Financial Performance - The operating revenue for the six months ended June 30, 2019, was approximately HKD 118.8 million, a decrease of 32.3% compared to HKD 175.4 million in the same period of 2018[9]. - The gross profit for the same period was HKD 20.2 million, down 59.0% from HKD 49.3 million in 2018[6]. - The loss attributable to owners of the company was approximately HKD 29.8 million, a significant decrease of 321.9% compared to a profit of HKD 13.4 million in the prior year[9]. - The overall revenue dropped by 36.6% to HKD 94.61 million, attributed to cash flow tightening from local governments in China[22]. - The company reported a loss before tax of HKD 44,379,000, compared to a profit of HKD 18,565,000 in the previous year[80]. - The net loss for the period was HKD 43,860,000, compared to a profit of HKD 11,491,000 in 2018[80]. - The company reported a pre-tax loss of HKD 29,774,000 for the six months ended June 30, 2019, compared to a profit of HKD 13,416,000 in the same period of 2018[161]. Revenue Breakdown - Revenue from the asphalt pavement maintenance services segment was approximately HKD 94.6 million, a decrease of 36.6% compared to the previous year[11]. - The revenue for the "in-situ thermal regeneration" projects decreased by 48.4% to HKD 51.15 million, with a service area of 786,000 square meters compared to 1.63 million square meters in the previous year[22]. - Revenue from maintenance services included HKD 51,153,000 from "on-site thermal regeneration" projects and HKD 43,458,000 from non-"on-site thermal regeneration" projects[137]. - Equipment sales totaled HKD 24,167,000, with HKD 20,672,000 from standard series equipment and HKD 3,495,000 from maintenance and repair services[137]. Research and Development - The company continued to invest in R&D, developing high-performance vacuum cleaners and snow plows targeting high-end customers in aviation and highways[16]. - The company is enhancing its R&D capabilities to overcome technical limitations in the asphalt pavement maintenance service industry[16]. - The company is developing a global technology R&D center from an investment property acquired in December 2016, which is expected to enhance its R&D capabilities and provide long-term investment potential[20]. Market Strategy - The company aims to expand its market presence in countries along the Belt and Road Initiative and the Four Asian Tigers despite challenges in the U.S. market due to trade tensions[9]. - The company plans to explore overseas opportunities and strategic partnerships, particularly in countries along the "Belt and Road" initiative and the Four Asian Tigers[18]. - The company aims to increase market penetration in cities with limited use of "in-situ thermal regeneration" technology and enhance its one-stop service image by investing more resources in the testing and planning departments[20]. - The company is optimistic about the overall pavement maintenance market in China, supported by government policies and the low current penetration rate of regeneration technologies[18]. Financial Position - As of June 30, 2019, the group's bank balances and cash amounted to approximately HKD 150.4 million, down from HKD 192.4 million as of December 31, 2018, primarily due to cash used in operating activities and repayment of bank borrowings[41]. - The group had total debt of HKD 117.2 million as of June 30, 2019, down from HKD 123.0 million as of December 31, 2018[43]. - The company’s cash and cash equivalents decreased to HKD 107,086,000 from HKD 154,614,000[82]. - The total equity attributable to owners of the company was HKD 671,365,000, down from HKD 702,679,000 at the end of 2018[82]. Employee and Governance - The company employed a total of 570 full-time employees as of June 30, 2019, a slight decrease from 572 employees as of December 31, 2018[53]. - The board of directors has implemented a high level of corporate governance to protect shareholders' interests[70]. - The audit committee consists of three independent non-executive directors, ensuring proper oversight of financial reporting[73]. - The company has implemented a policy to assess credit risk when accepting new business, limiting exposure to individual customer credit risk[52]. Stock Options and Share Plans - The company has a stock option plan effective from June 7, 2013, aimed at incentivizing eligible individuals to enhance performance and efficiency, with a duration of ten years unless revoked or amended[182]. - The total number of reward shares granted under the share option plan is limited to 3% of the company's issued share capital[68]. - The company adopted a share award plan on May 7, 2014, allowing for the granting of shares to selected employees, with a total limit of 3% of the issued share capital[194]. - As of June 30, 2019, the trustee held 17,370,000 shares that have not yet been awarded under the share award plan[195]. Financial Risks and Liabilities - The group’s financial risk management includes exposure to interest rate risk, with 18.5% of bank borrowings at fixed rates and 81.5% at floating rates as of June 30, 2019[50]. - The company has not hedged its foreign currency risk, which is primarily due to the depreciation of RMB against HKD[51]. - The company maintains strict control over outstanding receivables and has established a credit control department to minimize credit risk[168]. - The company has no significant contingent liabilities as of June 30, 2019[48].

Financial Performance - For the fiscal year ending December 31, 2018, Freetech reported revenue of approximately HKD 522.4 million, an increase of 9.9% compared to HKD 475.5 million in 2017[14]. - The gross profit for the same period was HKD 102.1 million, down 10.1% from HKD 113.5 million in 2017, resulting in a gross margin of 19.5%[14][15]. - The loss attributable to owners of the company narrowed to approximately HKD 139.1 million from HKD 265.0 million in 2017, reflecting a 47.5% improvement[14][19]. - The group's operating revenue for 2018 was approximately HKD 522.4 million, an increase of about 9.9% compared to 2017[29]. - The asphalt pavement maintenance services segment recorded revenue of approximately HKD 468.0 million, an increase of 8.4% from 2017[30]. - The asphalt pavement maintenance equipment segment generated revenue of HKD 54.4 million, a 23.9% increase from 2017[34]. - The total revenue for the year ended December 31, 2018, was HKD 468,008,000, representing an 8.4% increase from HKD 431,606,000 in 2017[52]. - Revenue from "in-situ thermal regeneration" projects was HKD 265,755,000, a slight decrease of 0.7% from HKD 267,734,000 in 2017, while non-"in-situ thermal regeneration" projects saw a 23.4% increase to HKD 202,253,000 from HKD 163,872,000[52]. - Maintenance and repair revenue surged by 86.8% to HKD 5,703,000 in 2018, primarily due to increased upgrade services for standard equipment sold a decade ago[56]. Cash and Debt Management - Cash and cash equivalents, including fixed deposits, decreased by 26.1% to HKD 192.4 million from HKD 260.6 million in 2017[15]. - Bank borrowings were reduced by 20.0% to HKD 123.0 million from HKD 153.8 million in the previous year[15]. - The group’s bank borrowings amounted to HKD 123.0 million as of December 31, 2018, down from HKD 153.8 million in 2017[72]. - Cash and cash equivalents, including bank deposits, decreased to approximately HKD 192.4 million as of December 31, 2018, from HKD 260.6 million in 2017, mainly due to cash used in operating activities and purchases of properties[72]. - The group has a solid liquidity position, which supports its operational expansion plans[77]. Market and Growth Opportunities - The company anticipates significant growth in the road maintenance sector due to increasing environmental regulations and the rising prices of aggregates[20][22]. - The introduction of new products, such as the safety buffer vehicle, has led to an increase in market share and recognition since its launch[22]. - The company is positioned to benefit from the upcoming five-year road inspection by the Ministry of Transport, expected to drive demand for road maintenance projects[22]. - Freetech's technology, including the "in-situ thermal regeneration" technique, has substantial expansion potential in the Chinese market, which has the longest highway network globally[22]. - The overall growth potential in China's asphalt pavement maintenance industry remains significant due to the low current adoption rate of regeneration technologies[46]. - The company plans to continue expanding into international markets, including the "Belt and Road" countries and regions such as the United States, India, and Singapore[23]. - The company aims to enhance its research and development capabilities to overcome technical limitations in the asphalt pavement maintenance service industry[37]. - The company is committed to providing customized solutions using advanced recycling technology to maintain its competitive advantage in the asphalt pavement maintenance industry[42]. - The company is expanding its market presence in Southeast Asia, targeting a 30% increase in market share within the next two years[114]. Research and Development - The company registered a total of 148 patents as of December 31, 2018, up from 131 in 2017, including 17 invention patents[36]. - The investment property acquired in December 2016 will serve as the company's global technology R&D center, enhancing its research capabilities and long-term investment potential[47]. - The group has allocated HKD 137.4 million for R&D, with the full amount already utilized[80]. - The management team highlighted the importance of technological innovation, with a budget allocation of HKD 50 million for R&D in the upcoming fiscal year[114]. - The company has a strong emphasis on research and development, with its founder being the inventor of 148 registered patents and the "in-situ thermal regeneration" technology[103]. Corporate Governance - The board emphasized the importance of corporate governance, ensuring compliance with the Hong Kong Stock Exchange's guidelines to protect shareholder interests[121]. - The board has established a remuneration committee, nomination committee, and audit committee with clear responsibilities[141]. - The company engaged Deloitte as the external auditor for the fiscal year 2019, with a remuneration of HKD 1,770,000 for audit services[168]. - The audit committee held two meetings during the fiscal year to review financial statements and compliance with accounting principles[157]. - The board acknowledged its responsibility for preparing the group's financial statements and ensuring adequate resources for accounting and financial reporting functions[162]. Risk Management - The company faces significant risks related to the Chinese market, particularly in the asphalt maintenance equipment and services sector, which heavily relies on local government spending and commercial investments[97]. - There is a financial credit risk due to potential delays in collecting trade receivables, especially from local governments, which may increase the risk of impairment of trade receivables[98]. - The company is implementing environmental compliance policies to meet stricter regulations in China, which may incur additional costs for updating environmental equipment and ensuring compliance[99]. - The company plans to diversify its customer base to mitigate risks associated with the Chinese economy's growth rate and local government spending on road maintenance[97]. - The management is focusing on improving the performance of subsidiaries and joint ventures that are currently underperforming to seize existing business opportunities[97]. Shareholder Information - The company does not recommend the payment of any dividends for the year ending December 31, 2018, and no arrangements have been made for any shareholder to waive dividends[188]. - Approximately 49.0% of total sales for the year were attributed to the top five customers, with the largest customer accounting for about 24.6%[199]. - The company’s available distributable reserves as of December 31, 2018, were approximately HKD 592.2 million, down from HKD 787.2 million in 2017[198].