Financial Performance - The group recorded total revenue of approximately HKD 445 million for the period, an increase of 4% compared to HKD 429 million in the same period last year[9]. - The loss attributable to owners for the period was approximately HKD 48 million, a 26% increase from a loss of HKD 38 million in the previous period[9]. - Retail and franchise revenue for the period was approximately HKD 293 million, a decrease of 25% from HKD 392 million in the previous period, with the retail and franchise segment accounting for 66% of total sales[15]. - Same-store sales recorded a decline of 29%, with a 33% decrease in mainland China and a 22% increase in Hong Kong[15]. - The company reported a loss before tax of HKD 82,748,000, compared to a loss of HKD 62,586,000 in the previous year, representing a 32.2% increase in losses[68]. - Total comprehensive loss for the period was HKD 100,264,000, significantly higher than HKD 43,445,000 in the prior period, indicating a 130.5% increase in comprehensive losses[68]. - Basic and diluted loss per share was HKD 0.178, compared to HKD 0.212 in the previous year, reflecting a decrease of 16.0%[68]. - The company reported a net loss of approximately HKD 84,049,000 for the six months ended December 31, 2022[80]. Revenue Sources - The new media marketing services generated approximately HKD 150 million in revenue, representing a 305% increase from approximately HKD 37 million in the previous period, accounting for 34% of total revenue compared to 9% in the previous year[24]. - Revenue for the six months ended December 31, 2022, totaled HKD 444,665,000, compared to HKD 428,890,000 for the same period in 2021, representing an increase of approximately 3.3%[86]. - Retail sales of gold and jewelry products in mainland China generated HKD 248,958,000, while sales in Hong Kong amounted to HKD 44,400,000[86]. - New media marketing services contributed HKD 150,356,000 to the total revenue, significantly up from HKD 37,076,000 in the previous year[86]. Cost Management - Sales and distribution expenses were reduced to approximately HKD 89 million, representing 20% of total revenue, down from 25% in the previous year[9]. - General and administrative expenses decreased by HKD 5 million to HKD 35 million, maintaining a stable percentage of 8% of total revenue[9]. - The group has implemented strict cost control measures to manage financial responsibilities effectively[28]. - The company is committed to improving cost efficiency and business effectiveness in response to market volatility, focusing on various cost-saving measures[26]. Market Strategy - The group plans to continue focusing on the growth of franchise stores in mainland China, leveraging local knowledge and minimizing capital investment[16]. - New product development and design efforts are ongoing to enhance product quality and meet customer preferences[17]. - The company plans to strengthen partnerships with various well-known e-commerce platforms in mainland China and Hong Kong to capitalize on the significant growth in e-commerce sales[26]. - The company emphasizes the importance of brand value and quality in its marketing strategy, continuing to promote the "King of Gold" brand through comprehensive marketing plans[20]. - The company continues to focus on expanding its new media marketing services, leveraging platforms like Douyin to enhance customer engagement and service delivery[93]. Financial Position - As of December 31, 2022, the company's cash and bank balances totaled HKD 874 million, down from HKD 882 million as of June 30, 2022, while the net borrowing increased to HKD 915 million from HKD 862 million[34]. - The current ratio as of December 31, 2022, was 81%, down from 90% as of June 30, 2022, with current assets of HKD 1,515 million and current liabilities of HKD 1,868 million[35]. - The company has a debt-to-asset ratio of 116% as of December 31, 2022, compared to 110% as of June 30, 2022, with total liabilities of HKD 2,014 million against total assets of HKD 1,753 million[35]. - The net current liability position worsened to HKD (353,036,000) from HKD (172,628,000), indicating a significant decline in liquidity[70]. - Total equity attributable to owners of the company was HKD (138,456,000), compared to HKD (80,931,000) as of June 30, 2022, reflecting a deterioration in financial health[72]. Shareholder Information - As of December 31, 2022, Mr. Wang Chaoguang holds 65,000,000 shares, representing 24.10% of the issued ordinary shares[54]. - Mr. Li Ning holds a total of 21,157,000 shares, which accounts for 7.85% of the issued ordinary shares[50]. - The company’s major shareholders include Grace Fountain Holdings Limited, which is fully owned by Mr. Wang Chaoguang[54]. - The company has not purchased, sold, or redeemed any of its listed securities during the reporting period[60]. Corporate Governance - The company has complied with the corporate governance code throughout the period, with the exception of the separation of roles between the Chairman and CEO[62]. - The company will review and update its corporate governance practices to comply with listing rules[63]. - The company has adopted the standard code for securities transactions by directors and confirmed compliance during the reporting period[64]. Employee Information - As of December 31, 2022, the company had 891 employees, a decrease from 947 employees as of June 30, 2022[48]. - Employee costs, including directors' remuneration, totaled HKD 64,905,000 for the six months ended December 31, 2022, down from HKD 72,826,000 in the previous year[108]. Financing Activities - The company raised approximately HKD 141 million through a subscription, with a subscription price of HKD 0.05 and a conversion price of HKD 0.065, representing a discount of about 15.25% and a premium of about 10.17% compared to the closing price on the subscription agreement date[31]. - The group secured a total revolving bank financing of HKD 2,150,000,000, with HKD 1,603,500,000 utilized as of December 31, 2022[28]. - The company raised new bank and other borrowings amounting to HKD 40,744,000 during the reporting period[78]. Subsequent Events - The group reported no significant subsequent events after the reporting period, except for the termination of a sales agreement in January 2023[160].

Business Strategy and Growth - The company aims to enhance its brand recognition and reputation for "King of Gold" jewelry, focusing on increasing revenue in mainland China and Hong Kong[27]. - The company plans to diversify its revenue base by exploring new business opportunities, aiming for a win-win situation to create greater value for shareholders and investors[27]. - The company is optimistic about its business prospects in the medium to long term, supported by the rapid economic growth in mainland China[4]. - The company will continue to promote its self-owned brand "King of Gold" to achieve higher recognition and credibility[27]. - The company is developing online sales platforms and introducing high-end products to expand its distribution channels[4]. - The company is committed to launching more K-gold jewelry products, leveraging high levels of creativity[4]. - The company plans to continue focusing on the growth of franchised stores in mainland China, which is expected to be a major growth driver[29]. - New product series launched include "Shining Rhythm" diamond series and "Gold Supreme x Wind Rises in Luoyang" series, aimed at capturing different market segments[51]. Financial Performance - The company recorded total revenue of approximately HKD 902 million, an increase of 5% compared to HKD 856 million in the previous year[29]. - The company reported a loss of approximately HKD 79 million, a significant increase of 422% from a loss of HKD 15 million in the previous year, primarily due to foreign exchange losses and early redemption of convertible bonds[29]. - Retail revenue for gold and jewelry was approximately HKD 680 million, a decrease of 13% from HKD 783 million in the previous year, with same-store sales declining by 17%[29]. - The company’s sales and distribution expenses decreased to HKD 197 million, representing 22% of total revenue, down from 26% in the previous year[29]. - General and administrative expenses increased by HKD 10 million to HKD 76 million, reflecting a strategic reallocation of spending[29]. - The company reported a total of 21,157,000 shares held by Mr. Li Ning, representing 7.85% of the issued ordinary shares[122]. - Mr. Wang Chao Guang holds 65,000,000 shares, accounting for 24.10% of the issued ordinary shares[134]. - The company has no distributable reserves available for shareholders as of June 30, 2022[117]. Capital and Financing - The company entered into a subscription agreement to issue 650 million new ordinary shares at a subscription price of HKD 0.05 per share[54]. - The company also agreed to issue convertible bonds amounting to HKD 52 million, convertible into 800 million new ordinary shares at an initial conversion price of HKD 0.065[54]. - The company plans to utilize HKD 126 million of the raised funds for debt repayment, with HKD 80 million allocated for convertible bond repayment[59]. - The company raised approximately HKD 141 million in net proceeds from the subscription, with a subscription price of HKD 0.05 per share, representing a discount of about 15.25% compared to the closing price of HKD 0.058 on the subscription agreement date[58]. - The company has an unused revolving bank financing amounting to HKD 587 million as of June 30, 2022, down from HKD 664 million in the previous year[61]. Corporate Governance - The company is committed to maintaining high standards of corporate governance and transparency in its operations[72]. - The company has established three committees: the Remuneration Committee, the Nomination Committee, and the Audit Committee, each with defined written terms of reference[90]. - The company has implemented a board diversity policy, considering factors such as gender, age, cultural background, and professional experience in board member selection[88]. - The company adhered to the corporate governance code as per the Hong Kong Stock Exchange, with the exception of the separation of roles between the Chairman and CEO, which is held by Mr. Li Ning since October 4, 2019[76]. - The board held five meetings and two shareholder meetings during the year, with all executive directors attending 100% of the board meetings[81]. Risk Management and Internal Control - The company is committed to ensuring the effectiveness of its risk management and internal control systems[101]. - The company confirmed that the internal control system is effective and has been reviewed at least annually[103]. - The audit included assessing the appropriateness of the valuation model and key assumptions used by management[170]. - The company’s financial statements are prepared on a going concern basis, reflecting its financial position accurately[100]. Related Party Transactions - The company entered into a franchise agreement with Gold Star Information Consulting Limited, with annual license fees capped at HKD 1,200,000 for 2022, HKD 1,300,000 for 2023, and HKD 1,400,000 for 2024[147]. - The company has established a supply agreement with Wanli Jia Enterprises Limited for the supply of various jewelry materials from July 1, 2021, to June 30, 2024[147]. - The company has confirmed that all related party transactions are conducted on normal commercial terms and are fair and reasonable[149]. Employee and Management - As of June 30, 2022, the group had 947 employees, a decrease from 982 employees in the previous year[65]. - The company has arranged appropriate liability insurance for directors, which is reviewed annually[84]. - The company appointed Mr. Li Ning as the Executive Director and Chairman on June 12, 2019, with prior experience as the Chairman of Shanxi Taihe Xiangye Industrial Group[70]. - Mr. Wang Chaoguang was appointed as the Executive Director and Co-Chairman on April 1, 2021, bringing over 10 years of experience in asset management and corporate investment consulting[70]. Market and Economic Environment - The company is focused on building partnerships that align with its franchise or alliance strategies in both physical and e-commerce distribution channels[7]. - The company plans to strengthen partnerships with various well-known e-commerce platforms in mainland China and Hong Kong to capitalize on the significant growth in e-commerce sales[54]. - The digital economy in China reached RMB 39.2 trillion in 2020, indicating substantial growth potential for new media business[54]. Charitable Contributions - The group made charitable donations of approximately HKD 19,000 in the current year, consistent with the previous year[157].

Financial Performance - The total revenue for the period ending December 31, 2021, was approximately HKD 429 million, representing a 10% increase compared to HKD 389 million in the same period last year[10]. - The group recorded a loss of approximately HKD 38 million for the period, compared to a profit of HKD 10 million in the previous period, primarily due to a decline in gross profit margin and reduced foreign exchange gains[10]. - Retail sales of gold and jewelry products accounted for 86% of total revenue, with retail sales amounting to approximately HKD 367 million, a 7% increase from the previous period[10]. - The overall same-store sales growth recorded a decline of 4% during the period[10]. - The gross profit for the period was HKD 107,433,000, down from HKD 138,755,000 in the previous year, indicating a decrease of about 22.6%[80]. - The company incurred a loss of HKD 52,085,000 for the period, compared to a profit of HKD 20,324,000 in the same period last year, reflecting a significant decline[80]. - The net loss attributable to equity holders of the company was HKD 41,811,000 for the period, compared to a loss of HKD 66,792,000 in the previous year[86]. - The company reported a basic and diluted loss per share of HKD 0.212 for the period, compared to earnings of HKD 0.064 in the same period last year[80]. - The company reported a total comprehensive income of HKD 9,862,000 for the period, compared to a total comprehensive loss of HKD 35,475,000 in the previous period[90]. Revenue Breakdown - Retail sales in mainland China contributed approximately HKD 332 million, a 14% increase from HKD 290 million in the previous period, representing 91% of total retail sales[10]. - Revenue from retail and franchise operations in mainland China was HKD 356.60 million, compared to HKD 320.19 million in the previous year, reflecting a growth of about 11.3%[101]. - Revenue from retail operations in Hong Kong and Macau was HKD 35.22 million, down from HKD 53.17 million in the previous year, indicating a decline of approximately 33.7%[99]. - Revenue from mobile media marketing services in mainland China was HKD 37.08 million, compared to HKD 0 in the previous year, marking a significant increase[99]. - The total revenue from all segments for the six months ended December 31, 2021, was HKD 428.89 million, compared to HKD 389.47 million in the same period of 2020, showing overall growth[99]. Cost Control and Management - The group has implemented cost control measures, reducing sales and distribution expenses to 25% of total revenue from 28% in the previous period[10]. - The management is focusing on improving profitability by adjusting the sales network through closing underperforming stores and emphasizing profitable ones[34]. - Cost control measures include negotiating rent reductions and improving cash flow[34]. - The company implemented strict cost control measures to manage financial responsibilities due within the next 18 months[94]. Market Strategy and Growth - The company plans to continue focusing on the growth of franchised stores in mainland China, leveraging local knowledge and resources[33]. - Future growth will be driven primarily by the mainland China market, which is expected to remain a key growth engine[34]. - The group aims to enhance its marketing strategies and execution to improve cost efficiency and business effectiveness[41]. - The group continues to explore new strategies for market expansion and product development in the jewelry and gold sectors[107]. Financial Position and Liquidity - The total cash and cash equivalents as of December 31, 2021, amounted to HKD 823,000,000, a decrease from HKD 863,000,000 as of June 30, 2021[46]. - The net borrowing as of December 31, 2021, was HKD 848,000,000, compared to HKD 840,000,000 as of June 30, 2021, with total borrowings of HKD 1,671,000,000[46]. - The current ratio as of December 31, 2021, was 94%, slightly up from 93% as of June 30, 2021, calculated based on current assets of HKD 1,600,000,000 and current liabilities of HKD 1,699,000,000[47]. - The debt-to-asset ratio was 106% as of December 31, 2021, down from 107% as of June 30, 2021, with total liabilities of HKD 1,936,000,000 against total assets of HKD 1,828,000,000[47]. - The company had an available undrawn revolving bank facility of HKD 664,000,000 as of December 31, 2021, unchanged from June 30, 2021[46]. Shareholder Information - The board has decided not to declare any interim dividends for the period[32]. - As of December 31, 2021, Mr. Wang Chaoguang holds 65,000,000 shares, representing 24.10% of the issued ordinary shares[61]. - Mr. Li Ning holds a total of 21,157,000 shares, which accounts for 7.85% of the issued ordinary shares[61]. - The company has a significant concentration of ownership, with major shareholders holding over 70% of the total issued shares[61]. - The company’s governance practices generally comply with the corporate governance code, with a noted deviation regarding the separation of roles between the Chairman and CEO[70]. Governance and Compliance - The company plans to review and update its corporate governance practices to comply with listing rules[73]. - The audit committee has reviewed the interim financial statements for the period, which have not been audited by the company's auditor[78]. - The company has disclosed no other relevant interests or short positions in its issued share capital as of December 31, 2021[66]. Employee and Management Information - The company had 975 employees as of December 31, 2021, a slight decrease from 982 employees as of June 30, 2021[53]. - The total remuneration for key management personnel, including directors, was HKD 6,536,000 for the six months ended December 31, 2021, compared to HKD 5,640,000 for the same period in 2020[192]. Taxation and Financial Obligations - The company has tax losses in Hong Kong for the two periods, resulting in no provision for Hong Kong taxation[126]. - The effective tax rate for subsidiaries in China is 25%, with certain subsidiaries eligible for a reduced rate of 15% if specific criteria are met[126]. - The company has not made any provisions for Macau income supplementary tax due to the absence of taxable profits in Macau during the periods[128]. Convertible Bonds and Financial Instruments - The company issued convertible bonds totaling HKD 52,000,000 and HKD 32,500,000, allowing bondholders to convert them into ordinary shares at a conversion price of HKD 0.65[153]. - The actual interest rates for the 2023 convertible bonds, A, and B are 17.01%, 4.0296%, and 4.0027% respectively[158]. - The fair value changes of the embedded derivatives resulted in a loss of approximately HKD 8,838,000 for the 2023 convertible bonds[160]. - The company recognized liabilities of approximately HKD 51,977,000 and HKD 32,501,000 for the 2023 convertible bonds A and B upon issuance[154].

香 港 资 源 控 股 HONG KONG KONS (股份代號：2882) PORTUNITIES 年報 2021 「中國內地將繼續為我們的主要市場⋯⋯」 其仍為世界最快速發展經濟體之一， 並為本集團的樂觀業務前景帶來中長期的支持。 • 形象：藉助富有魅力的及流行藝術家及社會名流， 增強流行形象及推廣 • 產品：藉助較高水準的創造力，更多K金珠寶亦將問世 • 渠道：於地區內開設新門店、開發線上 銷售平台及引入高檔產品 目錄 香港資源控股蓄勢待發 把握未來之良機。 | --- | --- | |--------------------------|-------| | | 頁次 | | 公司資料 | 4 | | 大事記 | 6 | | 致股東函件 | 9 | | 管理層討論與分析 | 10 | | 董事簡介 | 20 | | 企業管治報告 | 23 | | 董事報告 | 30 | | 獨立核數師報告 | 38 | | 財務報表： | | | 綜合損益及其他全面收益表 | 43 | | 綜合財務狀況表 | 44 | | 綜合權益變動表 | 46 | | 綜合現金流量表 | 48 | | 綜合財務報表附註 | 5 ...

Financial Performance - The total revenue for the period was approximately HKD 389 million, a decrease of 25% compared to HKD 517 million in the same period last year[14]. - The profit attributable to owners was approximately HKD 10 million, compared to a loss of HKD 38 million in the same period last year[14]. - Retail revenue for the period was approximately HKD 343 million, a decrease of 28% from HKD 474 million in the previous year[14]. - Same-store sales growth recorded an increase of 8%, compared to a decrease of 7% in the previous year[14]. - Revenue for the six months ended December 31, 2020, was HKD 389,467 thousand, a decrease of 24.7% compared to HKD 517,164 thousand in 2019[82]. - Gross profit for the same period was HKD 138,755 thousand, down from HKD 185,323 thousand, reflecting a decline of 25.1%[82]. - The company reported a profit of HKD 20,324 thousand for the period, a significant recovery from a loss of HKD 62,189 thousand in the previous year[82]. - Total comprehensive income for the period was HKD 37,510 thousand, compared to a loss of HKD 76,441 thousand in the same period last year[82]. - The company reported a total comprehensive loss of HKD 46,461,000 for the six months ended December 31, 2020, compared to a loss of HKD 76,441,000 in the previous period, showing an improvement of approximately 39.2%[98]. Retail Operations - Retail gold and jewelry products accounted for 88% of total revenue, down from 92% in the previous year[14]. - The retail revenue from mainland China was approximately HKD 290 million, a decrease of 16% from HKD 347 million in the previous year[14]. - Total revenue contribution from retail business in Hong Kong and Macau was approximately HKD 53 million, down from HKD 127 million in 2019, while mainland China contributed HKD 290 million, down from HKD 347 million in 2019[38]. - Retail sales of gold and jewelry products in mainland China generated revenue of HKD 320,191 thousand, down from HKD 390,264 thousand in the previous year, representing a decline of 17.9%[106]. - Retail sales in Hong Kong and Macau amounted to HKD 53,173 thousand, compared to HKD 126,900 thousand in the prior year, reflecting a significant decrease of 58.1%[106]. Cost Management - The company successfully implemented cost control measures, reducing general and administrative expenses to HKD 36 million, down from HKD 46 million in the previous year[14]. - The total financing costs for the period were HKD 23,984 thousand, a decrease from HKD 43,147 thousand in the previous year, reflecting a reduction of approximately 44%[141]. - The company has reported a significant reduction in employee costs, which totaled HKD 65,711 thousand, down from HKD 73,620 thousand in the previous period, indicating a cost management strategy[142]. Business Strategy - The company aims to enhance its brand image and expand its product offerings through new store openings and online sales platforms[4]. - The group plans to continue focusing on the growth of franchised stores in mainland China, allowing for flexible and rapid strategic expansion with minimal capital investment[38]. - Management is adjusting the sales network by focusing on profitable stores and closing underperforming ones, while also continuously developing and promoting new product lines[39]. - The group has expanded its product portfolio with new series including "Peter RabbitTM," "Year of the Zodiac Gold Collection," and "Platinum Sparkle" among others[44]. - The company is focusing on market expansion and new product development as part of its strategic initiatives moving forward[130]. Financial Position - As of December 31, 2020, the group's cash and cash equivalents totaled HKD 877 million, with net borrowings of HKD 556 million[53]. - The current ratio as of December 31, 2020, was 95%, an increase from 92% as of June 30, 2020[53]. - The debt-to-asset ratio was 104% as of December 31, 2020, down from 106% as of June 30, 2020[53]. - The group had available undrawn revolving bank financing of HKD 664 million as of December 31, 2020, compared to HKD 640 million as of June 30, 2020[53]. - The company’s total liabilities exceeded total assets by HKD 81,936,000, indicating significant uncertainty regarding the company's ability to continue as a going concern[101]. Shareholder Information - The company issued 1,546,716,012 ordinary shares with a par value of HKD 0.04 each as of December 31, 2020[53]. - Major shareholder Li Ning held a total of 211,570,000 shares, representing 13.68% of the issued ordinary shares as of December 31, 2020[66]. - Major shareholders include Ms. Hao Yuan with 280,000,000 shares, representing 18.10% of issued ordinary shares[71]. - Well Pop Group Limited also holds 280,000,000 shares, equivalent to 18.10% of issued ordinary shares[71]. - Mr. Zheng Yuewen holds 251,055,619 shares, accounting for 16.23% of issued ordinary shares[71]. Corporate Governance - The company has adopted corporate governance practices in compliance with the Hong Kong Stock Exchange Listing Rules[77]. - The audit committee reviewed the accounting standards and internal controls for the period ending December 31, 2020[79]. - The company has taken sufficient measures to ensure its corporate governance practices meet the standards set by the corporate governance code[77]. - The company will review and update its current corporate governance practices to comply with listing rules in a timely manner[77]. Economic Outlook - The group anticipates that social and economic activities will not return to normal in the short term due to the impact of COVID-19 and other factors, and will continue to adjust its business scale and costs accordingly[49]. - The company anticipates no significant currency risk in the near future, despite not having adopted any foreign currency hedging policies[59]. - The chairman and major shareholder provided a financial support letter in February 2021 to ensure the group can meet its financial obligations over the next 18 months[61].

香 港 资 源 控 股 HONG KONG KONS HOLDINGS (股份代號：2882) ORTUNITIES 年報 2020 ai160327491488_01 HKRH AR20 cover grace V03 18mm 2.pdf 2 21/10/2020 下午6:08 「中國內地將繼續為我們的主要市場⋯⋯」 其仍為世界最快速發展經濟體之一， 並為本集團的樂觀業務前景帶來中長期的支持。 ‧形象：藉助富有魅力的及流行藝術家及社會名流， 增強流行形象及推廣 ‧產品：藉助較高水準的創造力，更多K金珠寶亦將問世 ‧渠道：於地區內開設新門店、開發線上 銷售平台及引入高檔產品 目錄 香港資源控股蓄勢待發 把握未來之良機。 | --- | --- | |--------------------------|-------| | | 頁次 | | 公司資料 4 | | | 大事記 6 | | | 致股東函件 9 | | | 管理層討論與分析 10 | | | 環境、社會及管治報告 17 | | | 董事簡介 23 | | | 企業管治報告 25 | | | 董事報告 32 | | | 獨立核數師報告 41 | | ...

Revenue and Sales Performance - The total revenue for the period was approximately HKD 781 million, an increase of 25% compared to HKD 623 million in the previous period[12]. - Retail sales of gold and jewelry accounted for 80% of total revenue, with retail revenue of approximately HKD 624 million, up 7% from HKD 584 million in the previous period[12]. - The mainland China market continues to be the primary market, contributing 61% of retail sales during the period[12]. - Total revenue contribution from retail business in Hong Kong and Macau reached HKD 242 million, up from HKD 211 million in 2017, while mainland China contributed HKD 382 million, up from HKD 373 million in 2017[41]. - Revenue from external sales in mainland China reached HKD 412,567,000, while sales in Hong Kong and Macau amounted to HKD 210,526,000, totaling HKD 623,093,000[170]. - The total revenue for the six months ended December 31, 2018, was HKD 775,630,000, with a slight adjustment of (202,000) resulting in a final figure of HKD 775,428,000[126]. Financial Losses and Challenges - The company recorded a loss attributable to owners of approximately HKD 48 million, a 109% increase from HKD 23 million in the previous period[12]. - Same-store sales decreased by 4%, with a decline of 6% in mainland China and a decline of 1% in Hong Kong and Macau[12]. - The company reported a loss before tax of HKD 77.61 million, compared to a loss of HKD 21.67 million in the previous year, reflecting a significant increase in losses[81]. - The net loss for the period was HKD 79.50 million, compared to a net loss of HKD 26.67 million in the prior year, marking an increase in losses of approximately 198.5%[81]. - The total comprehensive loss for the period was HKD 79,500,000, reflecting a decline from the previous period's performance[167]. Operational and Strategic Developments - The company opened an additional 11 stores and counters in Hong Kong and mainland China as part of its strategy to expand retail operations[12]. - The group opened 46 new stores and counters in mainland China during the period, while closing 36 stores and counters[41]. - The group focuses on the growth of franchised stores in mainland China, allowing for flexible and rapid strategy implementation with minimal capital investment[42]. - Management aims to improve profitability by adjusting the sales network, introducing new regional franchising systems, and continuously developing new product lines[42]. - The company has initiated wholesale and subcontracting operations since January 2018, marking a strategic expansion into new business areas[165]. Cost Management and Financial Controls - Advertising and promotional expenses increased to HKD 18 million, accounting for 2.3% of total revenue, compared to 1.6% in the previous period[12]. - The company has successfully implemented cost control measures, reducing general and administrative expenses to HKD 48 million from HKD 55 million in the previous period[12]. - The company plans to enhance operational controls, strengthen brand positioning, and introduce higher-margin products to improve profitability[50]. Shareholder and Capital Structure - Major shareholder Weltrade Group Limited held 245,055,619 shares, representing 23.19% of the issued ordinary shares[64]. - The company underwent a share consolidation on July 18, 2018, merging every four existing shares into one share[56]. - As of December 31, 2018, the total issued shares were 1,056,716,012[56]. - The corporate interests held by Mr. Huang, Mr. Chen, Mr. Xie, and Mr. Li each amount to 80,168,539 shares, accounting for 7.59% of the issued ordinary shares[71]. Cash Flow and Financial Position - As of December 31, 2018, the total cash and cash equivalents amounted to HKD 976 million, an increase from HKD 799 million as of June 30, 2018[53]. - The total borrowings increased to HKD 2,020 million as of December 31, 2018, compared to HKD 1,693 million on June 30, 2018[53]. - The net cash used in operating activities was (128,441) thousand HKD, compared to (98,910) thousand HKD in the previous period, indicating a decline of approximately 29.8%[95]. - The total cash and cash equivalents at the end of the period were 60,441 thousand HKD, down from 135,009 thousand HKD, representing a decrease of about 55.3%[95]. Compliance and Governance - The company plans to review and update its corporate governance practices to align with listing rules, ensuring compliance and transparency[80]. - The audit committee has reviewed the accounting standards and internal controls, ensuring adherence to financial reporting requirements[80]. Accounting Changes and Impacts - The application of HKFRS 15 resulted in a reclassification of deferred income related to customer loyalty programs amounting to HKD 2,266,000[119]. - The expected credit loss model under HKFRS 9 requires the group to recognize losses on financial assets, including trade and other receivables, based on updated credit risk assessments[135]. - The company reported a trade receivables impairment of HKD 2,035,000, with an additional credit loss provision of HKD 894,000 recognized[148]. Market Outlook and Future Plans - Management holds a cautiously optimistic outlook for business growth in the coming year, despite uncertainties from the US-China trade war[50]. - The company plans to continue its market expansion and product development strategies to enhance future performance[91]. - The company is actively exploring mergers and acquisitions to strengthen its market position and diversify its portfolio[91].