ended December 31, 2023, to approximately HKD 205.8 million for the year ended December 31, 2024, representing a growth of about HKD 37.6 million or 22.3%[3] - The total profit and comprehensive income for the year was approximately HKD 8.7 million, a decrease of about HKD 5.2 million or 37.3% compared to HKD 13.9 million for the year ended December 31, 2023[3] - The group's gross profit for the year was HKD 17.7 million, down from HKD 20.7 million in the previous year[4] - Public project revenue contributed HKD 193,598,000, up from HKD 146,409,000, reflecting a growth of 32.2% year-over-year[23] - Private project revenue decreased to HKD 12,182,000 from HKD 21,793,000, representing a decline of 44.0%[23] - Basic earnings per share for the year ended December 31, 2024, were HKD 8,745, down from HKD 13,942 in 2023[38] Dividends - The board of directors did not recommend the declaration and payment of a final dividend for the year ended December 31, 2024, compared to no dividend declared for the year ended December 31, 2023[3] - A special dividend of HKD 0.175 per ordinary share was distributed on February 16, 2024, totaling HKD 70.0 million[3] - The company declared a special dividend of HKD 70,000,000 for the year ending December 31, 2024, compared to no special dividend in 2023[34] - The company has not provided a final dividend recommendation for the year ending December 31, 2024, indicating a potential shift in capital allocation strategy[35] Financial Position - The group's total assets decreased from HKD 160.2 million in 2023 to HKD 103.7 million in 2024, reflecting a significant reduction in cash and bank balances[6] - The net asset value of the group decreased from HKD 143.1 million in 2023 to HKD 81.8 million in 2024[6] - Current liabilities increased from HKD 23.0 million in 2023 to HKD 28.7 million in 2024, indicating a rise in trade and other payables[6] - The current ratio decreased from approximately 7.0 times as of December 31, 2023, to approximately 3.6 times as of December 31, 2024, with net current assets of approximately HKD 74.9 million, down from approximately HKD 137.2 million[88] - The asset-liability ratio increased from approximately 0.5% as of December 31, 2023, to approximately 1.4% as of December 31, 2024, due to a decrease in equity attributable to shareholders[86] Financial Reporting Standards - The adoption of revised Hong Kong Financial Reporting Standards effective from January 1, 2024, is not expected to have a significant impact on the group's financial performance[14] - The group is currently evaluating the impact of the new standards on its consolidated financial statements and performance indicators[18] - The group anticipates that other newly issued and revised Hong Kong Financial Reporting Standards will not have a significant impact on its consolidated financial statements[21] - The group’s financial reporting will include new classifications and disclosures as per the revised standards, enhancing clarity in financial performance reporting[19] - The group’s management has defined performance indicators that will be disclosed in the financial statements, improving transparency[19] Costs and Expenses - Service costs rose by approximately HKD 40.5 million or 27.5%, from about HKD 147.5 million to approximately HKD 188.1 million for the same periods[72] - Gross profit decreased by approximately HKD 3.0 million or 14.4%, from about HKD 20.7 million to approximately HKD 17.7 million, with gross margin dropping from 12.3% to 8.6%[73] - Subcontracting costs increased by approximately 63.0% compared to the previous year, impacting overall profit margins[74] - Employee benefit expenses for 2024 are HKD 60,872,000, slightly increasing from HKD 60,181,000 in 2023, reflecting a 1.15% growth[32] - Financial costs increased by approximately HKD 19,000 or 22.9%, from about HKD 83,000 to approximately HKD 102,000 due to higher interest expenses on long-term service obligations[77] Cash Flow and Investments - As of December 31, 2024, the group's cash and bank balances were approximately HKD 63.4 million, a decrease of about HKD 51.2 million or 44.7% from approximately HKD 114.6 million as of December 31, 2023, primarily due to dividend payments of approximately HKD 70.0 million during the year[83] - The group invested approximately HKD 5.8 million in the acquisition of property, plant, and equipment for the year ended December 31, 2024[91] - The group had no significant capital commitments or contingent liabilities as of December 31, 2024[81] Long Service Payment Obligations - The present value of the unallocated long service payment liability as of December 31, 2024, is estimated at HKD 293,000, with a current service cost of HKD 266,000 and interest cost of HKD 27,000[57] - The long service payment liability has a weighted average term of 18 years, indicating a long-term financial commitment[59] - The discount rate used for calculating the long service payment liability increased from 3.8% in 2023 to 4.1% in 2024, while the salary growth rate rose from 2.0% to 3.1%[57] - The maximum benefit payment under the long service payment scheme remains capped at HKD 390,000 per employee[54] - The Hong Kong government has announced the repeal of the offsetting mechanism for long service payments, effective May 1, 2025, which will impact the company's long service payment obligations[52] Operational Highlights - The group continues to focus on slope engineering in Hong Kong, with no new product or technology developments reported in the current financial year[9] - The group is involved in various slope engineering projects, including soil nail drilling and installation, construction of retaining walls, and installation of drainage systems[65] - The group secured 20 contracts with a total contract value of approximately HKD 806.1 million, of which 3 contracts worth about HKD 47.1 million have been completed as of December 31, 2024[66] Compliance and Governance - The company has confirmed that as of December 31, 2024, there are no direct or indirect competitive businesses or interests held by directors, major shareholders, or their associates[98] - The company has adopted a strict code of ethics and securities trading standards, ensuring compliance with the listing rules as of December 31, 2024[100] - The audit committee, consisting of four members, has reviewed the annual performance for the fiscal year ending December 31, 2024, and confirmed compliance with applicable accounting standards[106] - The company's preliminary performance figures for the fiscal year ending December 31, 2024, have been verified to be consistent with the audited consolidated financial statements[107]

Financial Performance - Revenue decreased from approximately HKD 88.2 million for the six months ended June 30, 2023, to approximately HKD 84.8 million for the six months ended June 30, 2024, a decline of about 3.4 million or 3.8%[4] - Gross profit fell from approximately HKD 9.9 million to approximately HKD 5.9 million, a decrease of about HKD 4.1 million or 41.2%[4] - Gross margin decreased from approximately 11.3% to approximately 6.9% due to a slight increase in service costs despite the revenue decline[4] - Total comprehensive income decreased from approximately HKD 6.4 million to approximately HKD 1.7 million, a decline of about HKD 4.8 million or 74.0%[4] - Basic and diluted earnings per share were approximately HKD 0.42 for the six months ended June 30, 2024, compared to HKD 1.61 for the same period in 2023[5] - For the six months ended June 30, 2024, the company reported a pre-tax profit of HKD 21,845,000, a decrease of 33.3% compared to HKD 32,658,000 for the same period in 2023[23] - The company's total revenue from bank interest income and gains/losses from the sale of properties, plants, and equipment was HKD 814,000, down from HKD 2,387,000 in the previous year, representing a decline of 65.9%[21] - The company incurred administrative expenses of HKD 2,605,000, an increase from HKD 2,393,000 in the previous year, reflecting an increase of 8.8%[24] - The company's tax expense for the six months ended June 30, 2024, was HKD 421,000, a significant decrease from HKD 1,232,000 in the previous year, reflecting a reduction of 65.8%[27] Dividends - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2024, compared to an interim dividend of HKD 0.025 per share for the same period in 2023[4] - The company proposed a special dividend of HKD 0.175 per ordinary share, totaling HKD 70,000,000, which was approved by shareholders[29] - The board proposed a special dividend of HKD 0.175 per ordinary share, totaling HKD 70 million, which was approved by shareholders[85] Assets and Liabilities - Total assets less current liabilities amounted to approximately HKD 76.5 million as of June 30, 2024, down from HKD 144.0 million as of December 31, 2023[8] - Current liabilities decreased from approximately HKD 160.2 million to approximately HKD 93.9 million[8] - The company's equity attributable to owners decreased from approximately HKD 143.1 million to approximately HKD 74.8 million[8] - The company reported a net cash position of approximately HKD 51.5 million as of June 30, 2024, compared to HKD 114.6 million as of December 31, 2023[8] - Cash and cash equivalents at the end of the period were HKD 51,516,000, down from HKD 121,577,000 at the end of June 2023[10] - Trade receivables as of June 30, 2024, were HKD 3,636,000, down from HKD 6,495,000 as of December 31, 2023, indicating a decrease of 44.5%[31] - Contract assets totaled HKD 31,827,000 as of June 30, 2024, a decrease from HKD 33,615,000 as of December 31, 2023, representing a decline of 5.3%[35] - Trade payables decreased slightly from HKD 20,066 thousand as of December 31, 2023, to HKD 19,701 thousand as of June 30, 2024, reflecting a reduction of approximately 1.8%[37] - Accrued expenses and other payables increased significantly from HKD 1,566 thousand to HKD 5,330 thousand, representing an increase of approximately 239%[37] Cash Flow - Operating cash flow for the six months ended June 30, 2024, was HKD 10,041,000, compared to HKD 2,575,000 for the same period in 2023, representing a significant increase[10] - Net cash used in investing activities was HKD 2,747,000 for the six months ended June 30, 2024, compared to HKD 2,134,000 in the same period of 2023[10] - Net cash used in financing activities was HKD 70,333,000 for the six months ended June 30, 2024, compared to HKD 30,499,000 in the same period of 2023[10] Contracts and Projects - The group secured 17 contracts with a total contract value of approximately HKD 814.0 million during the six months ended June 30, 2024[45] - As of June 30, 2024, there were 16 ongoing contracts with a total contract value of approximately HKD 810.9 million, and one contract valued at HKD 3.2 million was yet to commence[45] - The number of projects contributing to revenue dropped from 42 to 18, with a significant reduction in private projects from 31 to 7[48] - The group experienced a decrease in retention receivables due to a reduction in the number of ongoing and completed contracts during the year[36] Employment and Staff - As of June 30, 2024, the group employed 136 staff, an increase from 119 staff as of December 31, 2023[82] - The total employee cost (excluding directors' remuneration) for the six months ended June 30, 2024, was approximately HKD 20.1 million, down from HKD 31.1 million for the same period in 2023[82] Environmental and Compliance - The company has implemented various environmental protection measures to minimize its impact on the environment and natural resources[63] - The company has not faced any prosecutions, fines, or penalties for violations of applicable environmental laws or regulations as of the report date[63] - The company has not faced any foreign exchange risks during the six months ended June 30, 2024, and did not engage in foreign exchange hedging[62] - The audit committee, consisting of four members, has reviewed the interim financial statements and confirmed compliance with applicable accounting standards[84] Share Capital and Ownership - The company's issued share capital as of June 30, 2024, was HKD 4.0 million, divided into 400,000,000 shares with a par value of HKD 0.01 each[66] - The company’s major shareholders, Mr. Xie and Mr. He, each hold a 75% interest in 300,000,000 shares through Junfeng[65] - The company did not purchase, sell, or redeem any shares during the six months ending June 30, 2024[70] - The total number of shares that may be issued under the share option plan is capped at 10% of the total shares issued at the time of listing, which amounts to 40,000,000 shares[75] - The maximum number of shares that can be issued to each participant under the share option plan is limited to 1% of the company's issued share capital at that time within any 12-month period[76] - The share options granted under the plan must be exercised within a period not exceeding 10 years from the date of grant[77] Future Outlook - The company is adjusting its bidding strategy due to a shortage of construction-related professionals, with an estimated shortfall of 17,500 to 24,000 workers expected to increase to 48,500 to 55,000 by 2027[45] - The Hong Kong government plans to allocate HKD 1.1 billion for landslide prevention and mitigation in the fiscal year 2024/25, an increase from HKD 1 billion in 2023/24[45] - The company has no plans for significant investments or capital assets in the future[63] - No significant events affecting the group have occurred since the end of the reporting period on June 30, 2024[86]

Financial Performance - Revenue decreased from approximately HKD 88.2 million for the six months ended June 30, 2023, to approximately HKD 84.8 million for the six months ended June 30, 2024, a decline of about 3.4 million HKD or 3.8%[1] - Gross profit fell from approximately HKD 9.9 million to approximately HKD 5.9 million, a decrease of about 4.1 million HKD or 41.2%[1] - Gross margin decreased from approximately 11.3% to approximately 6.9% due to reduced revenue and slightly increased service costs[1] - Profit and total comprehensive income decreased from approximately HKD 6.4 million to approximately HKD 1.7 million, a decline of about 4.8 million HKD or 74.0%[2] - Basic and diluted earnings per share were approximately HKD 0.42, down from HKD 1.61 for the previous period[2] - Total revenue for the group for the six months ended June 30, 2024, was HKD 84,794,000, compared to HKD 88,173,000 for the same period in 2023, reflecting a decrease of 3.2%[13] - The group reported a basic earnings per share of HKD 4.18 for the six months ended June 30, 2024, compared to HKD 16.09 for the same period in 2023, a decrease of 74.0%[19] - Profit and total comprehensive income decreased by approximately HKD 4.8 million or 74.0% to about HKD 1.7 million for the six months ending June 30, 2024[48] Assets and Liabilities - Total assets decreased from HKD 160.2 million as of December 31, 2023, to HKD 93.9 million as of June 30, 2024[4] - Cash and bank balances decreased significantly from HKD 114.6 million to HKD 51.5 million[4] - Net current assets decreased from HKD 137.2 million to HKD 67.1 million[4] - The company’s equity attributable to owners decreased from HKD 143.1 million to HKD 74.8 million[4] - As of June 30, 2024, the group recorded net current assets of approximately HKD 67.1 million, down from HKD 137.2 million as of December 31, 2023[49] - The current ratio as of June 30, 2024, was approximately 3.5 times, down from about 7.0 times as of December 31, 2023[49] Cash Flow - Operating cash flow for the six months ended June 30, 2024, was HKD 10,041 million, a significant increase from HKD 2,575 million in the same period of 2023, representing a growth of 288%[6] - The company reported a decrease in cash flow from investing activities, with a net cash outflow of HKD 2,747 million compared to a net inflow of HKD 2,134 million in the previous year[6] - Cash and cash equivalents at the end of June 30, 2024, were HKD 51,516 million, down from HKD 121,577 million at the end of June 30, 2023, indicating a decrease of 57.6%[6] - The company experienced a significant reduction in trade and other receivables, decreasing by HKD 21,367 million, which positively impacted operating cash flow[6] Dividends - The company does not recommend the payment of an interim dividend for the six months ended June 30, 2024, compared to a dividend of HKD 0.025 per share for the previous period[2] - The board proposed a special dividend of HKD 0.175 per ordinary share, totaling HKD 70 million, which was approved by shareholders on February 2, 2024[76] Revenue Sources - Revenue from public projects for the six months ended June 30, 2024, was HKD 79,271,000, an increase from HKD 74,461,000 in the same period of 2023, representing a growth of 2.4%[13] - Revenue from private projects decreased significantly to HKD 5,523,000 for the six months ended June 30, 2024, down from HKD 13,712,000 in the same period of 2023, a decline of 59.7%[13] - The number of projects contributing to revenue dropped from 42 to 18, with a significant reduction in private projects[40] Employee and Management Costs - The total remuneration for directors and senior management for the six months ended June 30, 2024, was 3,168,000 HKD, an increase from 2,484,000 HKD for the same period in 2023[33] - Total employee costs (excluding director remuneration) for the six months ended June 30, 2024, were approximately HKD 20.1 million, down from HKD 31.1 million for the same period in 2023[73] - As of June 30, 2024, the group had 136 employees, an increase from 119 employees as of December 31, 2023[73] Corporate Governance - The company has adopted the principles and code provisions of the corporate governance code as its corporate governance framework since its listing[74] - The audit committee, consisting of four members, has reviewed the unaudited condensed consolidated interim financial statements and confirmed compliance with applicable accounting standards[75] - The board emphasizes the importance of sound corporate governance to protect shareholder interests and enhance corporate value[74] - The company has maintained compliance with all applicable corporate governance code provisions as of the announcement date[75] Environmental Compliance - The company has implemented various environmental protection measures to minimize its impact on air pollution and noise[57] - The company has not faced any penalties or prosecutions for violating applicable environmental laws or regulations as of the announcement date[57] - The company recognizes the importance of environmental protection and is committed to compliance with all applicable laws and regulations in Hong Kong[57] - The company has sufficient environmental protection measures in place to ensure compliance with relevant laws[57] Contracts and Future Outlook - The group secured 17 contracts with a total contract value of approximately HKD 814.0 million for the six months ending June 30, 2024[37] - As of June 30, 2024, the group has 16 ongoing contracts with a total contract value of approximately HKD 810.9 million, excluding one contract valued at HKD 3.2 million that has not yet commenced[37] - The group is facing a labor shortage, with an estimated shortfall of 17,500 to 24,000 workers and professionals in the construction industry[38] - The group maintains a cautious outlook for the remaining period of 2024 due to ongoing challenges in the labor market[39]

Corporate Governance - The board has adopted the corporate governance code as the basis for the group's governance practices[2]. - No violations of the standard code were found among employees with access to unpublished inside information during the year ending December 31, 2023[3]. - The remuneration committee approved the compensation details for senior management, excluding directors, for the year ending December 31, 2023[13]. - The board's diversity policy includes considerations of various factors such as candidates' qualifications and independence[11]. - The nomination committee reviewed the independence of independent non-executive directors during the year ending December 31, 2023[32]. - The board has mechanisms in place to enhance the credibility of independent opinions[36]. - The board is committed to ensuring a balanced skill set, experience, and diverse perspectives necessary for executing the company's business strategy[39]. - The company has established a diversity policy for its board, considering factors such as gender, age, cultural background, and professional experience[41]. - The board is responsible for maintaining adequate resources, employee qualifications, and financial reporting functions[49]. - The company has adopted a whistleblowing policy to provide guidance and reporting channels for employees and relevant third parties to report any suspected misconduct[78]. - The audit committee is composed of four independent non-executive directors, with Mr. Cao serving as the chairman[97]. - The company emphasizes the importance of continuous professional development for all directors to ensure they contribute effectively to the board[74]. - The company appointed Mr. Kwan Chi-seng as an independent non-executive director on November 25, 2019, who is a member of the audit, remuneration, and nomination committees[199]. - Mr. Kwan has been a registered land surveyor since February 2003 and has extensive experience in the field, having worked in various capacities since 1984[199]. - The company has established G&T Surveying Services Company Limited and Kwan Chi-seng Surveying Company Limited, with Mr. Kwan as one of the founding shareholders[199]. Risk Management - The company faces various risks including credit risk, ESG-related risks, interest rate risk, liquidity risk, operational risk, and legal compliance risk[27]. - The independent auditor is responsible for auditing and confirming the financial statements of the group[28]. - The company has strict prohibitions against unauthorized use of confidential or inside information[31]. - The company has implemented a risk management and internal control system to protect its assets and ensure compliance with applicable laws[49]. - The board and audit committee oversee the management of significant risks and the effectiveness of the internal control system[71]. - The board believes that the risk management and internal control systems are effective and ensure the accuracy, reliability, and timeliness of the data presented[72]. - The company’s financial and administrative staff conduct regular independent credit assessments of clients to manage credit risk[181]. - The company closely monitors its working capital to ensure it can meet financial commitments on time[181]. Financial Performance - For the fiscal year ending December 31, 2023, the company recorded revenue of approximately HKD 168.2 million, a decrease of about HKD 24.1 million or 12.5% compared to HKD 192.3 million for the fiscal year ending December 31, 2022[131]. - The profit attributable to equity holders for the year was HKD 13.9 million, down by approximately HKD 0.5 million or 3.7% from HKD 14.5 million in the previous year[131]. - The adjusted profit attributable to equity holders, excluding financial support from the anti-epidemic fund, was approximately HKD 13.9 million, an increase of about HKD 2.9 million or 25.7% from HKD 11.1 million in the previous year[131]. - As of December 31, 2023, the company's cash and bank balances were approximately HKD 114.6 million, a decrease of about HKD 32.8 million or 22.3% from HKD 147.4 million as of December 31, 2022[131]. - The net asset value of current assets as of December 31, 2023, was approximately HKD 137.2 million, a decrease of about HKD 24.0 million from approximately HKD 161.2 million as of December 31, 2022[159]. - The company's asset-to-equity ratio decreased from approximately 1.0% as of December 31, 2022, to approximately 0.5% as of December 31, 2023, primarily due to a reduction in lease liabilities by about 54.4%[158]. - Adjusted profit and total comprehensive income for the year ended December 31, 2023, was approximately HKD 13.9 million, an increase of about HKD 2.9 million or 25.7% compared to approximately HKD 11.1 million for the year ended December 31, 2022[172]. - The total employee cost (excluding directors' remuneration) for the year ended December 31, 2023, was approximately HKD 57.1 million, compared to HKD 56.5 million for the year ended December 31, 2022[163]. - The company did not recommend the payment of a final dividend for the year ended December 31, 2023[155]. Project and Operational Updates - The company secured 42 contracts during the fiscal year, with a total contract value of approximately HKD 838.9 million, of which 29 contracts valued at approximately HKD 166.5 million were completed[135]. - The number of public projects decreased from 17 to 16, while private projects increased from 25 to 31, resulting in a total increase in confirmed revenue-generating projects from 42 to 47[136]. - Service costs decreased from approximately HKD 171.4 million to HKD 147.5 million, a reduction of about HKD 23.9 million or 13.9%[149]. - Gross profit decreased slightly from approximately HKD 20.9 million to HKD 20.7 million, but the gross profit margin increased from approximately 10.9% to 12.3%[150]. - Administrative expenses remained stable at approximately HKD 9.0 million for the year ending December 31, 2023, compared to HKD 8.9 million in the previous year[138]. - The company plans to continue expanding its operations in slope engineering and related services, focusing on enhancing stability and safety in slope and retaining wall projects[145]. - The percentage of private projects in total projects increased from 59.5% for the year ended December 31, 2022, to 66.0% for the year ended December 31, 2023, indicating the company's efforts to expand its customer base[179]. ESG Commitment - The company is committed to sustainable ESG management policies, which are considered essential for future success[89]. - The ESG report focuses on social and environmental aspects, with key performance indicators based on revenue generated during the reporting year[69]. - The board regularly reviews the performance, strategies, and effectiveness of the ESG plans to ensure alignment with market developments and regulatory requirements[91]. - The board is committed to integrating ESG principles into the overall business strategy, identifying ESG-related risks and opportunities, and adjusting strategies accordingly[104]. - The company emphasizes stakeholder engagement to enhance performance and considers stakeholder expectations in operational strategies and ESG measures[109]. Shareholder Communication - The company maintains effective communication channels with shareholders through its website and annual general meetings[62]. - The company has established a shareholder communication policy to provide balanced and easily understandable information to shareholders and investors[85]. - The company is dedicated to maintaining effective communication with shareholders through annual general meetings and other shareholder meetings[86]. - The company will hold its annual general meeting on May 21, 2024[34].

Financial Performance - Gross profit increased by approximately HKD 0.8 million or 8.4% to HKD 9.9 million for the six months ended June 30, 2023, compared to HKD 9.2 million for the same period in 2022[6] - Gross margin remained stable at approximately 11.3% for the six months ended June 30, 2023, compared to 11.0% for the same period in 2022[6] - The group reported a total revenue of HKD 2,397,000 for the six months ended June 30, 2023, up from HKD 2,261,000 in the previous year, indicating a year-on-year growth of approximately 6%[44] - The group's revenue increased from approximately HKD 83.2 million for the six months ended June 30, 2022, to approximately HKD 88.2 million for the six months ended June 30, 2023, representing a growth of about HKD 5.0 million or 6.0%[183] - For the six months ended June 30, 2023, the total comprehensive income increased to approximately HKD 6.4 million, representing a growth of about HKD 0.4 million or 6.0% compared to the same period in 2022[115] - The total revenue for the six months ended June 30, 2023, was HKD 88,173,000, an increase from HKD 83,184,000 in 2022, representing a growth of 6.0%[197] Dividends and Share Capital - The board proposed an interim dividend of HKD 0.025 per share for the six months ended June 30, 2023, compared to no dividend for the same period in 2022[7] - As of June 30, 2023, the company's issued share capital amounted to HKD 4.0 million, divided into 400,000,000 shares at HKD 0.01 each[103] - The interim dividend record date is set for September 19, 2023, with a suspension of share transfer registration from September 18 to September 19, 2023[175] Employee Costs and Workforce - Employee costs, including director remuneration, increased from HKD 25.364 million in 2022 to HKD 30.013 million in 2023[23] - Total employee costs (excluding directors' remuneration) for the six months ended June 30, 2023, were approximately HKD 31.1 million, up from HKD 26.3 million for the same period in 2022[153] - The company has 151 employees as of June 30, 2023, an increase from 137 employees as of December 31, 2022[137] Financial Position and Ratios - The group recorded a net current asset value of approximately HKD 139.5 million as of June 30, 2023, down from HKD 161.2 million as of December 31, 2022[81] - The debt-to-equity ratio was approximately 0.8% as of June 30, 2023, down from 1.0% as of December 31, 2022[90] - As of June 30, 2023, the current ratio was approximately 4.1 times, down from 5.5 times as of December 31, 2022[117] - The group's equity attributable to owners was approximately HKD 145.6 million as of June 30, 2023, with no changes in capital structure since listing[118] Revenue Sources - Revenue from public projects reached HKD 74,461,000, up from HKD 72,712,000 in the previous year, reflecting a growth of 2.4%[197] - Revenue from private projects increased to HKD 13,712,000, compared to HKD 10,472,000 in the same period of 2022, marking a growth of 31.5%[197] Contractual Obligations and Pipeline - The group has received 44 contracts with a total contract value of approximately HKD 666.1 million, of which 32 contracts valued at HKD 62.9 million have been completed[65] - As of June 30, 2023, the group has 12 ongoing contracts with a total value of approximately HKD 603.2 million, indicating a strong pipeline of work[65] - The group has unbilled revenue of HKD 43,687,000 as of June 30, 2023, compared to HKD 20,835,000 as of December 31, 2022, reflecting a growth of approximately 109%[54] Costs and Expenses - Total service costs increased from approximately HKD 74.0 million to approximately HKD 78.2 million, reflecting a rise of about 5.7% due to increased revenue[78] - The company reported lease liabilities interest of HKD 41,000 for the six months ended June 30, 2023, compared to HKD 3,000 for the same period in 2022[22] - Administrative expenses for the six months ended June 30, 2023, were approximately HKD 4.6 million, remaining stable compared to the previous period[112] - The group's financial costs for the six months ended June 30, 2023, were approximately HKD 41,000, an increase from HKD 3,000 in the same period of 2022, attributed to the rise in lease liabilities[113] Governance and Compliance - The company confirmed compliance with the corporate governance code since its listing date[139] - The company has adopted the principles and code provisions of the Corporate Governance Code as the basis for its corporate governance practices[154] - The audit committee consists of four members, with Mr. Cao Bingchang serving as the chairman, who has over 19 years of professional accounting experience[156] - The company has complied with the listing rules regarding the trading of securities by directors and relevant employees, with no violations found during the review period[168] Environmental and Social Responsibility - The company has implemented various environmental protection measures to minimize its impact on the environment and natural resources[120] - The company has sufficient environmental protection measures to ensure compliance with all applicable laws and regulations in Hong Kong[160] Future Outlook and Challenges - The construction industry in Hong Kong is facing a shortage of 17,500 to 24,000 workers, which is expected to increase to 48,500 to 55,000 by 2027, impacting the group's ability to recruit sufficient construction personnel[66] - The group has adopted a conservative bidding strategy for new projects until sufficient resources are available due to the labor shortage[66] - The group plans to adopt a conservative approach to new project tenders due to labor shortages, with the government suggesting the hiring of up to 12,000 non-local workers to alleviate this issue[75] Cash Flow and Investments - Operating cash flow before tax profit increased to HKD 7,667,000 for the six months ended June 30, 2023, compared to HKD 6,838,000 in the same period of 2022, representing a growth of 12.1%[189] - The net cash generated from operating activities decreased to HKD 2,575,000 in the first half of 2023, down from HKD 4,618,000 in 2022, a decline of 44.3%[189] - Cash flow from investing activities showed a net inflow of HKD 2,134,000 for the six months ended June 30, 2023, compared to a net outflow of HKD 2,780,000 in the same period of 2022[189] - The company invested approximately HKD 34,000 in the acquisition of properties, plants, and equipment during the six months ended June 30, 2023[92] Taxation - The income tax expense rose by approximately HKD 0.5 million or 60.8%, from HKD 0.8 million for the six months ended June 30, 2022, to HKD 1.2 million for the same period in 2023[114]

Financial Performance - The group's revenue for the year ended December 31, 2022, was approximately HKD 192.3 million, a decrease of about 34.5% from HKD 293.9 million in the previous year[28]. - Gross profit for the year was approximately HKD 20.9 million, down from HKD 53.7 million, reflecting a significant decline in profitability[28]. - The net profit and total comprehensive income for the year amounted to HKD 14.5 million, compared to HKD 27.8 million in the previous year, indicating a decrease of approximately 47.9%[28]. - The total revenue for the year ended December 31, 2022, was HKD 192,258,000, a decrease of 34.5% from HKD 293,907,000 in 2021[58]. - The total profit and comprehensive income for the year was approximately HKD 14.5 million, a decrease of about HKD 13.3 million or 47.8% compared to HKD 27.8 million for the year ended December 31, 2021[48]. - Adjusted profit and comprehensive income (excluding listing and related expenses and financial support from the anti-epidemic fund) for the year was approximately HKD 11.1 million, down about HKD 27.2 million or 71.0% from approximately HKD 38.3 million for the year ended December 31, 2021[48]. - The company's basic earnings per share for 2022 was HKD 14,475,000, down 47.9% from HKD 27,801,000 in 2021[89]. - Income tax expense significantly decreased from approximately HKD 7.5 million for the year ended December 31, 2021, to approximately HKD 1.8 million for the year ended December 31, 2022, a decline of about HKD 5.7 million or 76.0%[135]. Assets and Liabilities - The group's current assets net value as of December 31, 2022, was approximately HKD 161.2 million, an increase of about HKD 9.9 million from HKD 151.3 million in the previous year[7]. - The company's equity attributable to equity holders increased to HKD 169.138 million from HKD 154.663 million[30]. - The group's total liabilities as of December 31, 2022, were significantly impacted by the changes in accounting policies, with specific adjustments noted in the financial statements[56]. - As of December 31, 2022, the group's asset-liability ratio increased from approximately 0.1% on December 31, 2021, to about 1.0%, primarily due to an increase in lease liabilities[168]. - The group's current ratio decreased from approximately 5.7 times to 5.5 times over the same period[7]. Cash Flow and Investments - Cash and bank balances increased to HKD 147.367 million from HKD 119.417 million[30]. - The group invested approximately HKD 6.1 million in the acquisition of properties, plants, and equipment during the fiscal year ending December 31, 2022, with capital expenditures mainly funded by internal resources[172]. - The total lease cash outflow for the year ended December 31, 2022, was approximately HKD 11.64 million, compared to HKD 10.01 million in 2021[119]. - The group did not hold any significant investments during the year ended December 31, 2022[11]. - There were no major investments or capital assets planned as of December 31, 2022[12]. Dividends - The board proposed a final dividend of HKD 0.075 per share for the year ended December 31, 2022, compared to no dividend in the previous year[9]. - The board proposed a final dividend of HKD 0.075 per ordinary share for the year ended December 31, 2022, compared to no dividend for the year ended December 31, 2021[48]. - The company plans to pay the final dividend, subject to approval at the upcoming annual general meeting, expected to be distributed on or before June 5, 2023[171]. Operational Challenges - The group has been impacted by supply chain disruptions and labor shortages due to COVID-19, affecting operational efficiency and increasing financial burdens[107]. - The group faced severe labor shortages due to COVID-19, impacting project progress and causing significant delays[126]. - The construction industry is experiencing a continuous shortage of skilled labor, affecting the ability to recruit sufficient personnel for new projects[157]. - The group anticipates challenges in material supply and project delays due to ongoing pandemic-related issues, which may affect future performance[107]. - The group has adopted measures to address labor shortages, including hiring additional temporary workers[126]. Government Support and Grants - Government grants received increased to HKD 3.386 million from HKD 1.573 million year-on-year[44]. - The group recognized various government subsidies under the anti-epidemic fund totaling approximately HKD 3,324,000, HKD 54,000, and HKD 8,000 for different programs, compared to HKD 1,276,000, HKD 297,000, and HKD 0 in 2021[62]. - The Hong Kong government plans to allocate HKD 1 billion for landslide prevention and mitigation in the fiscal budget for 2023, which is expected to stimulate demand for slope engineering[124]. Project Engagement - The number of projects contributing to revenue was 42 in 2022, compared to 39 in 2021, indicating a growth in project engagement[110]. - The group completed 12 contracts in 2022, contributing to revenue from 11 previously recognized completed projects[123]. - As of December 31, 2022, the group was awarded 31 contracts with a total contract value of approximately HKD 911.6 million, of which 12 contracts were completed with a total value of approximately HKD 255.2 million[123]. Corporate Governance - The company emphasizes the importance of corporate governance to protect shareholder interests and enhance corporate value[174]. - The corporate governance code has been adhered to since the company's listing on GEM on December 13, 2019[175].

Financial Performance - Revenue decreased significantly from approximately HKD 154.8 million for the six months ended June 30, 2021, to approximately HKD 83.2 million for the six months ended June 30, 2022, representing a decline of about HKD 71.6 million or 46.3%[9] - Gross profit fell from approximately HKD 28.8 million to approximately HKD 9.2 million, a decrease of about HKD 19.6 million or 68.1%, with the gross profit margin dropping from 18.6% to 11.0%[9] - Total comprehensive income attributable to equity holders decreased from approximately HKD 15.8 million to approximately HKD 6.1 million, a decline of about HKD 9.7 million or 61.5%[9] - Adjusted profit attributable to equity holders was approximately HKD 3.9 million, down about HKD 16.2 million or 80.8% compared to the same period in the previous year[9] - Basic and diluted earnings per share were approximately HKD 0.0152, compared to HKD 0.039 for the six months ended June 30, 2021[9] - Total profit and comprehensive income for the six months ended June 30, 2022, decreased significantly to approximately HKD 6.1 million, down by HKD 9.7 million or 61.5% compared to HKD 15.8 million for the same period in 2021[97] - Adjusted profit and comprehensive income attributable to equity holders for the six months ended June 30, 2022, was approximately HKD 3.9 million, a decrease of about HKD 16.2 million or 80.8% from HKD 20.1 million for the same period in 2021[97] Dividends and Earnings - The company did not recommend any interim dividend for the six months ended June 30, 2022, consistent with the previous year[9] - The board of directors did not recommend any interim dividend for the six months ended June 30, 2022, consistent with the previous year[153] Labor and Operational Challenges - Labor shortages due to COVID-19 infections and isolation requirements led to project delays and additional financial burdens for the company[9] - The company implemented measures to mitigate labor shortages by hiring additional temporary workers during the pandemic[9] - The significant decrease in revenue and gross profit was primarily attributed to a reduction in the number of large-scale projects and their associated income[9] - The company maintained its workforce during quarantine periods to ensure readiness for immediate resumption of work, adding to financial pressures[9] - The group anticipates a challenging second half of 2022, with expectations of improved business conditions due to economic recovery and favorable government policies[84] Assets and Liabilities - Non-current assets increased to HKD 5,711 million as of June 30, 2022, compared to HKD 3,863 million as of December 31, 2021, reflecting a growth of 47.8%[14] - Current assets decreased to HKD 176,800 million from HKD 183,218 million, a decline of 3.3% year-over-year[14] - Total assets less current liabilities rose to HKD 161,188 million, up from HKD 155,162 million, representing a growth of 3.7%[14] - The company's equity attributable to owners increased to HKD 160,735 million as of June 30, 2022, compared to HKD 154,663 million as of December 31, 2021, an increase of 3.9%[14] - The company’s total liabilities decreased to HKD 21,323 million from HKD 31,919 million, a decrease of 33.3%[14] Cash Flow and Financial Position - Net cash generated from operating activities was HKD 4,618 million for the six months ended June 30, 2022, down from HKD 12,776 million, a decrease of 63.8%[19] - Cash and bank balances increased to HKD 121,116 million from HKD 119,417 million, showing a slight increase of 1.4%[14] - The current ratio as of June 30, 2022, was approximately 8.3 times, an increase from 5.7 times as of December 31, 2021[98] - The net cash and bank balance as of June 30, 2022, was approximately HKD 121.1 million, compared to HKD 119.4 million as of December 31, 2021[98] Employee Costs and Management - The total employee costs for the six months ended June 30, 2022, were HKD 27,851,000, a decrease of 27.4% from HKD 38,362,000 in 2021[41] - Total employee costs (excluding director remuneration) for the six months ended June 30, 2022, were approximately HKD 26.3 million, compared to HKD 36.9 million for the same period in 2021[148] - The total number of employees as of June 30, 2022, was 161, down from 212 as of December 31, 2021[148] - The group’s management personnel compensation for the six months ended June 30, 2022, was HKD 2,119 thousand, compared to HKD 1,980 thousand for the same period in 2021, an increase of approximately 7.0%[73] Contracts and Projects - The group was awarded 27 contracts with a total contract value of approximately HKD 819.5 million, of which 6 contracts worth approximately HKD 85.3 million were completed[80] - As of June 30, 2022, the group had 21 ongoing contracts with a total contract value of approximately HKD 734.2 million[80] - The number of projects contributing to revenue was 27 for both periods, but the number of public projects decreased from 17 to 12, while private projects increased from 10 to 15[88] Government Support and Subsidies - The group recognized government subsidies of HKD 2,200,000 under the anti-epidemic fund, compared to HKD 1,321,000 for the same period in 2021[35] - Other income, gains, and losses increased from approximately HKD 1.5 million to approximately HKD 2.3 million, mainly due to increased government subsidies under the employment support scheme[92] Corporate Governance and Compliance - The company has complied with the corporate governance code since its listing date and continues to uphold high standards of corporate governance[149] - The company has maintained compliance with the Securities and Futures Ordinance regarding the disclosure of interests and holdings by directors and major executives[120] - The audit committee consists of four members, with Mr. Cao Bingchang as the chairman, who has over 18 years of professional accounting experience[152] Share Capital and Ownership - As of June 30, 2022, the company's issued share capital was HKD 4.0 million, divided into 400,000,000 shares at HKD 0.01 each[127] - Mr. Xie and Mr. He are deemed to jointly hold 300,000,000 shares, representing 75% of the issued share capital of the company[127] - The company has a significant concentration of ownership, with major shareholders holding 75% of the issued share capital[127] Future Outlook - The company continues to review and compare its disclosed business strategies with the evolving industry conditions to ensure effective use of net proceeds[118] - The company has confirmed that there were no purchases, sales, or redemptions of its own shares during the six months ended June 30, 2022[130] - There were no significant events affecting the group after the reporting period ending June 30, 2022[154]