Financial Performance - The company's revenue for the six months ended June 30, 2021, was HKD 241.5 million, an increase of 40.5% compared to HKD 171.8 million for the same period in 2020[12]. - Gross profit for the same period was HKD 127.3 million, representing a 43.5% increase from HKD 88.7 million in the previous year[7]. - The company recorded a loss before tax of HKD 59.9 million, which is a 42.2% increase from a loss of HKD 42.1 million in the prior period[7]. - The basic and diluted loss per share was HKD 17.18, up 42.8% from HKD 12.03 in the previous year[7]. - Total revenue for the group increased by 40.5% to HKD 241.5 million from HKD 171.8 million in the same period last year, primarily driven by a 42.2% increase in health and wellness product sales[28]. - The group reported a total comprehensive loss of HKD 58.046 million for the period, compared to a loss of HKD 45.055 million in the previous year[109]. - The company incurred a net loss of approximately HKD 60 million for the six months ended June 30, 2021, compared to a net loss of HKD 42.373 million in the prior year, indicating a deterioration in performance[104][109]. - The group incurred a total loss of HKD 60,345,000 for the six months ended June 30, 2021, compared to a loss of HKD 42,373,000 for the same period in 2020[141]. Cash Flow and Liquidity - The company's cash and bank balances decreased by 10.6% to HKD 105.9 million from HKD 118.5 million[7]. - The net cash inflow from operating activities was HKD 4.6 million, a significant decrease from HKD 50.1 million for the six months ended June 30, 2020[49]. - The company reported a net cash outflow from financing activities of HKD (41,051,000) for the six months ended June 30, 2021, compared to HKD (33,903,000) in the prior year, indicating a worsening cash flow situation[120]. - The total liabilities exceeded current assets by approximately HKD 35 million as of June 30, 2021, raising concerns about the company's liquidity[104]. - The company emphasized the significant uncertainty regarding its ability to continue as a going concern due to the financial losses and liabilities[104]. - The company has outstanding convertible bonds and accrued interest totaling approximately HKD 190 million, which are due for repayment[124]. Sales and Revenue Breakdown - Retail outlets generated HKD 126.6 million in revenue, representing 52.4% of total revenue, an increase from 53.8% in the previous year[16]. - International sales increased by 54.1% to HKD 9.5 million, compared to HKD 6.1 million in the prior period[16]. - The revenue contribution from the mainland China retail business was HKD 50.2 million, a 31.1% increase from HKD 38.3 million in the same period last year[21]. - The retail business in Hong Kong and Macau generated revenue of HKD 52.5 million, up 15.1% from HKD 45.6 million year-on-year[22]. - Revenue from Singapore and Malaysia retail operations was HKD 23.9 million, a significant increase of 223.0% from HKD 7.4 million in the previous year[23]. - Health and wellness product sales accounted for HKD 241,415,000, with leisure products contributing HKD 230,072,000 and fitness and other products contributing HKD 11,343,000[134]. Expenses and Costs - The cost of sales for the period was HKD 114.3 million, reflecting a 37.4% increase from HKD 83.2 million in the previous year[32]. - Selling and distribution expenses increased from HKD 85.8 million to HKD 104.7 million, primarily due to a rise in distribution expenses by HKD 2.1 million, rental and management expenses by HKD 2.6 million, and employee costs by HKD 13.1 million[39]. - The cost of inventory recognized as an expense increased significantly to HKD 95,234,000, up 49.2% from HKD 63,847,000 in the previous year[7]. - The impairment loss on property, plant, and equipment for the six months ended June 30, 2021, was HKD 24,349,000, with no such loss recorded in the same period of 2020[8]. Corporate Governance and Shareholding - The company has complied with the corporate governance code, except for rule A.5.1, which requires the nomination committee to be chaired by the board chairman or an independent non-executive director[74]. - Following the appointment of Mr. Zheng, the number of independent non-executive directors has met the minimum requirement of three as per listing rule 3.10(1)[75]. - As of June 30, 2021, Mr. Zhong Baisheng holds 201,534,092 shares, representing 57.70% of the company's equity[79]. - The major shareholder, Tongbang Holdings Limited, holds 201,534,092 shares, representing 57.70% of the company's total shares[84]. - The total number of issued shares as of June 30, 2021, is 349,260,800[88]. Employee and Management Information - The company has 608 full-time employees as of June 30, 2021, compared to 604 on December 31, 2020[71]. - The total remuneration for key management personnel was HKD 4,313,000 for the six months ended June 30, 2021, compared to HKD 4,053,000 for the same period in 2020[193]. Stock Options and Equity - The company has granted a total of 66,986,000 share options across four tranches to selected directors and employees[89]. - The total number of stock options granted was 19,600,000, with 9,900,000 options remaining unexercised as of June 30, 2021[93]. - The exercise price for the stock options ranges from HKD 1.84 to HKD 2.13, with the majority set at HKD 1.84[93]. - The company has adopted a share option scheme, allowing for a maximum of 34,926,080 shares to be issued upon exercise of options[89]. Future Outlook and Strategic Initiatives - The company is actively seeking suitable investment opportunities that align with its strategy[68]. - The company remains cautiously optimistic about its business and development prospects despite the ongoing impacts of COVID-19[72]. - The company plans to enhance its proprietary "OTO" brand and strengthen its market share through innovation and continuous improvement[72].

Financial Performance - The company reported a loss of approximately HKD 81 million for the year ended December 31, 2020, a decrease of about HKD 147 million compared to the previous year[8]. - Revenue from ongoing operations decreased by approximately 24% in the first half of 2020 compared to the same period in 2019, and by about 11% for the full year[9]. - Financial asset impairment losses were significantly reduced to approximately HKD 22 million for the year ended December 31, 2020, compared to HKD 50 million in the previous year[8]. - For the year ended December 31, 2020, the group's revenue from continuing operations was HKD 403.4 million, a decrease of 10.5% compared to HKD 450.8 million for the year ended December 31, 2019[15]. - The group recorded a loss from continuing operations of HKD 81.4 million for the year, compared to a loss of HKD 228.1 million in 2019[15]. - The pre-tax loss for continuing operations was HKD 79.9 million in 2020, significantly improved from a loss of HKD 227.0 million in 2019[46]. - The net loss for the year was HKD 81.4 million, compared to a loss of HKD 228.1 million in 2019, indicating a reduction in losses[48]. Revenue and Sales - Sales from health and wellness products included HKD 367.4 million from massage chairs and related products, accounting for 91.9% of the segment's revenue[17]. - The group launched 36 new products, generating HKD 50.2 million in revenue, which represented 12.5% of the health and wellness segment's revenue[17]. - Retail network revenue decreased by 11.6% to HKD 231.8 million, while international sales increased by 73.4% to HKD 16.7 million[20][21]. - The number of retail outlets in mainland China increased from 113 to 118, but revenue decreased by 16.9% to HKD 92.5 million[23]. - Revenue from Hong Kong and Macau retail operations decreased by 11.3% to HKD 108.8 million, with the number of outlets remaining at 23[24]. - Revenue from Singapore and Malaysia increased by 7.8% to HKD 30.4 million, despite a decline in Malaysia due to the pandemic[25]. - Internet sales grew by 33.8% to HKD 36.3 million, driven by increased online shopping demand in mainland China[26]. Cost and Expenses - Administrative expenses decreased by approximately HKD 26 million for the year ended December 31, 2020, compared to the previous year[8]. - Selling and distribution expenses decreased to HKD 168.2 million in 2020 from HKD 209.2 million in 2019, driven by reductions in advertising and marketing expenses[43]. - Administrative expenses were reduced to HKD 76.2 million in 2020 from HKD 101.9 million in 2019, mainly due to lower legal and professional fees[44]. - The cost of sales for continuing operations decreased by 6.2% to HKD 200.7 million from HKD 214.0 million in 2019, reflecting the decline in health and wellness product sales[32]. - Gross profit for 2020 was HKD 202.7 million, with a gross margin of 50.2%, down from HKD 236.8 million and a gross margin of 52.5% in 2019[33]. Corporate Governance and Management - The company aims to enhance corporate governance and operational efficiency in response to the challenges posed by the COVID-19 pandemic[12]. - The board decided not to declare a final dividend for the year ended December 31, 2020, consistent with the previous year, and no interim dividend was paid for the six months ended June 30, 2020[79]. - The company has adopted a dividend policy since January 1, 2019, aimed at enhancing transparency and guiding informed investment decisions[81]. - The company has confirmed the independence of its independent non-executive directors as per the listing rules[112]. - The remuneration committee regularly monitors the compensation of all directors to ensure it remains at an appropriate level[114]. - The company has adopted the corporate governance code as per the listing rules and has complied with it, except for code provision A.5.1[162]. - The audit committee, along with management and external auditors, has reviewed the accounting principles and policies adopted by the group for the year[159]. Restructuring and Future Outlook - The management is focused on restructuring convertible bonds that were due in 2019 and exploring new business opportunities[12]. - The company remains cautiously optimistic about its business outlook while addressing the restructuring of convertible bonds amounting to approximately HKD 194.66 million[73]. - The company plans to discuss the restructuring of convertible bonds, liquidate some assets, and explore financing options to supplement operational funds[73]. - The company continues to monitor market trends and explore new business opportunities moving forward[14]. Employee and Operational Details - The group had a total of 604 full-time employees as of December 31, 2020, down from 780 in 2019, with compensation determined based on individual qualifications and contributions[70]. - The company emphasizes the importance of employee training and competitive compensation to retain talent, with stock option plans in place for eligible participants[152]. - The company has arranged for appropriate directors and officers liability insurance for its directors and senior executives[130]. Liquidity and Financial Position - Cash and cash equivalents rose to HKD 118.5 million as of December 31, 2020, up from HKD 73.3 million in 2019, indicating improved liquidity[52]. - The net cash generated from operating activities for 2020 was HKD 76.9 million, significantly higher than HKD 26.3 million in 2019, reflecting better management of working capital[53]. - The company's net current liabilities increased to HKD 260.0 million as of December 31, 2020, compared to HKD 247.5 million in 2019, maintaining a current ratio of 0.5 times[51]. - The total borrowings of the company as of December 31, 2020, amounted to HKD 386.1 million, with an increase in the debt-to-asset ratio from 53.4% in 2019 to 60.8% in 2020[57]. Shareholding and Equity - The company has a total of 201,534,092 shares held by Mr. Zhong Baisheng, representing approximately 57.70% of the company's equity[120]. - The company’s shareholding structure indicates a high level of control by a few entities, with the largest shareholder holding over 57%[136]. - The total issued shares as of December 31, 2020, is 349,260,800[136]. - The company has a stock option plan that allows for the issuance of options up to 10% of the total issued shares at the time of listing[139]. Compliance and Risk Management - The company has complied with the relevant laws and regulations, ensuring no significant violations were reported during the year[150]. - An external professional service company has been engaged to review the risk management and internal control systems annually, with no significant deficiencies found[199]. - The company confirms compliance with public float requirements as per listing rules prior to the publication of the annual report[157].

Financial Performance - For the six months ended June 30, 2020, the revenue from continuing operations was HKD 171.8 million, a decrease of 24.4% compared to HKD 227.4 million for the same period in 2019[11]. - The gross profit from continuing operations was HKD 88.7 million, down 30.3% from HKD 127.2 million in the previous year[11]. - The loss before tax from continuing operations was HKD 42.1 million, an improvement of 36.1% compared to a loss of HKD 65.9 million in the prior period[11]. - The net loss attributable to continuing operations was HKD 42.4 million, a reduction of 36.4% from HKD 66.6 million in the same period last year[11]. - Revenue from health and wellness product sales dropped by 25.2% to HKD 169.7 million, down from HKD 226.9 million in the previous year[33]. - The overall sales revenue for the six months ended June 30, 2020, was HKD 169.7 million, with a total revenue decline of HKD 57.1 million compared to the previous year[21]. - The group recorded a total capital expenditure of HKD 2.5 million during the period for the acquisition of properties, plants, and equipment[65]. - The company reported a net loss of approximately HKD 42,373,000 for the six months ended June 30, 2020, compared to a net loss of HKD 67,523,000 in the prior year, representing a 37.2% improvement[126]. Revenue Breakdown - The company launched 9 new products during the period, generating revenue of HKD 11.4 million, which accounted for 6.7% of the health and wellness product sales segment[17]. - The revenue from massage chairs and other health products was HKD 110.7 million and HKD 59.0 million, representing 65.2% and 34.8% of the health and wellness product sales segment, respectively[17]. - Internet sales experienced significant growth of 67.3%, contributing HKD 17.6 million, compared to HKD 10.5 million in the prior period[28]. - Traditional sales channels generated HKD 91.3 million, accounting for 53.8% of total revenue, a decrease of 30.9% from HKD 132.2 million in the previous year[22]. - Trade business revenue increased by 301.1% to HKD 2.1 million, up from HKD 0.5 million in the previous year, primarily due to circuit board trade[31]. Liquidity and Financial Ratios - The bank balance and cash increased by 15.6% to HKD 84.8 million from HKD 73.3 million at the end of 2019[11]. - The current ratio decreased to 0.4 from 0.5, indicating a decline in liquidity[11]. - The asset-liability ratio increased to 60.8% from 53.4%, reflecting a higher level of debt relative to assets[11]. - Inventory turnover days increased to 69.7 days from 60.9 days, indicating slower inventory movement[11]. - As of June 30, 2020, the total borrowings of the group amounted to HKD 381.2 million, with an effective annual interest rate ranging from 1.75% to 23.1%[60]. - The debt-to-equity ratio increased from 53.4% as of December 31, 2019, to 60.8% as of June 30, 2020, an increase of 7.4 percentage points, primarily due to a significant decrease in trade receivables and other receivables by approximately HKD 59.8 million[60]. - As of June 30, 2020, the group's net working capital was negative HKD 270.6 million, an increase of HKD 23.1 million or 9.3% compared to negative HKD 247.5 million as of December 31, 2019[61]. Cost Management - The company's sales cost for continuing operations decreased by 17.0% to HKD 83.2 million, compared to HKD 100.2 million in the previous year[36]. - The company's administrative expenses decreased to HKD 40.0 million from HKD 53.5 million, primarily due to a reduction in travel and personnel costs[46]. - The company’s selling and distribution expenses decreased to HKD 81,583,000 from HKD 107,730,000, a reduction of 24.3%[124]. - The company’s administrative expenses also decreased to HKD 39,977,000 from HKD 53,451,000, reflecting a 25.2% reduction[124]. Shareholder Information - As of June 30, 2020, the largest shareholder holds 62.52% of the company's shares, totaling 218,347,092 shares[92]. - The company has a total of 12,700,000 unexercised stock options from the second batch as of June 30, 2020[79]. - The company has granted a total of 29,398,600 stock options under its stock option plan, with 21,600,000 options remaining unexercised as of June 30, 2020[79]. - The company has a significant percentage of shares held by related parties, indicating potential influence on corporate governance[99]. - The shareholding structure indicates a complex ownership involving multiple entities and individuals[107]. Operational Challenges - The company faced challenges in the first half of 2020 due to COVID-19, the ongoing US-China trade war, and economic slowdowns in mainland China and Hong Kong[80]. - The company implemented cost control and operational efficiency measures to address liquidity issues caused by the redemption of certain convertible bonds[80]. - The company sold non-core assets and divested loss-making businesses as part of its strategy to improve cash flow[80]. - The group is exploring opportunities to sell certain investments and other assets to mitigate overall business risks[143]. Future Outlook - The company has a cautious but optimistic outlook for its business and development moving forward[80]. - The report does not provide specific future guidance or performance outlook for the upcoming quarters[96]. - The company has not disclosed any new product developments or market expansion strategies in the current report[96]. - There are no new mergers or acquisitions mentioned in the current financial report[96].

Financial Performance - The company recorded significant losses during the reporting period due to a challenging operating environment, with investment returns substantially decreasing [11]. - For the year ended December 31, 2019, the revenue from continuing operations (health and wellness product sales and trading business) was HKD 450.8 million, a decrease of 17.3% compared to HKD 545.0 million for the year ended December 31, 2018 [17]. - The group recorded a loss of HKD 228.1 million from continuing operations for the year, compared to a loss of HKD 39.9 million in 2018, primarily due to a significant decrease in other income and increased impairment losses on financial assets [17]. - Revenue from discontinued operations (logistics business) was HKD 279.2 million, down from HKD 340.9 million in 2018, resulting in a loss of HKD 54.3 million compared to a profit of HKD 9.0 million in 2018 [18]. - The pre-tax loss for continuing operations in 2019 was HKD 227.0 million, compared to a pre-tax loss of HKD 37.6 million in 2018 [52]. - The net loss for the year from continuing operations in 2019 was HKD 228.1 million, compared to a net loss of HKD 39.9 million in 2018 [54]. Revenue Breakdown - The health and wellness product sales segment generated revenue of HKD 404.5 million from massage chairs and HKD 44.1 million from other products, accounting for 90.2% and 9.8% of the segment's revenue, respectively [21]. - The group launched 34 new products, generating HKD 65.2 million in revenue, which represented 14.5% of the health and wellness product sales segment revenue [21]. - Traditional sales channels generated revenue of HKD 262.2 million, accounting for 58.4% of the health and wellness product sales segment, a slight increase of 1.0% from HKD 259.6 million in 2018 [26]. - Company sales increased by 48.4% to HKD 105.9 million, driven by large corporate projects during the year [31]. - Internet sales grew by 23.7% to HKD 27.1 million, attributed to the rapid development of online sales in the current market environment in mainland China [31]. - Trading business revenue was HKD 2.2 million, a significant decrease of 98.5% due to adverse impacts from the prolonged US-China trade war and political unrest in Hong Kong [32]. Operational Changes and Strategies - The company accelerated the recovery of invested projects and divested loss-making businesses, including the sale of commercial and residential properties, to enhance operational capital [11]. - In response to the COVID-19 pandemic, the company adjusted its operational strategies to reduce costs and optimize operations [15]. - The management expressed confidence in overcoming challenges and is committed to maximizing shareholder returns [15]. - The management team underwent changes in the second half of 2019, bringing new ideas and motivation to explore new business opportunities [12]. - The company remains cautiously optimistic about the future of its trading and logistics business, focusing on market trends and new business opportunities [12]. - The group remains cautiously optimistic about the future of the logistics business and will continue to monitor market trends and explore new opportunities [17]. Financial Position and Liquidity - Total equity as of December 31, 2019, was HKD 160.4 million, down from HKD 450.3 million at the end of 2018, mainly due to losses incurred during the year [57]. - The current ratio decreased to 0.5 times as of December 31, 2019, from 1.0 times at the end of 2018, indicating a decline in liquidity [57]. - Cash and bank balances were HKD 73.3 million as of December 31, 2019, down from HKD 134.5 million in 2018, reflecting a tighter cash position [58]. - Net cash generated from operating activities was HKD 26.3 million in 2019, compared to a net cash outflow of HKD 42.6 million in 2018 [60]. - Net cash from investing activities increased significantly to HKD 70.2 million in 2019, up from HKD 11.6 million in 2018, mainly due to cash inflows from the sale of subsidiaries [61]. - Net cash used in financing activities was HKD 150.7 million in 2019, compared to a net cash inflow of HKD 42.4 million in 2018, primarily due to repayments of lease liabilities and preferred notes [62]. Shareholder and Governance Matters - The company reported a loss for the year ended December 31, 2019, with no final dividend declared for the year, consistent with the previous year [93]. - The company has adopted a dividend policy effective from January 1, 2019, aimed at improving transparency for shareholders [94]. - The board consists of four executive directors, one non-executive director, and three independent non-executive directors, ensuring a diverse range of business experience and expertise [184]. - The company has established various committees, including the audit committee, remuneration committee, and nomination committee, to oversee different responsibilities [184]. - The roles of Chairman and CEO have been separated to ensure a balance of power within the company [186]. - The company has implemented indemnification provisions for directors against liabilities incurred in their roles [145]. Risks and Compliance - The board is closely monitoring the risks and uncertainties related to the COVID-19 outbreak, which has led to a significant decrease in customer traffic to shopping centers, potentially impacting sales and revenue [173]. - The group faces liquidity risks if cash from financing activities and existing cash are insufficient to redeem convertible bonds and repay bank loans [119]. - The group has floating-rate bank loans, exposing it to interest rate risk, and has not engaged in any hedging activities to manage this risk as of December 31, 2019 [120]. - The company has confirmed compliance with the disclosure requirements of the Listing Rules regarding related party transactions [166]. - The company has complied with all relevant environmental laws and regulations during the year, ensuring responsible operations [168]. - The company has not reported any significant violations of applicable laws and regulations that could impact its operations [167]. Employee and Operational Efficiency - The company emphasizes the importance of employee training and development, aiming to provide competitive compensation to retain talent [169]. - The company has implemented an ERP system to optimize resource allocation and reduce resource consumption, contributing to environmental sustainability [168]. - The company has established a customer relationship management system to collect feedback and improve product design and quality management [171]. - The company has maintained good relationships with suppliers, regularly evaluating and inspecting external manufacturers [171]. Changes in Share Capital and Stock Options - The company has a structured share option plan, with specific exercise prices and timelines for options granted to directors [137]. - The total number of unexercised stock options as of December 31, 2019, was 60,106,000, with 29,398,600 remaining unexercised after accounting for expirations and cancellations [164]. - The company has a total of 36,708,800 stock options that have been exercised or are still available for exercise, with 20,598,600 options remaining after accounting for expirations [164]. - The company’s stock options must have an exercise price not lower than the higher of the closing price on the date of grant or the average closing price over the preceding five trading days [157]. - The company has not granted any rights to directors or their family members to purchase shares or debt securities during the year [142].

Financial Performance - The group's revenue for the six months ended June 30, 2019, was HKD 382.3 million, a decrease of 1.2% compared to HKD 387.0 million for the same period in 2018[14]. - The group recorded a loss of HKD 67.5 million for the period, compared to a profit of HKD 7.1 million for the same period in 2018, representing a decline of 1,047.0%[9]. - Total revenue for the group was HKD 382.3 million, a decrease of 1.2% from HKD 387.0 million, mainly due to a 12.9% decline in trade and logistics business revenue[30]. - The company reported a loss before tax of HKD 65,196, compared to a profit of HKD 11,678 in the previous year[123]. - Net loss for the period was HKD 67,523, a significant decline from a profit of HKD 7,130 in the same period last year[123]. - The company reported a loss attributable to shareholders of HKD 66,006,000 for the period, compared to a profit of HKD 4,266,000 in the previous year[192]. Revenue Breakdown - The health and wellness product sales segment generated revenue of HKD 226.9 million, with new product launches contributing HKD 20.9 million, accounting for 9.2% of the segment's revenue[15]. - Revenue from the mainland China retail business contributed HKD 89.3 million, a 28.3% increase from HKD 69.6 million in the previous year, attributed to an increase in retail outlets and optimized store distribution[20]. - Revenue from Hong Kong and Macau retail business was HKD 61.4 million, a slight increase of 2.8% from HKD 59.7 million in the previous year, indicating stable performance[21]. - Revenue from Singapore and Malaysia retail business decreased by 8.6% to HKD 14.8 million from HKD 16.2 million, primarily due to a significant decline in Malaysia's retail performance[22]. - The group's revenue from traditional sales channels was HKD 165.5 million, accounting for 72.9% of the health and wellness product sales, an increase of 13.7% compared to HKD 145.5 million for the same period last year[20]. Cost and Profitability - The cost of sales decreased by 3.2% to HKD 239.5 million from HKD 247.4 million, primarily due to the decline in trade and logistics business costs[32]. - Gross profit for the period was HKD 142.8 million, with a gross margin of 37.4%, an increase of 1.3 percentage points from 36.1% in the previous year[33]. - The gross profit margin improved to 37.4%, up 1.3 percentage points from 36.1% in the previous year[9]. - Selling and distribution expenses increased from HKD 95.4 million to HKD 118.1 million, mainly due to an increase in advertising and marketing expenses of HKD 10.2 million and transportation expenses of HKD 5.3 million[43]. - Administrative expenses rose from HKD 54.4 million to HKD 56.5 million, attributed to an increase in depreciation expenses of HKD 2.8 million and labor costs of HKD 1.6 million[44]. Cash Flow and Liquidity - The group’s cash and bank balances decreased by 44.7% to HKD 74.4 million from HKD 134.5 million at the end of 2018[9]. - The net cash from operating activities was HKD 31.3 million, compared to a net cash outflow of HKD 29.8 million for the six months ended June 30, 2018[52]. - The total cash and cash equivalents at the end of June 30, 2019, decreased to HKD 74,516,000 from HKD 195,242,000 in the previous year, reflecting a decline of 61.8%[134]. - The company’s bank balances and cash as of June 30, 2019, were HKD 74,000,000, which raises concerns regarding liquidity given the HKD 200,000,000 convertible bonds due[137]. - The company recorded a significant increase in selling and distribution expenses, rising to HKD 118,091 from HKD 95,407[123]. Asset Management - The group’s total equity decreased to HKD 379.3 million as of June 30, 2019, from HKD 450.3 million as of December 31, 2018, primarily due to the loss incurred during the period[50]. - The total borrowings amounted to HKD 489.5 million, with an actual interest rate ranging from 2.1% to 10.0%[57]. - The company has pledged assets with a total book value of HKD 328.6 million as of June 30, 2019, including leased land and buildings, properties, factories, equipment, investment properties, and bank deposits to secure various bank and other financing[62]. - The company entered into an agreement to sell a wholly-owned subsidiary for a cash consideration of HKD 122,268,000, received on July 23, 2019[138]. - The company also sold a commercial property and a residential property for cash considerations of HKD 10,620,000 and HKD 10,800,000 respectively[138]. Strategic Initiatives - The group is actively expanding its sales channels, including traditional retail and internet sales, to enhance market coverage[16]. - The company is considering various fundraising measures, including asset sales and equity financing, to fulfill repayment obligations for convertible bonds totaling HKD 190 million[69]. - The company has implemented measures to address liquidity issues arising from the redemption of certain convertible bonds, including the sale of non-core assets and enhancing fundraising activities[82]. - The company has accelerated efforts to recover receivables and improve operational efficiency as part of its strategy to overcome financial challenges[82]. - The company anticipates significant challenges in the second half of 2019 due to ongoing political unrest in Hong Kong and the impact of the US-China trade war on consumer sentiment in mainland China[82]. Shareholder Information - As of June 30, 2019, Mr. Zhong Baisheng holds 232,104,800 shares, representing approximately 66.46% of the company's equity[95]. - The total number of shares held by the directors and senior management amounts to 349,260,800 shares as of June 30, 2019[98]. - The major shareholder, Tengbang Holdings Limited, holds 232,104,800 shares, representing 66.46% of the company's total equity[100]. - The ownership structure indicates significant control by Mr. Zhong Baisheng and related entities, with a combined ownership exceeding 66%[97]. - The company has a significant concentration of ownership, with the top shareholders controlling over 66% of the equity[100]. Stock Options and Equity Management - The company has issued a total of 60,106,000 stock options under the stock option plan, with 50,706,000 options remaining unexercised as of June 30, 2019[80]. - The stock options granted to directors include various exercise prices, with the lowest being HKD 1.84 per share[97]. - The company has a structured approach to equity management, ensuring compliance with the Securities and Futures Ordinance[106]. - The total number of unexercised stock options as of June 30, 2019, is 50,706,000[113]. - The company has been actively managing its stock options to incentivize selected participants for their contributions to the group[107]. Accounting Policies - The company has implemented new accounting policies that affect the recognition and measurement of lease liabilities and right-of-use assets[141]. - The application of Hong Kong Financial Reporting Standard 16 (HKFRS 16) has been adopted, impacting the accounting policies and reported amounts[139]. - The company recognized right-of-use assets at the commencement date of leases, measured at cost less accumulated depreciation and impairment losses[146]. - Lease liabilities are recognized at the present value of unpaid lease payments at the lease commencement date[150]. - The company applies short-term lease exemptions for leases with a term of 12 months or less and for low-value asset leases[145].

Financial Performance - Total revenue for 2018 was HKD 885.9 million, representing a 6.2% increase from HKD 834.3 million in 2017[12] - Gross profit decreased by 10.4% to HKD 262.3 million, down from HKD 292.9 million in the previous year[12] - The company reported a loss before tax of HKD 25.4 million, a significant decline of 161.5% compared to a profit of HKD 41.3 million in 2017[12] - Net loss after tax for the year was HKD 30.9 million, a 198.1% decrease from a profit of HKD 31.5 million in 2017[12] - The gross profit margin fell to 29.6%, down from 35.1% in the previous year, a decline of 5.5 percentage points[12] - The company recorded a loss of HKD 30.9 million in 2018, compared to a profit of HKD 31.5 million in 2017, primarily due to significant increases in administrative expenses and financing costs[18] - Trade and logistics business generated revenue of HKD 481.2 million, accounting for 54.3% of total revenue, with a 14.4% increase from HKD 420.7 million in 2017[30][35] - Sales of health and wellness products decreased by 2.1% to HKD 404.7 million, down from HKD 413.5 million in 2017[35] Liquidity and Debt - The company maintained a current ratio of 1.0, indicating stable liquidity[12] - Bank borrowings increased by 96.7% to HKD 293.7 million from HKD 149.3 million in 2017[12] - Total borrowings as of December 31, 2018, were HKD 541.7 million, with a debt-to-equity ratio increasing to 48.2% from 39.6% in 2017[59] - The group faced significant competition from both international and local enterprises, impacting pricing and gross margins[163] - The group has HKD 190,000,000 in convertible bonds and approximately HKD 111,500,000 in short-term revolving loans due within one year, raising liquidity concerns[166] Investments and Acquisitions - The company acquired a 17% stake in Shenzhen Tempus Value Chain Co., Ltd. to enhance its logistics supply chain business[13] - The group invested approximately RMB 11.1 million for an 11.11% stake in Guangdong Shucheng Technology Co., Ltd., a joint venture in supply chain big data[67] - The group acquired a 7% stake in Chongqing Globor E-commerce Co., Ltd. for RMB 10.5 million, a rapidly growing e-commerce company[68] - The company acquired an additional 17% stake in Shenzhen Tengbang Value Chain, increasing its total ownership to 78.75%, for a cash consideration of HKD 17,000,000[69] - The company sold its 12% stake in Cloud Power for RMB 67,220,000, resulting in a gain of RMB 1,933,000[71] Operational Efficiency - Selling and distribution expenses decreased to HKD 197.3 million from HKD 219.0 million in 2017, mainly due to reductions in labor, rental, and advertising costs[45] - Administrative expenses rose to HKD 113.3 million from HKD 88.5 million in 2017, primarily due to increases in labor and professional fees[47] - Financing costs surged to HKD 58.4 million from HKD 18.6 million in 2017, attributed to increased average borrowings[48] - The company plans to strengthen and expand its core business while optimizing cost control and enhancing the value of existing customers and channels[15] Environmental, Social, and Governance (ESG) - The company presented its Environmental, Social, and Governance (ESG) report, outlining its performance in corporate social responsibility during the reporting period[81] - The company emphasizes compliance with environmental regulations and stakeholder engagement as part of its sustainable development strategy[88] - The company has identified key stakeholders, including investors and customers, and established various communication channels to address their expectations[89] - The company aims to ensure low risk and transparency for shareholders through regular reports and meetings[91] - The company is committed to providing a safe and quality work environment for employees, including health and safety measures[91] Employee and Management Structure - The group has a total of 765 employees across Hong Kong, China, and overseas, with a gender distribution of 38% male and 62% female[118] - Employee training participation in 2018 was 24% for males and 25% for females, with average training hours of 586 for males and 808 for females[122] - The group has a structured human resources operation system that ensures equal opportunities and fair treatment for all employees[125] - The group has established a team of senior engineers and technicians to provide high-quality after-sales service, with a one-year warranty for all products[130] Shareholder Information - As of December 31, 2018, Mr. Zhong Baisheng holds 232,104,800 shares, representing 66.34% of the company's equity[178] - The largest shareholder, Tongbang Holdings Limited, holds 232,104,800 shares, representing 66.34% of the company's total shares[193] - The total number of shares outstanding as of December 31, 2018, was 349,876,800 shares[185] - The company has granted stock options totaling 4,450,000 shares under the stock option plan, with exercise prices ranging from HKD 1.84 to HKD 3.38[185] Future Outlook - The company aims to reduce its debt ratio and ensure a stable capital operation state in 2019[15] - The company is considering various financing activities, including issuing new bonds or shares and selling non-core assets[166] - The company has no specific plans for major investments or acquisitions as of the report date, but continues to seek suitable investment opportunities[75]