Financial Performance - Hang Tai Yue Group Holdings Limited reported a significant increase in revenue, achieving a total of HKD 150 million, representing a growth of 25% compared to the previous year[11]. - The Group recorded revenue of approximately HK$1,799,501,000 for the year ended 31 December 2021, representing a 71% increase compared to HK$1,050,847,000 in 2020[18]. - Profit attributable to shareholders was approximately HK$55,699,000, a significant recovery from a loss of approximately HK$72,697,000 in 2020[18]. - The Group reported a profit of approximately HK$10,841,000 for the year ended 31 December 2021, a turnaround from a loss of approximately HK$104,436,000 in 2020, primarily due to a 64% increase in revenue from approximately HK$109,966,000 in 2020 to approximately HK$180,762,000 in 2021[46]. - Revenue from the mobile internet cultural business and IT services reached approximately HK$1,755,272,000 in 2021, representing a growth of approximately 73% compared to HK$1,014,554,000 in 2020[46]. Market Expansion and Strategy - Future outlook indicates a projected revenue growth of 30% for the next fiscal year, driven by new product launches and market expansion strategies[11]. - The company plans to enter two new markets in Southeast Asia by the end of the next fiscal year, aiming to capture an additional 10% market share[11]. - A strategic acquisition of a local competitor is under consideration, which could potentially increase market presence by 20%[11]. - The Group aims to leverage its competitive advantages to enhance existing businesses and create value for shareholders[40]. - The Group plans to expand its Walletku payment application and e-commerce platform in Indonesia, capitalizing on the country's large unbanked population and growing smartphone penetration[175]. Operational Improvements - Investment in research and development increased by 15%, focusing on innovative technologies to enhance product offerings[11]. - The gross profit margin improved to 35%, up from 30% in the previous year, reflecting better cost management and pricing strategies[11]. - The company has set a target to reduce operational costs by 10% through efficiency improvements in the supply chain[11]. - The Group aims to maintain operational resilience and explore new opportunities amid geopolitical and macroeconomic uncertainties[179]. Customer Engagement and Retention - The company’s user base expanded to 500,000 active users, marking a 40% increase year-over-year[11]. - Customer retention rate reached 85%, indicating strong brand loyalty and satisfaction among users[11]. Impact of COVID-19 - The Group's hospitality services in Australia were impacted by COVID-19, with Balgownie remaining open for most of the year despite several lockdowns[26]. - The Group's resorts were closed for several periods due to COVID-19, but Balgownie remained open for most of 2021, contributing to improved revenue[87]. - The ongoing pandemic situation has necessitated the implementation of new strategies to adapt to changing market conditions and consumer behavior[104]. Financial Health and Assets - As of December 31, 2021, the Group's total assets were approximately HK$657,894,000, a decrease from HK$1,134,050,000 in 2020[181]. - The Group's cash and cash equivalents were approximately HK$10,839,000, down from HK$89,480,000 in 2020[181]. - The Group's borrowings repayable within one year were approximately HK$86,827,000, significantly reduced from HK$277,205,000 in 2020[181]. - The gearing ratio improved to 0.52 times as of December 31, 2021, compared to 0.77 times in 2020[185]. - The net debt-to-equity capital ratio decreased to 0.80 times from 2.36 times in 2020[185]. Investment and Asset Management - The Group's investment strategy includes monitoring loan repayments and engaging legal advisers if necessary for recovery of loans[127]. - The Group's internal control procedures ensure that loans are only granted to borrowers with sound credit history and sufficient collateral[127]. - The Group plans to maintain its existing investment portfolio unless there are changes in investment strategy or opportunities to realize existing investments arise[165]. New Product Development - Plans for launching a new product line in Q3 2022 are underway, expected to contribute an additional HKD 50 million in revenue[11]. - The group plans to launch a new "Wellness Retreat" product/service in partnership with Endota Spa by the end of Q2 2022, targeting leisure and corporate segments[73]. - The new wellness offerings will include comprehensive treatments, healthy dining options, and mindfulness activities, aimed at attracting more customers[75]. Challenges and Adjustments - The Group faced a significant decline in bookings across Victoria due to ongoing restrictions, leading to underperformance in hospitality services for the financial years ended December 31, 2020, and 2021[104]. - The Group incurred significant human resources costs to retain and recruit IT professionals due to strong market demand, which outpaced revenue growth[52]. - The Group's operations were affected by the fluctuating restrictions, with multiple closures and reopenings throughout 2020 and 2021[104].

Financial Performance - The Group reported revenue of HK$1,335,991,000 for the nine months ended September 30, 2021, compared to HK$607,292,000 for the same period in 2020, representing an increase of approximately 120%[11]. - The loss for the period was HK$93,424,000 for the nine months ended September 30, 2021, compared to a loss of HK$85,147,000 for the same period in 2020, indicating a slight increase in losses[13]. - The Group's total comprehensive expense for the period was HK$120,665,000 for the nine months ended September 30, 2021, compared to HK$90,838,000 for the same period in 2020, reflecting an increase of approximately 33%[15]. - Basic and diluted loss per share was HK$1.19 for the nine months ended September 30, 2021, compared to HK$1.05 for the same period in 2020, indicating a deterioration in per-share performance[15]. - The Group's total comprehensive expense attributable to shareholders was HK$91,634,000 for the nine months ended September 30, 2021, compared to HK$61,734,000 for the same period in 2020, indicating an increase of approximately 48%[15]. - The Group reported a loss attributable to shareholders of approximately HK$93,424,000 for the nine months ended 30 September 2021, compared to a loss of HK$85,147,000 in the same period of 2020, representing an increase in loss of approximately 3.5%[41]. - The total comprehensive loss for the period was approximately HK$120,665,000, compared to HK$90,838,000 in the previous year[41]. Revenue Breakdown - Total revenue, other income, and gains for the nine months ended 30 September 2021 reached HK$1,347,375,000, a significant increase from HK$618,563,000 in the same period of 2020, representing a growth of approximately 117.5%[22]. - Revenue from IT contract services and maintenance services amounted to HK$1,206,212,000 for the nine months ended 30 September 2021, compared to HK$580,694,000 in 2020, reflecting a growth of about 107.5%[22]. - Revenue from hospitality and related services was HK$95,917,000 for the nine months ended 30 September 2021, with no revenue reported in the same period of 2020[22]. - Loan interest income for the nine months ended 30 September 2021 was HK$5,395,000, compared to HK$1,059,000 in 2020, indicating a substantial increase[22]. - The company reported a total of HK$11,384,000 in other income and gains for the nine months ended 30 September 2021, slightly up from HK$11,271,000 in 2020[22]. Expenses and Costs - The Group incurred finance costs of HK$10,485,000 for the nine months ended September 30, 2021, down from HK$21,637,000 in the same period of 2020, showing a reduction of approximately 52%[13]. - The Group's administrative expenses were HK$212,603,000 for the nine months ended September 30, 2021, compared to HK$140,871,000 for the same period in 2020, representing an increase of approximately 51%[13]. - The Group incurred substantial human resources costs to retain existing employees and recruit new staff due to increased service demand, leading to a growth in salaries and benefits that outpaced revenue growth[47]. Investment and Financial Assets - The fair value losses on financial assets at fair value through profit or loss were HK$147,000 for the nine months ended September 30, 2021, compared to losses of HK$9,675,000 in the same period of 2020, indicating a significant improvement[13]. - The Group recorded fair value losses on financial assets at FVTOCI of approximately HK$33,179,000 for the nine months ended September 30, 2021, compared to HK$4,969,000 in 2020[77]. - The Group's investment portfolio mainly comprised securities issued by listed companies as of September 30, 2021[77]. - The Group aims to optimize returns from its investment portfolios and create value for shareholders[79]. Corporate Governance and Compliance - The Group's unaudited condensed consolidated results for the nine months ended 30 September 2021 have been reviewed by the Audit Committee, confirming compliance with applicable accounting standards and GEM Listing Rules[145]. - The Company has adopted a code of conduct regarding Directors' securities transactions, with no non-compliance reported during the review period[138]. - The Audit Committee consists of four independent non-executive Directors as of the date of the report, ensuring effective oversight of financial reporting and internal controls[143]. - The Company has complied with the Corporate Governance Code provisions during the nine months ended 30 September 2021, promoting transparency and quality of disclosure[140]. Business Operations and Strategy - The Group's principal activities include mobile internet cultural business, IT services, hospitality services in Australia, money lending, and asset investments[40]. - The Group commenced retail commerce through network media after acquiring 51% of TNG Indonesia Holdings Limited for US$1,000,000 (approximately HK$7,800,000) on 9 March 2021[48]. - The Group is actively exploring investment opportunities to diversify its business, including the operation of retail commerce through network media after acquiring 51% of TNG Holdings[113]. - The Group is also looking into developing and operating microlending FinTech platforms in Hong Kong and Southeast Asia, including Indonesia, to further diversify its business[115]. Impact of COVID-19 - The Group's operations were impacted by multiple lockdowns throughout 2021, including a sixth lockdown announced on August 5, 2021[66]. - The Group plans to adapt to ongoing restrictions for unvaccinated individuals expected to continue throughout 2022[66]. - Domestic tourism demand in Regional Victoria increased since Q1 2021, despite the five-day lockdown in February 2021[66]. Shareholder Information - As of September 30, 2021, Mr. Ng holds 763,780,000 ordinary shares, representing approximately 14.31% of the total issued shares[118]. - The total issued shares as of September 30, 2021, is 5,336,235,108 shares[118]. - The maximum number of shares that may be issued under the existing share option scheme is 533,623,510 shares, representing approximately 10% of the issued share capital[122].

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability) (於開曼群島註冊成立並於百慕達存續之有限公司) (Stock Code 股份代號: 8081) INTERIM REPORT 中期報告 2021 Chairman CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE") GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of i ...

Financial Performance - For the three months ended March 31, 2021, the Group reported revenue of HK$378,555,000, an increase from HK$159,750,000 in the same period of 2020, representing a growth of 136.5%[12] - The Group incurred a loss before tax of HK$46,624,000, an improvement compared to a loss of HK$54,406,000 in the prior year, indicating a reduction in loss of approximately 14.5%[14] - Total comprehensive income for the period was a loss of HK$44,904,000, compared to a loss of HK$14,494,000 in the same period last year, reflecting a decline in overall performance[14] - The loss attributable to shareholders was HK$32,914,000, slightly better than the loss of HK$34,745,000 reported in the previous year, showing a decrease in loss of about 5.0%[16] - Basic and diluted loss per share for the period was HK$0.62, compared to HK$0.65 in the same period of 2020, indicating a minor improvement in per-share loss[16] - Other comprehensive income for the period included an exchange gain of HK$8,261,000, contrasting with an exchange loss of HK$6,751,000 in the previous year[14] - The Group's total comprehensive income attributable to non-controlling interests was a loss of HK$12,904,000, compared to a loss of HK$18,230,000 in the same period last year, indicating a reduction in loss of approximately 29.0%[16] - Total revenue, other income, and gains for the three months ended March 31, 2021, amounted to HK$381,028,000, a significant increase from HK$163,556,000 in the same period of 2020, representing a growth of 132.9%[21] - Revenue from contracts with customers reached HK$376,266,000 for the three months ended March 31, 2021, compared to HK$159,458,000 in 2020, indicating an increase of 135.5%[21] Operational Highlights - The Group's IT services business experienced a significant recovery in operational efficiency after the COVID-19 pandemic was brought under control in early 2020[42] - The Group faced operational challenges due to COVID-19 restrictions, impacting revenue generation despite a recovery in domestic tourism[56] - The reconstruction of Balgownie's restaurant and cellar door, destroyed by fire, is expected to be completed in the third quarter of 2021[56] - The Group has insurance coverage for the reconstruction of the facilities at Balgownie[56] - The Group's hospitality segment in Australia generated revenue of approximately HK$14,740,000, down from HK$19,589,000 in 2020[51] - The decline in hospitality revenue was primarily due to the disposal of Bellinzona Resort in June 2020 and reduced service capacity at Balgownie following a fire[52] Investment and Strategic Initiatives - The Group commenced retail commerce operations through network media after acquiring 51% of TNG Indonesia Holdings Limited for US$1,000,000 (approximately HK$7,800,000) on March 9, 2021[46] - The Group is exploring business opportunities in developing FinTech platforms for microlending in Hong Kong and Southeast Asia, particularly Indonesia[94][97] - The Group plans to diversify its operations by providing medical services in Hong Kong[95][98] - The Group has identified investment opportunities to diversify its businesses, including the operation of retail commerce through network media after acquiring 51% of TNG Holdings[94][97] Financial Position and Equity - The Group's accumulated losses as of March 31, 2021, amounted to HK$809,596,000[34] - The Group's total equity as of March 31, 2021, was HK$209,802,000[34] - The Group's investment portfolio primarily consists of securities issued by listed companies as of 31 March 2021[74] Governance and Compliance - The Company has complied with the Corporate Governance Code provisions during the three months ended March 31, 2021[124] - The Audit Committee consists of three independent non-executive Directors, ensuring compliance with GEM Listing Rules and maintaining financial oversight[125] - The Group's unaudited condensed consolidated results for the three months ended March 31, 2021, have been reviewed and deemed compliant with applicable accounting standards and GEM Listing Rules[130] - The Board comprises three executive Directors and three independent non-executive Directors, ensuring a balanced governance structure[131] Shareholder Information - As of March 31, 2021, no Directors or chief executives had interests in the Company's shares or associated corporations[96][99] - Substantial shareholders had long positions in the Shares as recorded in the register required under the Securities and Futures Ordinance[101] - As of March 31, 2021, Cheng Hei Yu holds 2,376,907,973 ordinary shares, representing 44.54% of the total issued shares of 5,336,235,108[102] - The Company has adopted a share option scheme allowing the Board to grant options to eligible participants, with a maximum entitlement of 1% of the aggregate number of shares issued in any 12-month period[104] - The maximum number of shares that may be issued upon exercise of all options under the existing scheme is 533,623,510 shares, representing approximately 10% of the issued share capital as of the report date[107] - No options have been granted under the existing scheme limit during the three months ended March 31, 2021[107] - There were no share options outstanding, granted, exercised, cancelled, or lapsed under the scheme as of January 1, 2021, and March 31, 2021[113] - The Company did not purchase, sell, or redeem any of its listed securities during the three months ended March 31, 2021[115]

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability) (於開曼群島註冊成立並於百慕達存續之有限公司) (Stock Code 股份代號: 8081) ANNUAL REPORT 年 報 2020 CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE") GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a high investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in s ...

Financial Performance - For the nine months ended September 30, 2020, the Group reported revenue of HK$607,292,000, an increase from HK$465,615,000 in the same period of 2019, representing a growth of approximately 30.3%[14] - The loss for the period was HK$85,147,000, compared to a loss of HK$56,664,000 for the same period in 2019, indicating a decline in performance[14] - The total comprehensive expense for the period attributable to shareholders was HK$61,734,000, compared to HK$29,104,000 in the previous year, reflecting a significant increase in losses[16] - Basic and diluted loss per share for the nine months ended September 30, 2020, was HK$1.05, compared to HK$0.92 for the same period in 2019[16] - For the three months ended September 30, 2020, the Group's revenue was HK$255,456,000, up from HK$163,230,000 in the same quarter of 2019, marking a growth of approximately 56.5%[14] - The loss for the three-month period was HK$14,280,000, compared to a loss of HK$27,329,000 in the same quarter of 2019, showing an improvement in quarterly performance[14] - The total comprehensive expense for the three months ended September 30, 2020, was HK$64,338,000, compared to HK$41,566,000 in the same quarter of 2019, indicating a worsening of comprehensive losses[16] - Total revenue for the nine months ended September 30, 2020, was HK$618,563,000, an increase of 31.7% from HK$469,673,000 in the same period of 2019[22] - The loss attributable to the Shareholders for the nine months ended 30 September 2020 was approximately HK$56,005,000, compared to HK$48,988,000 in 2019, representing an increase in loss of approximately 20.6%[40] - Revenue for the nine months ended 30 September 2020 increased to approximately HK$607,292,000 from HK$465,615,000 in 2019, reflecting a growth of approximately 30.4%[40] Revenue Sources - Revenue from IT contract services and maintenance services was HK$580,694,000 for the nine months ended September 30, 2020, compared to HK$395,770,000 in 2019, reflecting a growth of 46.6%[22] - Revenue from hospitality services in Australia decreased to HK$10,838,000 in 2020 from HK$31,173,000 in 2019, a decline of 65.2%[22] - The Group's total revenue from other sources, including dividend income, was HK$1,059,000 for the nine months ended September 30, 2020, compared to HK$1,329,000 in 2019[22] - The Group recorded revenue of approximately HK$25,539,000 for the hospitality and related services segment in Australia, a decline from HK$68,516,000 in 2019, representing a decrease of approximately 62.7%[56] Operational Challenges - The adverse impact of the COVID-19 pandemic affected the Group's ability to deliver IT services, particularly in the first quarter of 2020, due to staff quarantines[40] - The group faced operational challenges due to COVID-19, impacting the ability to fulfill IT service orders in the first quarter of 2020[42] - The Group suspended operations of the Resorts on March 30, 2020, due to COVID-19 restrictions, with partial resumption occurring in June 2020[60] - The resurgence of COVID-19 cases led to the reintroduction of Stage 3 restrictions in Victoria, impacting the operation of the Resorts and resulting in a significant decline in bookings[60] - The decline in revenue and occupancy rates is expected to continue until at least the first quarter of 2021 due to ongoing economic challenges and pandemic-related restrictions[61] Cost Management - The administrative expenses for the nine months were HK$140,871,000, compared to HK$146,797,000 in the same period of 2019, indicating a reduction in costs[14] - The increase in salaries and benefits for technical staff during the nine months ended 30 September 2020 was attributed to the expansion of the Group's IT business, which outpaced revenue growth[40] - The Group's IT services faced increased operational costs due to hiring for business expansion, which outpaced revenue growth[42] Investments and Disposals - The Group completed the disposal of the Bellinzona Resort, its worst-performing resort, in August 2020 to reallocate resources to the Balgownie Estate Vineyard Resort & Spa Yarra Valley[89] - The Group entered into two sale and purchase agreements for the Bellinzona Disposals with an aggregate consideration of AUD3,575,000 (approximately HK$19,135,000) due to declining demand for the Bellinzona Resort services[65] - The carrying amount of the investment in Something Big Group was reduced to zero as of September 30, 2020, due to accumulated losses exceeding the investment value[47] Corporate Governance - The company has adopted a code of conduct regarding Directors' securities transactions, compliant with GEM Listing Rules, with no reported non-compliance during the review period[110] - The company has adhered to the Corporate Governance Code, enhancing transparency and quality of disclosure during the nine months ended September 30, 2020[120] - The Audit Committee, consisting of three independent non-executive directors, has reviewed the unaudited condensed consolidated results for the nine months ended September 30, 2020, confirming compliance with applicable accounting standards and GEM Listing Rules[118] - The company is committed to good corporate governance practices, promoting effective internal control[116] Future Outlook - The Group plans to reallocate resources to the development of the Balgownie Estate Vineyard Resort & Spa Yarra Valley, which is expected to recover more rapidly due to its competitive advantages[65] - The Group is actively identifying investment opportunities to diversify its business amidst the ongoing pandemic[91] - The company is actively seeking investment opportunities to diversify its business in response to the adverse impacts of the COVID-19 pandemic[95] - The Group will continue to monitor the COVID-19 situation and take proactive measures to mitigate its adverse impacts on business[91]

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability) (於開曼群島註冊成立並於百慕達存續之有限公司) (Stock Code 股份代號: 8081) INTERIM REPORT 中期報告 2020 Chairman CHARACTERISTICS OF GEM OF THE STOCK EXCHANGE OF HONG KONG LIMITED (THE "STOCK EXCHANGE") GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of i ...

Financial Performance - Revenue for the three months ended March 31, 2020, was HK$159,750,000, an increase of 5.9% compared to HK$150,961,000 for the same period in 2019[14] - Loss for the period attributable to shareholders was HK$34,745,000, compared to a loss of HK$11,081,000 in the same period of 2019, representing a significant increase in losses[16] - Total comprehensive income for the period was a loss of HK$14,494,000, contrasting with a gain of HK$26,213,000 in the previous year[14] - Basic and diluted loss per share was HK$0.65, compared to HK$0.21 for the same period in 2019, indicating a deterioration in earnings per share[16] - The Group reported a loss before tax of HK$54,406,000, compared to a loss of HK$11,081,000 in the previous year, highlighting a worsening financial performance[14] - Administrative expenses for the period were HK$57,415,000, up from HK$46,773,000 in the same period last year, indicating increased operational costs[14] - The Group reported a loss attributable to shareholders of HK$34,745,000 for the three months ended March 31, 2020, compared to a loss of HK$11,081,000 in the same period of 2019, indicating a significant increase in losses[29] Revenue Breakdown - Total revenue, other income, and gains for the three months ended March 31, 2020, amounted to HK$163,556,000, representing an increase of 7.8% compared to HK$152,053,000 for the same period in 2019[22] - Revenue from contracts with customers was HK$159,458,000 for the three months ended March 31, 2020, compared to HK$150,480,000 in 2019, reflecting a growth of 5.2%[22] - The Group's revenue from hospitality and related services decreased to HK$9,001,000 in 2020 from HK$11,681,000 in 2019, a decline of 23.0%[22] - The Group's revenue from food and beverage sales in the hotel business decreased to HK$10,588,000 in 2020 from HK$14,045,000 in 2019, a decline of 24.7%[22] - The mobile internet cultural business and IT services recorded revenue of approximately HK$139,869,000, a growth of approximately 12.1% compared to HK$124,754,000 in 2019[38] Other Comprehensive Income - Other comprehensive income for the period, net of tax, was HK$39,912,000, compared to HK$37,294,000 in the previous year, showing an increase in other comprehensive gains[14] - Fair value gain on financial assets at fair value through other comprehensive income was HK$46,663,000, compared to HK$38,837,000 in the previous year, reflecting positive performance in financial investments[14] - The Group recorded a fair value loss on financial assets at FVTPL of approximately HK$143,000 for the three months ended 31 March 2020, compared to a fair value gain of approximately HK$957,000 in 2019[53] - The fair value gain on financial assets at FVTOCI was approximately HK$46,663,000 for the three months ended 31 March 2020, an increase from HK$38,837,000 in 2019, representing a growth of approximately 20.5%[53] Impact of COVID-19 - The COVID-19 pandemic adversely affected the Group's ability to deliver IT services, impacting operational efficiency due to staff quarantines[38] - The COVID-19 pandemic has significantly impacted the Group's mobile internet cultural business and IT services, leading to cash flow pressure and lower than expected demand for IT services[64][65] - The demand for resort services in Australia has substantially decreased and is expected to continue declining until Q3 2020 due to COVID-19 restrictions[66][68] - The Group plans to resume resort operations in stages as restrictions are lifted and it becomes economically viable, with a focus on reallocating resources to the Balgownie Estate Vineyard Resort & Spa Yarra Valley for a quicker recovery[66][68] Strategic Initiatives - The Company continues to focus on strategic initiatives to improve financial performance and market position amid challenging conditions[12] - The Group is actively seeking investment opportunities to diversify its business in response to the ongoing impacts of COVID-19[70][76] Governance and Compliance - The Audit Committee reviewed the Group's unaudited condensed consolidated results for the three months ended March 31, 2020, and confirmed compliance with applicable financial reporting standards and GEM Listing Rules[100] - The Company has adopted a code of conduct regarding Directors' securities transactions, with no non-compliance reported during the review period[93] - The Company complied with the Corporate Governance Code provisions during the three months ended March 31, 2020[94] - The Audit Committee consists of three independent non-executive Directors, ensuring oversight of financial reporting and internal controls[99] Shareholder Information - As of March 31, 2020, Cheng Hei Yu holds a beneficial ownership of 3,765,987,973 shares, representing approximately 70.57% of the company[74] - The Company had no shareholders or other persons with interests in the Shares that required disclosure as of March 31, 2020[84] - As of March 31, 2020, there were no outstanding share options granted under the share option scheme[81] - The Board consists of three executive Directors and three independent non-executive Directors[103]

Financial Performance - The Group reported revenue of HK$465,615,000 for the nine months ended September 30, 2019, compared to HK$339,124,000 for the same period in 2018, representing a year-over-year increase of approximately 37.3%[11]. - The loss for the period attributable to shareholders of the Company was HK$48,988,000 for the nine months ended September 30, 2019, compared to a loss of HK$17,535,000 for the same period in 2018, indicating a significant increase in losses[15]. - The total comprehensive loss for the period was HK$49,375,000 for the nine months ended September 30, 2019, compared to HK$73,167,000 for the same period in 2018, showing an improvement in overall loss[15]. - The loss per share for the nine months ended September 30, 2019, was HK$0.92, compared to HK$0.33 for the same period in 2018, reflecting a deterioration in per-share performance[15]. - For the three months ended September 30, 2019, the Group reported a revenue of HK$163,230,000, up from HK$116,797,000 in the same period of 2018, marking a growth of approximately 39.7%[13]. - The loss for the three months ended September 30, 2019, was HK$27,329,000, compared to a loss of HK$16,808,000 for the same period in 2018, indicating a worsening of quarterly performance[15]. - The total comprehensive loss for the three months ended September 30, 2019, was HK$41,566,000, compared to HK$30,565,000 for the same period in 2018, indicating an increase in comprehensive losses[15]. - The total comprehensive loss for the period ended September 30, 2019, was HK$72,026,000, compared to HK$54,491,000 for the same period in 2018, indicating a significant increase in comprehensive loss[38]. - The accumulated losses as of September 30, 2019, amounted to HK$610,486,000, reflecting a deterioration from HK$255,955,000 as of the previous year[38]. - The total equity attributable to shareholders at September 30, 2019, was HK$395,776,000, down from HK$578,508,000 at the same time in 2018[38]. Revenue Breakdown - Revenue from mobile internet cultural business and IT services amounted to HK$395.8 million for the nine months ended September 30, 2019, compared to HK$256.9 million in 2018, reflecting a growth of 54.2%[23]. - Revenue from hospitality and related services in Australia was HK$68.5 million for the nine months ended September 30, 2019, a decrease of 13.4% from HK$79.3 million in 2018[23]. - The Group's revenue for the three months ended September 30, 2019, was HK$163.2 million, up 39.7% from HK$116.8 million in the same period of 2018[23]. - The Group recorded revenue of approximately HK$68,516,000 for the hospitality segment in Australia, a decline from HK$79,313,000 in 2018, attributed to a drop in average occupancy rate from 61% to 58%[62]. Expenses and Costs - The Group's employee benefits expenses for the nine months ended September 30, 2019, amounted to HK$87,514,000, compared to HK$78,121,000 in 2018, reflecting a rise of approximately 12.3%[13]. - The finance costs for the nine months ended September 30, 2019, were HK$13,655,000, compared to HK$7,114,000 for the same period in 2018, indicating an increase of approximately 92.5%[13]. - Cost of inventories sold/services rose to approximately HK$366,610,000, up from HK$232,720,000 in 2018, primarily due to increased salaries and benefits for technical staff[41]. Investment and Financial Strategy - The Group's investment portfolio primarily consists of securities issued by listed companies, with unrealised fair value losses on financial assets at FVTPL of approximately HK$452,000, contrasting with a gain of HK$2,158,000 in 2018[64]. - The Group recorded interest income of approximately HK$1,297,000 from its money lending business, an increase from HK$1,012,000 in 2018, indicating growth in this segment[63]. - The Group plans to continue holding its investment portfolio unless there are changes in investment strategy or opportunities to realize existing investments arise[71]. - The Group is committed to a diversified business development strategy and will carefully select investments to secure better returns for shareholders[98][100]. Legal and Compliance Matters - The Group is currently involved in arbitration proceedings initiated by LEO regarding the unsettled FY2017 compensation, with a hearing held on September 24, 2019[84]. - The Group has been advised that it has a good chance to contest LEO's demand for the unsettled FY2017 compensation in arbitration[84]. - The total cash compensation cap for the Group under the Performance Compensation Agreement is RMB 25,510,009[77]. - The Group is required to return cash dividends of approximately RMB 506,000 received from LEO to a designated account due to insufficient shares to settle FY2017 compensation[83]. Corporate Governance - The Company has complied with the Corporate Governance Code during the nine months ended September 30, 2019, except for the deviation regarding the separation of the roles of chairman and CEO[109]. - The CEO position was vacant from November 22, 2017, until June 4, 2019, when Ms. Lam Ching Yee was appointed[110]. - The Audit Committee consists of three independent non-executive Directors, ensuring compliance with GEM Listing Rules and adequate financial reporting[114]. - The unaudited condensed consolidated results for the nine months ended September 30, 2019, were reviewed by the Audit Committee, confirming compliance with applicable accounting standards[115].

Part I [Company Information and Declarations](index=1&type=section&id=I.%20Company%20Information%20and%20Declarations) This section provides an overview of the company's information and declarations [Characteristics of GEM Market and Disclaimer](index=2&type=section&id=1.1%20Characteristics%20of%20GEM%20Market%20and%20Disclaimer) This section outlines the characteristics of the Hong Kong Stock Exchange's GEM market, highlighting its platform for SMEs, higher investment risks, and lack of liquidity guarantee, alongside the Exchange's disclaimer of responsibility - The GEM market targets small and medium-sized enterprises, carrying higher investment risks and no guarantee of high liquidity[3](index=3&type=chunk) - Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this report[3](index=3&type=chunk) [Directors' Responsibility Statement](index=2&type=section&id=1.2%20Directors'%20Responsibility%20Statement) The Board of Directors collectively and individually assumes full responsibility for the accuracy, completeness, and non-misleading nature of this report, confirming all reasonable inquiries have been made - The Board of Directors jointly and individually assumes full responsibility for this report[3](index=3&type=chunk) - Directors confirm the report's content is accurate, complete, and free from misleading or fraudulent elements in all material aspects[3](index=3&type=chunk) Part II [Interim Financial Results](index=3&type=section&id=II.%20Interim%20Financial%20Results) This section presents the interim financial results, including the condensed consolidated statement of profit or loss and other comprehensive income, statement of financial position, statement of changes in equity, and cash flow statement [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=2.1%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2019, revenue increased by 36% to HK$302,385 thousand, but loss for the period significantly widened to HK$29,335 thousand, mainly due to rising costs and the absence of gain on disposal of a subsidiary, while total comprehensive loss narrowed significantly due to fair value gains on financial assets Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income for the Six Months Ended June 30, 2019 | Metric (HK$ thousand) | 2019 (Unaudited) | 2018 (Unaudited) | Change | | :------------ | :---------------- | :---------------- | :--- | | Revenue | 302,385 | 222,327 | +36% | | Cost of inventories sold/services rendered | (234,770) | (147,920) | +59% | | Other gains and losses | 139 | 20,431 | -99% | | Employee benefit expenses | (58,779) | (53,225) | +10% | | (Loss)/Profit before income tax | (29,335) | (919) | Loss widened | | (Loss)/Profit for the period | (29,335) | (2,028) | Loss widened | | Total comprehensive loss for the period | (7,809) | (42,602) | Loss narrowed | - Net loss attributable to owners of the Company for the six months ended June 30, 2019, was **HK$27,259 thousand**, a significant increase from HK$727 thousand in the same period of 2018[9](index=9&type=chunk) - Total comprehensive loss narrowed from HK$42,602 thousand in the same period of 2018 to **HK$7,809 thousand** in 2019, primarily due to a fair value gain of HK$23,202 thousand on financial assets at fair value through other comprehensive income[9](index=9&type=chunk)[138](index=138&type=chunk) [Condensed Consolidated Statement of Financial Position](index=5&type=section&id=2.2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2019, the Group's total assets increased to HK$912,428 thousand, with growth in both non-current and current assets, while current liabilities slightly decreased, leading to an improvement in net current assets and net assets Condensed Consolidated Statement of Financial Position as of June 30, 2019 | Metric (HK$ thousand) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | Change | | :------------ | :----------------------- | :----------------------- | :--- | | Non-current assets | 441,039 | 400,565 | +10% | | Current assets | 471,389 | 443,785 | +6% | | Current liabilities | (376,564) | (388,666) | -3% | | Non-current liabilities | (103,491) | (37,502) | +176%| | Net assets | 432,373 | 418,182 | +3% | | Net current assets | 94,825 | 55,119 | +72% | - Right-of-use assets increased by **HK$18,011 thousand**, reflecting the initial application of HKFRS 16 "Leases"[12](index=12&type=chunk)[26](index=26&type=chunk) - Trade and other payables and provisions increased from HK$156,966 thousand to **HK$217,715 thousand**, while borrowings decreased from HK$164,812 thousand to **HK$81,296 thousand**[12](index=12&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=7&type=section&id=2.3%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) For the six months ended June 30, 2019, the company's share capital remained unchanged, but reserves varied due to the loss for the period and transactions with non-controlling interests, with total equity attributable to owners of the Company increasing from HK$418,182 thousand at the beginning of the period to HK$432,027 thousand at the end Condensed Consolidated Statement of Changes in Equity for the Six Months Ended June 30, 2019 | Metric (HK$ thousand) | June 30, 2019 (Unaudited) | January 1, 2018 (Restated) | | :------------ | :----------------------- | :------------------ | | Share capital | 53,362 | 53,362 | | Share premium | 510,233 | 510,233 | | Contributed surplus | 693,308 | 693,308 | | Share option reserve | - | 25,462 | | Exchange fluctuation reserve | (7,057) | 3,939 | | Other reserves | 16,680 | (2,419) | | Investment revaluation reserve | (245,742) | (192,064) | | Accumulated losses | (588,757) | (441,287) | | Total equity attributable to owners of the Company | 432,027 | 609,062 | | Non-controlling interests | 346 | 1,476 | | Total equity | 432,373 | 610,538 | - For the six months ended June 30, 2019, the loss for the period attributable to owners of the Company was **HK$27,259 thousand**, and the loss attributable to non-controlling interests was **HK$2,076 thousand**[9](index=9&type=chunk) - Following the subscription completion on May 27, 2019, the target company is held 51% by the Company and 49% by the subscriber, resulting in a change in non-controlling interests[131](index=131&type=chunk) [Condensed Consolidated Cash Flow Statement](index=8&type=section&id=2.4%20Condensed%20Consolidated%20Cash%20Flow%20Statement) For the six months ended June 30, 2019, cash flow from operating activities turned positive with a net inflow of HK$29,940 thousand, while cash flow from investing activities shifted from a net inflow to a net outflow of HK$3,349 thousand, with financing activities maintaining a net inflow, and cash and cash equivalents at period-end increasing to HK$203,634 thousand Condensed Consolidated Cash Flow Statement for the Six Months Ended June 30, 2019 | Metric (HK$ thousand) | 2019 (Unaudited) | 2018 (Unaudited) | Change | | :------------ | :---------------- | :---------------- | :--- | | Net cash generated from/(used in) operating activities | 29,940 | (39,062) | Significant improvement | | Net cash (used in)/generated from investing activities | (3,349) | 102,396 | Significant decrease | | Net cash generated from/(used in) financing activities | 234 | (34,643) | Significant improvement | | Net increase in cash and cash equivalents | 26,825 | 28,691 | -7% | | Cash and cash equivalents at end of period | 203,634 | 197,629 | +3% | - Net cash generated from operating activities improved from a net outflow of HK$39,062 thousand in the same period of 2018 to a net inflow of **HK$29,940 thousand** in 2019, indicating improved operating efficiency[22](index=22&type=chunk) - Net cash from investing activities shifted from a net inflow of HK$102,396 thousand in the same period of 2018 to a net outflow of **HK$3,349 thousand** in 2019, primarily due to reduced investment activities[22](index=22&type=chunk) Part III [Notes to the Financial Statements](index=9&type=section&id=III.%20Notes%20to%20the%20Financial%20Statements) This section provides detailed notes to the financial statements, covering basis of preparation, segment information, revenue, other gains and losses, income tax, dividends, earnings per share, and changes in assets and liabilities [Basis of Preparation](index=9&type=section&id=3.1%20Basis%20of%20Preparation) The unaudited condensed consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards, and the GEM Listing Rules, using the historical cost convention, with the initial application of HKFRS 16 "Leases" significantly impacting lease recognition and measurement - The financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards, and the GEM Listing Rules[23](index=23&type=chunk) - HKFRS 16 "Leases" was first applied, recognizing leases as right-of-use assets and corresponding liabilities[26](index=26&type=chunk)[27](index=27&type=chunk) - The implementation of HKFRS 16 resulted in lease liabilities of **HK$23,391 thousand** as of January 1, 2019, with a weighted average incremental borrowing rate of **5%**[36](index=36&type=chunk) [Segment Information](index=11&type=section&id=3.2%20Segment%20Information) The Group's operating segments include mobile internet culture business and IT services, Australia hotel and related services, lending business, and asset investment business; for the six months ended June 30, 2019, mobile internet culture business and IT services revenue grew significantly, while Australia hotel business revenue decreased - The Group's principal operating segments include mobile internet culture business and IT services, Australia hotel and related services, lending business, and asset investment business[39](index=39&type=chunk) Segment Revenue and Results for the Six Months Ended June 30, 2019 | Segment (HK$ thousand) | 2019 Revenue | 2019 Segment (Loss)/Profit | 2018 Revenue | 2018 Segment (Loss)/Profit | | :------------ | :--------- | :-------------------- | :--------- | :-------------------- | | Mobile Internet Culture Business and IT Services | 253,150 | (20,079) | 164,195 | (11,127) | | Australia Hotel and Related Services | 48,342 | (3,427) | 56,150 | 1,427 | | Lending Business | 893 | (134) | 151 | (323) | | Asset Investment Business | – | 4,291 | 1,831 | 18,827 | | **Total** | **302,385**| **(19,349)** | **222,327**| **8,804** | - Mobile internet culture business and IT services revenue increased by **54%** year-on-year, but segment loss widened[39](index=39&type=chunk)[139](index=139&type=chunk) - Australia hotel and related services revenue decreased by **14%** year-on-year, with the segment shifting from profit to loss[39](index=39&type=chunk)[154](index=154&type=chunk) [Revenue](index=13&type=section&id=3.3%20Revenue) For the six months ended June 30, 2019, the Group's total revenue was HK$302,385 thousand, a 36% year-on-year increase, primarily driven by mobile internet culture business and IT services, while Australia hotel and related services revenue decreased, and other income sources significantly reduced Revenue Analysis for the Six Months Ended June 30, 2019 | Revenue Source (HK$ thousand) | 2019 (Unaudited) | 2018 (Unaudited) | Change | | :---------------- | :---------------- | :---------------- | :--- | | Mobile Internet Culture Business and IT Services | 253,150 | 164,195 | +54% | | Australia Hotel and Related Services | 48,342 | 56,150 | -14% | | **Total revenue from contracts with customers within HKFRS 15 scope** | **301,492** | **220,345** | **+37%** | | Loan interest income | 893 | 151 | +491%| | Rental income | – | 1,211 | -100%| | Dividend income | – | 620 | -100%| | **Total revenue from other sources** | **893** | **1,982** | **-55%** | | **Total Revenue** | **302,385** | **222,327** | **+36%** | - Mobile internet culture business and IT services revenue was the primary growth driver, increasing by **54%** year-on-year[50](index=50&type=chunk) - Rental income and dividend income both decreased to **zero** in the first half of 2019[50](index=50&type=chunk) [Other Gains and Losses](index=14&type=section&id=3.4%20Other%20Gains%20and%20Losses) For the six months ended June 30, 2019, other gains and losses significantly decreased to HK$139 thousand (2018: HK$20,431 thousand), mainly due to the absence of gain on disposal of a subsidiary in the first half of 2019, compared to HK$17,795 thousand in the same period of 2018 Other Gains and Losses for the Six Months Ended June 30, 2019 | Item (HK$ thousand) | 2019 (Unaudited) | 2018 (Unaudited) | Change | | :------------ | :---------------- | :---------------- | :--- | | Gain on disposal of a subsidiary | – | 17,795 | -100%| | Unrealized gain/(loss) on financial assets at fair value through profit or loss | 178 | 3,353 | -95% | | Loss on disposal/write-off of property, plant and equipment | (39) | (717) | +95% | | **Total** | **139** | **20,431** | **-99%** | - The absence of gain on disposal of a subsidiary in the first half of 2019, compared to **HK$17,795 thousand** in the same period of 2018, was the main reason for the significant decrease in other gains and losses[53](index=53&type=chunk)[138](index=138&type=chunk) [(Loss)/Profit Before Income Tax](index=14&type=section&id=3.5%20%28Loss%29%2FProfit%20Before%20Income%20Tax) For the six months ended June 30, 2019, loss before income tax widened from HK$919 thousand in the same period of 2018 to HK$29,335 thousand, primarily due to increased cost of inventories expensed, staff costs, depreciation and amortization, and interest expenses (Loss)/Profit Before Income Tax Composition for the Six Months Ended June 30, 2019 | Item (HK$ thousand) | 2019 (Unaudited) | 2018 (Unaudited) | Change | | :------------ | :---------------- | :---------------- | :--- | | Cost of inventories expensed | 11,199 | 5,386 | +108%| | Staff costs (salaries and benefits) | 253,257 | 126,805 | +100%| | Staff costs (retirement scheme contributions) | 21,930 | 11,661 | +88% | | Depreciation of property, plant and equipment | 6,105 | 2,769 | +120%| | Depreciation of right-of-use assets | 5,685 | – | New | | Amortization of intangible assets | 252 | 248 | +2% | | Interest on borrowings | 5,528 | 2,399 | +130%| - Salaries and benefits for technical staff significantly increased to **HK$198,722 thousand** (2018: HK$92,456 thousand), mainly due to an increase in staff numbers from IT business expansion[56](index=56&type=chunk) - New depreciation of right-of-use assets of **HK$5,685 thousand** resulted from the initial application of HKFRS 16 "Leases"[55](index=55&type=chunk) [Income Tax Expense](index=15&type=section&id=3.6%20Income%20Tax%20Expense) For the six months ended June 30, 2019, the Group's income tax expense was zero (2018: HK$1,109 thousand), primarily due to the loss for the period resulting in no current tax payable and no change in deferred tax Income Tax Expense for the Six Months Ended June 30, 2019 | Item (HK$ thousand) | 2019 (Unaudited) | 2018 (Unaudited) | Change | | :------------ | :---------------- | :---------------- | :--- | | Current tax | – | 1,512 | -100%| | Deferred tax | – | (403) | -100%| | **Total** | **–** | **1,109** | **-100%**| - Hong Kong profits tax is calculated at **16.5%**, while subsidiaries in China and Australia are taxed at **25%** and **30%** respectively[60](index=60&type=chunk) [Interim Dividend](index=15&type=section&id=3.7%20Interim%20Dividend) The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2019 (2018: nil) - The Board of Directors does not recommend an interim dividend for the first half of 2019[62](index=62&type=chunk) [(Loss)/Earnings Per Share](index=16&type=section&id=3.8%20%28Loss%29%2FEarnings%20Per%20Share) For the six months ended June 30, 2019, basic and diluted loss per share was HK$0.51 cents (2018: HK$0.01 cents), indicating a significant widening of loss, and diluted loss per share calculation did not assume conversion of share options as all share options were cancelled (Loss)/Earnings Per Share for the Six Months Ended June 30, 2019 | Metric (HK cents) | 2019 (Unaudited) | 2018 (Unaudited) | Change | | :---------- | :---------------- | :---------------- | :--- | | Basic and diluted (loss)/earnings per share | (0.51) | (0.01) | Loss widened | - For the six months ended June 30, 2019, the loss for the period attributable to owners of the Company was **HK$27,259 thousand**[65](index=65&type=chunk) - The weighted average number of ordinary shares outstanding was **5,336,235,108** shares[65](index=65&type=chunk) - As all share options were cancelled in 2018, the calculation of diluted loss per share did not assume conversion of share options[67](index=67&type=chunk) [Movements in Property, Plant and Equipment](index=17&type=section&id=3.9%20Movements%20in%20Property%2C%20Plant%20and%20Equipment) For the six months ended June 30, 2019, additions to property, plant and equipment amounted to approximately HK$4,651 thousand (2018: HK$5,383 thousand) - Additions to property, plant and equipment in the first half of 2019 amounted to **HK$4,651 thousand**, a slight decrease from HK$5,383 thousand in the same period of 2018[69](index=69&type=chunk) [Other Equity Investments](index=17&type=section&id=3.10%20Other%20Equity%20Investments) As of June 30, 2019, the Group's financial assets at fair value through other comprehensive income increased to HK$120,001 thousand (December 31, 2018: HK$97,712 thousand), primarily comprising China-listed equity securities, while financial assets at fair value through profit or loss amounted to HK$42,110 thousand Other Equity Investments as of June 30, 2019 | Item (HK$ thousand) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | | :------------ | :----------------------- | :----------------------- | | Financial assets at fair value through other comprehensive income | 120,001 | 97,712 | | - Hong Kong listed equity securities | 12,626 | 13,105 | | - China listed equity securities | 99,452 | 76,615 | | - Unlisted equity securities | 7,923 | 7,992 | | Financial assets at fair value through profit or loss | 42,110 | 41,932 | - In the first half of 2019, no dividend income was recognized for financial assets at fair value through other comprehensive income (2018: HK$620 thousand)[73](index=73&type=chunk) - As of June 30, 2019, the investment in Leo Group Co., Ltd. accounted for **10.9%** of the Group's total assets[164](index=164&type=chunk) [Contract Assets and Contract Liabilities](index=18&type=section&id=3.11%20Contract%20Assets%20and%20Contract%20Liabilities) As of June 30, 2019, contract assets increased to HK$140,535 thousand (December 31, 2018: HK$132,455 thousand), primarily from contract performance, while contract liabilities slightly decreased to HK$7,377 thousand Contract Assets and Contract Liabilities as of June 30, 2019 | Item (HK$ thousand) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | | :------------ | :----------------------- | :----------------------- | | Contract assets | 140,535 | 132,455 | | - Arising from contract performance | 141,241 | 133,121 | | - Less: Loss allowance | (706) | (666) | | Contract liabilities | 7,377 | 7,427 | | - Deposits received and deferred income | 7,377 | 7,427 | - The expected recovery period for contract assets is all within **one year**[79](index=79&type=chunk) - The loss allowance for contract assets increased from HK$666 thousand to **HK$706 thousand** during the reporting period[79](index=79&type=chunk) [Trade and Other Receivables](index=19&type=section&id=3.12%20Trade%20and%20Other%20Receivables) As of June 30, 2019, total trade and other receivables amounted to HK$62,105 thousand, a decrease from HK$68,791 thousand as of December 31, 2018, with trade receivables increasing and loan receivables significantly decreasing Trade and Other Receivables as of June 30, 2019 | Item (HK$ thousand) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | Change | | :------------ | :----------------------- | :----------------------- | :--- | | Trade receivables | 33,037 | 27,471 | +20% | | Loan receivables | 13,900 | 27,400 | -49% | | Loan interest receivables | 5 | 81 | -94% | | Deposits | 1,467 | 3,966 | -63% | | Other receivables and prepayments | 13,696 | 9,873 | +39% | | **Total** | **62,105** | **68,791** | **-10%** | - As of June 30, 2019, the aging of trade receivables was primarily within **one month** (HK$28,025 thousand)[88](index=88&type=chunk) - As of June 30, 2019, loan receivables were unsecured, with an average annual interest rate of approximately **10%-11%**, and none were overdue or impaired[94](index=94&type=chunk)[97](index=97&type=chunk) [Trade and Other Payables and Provisions](index=21&type=section&id=3.13%20Trade%20and%20Other%20Payables%20and%20Provisions) As of June 30, 2019, total trade and other payables and provisions significantly increased to HK$217,715 thousand from HK$156,966 thousand as of December 31, 2018, with trade payables decreasing and accrued expenses and other payables substantially increasing Trade and Other Payables and Provisions as of June 30, 2019 | Item (HK$ thousand) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | Change | | :------------ | :----------------------- | :----------------------- | :--- | | Trade payables | 9,586 | 13,211 | -27% | | Accrued expenses and other payables | 229,278 | 173,540 | +32% | | Provisions | 7,200 | 7,200 | 0% | | **Total** | **246,064** | **193,951** | **+27%** | | Less: Amounts due after one year | (28,349) | (36,985) | -23% | | **Current portion** | **217,715** | **156,966** | **+39%** | - Other payables include **HK$57,475 thousand** (approximately RMB48,088 thousand) in compensation payable to Huawei Technologies Co., Ltd. due to bribery by a former employee[105](index=105&type=chunk) - The Huawei compensation will be offset against Yibao's receivables from Huawei in **36 equal monthly installments** starting from April 1, 2019[106](index=106&type=chunk) [Borrowings](index=23&type=section&id=3.14%20Borrowings) As of June 30, 2019, the Group's total borrowings amounted to HK$148,104 thousand, a decrease from HK$164,812 thousand as of December 31, 2018, with borrowings repayable within one year or on demand significantly decreasing, and new borrowings of HK$66,808 thousand repayable between one and two years Borrowings as of June 30, 2019 | Item (HK$ thousand) | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | Change | | :------------ | :----------------------- | :----------------------- | :--- | | Fixed-rate borrowings | 80,836 | 80,913 | -0.1%| | Floating-rate borrowings | 67,268 | 83,899 | -20% | | **Total Borrowings** | **148,104** | **164,812** | **-10%** | | Secured borrowings | 147,644 | 161,359 | -9% | | Unsecured borrowings | 460 | 3,453 | -87% | | Repayable within one year or on demand | 81,296 | 164,812 | -51% | | Repayable between one and two years | 66,808 | – | New | - Borrowing interest rates range from **4.5% to 6%** per annum, with approximately **55%** at fixed rates[113](index=113&type=chunk) - A Group subsidiary breached a loan covenant by failing to maintain sufficient collateral, but no repayment demand has been received as of the reporting date[117](index=117&type=chunk) [Share Capital](index=24&type=section&id=3.15%20Share%20Capital) As of June 30, 2019, the company's authorized share capital was HK$200,000 thousand (20,000,000,000 ordinary shares of HK$0.01 each), and issued and fully paid share capital was HK$53,362 thousand (5,336,235,108 ordinary shares of HK$0.01 each), consistent with December 31, 2018 Share Capital as of June 30, 2019 | Item | Number of Shares | Amount (HK$ thousand) | | :------------ | :--------------- | :------------ | | Authorized share capital | 20,000,000,000 | 200,000 | | Issued and fully paid share capital | 5,336,235,108 | 53,362 | [Share-based Payments](index=24&type=section&id=3.16%20Share-based%20Payments) As of June 30, 2019, there were no outstanding share options under the company's share option scheme, and no share options were granted, exercised, cancelled, or lapsed during the first half of 2019 - As of June 30, 2019, there were no outstanding share options under the share option scheme[122](index=122&type=chunk)[122](index=122&type=chunk) - In 2018, **82,025,748** share options were cancelled due to the resignation of grantees[122](index=122&type=chunk) [Related Party Transactions](index=24&type=section&id=3.17%20Related%20Party%20Transactions) For the six months ended June 30, 2019, the company paid HK$720 thousand in consultancy fees to a substantial shareholder, and the Group received HK$22,000 thousand in subscription price from a director of a subsidiary Related Party Transactions for the Six Months Ended June 30, 2019 | Transacting Party | Nature of Transaction | 2019 (HK$ thousand) | 2018 (HK$ thousand) | | :------------ | :---------------- | :-------------- | :-------------- | | Substantial shareholder of the Company | Consultancy fees paid or payable | 720 | – | | A director of a subsidiary of the Company | Subscription price received by the Group | 22,000 | – | - Total directors' remuneration was **HK$683 thousand** (2018: HK$1,286 thousand), including salaries, other short-term benefits, and retirement scheme contributions[127](index=127&type=chunk) [Transactions with Non-controlling Interests](index=25&type=section&id=3.18%20Transactions%20with%20Non-controlling%20Interests) On May 27, 2019, the company completed the subscription of a 49% equity interest in its wholly-owned subsidiary, Concord-Linked Limited, by Mr. Wong Ching Chun for HK$22,000 thousand; this transaction did not result in a loss of control by the company and was therefore accounted for as an equity transaction, with no gain or loss recognized in profit or loss - On May 27, 2019, the Company disposed of a **49%** equity interest in Concord-Linked Limited to Mr. Wong Ching Chun for a subscription price of **HK$22,000 thousand**[131](index=131&type=chunk) - This transaction did not result in a loss of control by the Company and was therefore accounted for as an equity transaction, with no gain or loss recognized in profit or loss[131](index=131&type=chunk) Impact of Change in Ownership Interest in a Subsidiary on Equity Attributable to Owners of the Company | Item | Amount (HK$ thousand) | | :------------ | :------------ | | Carrying amount of non-controlling interests disposed | (2,707) | | Consideration receivable from non-controlling shareholder | 22,000 | | Change recognized in equity on disposal | 19,293 | Part IV [Management Discussion and Analysis](index=26&type=section&id=IV.%20Management%20Discussion%20and%20Analysis) This section provides management's discussion and analysis of the Group's business and financial performance, including segment reviews, outlook, financial resources, capital structure, and risk factors [Business and Financial Review](index=26&type=section&id=4.1%20Business%20and%20Financial%20Review) The Group primarily engages in mobile internet culture business and IT services, Australia hotel and related services, lending business, and asset investment business; in the first half of 2019, revenue increased by 36% year-on-year, but net loss attributable to owners of the Company significantly increased, mainly due to rising costs and the absence of gain on disposal of a subsidiary, while total comprehensive loss narrowed significantly due to fair value gains on financial assets - The Group's principal businesses include mobile internet culture business and IT services, Australia hotel and related services, lending business, and asset investment business[134](index=134&type=chunk) Key Financial Metrics Comparison for the First Half of 2019 | Metric (HK$ thousand) | First Half 2019 | First Half 2018 | Change | | :------------ | :----------- | :----------- | :--- | | Revenue | 302,385 | 222,327 | +36% | | Net loss attributable to owners of the Company | (27,259) | (727) | Loss widened | | Cost of inventories sold/services rendered | 234,770 | 147,920 | +59% | | Other gains and losses | 139 | 20,431 | -99% | | Employee benefit expenses | 58,779 | 53,225 | +10% | | Total comprehensive loss | (7,809) | (42,602) | Loss narrowed | - The increased loss was primarily attributable to higher technical staff salaries and benefits due to IT business expansion, and the absence of gain on disposal of a subsidiary in the first half of 2019[135](index=135&type=chunk) [Overall Performance Overview](index=26&type=section&id=4.1.1%20Overall%20Performance%20Overview) In the first half of 2019, the Group's revenue increased by 36% year-on-year, but net loss attributable to owners of the Company significantly increased, mainly due to rising costs from IT business expansion and the absence of gain on disposal of a subsidiary, while total comprehensive loss narrowed significantly due to fair value gains on financial assets - Revenue for the first half of 2019 was approximately **HK$302,385 thousand**, an increase of approximately **36%** year-on-year[135](index=135&type=chunk) - Net loss attributable to owners of the Company was approximately **HK$27,259 thousand**, a significant increase from HK$727 thousand in the same period of 2018[135](index=135&type=chunk) - Total comprehensive loss was approximately **HK$7,809 thousand**, a significant narrowing from HK$42,602 thousand in the same period of 2018, primarily due to fair value gains on financial assets[135](index=135&type=chunk) [Mobile Internet Culture Business and IT Services](index=26&type=section&id=4.1.2%20Mobile%20Internet%20Culture%20Business%20and%20IT%20Services) In the first half of 2019, this segment's revenue increased by 54% to HK$253,150 thousand; however, due to subsidiary Yibao's breach of integrity commitment with Huawei, new business cooperation was suspended, leading to lower-than-expected revenue growth, and the Group's mobile online game business continued to incur losses due to intense market competition and lack of innovative games - Mobile internet culture business and IT services revenue was approximately **HK$253,150 thousand**, an increase of approximately **54%** year-on-year[136](index=136&type=chunk)[139](index=139&type=chunk) - Subsidiary Yibao is required to pay approximately **RMB48,088 thousand** in compensation to Huawei due to bribery by a former employee, breaching the integrity commitment[141](index=141&type=chunk) - Huawei suspended new business cooperation with Yibao since December 2018, resulting in lower-than-expected IT services revenue growth[141](index=141&type=chunk) - The Group holds a **28.8%** equity interest in Dashishi Technology Holdings Limited, whose mobile online game business incurred a loss of **HK$1,466 thousand** due to intense market competition and lack of innovative games[145](index=145&type=chunk)[148](index=148&type=chunk) [Australia Hotel and Related Services](index=28&type=section&id=4.1.3%20Australia%20Hotel%20and%20Related%20Services) In the first half of 2019, Australia hotel and related services revenue decreased by 14% to HK$48,342 thousand, primarily due to a drop in resort average occupancy rate from 60% to 56%, attributed to slower Australian economic growth and uncertainty from the May 2019 federal election, reducing domestic tourism demand - Australia hotel and related services revenue was approximately **HK$48,342 thousand**, a year-on-year decrease of **14%**[154](index=154&type=chunk)[157](index=157&type=chunk) - The average occupancy rate of resorts decreased from approximately **60%** in the first half of 2018 to approximately **56%** in the first half of 2019[155](index=155&type=chunk)[157](index=157&type=chunk) - The revenue decrease was mainly affected by slower Australian economic growth (Q1 2019 GDP growth of **0.4%**) and federal election uncertainty[155](index=155&type=chunk)[157](index=157&type=chunk) - The Group owns three resorts in Australia: Balgownie Estate Vineyard Resort & Spa Yarra Valley, Bellinzona Resort Cellar Door & Dining, and Cleveland Winery Resort & Events, marketed under the "Premier Resort Group" brand[149](index=149&type=chunk)[156](index=156&type=chunk) [Lending Business](index=30&type=section&id=4.1.4%20Lending%20Business) In the first half of 2019, the Group's lending business interest income increased to HK$893 thousand (2018: HK$151 thousand); the Group conducts its lending business in Hong Kong through its wholly-owned subsidiary, Premier Finance Limited, and plans to continue its development under prudent credit procedures - Lending business interest income was approximately **HK$893 thousand**, a significant increase from HK$151 thousand in the same period of 2018[160](index=160&type=chunk)[162](index=162&type=chunk) - The Group conducts its lending business in Hong Kong through its wholly-owned subsidiary, Premier Finance Limited[160](index=160&type=chunk) - The Group will closely monitor market conditions and develop its lending business with prudent credit procedures[160](index=160&type=chunk) [Asset Investment Business](index=30&type=section&id=4.1.5%20Asset%20Investment%20Business) As of June 30, 2019, the Group's asset investment portfolio primarily comprised securities of listed companies; in the first half of 2019, an unrealized fair value gain of HK$178 thousand on financial assets at fair value through profit or loss was recorded, along with a fair value gain of HK$23,255 thousand on financial assets at fair value through other comprehensive income (2018: loss of HK$31,318 thousand), and the investment in Leo Group Co., Ltd. accounted for 10.9% of the Group's total assets - The asset investment portfolio primarily comprises securities of listed companies[161](index=161&type=chunk) Asset Investment Business Gains for the First Half of 2019 | Item (HK$ thousand) | First Half 2019 | First Half 2018 | Change | | :------------ | :----------- | :----------- | :--- | | Unrealized fair value gain on financial assets at fair value through profit or loss | 178 | 3,353 | -95% | | Fair value gain/(loss) on financial assets at fair value through other comprehensive income | 23,255 | (31,318) | Significant improvement | - The investment in Leo Group Co., Ltd. accounted for **10.9%** of the Group's total assets, with the company primarily engaged in water pump manufacturing and internet services[164](index=164&type=chunk)[166](index=166&type=chunk) - Leo Group's net profit for Q1 2019 increased by **23%** year-on-year, mainly due to increased government subsidies, gains on asset disposal, and investment income[166](index=166&type=chunk) [Disposal of Zhiqu](index=32&type=section&id=4.2%20Disposal%20of%20Zhiqu) In 2015, the Group disposed of its entire equity interest in Zhiqu to Leo, with the total consideration adjusted by Zhiqu's audited Net Operating Profit (NOP) performance; as Zhiqu's NOP for FY2016 and FY2017 fell short of targets, compensation mechanisms were triggered, with the FY2017 compensation involving 23,477,822 shares of Jixiang, and Leo has initiated arbitration against the Group for the outstanding FY2017 compensation, while the FY2018 adjustment amount remains undetermined - The Group disposed of its entire equity interest in Zhiqu to Leo in 2015, with the total consideration adjusted by Zhiqu's audited Net Operating Profit (NOP) performance[171](index=171&type=chunk) Zhiqu Committed Net Operating Profit (NOP) | Fiscal Year | Committed NOP (RMB) | Actual NOP (RMB) | | :--- | :--------------- | :--------------- | | 2016 | 58,000,000 | 32,239,594.87 | | 2017 | 75,400,000 | 36,689,479.02 | | 2018 | 98,020,000 | 12,089,600 (Net Profit) | - The FY2016 compensation amount was **RMB83,931,144.53**, settled by Jixiang shares, with no payment required from the Group[177](index=177&type=chunk) - The FY2017 compensation amount was **RMB126,124,504.45**, settled by **23,477,822** Jixiang shares, and Leo has initiated arbitration against the Group for the outstanding portion[178](index=178&type=chunk)[181](index=181&type=chunk)[183](index=183&type=chunk) - The Group's PRC legal counsel initially believes the Group has a strong chance of successfully arguing that Leo's claims should not be supported in arbitration[183](index=183&type=chunk) [Outlook](index=35&type=section&id=4.3%20Outlook) The Group anticipates continued decline in Australia hotel accommodation demand due to global economic slowdown, will adopt a conservative capital expenditure strategy, and seek partnerships to improve occupancy rates; the IT services business faces high staff costs and cash flow uncertainty from the Huawei compensation settlement, while the Group will continue its diversified business development strategy, prudently selecting investments to navigate market volatility and create shareholder value - Australia hotel accommodation demand is expected to continue to slow due to the impact of the US-China trade conflict on global economic growth[183](index=183&type=chunk) - The Group will adopt a conservative capital expenditure strategy for resort facility upgrades and seek cooperation with inbound tour operators to improve occupancy rates[183](index=183&type=chunk) - The IT services business faces high staff costs and cash flow uncertainty arising from the Huawei compensation settlement arrangement[185](index=185&type=chunk) - The Group will adhere to its diversified business development strategy, prudently selecting investments to navigate market volatility and create shareholder value[186](index=186&type=chunk)[189](index=189&type=chunk) [Financial Resources and Liquidity](index=36&type=section&id=4.4%20Financial%20Resources%20and%20Liquidity) As of June 30, 2019, the Group's financial position was robust, with total assets increasing to HK$912,428 thousand and cash and bank balances to HK$203,634 thousand; net current assets significantly increased to HK$94,825 thousand, and total borrowings decreased, with a substantial reduction in borrowings repayable within one year Financial Resources Overview as of June 30, 2019 | Metric (HK$ thousand) | June 30, 2019 | December 31, 2018 | Change | | :------------ | :----------- | :------------- | :--- | | Total assets | 912,428 | 844,350 | +8% | | Cash and bank balances | 203,634 | 176,993 | +15% | | Net current assets | 94,825 | 55,119 | +72% | | Total borrowings | 148,104 | 164,812 | -10% | | Borrowings repayable within one year | 81,296 | 164,812 | -51% | | Borrowings repayable between one and two years | 66,808 | – | New | - Cash and bank balances were primarily denominated in **HKD (84%)**, **RMB (7%)**, **USD (7%)**, and **AUD (2%)**[187](index=187&type=chunk) - Borrowing interest rates range from **4.5% to 6%** per annum, with approximately **55%** at fixed rates[187](index=187&type=chunk) [Capital Structure](index=37&type=section&id=4.5%20Capital%20Structure) As of June 30, 2019, the Group's shareholders' equity was HK$432,027 thousand; the Group manages its capital structure by monitoring current ratio, debt-to-asset ratio, and net debt-to-equity ratio - As of June 30, 2019, shareholders' equity was approximately **HK$432,027 thousand**[190](index=190&type=chunk) Capital Structure Ratios as of June 30, 2019 | Metric | June 30, 2019 | December 31, 2018 | | :------------ | :----------- | :------------- | | Current ratio | 1.25 times | 1.14 times | | Debt-to-asset ratio | 0.53 times | 0.50 times | | Net debt-to-equity ratio | 0.59 times | 0.60 times | [Foreign Exchange Risk](index=37&type=section&id=4.6%20Foreign%20Exchange%20Risk) The Group's revenue and costs are primarily denominated in HKD, RMB, and AUD; no derivative hedging was undertaken during the reporting period, and the Group will continue to monitor foreign exchange risk and consider appropriate hedging instruments when necessary - The Group's revenue and costs are primarily denominated in **HKD, RMB, and AUD**[190](index=190&type=chunk) - No derivative products were invested for hedging during the reporting period[190](index=190&type=chunk) - The Group will continue to monitor foreign exchange risk and consider appropriate hedging instruments when exchange rates fluctuate[190](index=190&type=chunk) [Pledge of Assets](index=38&type=section&id=4.7%20Pledge%20of%20Assets) As of June 30, 2019, certain of the Group's borrowings were secured by land and buildings (HK$177,164 thousand), financial assets at fair value through other comprehensive income (HK$99,452 thousand), and time deposits (HK$13,000 thousand) Group's Asset Pledge Situation as of June 30, 2019 | Pledged Assets | Amount (HK$ thousand) | December 31, 2018 (HK$ thousand) | | :------------ | :------------ | :----------------------- | | Land and buildings | 177,164 | 173,349 | | Financial assets at fair value through other comprehensive income | 99,452 | 76,615 | | Time deposits | 13,000 | 13,000 | [Capital Commitments](index=38&type=section&id=4.8%20Capital%20Commitments) As of June 30, 2019, the Group had no significant capital expenditure commitments (December 31, 2018: nil) - As of June 30, 2019, the Group had no significant capital expenditure commitments[192](index=192&type=chunk) [Litigation and Claims](index=38&type=section&id=4.9%20Litigation%20and%20Claims) The Group is involved in two legal proceedings: the Convoy Litigation and the Chu Litigation; in the Convoy Litigation, the plaintiff seeks to set aside share allotments, rescind financing facilities, and claim damages, with Linker having fully repaid the loans and filed a defense, while the Chu Litigation is stayed pending the outcome of the Convoy Litigation, and the Group's lawyers believe the potential liability and final outcome cannot be reliably assessed at present - The Group is involved in the Convoy Litigation initiated by Convoy Global Holdings Limited, seeking to set aside share allotments, rescind financing facilities, and claim damages[192](index=192&type=chunk) - Linker fully repaid the Convoy loan and margin loan on December 19, 2018, no longer holds Convoy shares, and has filed a defense[192](index=192&type=chunk)[194](index=194&type=chunk) - The Group is involved in the Chu Litigation initiated by Chu Xiaoyan, seeking to declare the Convoy share placement invalid and claim damages, with this litigation stayed pending the outcome of the Convoy Litigation[196](index=196&type=chunk)[199](index=199&type=chunk) - The Group's lawyers believe the potential liability amount and final outcome cannot be reliably assessed at present, thus no provision has been made[201](index=201&type=chunk) [Contingent Liabilities](index=41&type=section&id=4.10%20Contingent%20Liabilities) Except for the arbitration proceedings disclosed in the "Disposal of Zhiqu" section of this report, the Group had no other significant contingent liabilities as of June 30, 2019 - Except for the arbitration related to the Zhiqu disposal, the Group had no other significant contingent liabilities[205](index=205&type=chunk) [Employee Remuneration Policy](index=41&type=section&id=4.11%20Employee%20Remuneration%20Policy) As of June 30, 2019, the Group had approximately 3,070 employees, with total staff costs amounting to HK$275,187 thousand; the Group enhances employee capabilities through training, with remuneration determined by industry practice, performance, qualifications, and experience, and directors' remuneration decided by the Board based on Remuneration Committee recommendations, including discretionary bonuses, share options, and other benefits - As of June 30, 2019, the Group had approximately **3,070** employees (December 31, 2018: 2,900 employees)[206](index=206&type=chunk) - Total staff costs for the first half of 2019 were approximately **HK$275,187 thousand** (2018: HK$154,535 thousand)[206](index=206&type=chunk) - Employee remuneration is determined based on industry practice, individual performance, qualifications, and experience[207](index=207&type=chunk) - Directors' remuneration is determined by the Board based on the Remuneration Committee's recommendations, including discretionary bonuses, share options, and other benefits[208](index=208&type=chunk) Part V [Other Information](index=42&type=section&id=V.%20Other%20Information) This section covers other important information, including directors' and substantial shareholders' interests in securities, share option scheme, changes in directors' information, transactions in listed securities, directors' competing interests, code of conduct for securities transactions, corporate governance practices, and the audit committee [Directors' and Chief Executive's Interests in Securities](index=42&type=section&id=5.1%20Directors'%20and%20Chief%20Executive's%20Interests%20in%20Securities) As of June 30, 2019, none of the company's directors or chief executive held or were deemed to hold any interests or short positions in the shares, underlying shares, and debentures of the company or its associated corporations - As of June 30, 2019, no directors or chief executive held any interests or short positions in the securities of the Company or its associated corporations[214](index=214&type=chunk) [Substantial Shareholders' Interests](index=42&type=section&id=5.2%20Substantial%20Shareholders'%20Interests) As of June 30, 2019, Mr. Cheng Hei Yu was a substantial shareholder of the company, holding 3,765,987,973 ordinary shares, representing 70.57% of the total issued shares Substantial Shareholders' Shareholding as of June 30, 2019 | Shareholder Name | Capacity | Number of Ordinary Shares | Approximate Percentage | | :------- | :------- | :------------ | :--------- | | Cheng Hei Yu | Beneficial owner | 3,765,987,973 | 70.57% | - As of June 30, 2019, other than Mr. Cheng Hei Yu, no other substantial shareholders held disclosable interests or short positions[216](index=216&type=chunk) [Share Option Scheme](index=43&type=section&id=5.3%20Share%20Option%20Scheme) As of June 30, 2019, there were no outstanding share options under the company's share option scheme, and no share options were granted, exercised, cancelled, or lapsed during the reporting period - As of June 30, 2019, there were no outstanding share options under the share option scheme[212](index=212&type=chunk)[219](index=219&type=chunk) - The share option scheme aims to provide incentives, help the Group retain and recruit employees, and align them with the company's long-term business objectives[219](index=219&type=chunk) [Changes in Directors' Information](index=43&type=section&id=5.4%20Changes%20in%20Directors'%20Information) Independent Non-executive Director Mr. Li Kan Fai was appointed as an independent non-executive director of China Creative Digital Entertainment Limited on July 15, 2019, and of Easy Repay Finance Investment Limited on July 17, 2019 - Independent Non-executive Director Mr. Li Kan Fai was appointed as an independent non-executive director of two GEM-listed companies[219](index=219&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=43&type=section&id=5.5%20Purchase%2C%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2019, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - In the first half of 2019, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities[219](index=219&type=chunk) [Directors' Competing Interests](index=44&type=section&id=5.6%20Directors'%20Competing%20Interests) Executive Directors Mr. Hui Chun Sum and Ms. Lam Ka Wai are engaged in lending businesses in Hong Kong through Chinese Financial Credit Limited and Gold Leader Limited, respectively, which compete with the Group's lending business - Executive Directors Mr. Hui Chun Sum and Ms. Lam Ka Wai are engaged in lending businesses in Hong Kong through their respective companies, which compete with the Group's business[221](index=221&type=chunk)[225](index=225&type=chunk)[227](index=227&type=chunk) [Code of Conduct Regarding Securities Transactions by Directors](index=44&type=section&id=5.7%20Code%20of%20Conduct%20Regarding%20Securities%20Transactions%20by%20Directors) In the first half of 2019, the company adopted a code of conduct for directors' securities transactions no less exacting than required by the GEM Listing Rules, and no non-compliance was found after inquiry with all directors - The Company has adopted a code of conduct for directors' securities transactions that meets the requirements of the GEM Listing Rules[223](index=223&type=chunk) - After inquiry with all directors, no non-compliance was found during the reporting period[223](index=223&type=chunk) [Corporate Governance Code](index=44&type=section&id=5.8%20Corporate%20Governance%20Code) The company is committed to good corporate governance practices and has complied with the Corporate Governance Code in Appendix 15 of the GEM Listing Rules, with one deviation: the roles of Chairman and Chief Executive were previously held by different individuals, but the Chief Executive position was vacant from November 2017 to June 2019, after which Ms. Lam Ching Yee was appointed Chief Executive on June 5, 2019, and the Board believes the current arrangement ensures a balance of power - The Company has complied with the Corporate Governance Code in Appendix 15 of the GEM Listing Rules, with one deviation[224](index=224&type=chunk) - Code provision A.2.1 requires separation of Chairman and Chief Executive roles, but the Chief Executive position was vacant from November 2017 to June 2019[224](index=224&type=chunk) - Ms. Lam Ching Yee was appointed Chief Executive of the Company on **June 5, 2019**[224](index=224&type=chunk) - The Board believes the current arrangement (half independent non-executive directors) is sufficient to ensure a balance of power[229](index=229&type=chunk) [Audit Committee](index=45&type=section&id=5.9%20Audit%20Committee) The Audit Committee has been established in compliance with GEM Listing Rules, comprising three independent non-executive directors with Mr. Wong Siu Keung as Chairman; its primary responsibilities include reviewing financial information, internal controls, risk management, and audit plans, and the Committee has reviewed the current period's results and report, deeming them compliant with applicable accounting standards and disclosure requirements - The Audit Committee comprises three independent non-executive directors, with Mr. Wong Siu Keung serving as Chairman[230](index=230&type=chunk)[234](index=234&type=chunk) - The Committee's responsibilities include reviewing financial information, internal control and risk management systems, audit plans, and relationships with external auditors[230](index=230&type=chunk) - The Audit Committee has reviewed the unaudited condensed consolidated results and report for the current period, deeming them compliant with applicable accounting standards and GEM Listing Rules, and adequately disclosed[231](index=231&type=chunk)[235](index=235&type=chunk)