Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM. Hong Kong Exchanges and Clearing Limited and the Stock Exchange take no responsibility for the contents of this report, make no representation as to its accuracy or completeness and expressly discl ...

T H I R D Q U A R T E R L Y R E P O R T 第 三 季 度 業 績 報 告 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 investing in such companies and should make the decision to invest only after due and careful consideration. Giv ...

Financial Performance - For the six months ended June 30, 2020, the Group recorded revenue of approximately HK$17.5 million, a decrease from HK$28.9 million in the same period of 2019, representing a decline of about 39%[7]. - The loss after taxation for the same period was approximately HK$5.3 million, compared to a loss of HK$2.7 million in the corresponding period of 2019, indicating an increase in loss of approximately 96%[8]. - Basic and diluted loss per share for the six months ended June 30, 2020, was approximately HK0.60 cents, compared to HK0.32 cents for the same period in 2019, reflecting an increase in loss per share of about 88%[9]. - Gross profit for the six months ended June 30, 2020, was approximately HK$2.99 million, down from HK$6.40 million in the same period of 2019, a decrease of about 53%[8]. - Total comprehensive loss for the period was approximately HK$6.58 million, compared to HK$2.99 million in the same period of 2019, representing an increase of about 120%[9]. - The company reported a loss before tax of HK$5,316,000 for the six months ended June 30, 2020, compared to a loss of HK$3,145,000 for the same period in 2019, indicating a worsening of approximately 68.9%[16]. - The profit attributable to owners of the parent for the six months ended June 30, 2020, was a loss of HK$5,317,000 compared to a loss of HK$2,705,000 in 2019, indicating a worsening of 96.5%[79]. - The basic and diluted loss per share for the six months ended June 30, 2020, was HK(0.60) compared to HK(0.32) in 2019, reflecting an increase in loss per share of 87.5%[79]. Revenue Breakdown - Total revenue for the three months ended June 30, 2020, was HK$9,409,000, a decrease of 40.3% compared to HK$15,831,000 in the same period of 2019[59]. - Revenue from external customers is a key focus area, although specific figures are not provided in the extracted content[48][50]. - Revenue from the PRC for the three months ended June 30, 2020, was HK$6,694,000, down 24.1% from HK$8,825,000 in 2019[59]. - Overseas revenue for the same period decreased by 65.2% to HK$2,115,000 from HK$6,083,000 in 2019[59]. - Domestic sales in the PRC accounted for 63.1% of total revenue, amounting to HK$11.06 million, while overseas sales decreased by 54.0% to HK$5.06 million, representing 28.9% of total revenue[128]. Expenses and Costs - The Group's selling and distribution expenses for the six months ended June 30, 2020, were approximately HK$2.64 million, down from HK$3.10 million in the same period of 2019, a decrease of about 15%[8]. - Administrative expenses increased slightly to approximately HK$6.49 million for the six months ended June 30, 2020, compared to HK$6.62 million in the same period of 2019, a decrease of about 2%[8]. - Employee benefit expenses (excluding directors' remuneration) for the six months ended June 30, 2020, were HK$6,875,000, down from HK$9,055,000 in 2019, a decrease of 24.9%[70]. - The gross rental income for the six months ended June 30, 2020, was HK$646,000, a decrease from HK$770,000 in 2019[65]. - The Group's cost of sales decreased to approximately HK$14.5 million for the six months ended June 30, 2020, down 35.4% from approximately HK$22.5 million for the same period in 2019[133]. Assets and Liabilities - Total non-current assets decreased from HK$18,355,000 as of December 31, 2019, to HK$16,605,000 as of June 30, 2020, representing a decline of approximately 9.5%[11]. - Current assets decreased from HK$61,138,000 as of December 31, 2019, to HK$49,919,000 as of June 30, 2020, a reduction of about 18.4%[11]. - Net current assets increased from HK$27,986,000 as of December 31, 2019, to HK$37,240,000 as of June 30, 2020, reflecting an increase of approximately 33.1%[11]. - Total equity rose from HK$42,472,000 as of December 31, 2019, to HK$51,135,000 as of June 30, 2020, marking an increase of around 20.5%[12]. - The net carrying amount of property, plant, and equipment as of June 30, 2020, was HK$5,368,000, down from HK$6,175,000 at the beginning of the year, a decrease of 13.1%[81]. - The Group's right-of-use assets decreased to HK$4,633,000 as of June 30, 2020, from HK$5,530,000 at the beginning of the year, a decline of 16.2%[85]. - As of June 30, 2020, lease liabilities decreased to HK$4,836,000 from HK$6,024,000 as of December 31, 2019, representing a reduction of approximately 19.7%[89]. Cash Flow and Financing - Cash flows used in operating activities amounted to HK$9,160,000 for the six months ended June 30, 2020, compared to HK$835,000 for the same period in 2019, representing a significant increase in cash outflow[16]. - The net decrease in cash and cash equivalents for the period was HK$15,202,000, compared to a decrease of HK$1,604,000 in 2019, marking a substantial decline of 848%[17]. - Cash and cash equivalents at the end of the period stood at HK$18,284,000, down from HK$29,243,000 at the end of June 2019, a decrease of 37.5%[18]. - The company issued rights shares amounting to HK$15,243,000 during the period, contributing to the increase in total equity[14]. - The company completed a rights issue on June 11, 2020, issuing 400,000,000 new shares at a subscription price of HK$0.043 per share, raising approximately HK$15.2 million net proceeds[159]. Future Plans and Challenges - The Group faces uncertainties and multiple challenges, necessitating a prudent approach to implementing future plans as outlined in the Prospectus[199]. - The future plans and use of proceeds were based on the best estimation of market conditions post-Listing, with actual use differing due to ongoing trade conflicts, economic slowdown in China, and the COVID-19 pandemic[196]. - Strict adherence to the implementation plan is expected to increase the Group's production capacity, although additional machinery may lead to future impairment provisions[196]. - The Group's future plans are influenced by the continuing trade conflict between the USA and China, which has created a challenging market environment[199].

Financial Performance - For the three months ended March 31, 2020, the revenue amounted to approximately HK$8.1 million, a decrease from HK$13.1 million in the same period of 2019, representing a decline of about 38.5%[7] - The loss after taxation for the same period was approximately HK$2.9 million, compared to a loss of HK$2.96 million in the previous year, indicating a slight improvement[8] - Basic and diluted loss per share for the period was approximately HK0.36 cents, compared to HK0.37 cents in the prior year, reflecting a marginal decrease in loss per share[9] - Gross profit for the three months ended March 31, 2020, was HK$1.27 million, down from HK$2.25 million in 2019, marking a decline of approximately 43.4%[8] - Total comprehensive loss for the period was HK$4.02 million, compared to HK$1.39 million in the same period last year, indicating a significant increase in overall losses[9] - The company reported a loss before tax of HK$2.86 million, which is an improvement from a loss of HK$3.54 million in the same period of 2019[8] - The total comprehensive loss for the period was HK$4,018,000, which includes an exchange loss of HK$1,161,000 from foreign operations[11] - The loss attributable to the owners of the parent decreased to approximately HK$2.9 million for the three months ended March 31, 2020, a decrease of approximately 3.5% from approximately HK$3.0 million for the same period in 2019[70] Revenue Breakdown - Revenue from the PRC was HK$4,366,000, down 40.0% from HK$7,289,000 in the previous year[42] - Overseas revenue decreased by 40.0% to HK$2,948,000 from HK$4,915,000 in 2019[42] - Revenue from Hong Kong was HK$800,000, a slight decrease of 7.0% from HK$860,000 in the same period last year[42] - Revenue from contracts with customers for the three months ended March 31, 2020, was HK$8,114,000, a decrease of 37.5% from HK$13,064,000 in the same period of 2019[46] - Revenue from industrial products sales was HK$8,114,000, down from HK$13,064,000 in 2019, indicating a significant decline in sales performance[47] - Sales in the PRC market decreased by 40.1%, with revenue of HK$4.4 million for the three months ended March 31, 2020, compared to HK$7.3 million in 2019[74] - Overseas sales also decreased by 40.0%, with revenue of HK$2.9 million for the three months ended March 31, 2020, down from HK$4.9 million in 2019[74] Expenses and Costs - Selling and distribution expenses decreased to HK$1.35 million from HK$1.49 million, a reduction of approximately 9.1%[8] - Administrative expenses were reduced to HK$3.27 million from HK$3.90 million, showing a decrease of about 16.1%[8] - The Group's loss before tax for the three months ended March 31, 2020, was impacted by a cost of inventories sold amounting to HK$6,843,000, down from HK$10,810,000 in 2019[57] - Depreciation of fixed assets increased to HK$356,000 in 2020 from HK$283,000 in 2019, indicating a rise of 25.8%[57] - Employees' benefit expenses (excluding Directors' remuneration) decreased to HK$3,645,000 in 2020 from HK$4,746,000 in 2019, a reduction of 23.3%[57] - Finance costs for the three months ended March 31, 2020, were HK$203,000, down 33.4% from HK$305,000 in 2019[54] Equity and Share Capital - As of March 31, 2020, the company's total equity stood at HK$38,454,000, down from HK$42,472,000 as of January 1, 2020[11] - The company's accumulated losses increased to HK$36,843,000 as of March 31, 2020, compared to HK$33,986,000 at the beginning of the year[11] - As of March 31, 2020, the company's issued ordinary share capital was HK$8,000,000, divided into 800,000,000 shares of HK$0.01 each[117] - Mr. Wong Kwok Wai, Albert, holds a controlled corporation interest in 600,000,000 shares, representing 75% of the issued share capital[112] - Three Gates Investment Limited, wholly owned by Mr. Wong, is deemed to hold 600,000,000 shares, also accounting for 75% of the issued share capital[117] Corporate Governance and Compliance - The company is currently under investigation by the ICAC, but the directors believe it does not have a material impact on the financial statements[20] - The financial statements have been prepared in accordance with Hong Kong Financial Reporting Standards, with all values rounded to the nearest thousand[19] - The company has adopted the corporate governance code as per GEM Listing Rules and is committed to regular reviews to meet shareholder expectations[130] - The company has complied with the corporate governance code provisions for the three months ended March 31, 2020, except for a deviation from code provision A.2.1[131] - The company maintains compliance with GEM Listing Rules regarding the disclosure of interests and positions[115] Future Outlook and Plans - The Directors believe there are considerable business opportunities in the sewing threads industry in the long term and will implement expansion plans in a prudent manner considering market conditions[105] - The company proposes a rights issue conditional upon an underwriting agreement dated April 9, 2020[144] - The board proposes to change the board lot size for trading from 10,000 shares to 50,000 shares[145] Audit and Financial Review - The audit committee reviewed the unaudited first quarterly results for the three months ended March 31, 2020[152] - The company has established an audit committee responsible for reviewing financial information and monitoring internal control procedures[151] - The audit committee consists of three independent non-executive directors[152] Miscellaneous - The company is headquartered in Hong Kong at Unit 1006, 10/F., Harbour Crystal Centre[158] - The stock code for the company is 8377[159] - The company’s website is www.shenyouholdings.com[159]

Financial Performance - For the year ended December 31, 2019, the Group's revenue decreased to approximately HK$58.7 million, representing a decrease of approximately 8.9% compared to HK$64.5 million for the year ended December 31, 2018[17]. - The Group's net loss increased to approximately HK$19.2 million for the year ended December 31, 2019, up from approximately HK$10.9 million for the year ended December 31, 2018, representing a significant increase of approximately 77.1%[17]. - The increase in net loss was mainly due to a decrease of approximately HK$1.9 million in gross profit and an increase in impairment losses on financial assets and fixed assets totaling approximately HK$5.6 million[17]. - The Group's increase in income tax for the year was approximately HK$4.1 million compared to the previous year[17]. - The Group's financial performance reflects the impact of external economic uncertainties and market volatility[18]. - The gross profit margin decreased to approximately 19.3% for the year ended December 31, 2019, down from approximately 20.6% for the preceding year[27]. - The Group's gross profit decreased to approximately HK$11.3 million for the year ended December 31, 2019 from approximately HK$13.3 million for the year ended December 31, 2018, representing a decrease of approximately 14.7%[46]. - The total comprehensive loss attributable to the owners of the parent increased to approximately HK$20.6 million for the year ended December 31, 2019 from approximately HK$14.7 million for the year ended December 31, 2018, representing an increase of approximately 40.4%[58]. Sales and Market Performance - The Group's overseas sales slightly increased by approximately 1.1%, while sales to the PRC decreased by approximately 15.6% compared to the previous year[18]. - Sales in the PRC market accounted for approximately 56.1% of total revenue for the year ended 31 December 2019, with a decrease of approximately 15.6% compared to the previous year[27]. - The major product, 100% spun polyester sewing threads, generated approximately HK$52.1 million in revenue, accounting for 88.6% of total revenue for the year ended 31 December 2019[39]. - Other types of sewing threads generated approximately HK$6.7 million in revenue, representing a decrease of approximately 23.5% compared to the previous year[39]. - The Group has been actively seeking business opportunities in the PRC, with its Zhejiang office operational since May 2019[18]. - The ongoing trade conflict between the PRC and the U.S. has created economic challenges impacting the Group's business[18]. Cost Management - The cost of sales decreased to approximately HK$47.4 million for the year ended 31 December 2019, down from approximately HK$51.2 million for the year ended 31 December 2018, representing a decrease of approximately 7.4%[42]. - The Group's sales cost decreased from approximately HK$51.2 million for the year ended 31 December 2018 to approximately HK$47.4 million for the year ended 31 December 2019, representing a decrease of approximately 7.4%[44]. - Selling and distribution expenses decreased to approximately HK$7.4 million for the year ended 31 December 2019 from approximately HK$7.6 million for the year ended 31 December 2018[48]. - Administrative expenses decreased to approximately HK$13.5 million for the year ended 31 December 2019 from approximately HK$16.5 million for the year ended 31 December 2018, representing a decrease of approximately 17.9%[49]. - Finance costs increased to approximately HK$1.3 million for the year ended 31 December 2019 from approximately HK$0.9 million for the year ended 31 December 2018, representing an increase of approximately 48.2%[55]. Assets and Liabilities - The Group's cash and bank balances amounted to approximately HK$34.5 million as at 31 December 2019, compared to approximately HK$30.9 million as at 31 December 2018[67]. - As of December 31, 2019, the Group's net current assets were approximately HK$28 million, down from approximately HK$40.4 million as of December 31, 2018[72]. - The current ratio decreased from approximately 2.4 as at December 31, 2018 to approximately 1.8 as at December 31, 2019[68]. - Bank borrowings increased from approximately HK$15.2 million as of December 31, 2018, to approximately HK$20 million as of December 31, 2019, primarily due to increased financing needs in unfavorable market conditions[72]. - The gearing ratio was 3.1% as of December 31, 2019, while it was not applicable as of December 31, 2018, due to cash and bank balances exceeding total liabilities[74]. Corporate Governance - The company has a diverse board with members holding various qualifications and extensive experience in finance and management[141]. - The company is committed to maintaining a high standard of corporate governance through its diverse and qualified board[141]. - The company has adopted the corporate governance code as set out in Appendix 15 to the GEM Listing Rules, ensuring compliance with the standards[170]. - The Board believes that strong corporate governance practices are essential for safeguarding shareholder interests and ensuring accountability[169]. - The company has confirmed compliance with the required standard of dealings regarding securities transactions by the Directors during the year ended December 31, 2019[172]. - The company has complied with the code provisions for the year ended December 31, 2019, except for a deviation from code provision A.2.1[171]. - The company emphasizes the importance of cultivating a culture focused on good corporate governance for strong business growth[169]. Strategic Initiatives - The Group aims to explore new strategies for market expansion and product development in response to current challenges[18]. - Future plans and use of proceeds will be implemented prudently due to uncertainties from the ongoing U.S.-China trade conflict, China's economic slowdown, and the COVID-19 outbreak[121]. - The Directors believe there are significant long-term business opportunities in the sewing threads industry and will continue to pursue expansion plans conservatively[122]. - The Group aims to meet customer demands for high-quality and differentiated products to maintain long-term business relationships[122]. - The Directors will monitor and assess the situation, and may modify expansion plans to align with the Group's operational needs and future development[123]. Human Resources - The total staff costs for the two years ended December 31, 2019, were approximately HK$18.7 million and HK$17.3 million, respectively[94]. - The Group employed a total of 172 employees as of December 31, 2019, down from 184 employees as of December 31, 2018[94]. Investments and Assets - The Group upgraded machinery for the production of 100% spun polyester sewing threads for industrial use, utilising HK$3.1 million out of HK$20.3 million allocated for this purpose[114]. - The Group has purchased and is operating two waxing and winding machines for the production of 100% spun polyester sewing threads for industrial use, with plans to acquire more machinery[117]. - The Group has purchased and is operating three machines for the production of nylon threads, demonstrating progress in its machinery acquisition strategy[117]. - The Group has established a sales office in Zhejiang Province, which is currently fully operational[119]. - The Group has purchased one cone winding machine and ordered two additional machines to enhance production lines for 100% spun polyester sewing threads[119].

Financial Performance - For the nine months ended 30 September 2019, the Group recorded revenue of approximately HK$45.0 million, a decrease from HK$46.1 million in the same period of 2018[6]. - The loss after taxation for the nine months ended 30 September 2019 amounted to approximately HK$3.9 million, compared to a loss of HK$7.3 million for the same period in 2018[6]. - Basic and diluted loss per share for the nine months ended 30 September 2019 was approximately HK0.49 cents, down from HK0.92 cents in the previous year[8]. - Gross profit for the nine months ended 30 September 2019 was HK$9.0 million, a slight decrease from HK$9.4 million in the same period of 2018[8]. - Total comprehensive loss for the nine months ended 30 September 2019 was HK$6.0 million, compared to HK$10.6 million for the same period in 2018[9]. - The Group experienced a loss before tax of HK$4.4 million for the nine months ended 30 September 2019, an improvement from a loss of HK$8.2 million in the same period of 2018[8]. - The company reported a loss for the period of HK$3,921,000 for the three months ended September 30, 2019, compared to a loss of HK$7,342,000 for the same period in 2018[11]. - The total comprehensive loss for the period was HK$6,001,000, which includes an exchange difference on translation of foreign operations of HK$2,080,000[11]. - The company’s accumulated losses increased to HK$18,688,000 as of September 30, 2019, from HK$14,767,000 as of January 1, 2019[11]. - The Group's revenue decreased to approximately HK$45.0 million for the nine months ended 30 September 2019, down from approximately HK$46.1 million for the same period in 2018, representing a decrease of approximately 2.4%[79]. - The gross profit margin slightly decreased to approximately 20.1% for the nine months ended 30 September 2019 from approximately 20.3% for the same period in the preceding year[72]. - The loss attributable to the owners of the parent decreased to approximately HK$3.9 million for the nine months ended 30 September 2019 from approximately HK$7.3 million for the same period in 2018, representing a decrease of approximately 46.6%[73]. Revenue Breakdown - For the three months ended September 30, 2019, total revenue was HK$16,064,000, a decrease of 3.4% compared to HK$16,622,000 for the same period in 2018[33]. - Revenue from the PRC for the three months was HK$9,162,000, a decline of 10.4% from HK$10,222,000 in 2018[33]. - Revenue from overseas customers for the three months was HK$5,981,000, an increase of 2.2% compared to HK$5,851,000 in 2018[33]. - Revenue from Hong Kong for the three months was HK$921,000, up 67.5% from HK$549,000 in 2018[33]. - Sales to the PRC market decreased by 9.1%, while sales to overseas markets increased by 6.8% and sales in Hong Kong increased by 13.9%[78]. Expenses and Costs - The Group's administrative expenses for the nine months ended 30 September 2019 were HK$9.4 million, down from HK$13.9 million in the previous year[8]. - The Group's cost of sales decreased to approximately HK$35.9 million for the nine months ended 30 September 2019, down from approximately HK$36.7 million for the same period in 2018, representing a decrease of approximately 2.1%[82]. - Selling and distribution expenses decreased to approximately HK$4.6 million for the nine months ended 30 September 2019, down from approximately HK$5.1 million for the same period in 2018, representing a decrease of approximately 8.8%[85]. - The Group's finance costs for the nine months ended 30 September 2019 were HK$0.9 million, an increase from HK$0.6 million in the previous year[8]. - The depreciation of fixed assets increased to HK$880,000 for the nine months ended 30 September 2019 from HK$397,000 in 2018[63]. Corporate Governance - The board believes that strong corporate governance practices are essential for business growth and efficient management[131]. - The corporate governance code has been adopted by the board, and they are committed to regular reviews to ensure compliance[132]. - The company has complied with the corporate governance code provisions for the nine months ended September 30, 2019, except for a deviation from code provision A.2.1[133]. - Mr. Wong Kwok Wai, Albert serves as both chairman and CEO, ensuring strong leadership and effective operation[134]. - The board will continue to review the potential separation of the roles of chairman and CEO when beneficial to the group[134]. Strategic Initiatives - The Group is focused on expanding its market presence in the sewing thread and garment accessories sectors[14]. - The Group has established a sales office in Zhejiang province to expand its sales network and explore new business opportunities[111]. - The Group emphasizes high-quality and differentiated products to maintain long-term business relationships with customers[111]. - The Directors foresee considerable business opportunities in the sewing threads industry due to a strengthened financial position from the Listing[111]. - The Group will continue to monitor the economic environment and may modify its expansion plans if they become unfeasible[112]. Share Capital and Ownership - As of September 30, 2019, Mr. Wong Kwok Wai, the chairman, holds a 75% interest in the Company through a controlled corporation, amounting to 600,000,000 shares[117]. - The Company's issued ordinary share capital is HK$8,000,000, divided into 800,000,000 shares of HK$0.01 each[117]. - Three Gates Investment holds 600,000,000 shares, representing 75% of the issued share capital[125]. - Gold-Face Finance Limited, Upbest Credit and Mortgage Limited, Good Foundation Company Limited, Upbest Strategic Company Limited, Upbest Financial Holdings Limited, and Upbest Group Limited each hold 400,000,000 shares, representing 50% of the issued share capital[125]. - As of September 30, 2019, no other parties, apart from directors or chief executives, held interests or short positions in the shares that required disclosure[126]. Compliance and Audit - The Company has appointed Advent Corporate Finance Limited as its compliance adviser, with no interests in the Company's share capital reported[138]. - The Directors confirmed compliance with the required standard of dealings regarding securities transactions for the nine months ended September 30, 2019[139]. - The Audit Committee, consisting of three independent non-executive Directors, reviewed the unaudited third quarterly results for the nine months ended September 30, 2019[148]. - Ernst & Young serves as the Company's auditor[153].

Financial Performance - For the six months ended June 30, 2019, the Group recorded revenue of approximately HK$28.9 million, a decrease from HK$29.5 million in the same period of 2018[7]. - The loss after taxation for the six months ended June 30, 2019, amounted to approximately HK$2.7 million, compared to a loss of HK$5.2 million in the same period of 2018[8]. - Basic and diluted loss per share for the six months ended June 30, 2019, was approximately HK0.34 cents, an improvement from HK0.65 cents in the same period of 2018[8]. - Total comprehensive loss for the period was approximately HK$2.99 million, compared to HK$5.85 million in the same period of 2018[9]. - The Group reported a profit before tax of approximately HK$3.1 million for the six months ended June 30, 2019, compared to a loss before tax of HK$6.1 million in the same period of 2018[8]. - The company reported a loss for the period of HK$2,705,000 for the six months ended June 30, 2019[14]. - Loss before tax for the six months ended June 30, 2019, was HK$3,145,000, an improvement from a loss of HK$6,067,000 in the same period of 2018, representing a 48% reduction[16]. - The profit attributable to owners of the parent for the six months ended June 30, 2019, was a loss of HK$2,705,000, improving from a loss of HK$5,210,000 in the same period of 2018[101]. - Total comprehensive loss attributable to owners of the Company decreased to approximately HK$3.0 million for the six months ended 30 June 2019 from approximately HK$5.9 million for the six months ended 30 June 2018, representing a decrease of approximately 48.9%[156]. Revenue Breakdown - Revenue from Mainland China for the six months ended June 30, 2019, was HK$16,114,000, down 8.4% from HK$17,589,000 in 2018[71]. - Revenue from overseas customers increased to HK$10,998,000 for the six months ended June 30, 2019, up 9.5% from HK$10,042,000 in 2018[71]. - The Group's geographical revenue breakdown shows a decline in Hong Kong revenue to HK$1,782,000 for the six months ended June 30, 2019, from HK$1,824,000 in 2018[71]. - Revenue from contracts with customers for the three months ended June 30, 2019, was HK$15,831,000, a decrease of 8.2% compared to HK$17,234,000 in the same period of 2018[79]. - Sales in the PRC market decreased by approximately 8.4% from 2018 to 2019, contributing to the overall revenue decline[141]. Expenses and Cost Management - The Group's selling and distribution expenses decreased to approximately HK$3.1 million for the six months ended June 30, 2019, from HK$3.5 million in the same period of 2018[8]. - Administrative expenses were reduced to approximately HK$6.6 million for the six months ended June 30, 2019, compared to HK$9.1 million in the same period of 2018[8]. - The cost of inventories sold was HK$22,496,000, a decrease of 2.6% compared to HK$23,097,000 for the same period in 2018[93]. - The gross profit margin increased to approximately 22.1% for the six months ended 30 June 2019, up from approximately 21.6% for the same period in 2018, mainly due to a slight decrease in direct material costs[137]. - The depreciation of fixed assets increased to HK$585,000 for the six months ended June 30, 2019, compared to HK$174,000 for the same period in 2018[93]. Assets and Liabilities - Total non-current assets increased to HK$28,184,000 as of June 30, 2019, up from HK$23,936,000 as of December 31, 2018, representing a growth of 17.5%[11]. - Current assets decreased slightly to HK$68,208,000 from HK$68,695,000, a decline of 0.7%[11]. - Net current assets decreased to HK$37,189,000 from HK$40,393,000, reflecting a decrease of 7.3%[11]. - Total assets less current liabilities increased to HK$65,373,000 from HK$64,329,000, an increase of 1.6%[12]. - Non-current liabilities rose to HK$5,259,000 from HK$1,223,000, indicating a significant increase of 330.5%[12]. - Net assets decreased to HK$60,114,000 from HK$63,106,000, a decline of 4.7%[12]. - Cash and cash equivalents increased to HK$33,619,000 from HK$30,938,000, showing an increase of 8.7%[11]. - Total trade receivables decreased from HK$17,441,000 as of December 31, 2018 to HK$12,161,000 as of June 30, 2019, representing a decline of 30.4%[111]. - Trade payables as of June 30, 2019 totaled HK$5,145,000, a slight increase from HK$5,122,000 as of December 31, 2018[114]. - Other payables and accruals decreased from HK$7,765,000 as of December 31, 2018 to HK$4,624,000 as of June 30, 2019, a reduction of 40.4%[116]. Cash Flow and Financing - Net cash flows used in operating activities decreased significantly to HK$835,000 from HK$17,623,000 year-on-year, indicating improved operational efficiency[17]. - Cash used in operations was HK$111,000, a significant improvement from HK$15,866,000 in the prior year, showcasing enhanced cash flow management[16]. - New bank loans amounted to HK$10,693,000, while repayments of bank loans were HK$10,804,000, resulting in a net cash outflow from financing activities of HK$655,000[17]. - The Group's bank facilities amounted to HK$20,196,000 as of June 30, 2019, slightly down from HK$20,445,000 as of December 31, 2018[127]. - The total amount of financial assets pledged as security for interest-bearing bank borrowings was HK$8,556,000 as of June 30, 2019, down from HK$11,987,000 as of December 31, 2018[126]. Accounting Policies and Standards - The Group's interim condensed consolidated financial statements for the six months ended June 30, 2019, were prepared in accordance with Hong Kong Accounting Standard 34[28]. - The Group adopted HKFRS 16 using the modified retrospective method with an initial application date of January 1, 2019[38]. - The Group's accounting policies and methods of computation remain consistent with the consolidated financial statements for the year ended December 31, 2018, except for the adoption of new standards[30]. - The Group assessed all right-of-use assets for impairment based on HKAS 36 as of the transition date[46]. Employee and Corporate Governance - The Group employed a total of 175 employees as of June 30, 2019, a slight decrease from 178 employees in 2018[191]. - The remuneration committee is responsible for determining the remuneration packages of Directors and senior management, linking discretionary bonuses to the Group's profit performance[192]. - The group did not recommend the payment of an interim dividend for the six months ended June 30, 2019[98]. Market and Strategic Initiatives - The company continues to explore market expansion opportunities and new product development strategies[84]. - The Group's customers are located in the PRC, Hong Kong, and overseas countries including UAE, Mauritius, Switzerland, and the UK, with domestic sales accounting for 55.7% of total revenue in 2019[136].

Shen You Holdings Limited 申酉控股有限公司 (Incorporated in the Cayman Islands with limited liability) (於開曼群島註冊成立的有限公司) Stock Code 股份代號 : 8377 2019 FIRST QUARTERLY REPORT 第一季度業績業告 Shen You Holdings Limited 申酉控股有限公司 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 sho ...

Financial Performance - For the year ended December 31, 2018, the Group's revenue decreased to approximately HK$64.5 million, representing a decrease of approximately 13.3% compared to HK$74.4 million for the year ended December 31, 2017[19]. - The Group's net loss decreased to approximately HK$10.9 million for the year ended December 31, 2018, down from approximately HK$13.2 million for the year ended December 31, 2017, representing a significant decrease of approximately 17.7%[19]. - The decrease in net loss was primarily due to a reduction of approximately HK$18.5 million in Listing expenses[19]. - The Group experienced a decrease of approximately HK$12.2 million in gross profit during the year ended December 31, 2018, compared to the previous year[19]. - The gross profit margin decreased to approximately 20.6% for the year ended December 31, 2018, down from approximately 34.3% for the previous year[32]. - The net loss for the year ended December 31, 2018, was approximately HK$10.9 million, a significant reduction of about 17.7% from the net loss of approximately HK$13.2 million for the previous year[22]. - Gross profit decreased to approximately HK$13.3 million in 2018 from approximately HK$25.5 million in 2017, a decrease of approximately 48.0%[51]. - The total comprehensive loss attributable to the owners of the parent increased to approximately HK$14.7 million in 2018 from approximately HK$8.1 million in 2017, representing an increase of approximately 82.5%[64]. Revenue and Sales - Overseas sales decreased by approximately 20.8%, while sales to the PRC increased by approximately 5.6% for the year ended December 31, 2018, compared to the previous year[24]. - Sales to overseas markets accounted for approximately 34.1% of total revenue in 2018, while sales in Hong Kong dropped significantly, accounting for only 5.4% of total revenue[45]. Expenses and Costs - The cost of sales increased to approximately HK$51.2 million in 2018 from approximately HK$48.9 million in 2017, representing an increase of approximately 4.9%[46]. - Selling and distribution expenses rose to approximately HK$7.6 million in 2018 from approximately HK$6.4 million in 2017, mainly due to increased staff costs[53]. - Administrative expenses increased significantly to approximately HK$16.5 million in 2018 from approximately HK$9.8 million in 2017, representing an increase of approximately 67.4%[54]. Assets and Liabilities - The Group's cash and bank balances decreased from approximately HK$57.9 million as of December 31, 2017, to approximately HK$30.9 million as of December 31, 2018[73]. - The Group's net current assets decreased from approximately HK$64.9 million as of December 31, 2017, to approximately HK$40.4 million as of December 31, 2018[74]. - Bank borrowings decreased from approximately HK$22.6 million as of December 31, 2017, to approximately HK$15.2 million as of December 31, 2018[74]. Corporate Governance - The company has adopted the corporate governance code as set out in Appendix 15 to the GEM Listing Rules, ensuring compliance with the standards for the year ended December 31, 2018[181]. - The Board believes that strong corporate governance practices are essential for safeguarding shareholder interests and ensuring accountability[180]. - The company confirmed compliance with the required standard of dealings regarding securities transactions by the Directors during the year ended December 31, 2018[183]. - The Board currently comprises executive, non-executive, and independent non-executive Directors, ensuring a diverse governance structure[187]. - The company has committed to regularly reviewing its corporate governance practices to meet the rising expectations of shareholders and stakeholders[181]. Business Strategy and Expansion - The Group plans to establish a Zhejiang office to expand its reach in the PRC, expected to be fully operational by the end of 2019[24]. - The Group has no plans to deviate from its expansion plans outlined in the prospectus dated November 30, 2017, and will implement these plans in a more prudent manner[25]. - The Directors believe there are considerable business opportunities in the sewing threads industry in the long term[128]. - The expansion plans will be implemented in a prudent manner, considering market conditions[128]. - The Group will monitor and assess the feasibility of expansion plans continuously[129]. Management and Personnel - As of December 31, 2018, the Group employed a total of 184 employees, an increase from 178 employees in 2017[103]. - Total staff costs for the two years ended December 31, 2018, were approximately HK$15.2 million and HK$18.7 million, respectively[103]. Directors and Management Team - Mr. Yu Miaogen has extensive experience in the finance industry, having served as CEO and chairman of Huaan Funds Management Co., Ltd. from November 2006 to September 2011[139]. - Mr. Gao Biao holds two master's degrees, one in East Asian business and another in international shipping and finance, and has been a project manager at Shanghai Ruili Investment Management Center since 2017[144]. - Mr. Shi Guixiang, appointed as a non-executive director, has a background in finance with experience in various managerial roles in companies such as Shenzhen Development Bank and Guangzhou Fengshen Auto and Real Estate Development Company[149]. - Dr. Yeung Ngai Man, John has been an independent non-executive director since November 24, 2017, and is the chairman of the remuneration committee[154]. - Mr. Sung Alfred Lee Ming has over 30 years of experience in accounting and was appointed as an independent non-executive director on November 24, 2017[159]. - Mr. Zhang Guofu was appointed as an independent non-executive director on September 24, 2018, and holds a doctorate in economics[164].