Financial Performance - For the nine months ended September 30, 2021, the Group recorded revenue of approximately HK$49.3 million, an increase from HK$31.6 million in the same period of 2020[7]. - The loss after taxation for the nine months ended September 30, 2021, amounted to approximately HK$27.0 million, compared to a loss of HK$8.6 million in the same period of 2020[7]. - Basic and diluted loss per share for the nine months ended September 30, 2021, was approximately HK7.65 cents, up from HK4.25 cents in the same period of 2020[9]. - For the three months ended September 30, 2021, revenue was HK$16.8 million, compared to HK$14.1 million for the same period in 2020, reflecting a growth of approximately 19%[9]. - Gross profit for the nine months ended September 30, 2021, was approximately HK$8.6 million, compared to HK$6.5 million in the same period of 2020, representing a year-on-year increase of about 32%[9]. - Total comprehensive loss for the nine months ended September 30, 2021, was approximately HK$26.5 million, compared to HK$7.5 million in the same period of 2020[10]. - The Group's loss before tax for the nine months ended September 30, 2021, was approximately HK$27.0 million, compared to HK$8.6 million for the same period in 2020[9]. - The Group reported a segment loss of HK$7,468,000 for the nine months ended September 30, 2021, with losses of HK$5,571,000 in manufacturing and trading of threads and HK$1,094,000 in equine services[43]. - The Group recorded a loss before income tax of approximately HK$27.0 million for the nine months ended September 30, 2021, an increase of approximately 214.0% from approximately HK$8.6 million for the corresponding period in the previous year[108][112]. Revenue Breakdown - For the nine months ended September 30, 2021, total revenue was HK$49,328,000, comprising HK$39,397,000 from manufacturing and trading of threads and HK$9,931,000 from interior design and decoration[43]. - The revenue from the manufacturing and trading of threads increased to approximately HK$39.4 million, up 24.6% from approximately HK$31.6 million in the prior year[89]. - The revenue from the interior design and decoration segment for the nine months ended September 30, 2021, was HK$9.9 million, with no revenue recorded for the same period in 2020 due to the acquisition of Diamond Motto Limited[90]. - Revenue from external customers for the nine months ended September 30, 2021 included HK$20,570,000 from the PRC, an increase from HK$18,031,000 in 2020[48]. Expenses and Losses - The Group's administrative expenses for the nine months ended September 30, 2021, were approximately HK$17.5 million, compared to HK$10.6 million in the same period of 2020, indicating an increase of about 65%[9]. - Unallocated corporate expenses for the three months ended September 30, 2021, amounted to HK$3,267,000, contributing to a loss before tax of HK$5,354,000[42]. - For the nine months ended September 30, 2021, unallocated corporate expenses totaled HK$19,488,000, leading to a loss before tax of HK$26,956,000[43]. - Selling and distribution expenses increased to approximately HK$5.3 million, representing an increase of approximately 16.8% from approximately HK$4.5 million for the same period in 2020[106]. - The Group's employee benefit expenses (excluding directors' remuneration) for the three months ended September 30, 2021 were HK$5,716,000, compared to HK$3,898,000 in 2020, marking a 46% increase[64]. Acquisitions and Investments - The Group completed the acquisition of 100% equity interest in Diamond Motto Limited on 9 February 2021, aiming to diversify its business portfolio[80]. - The total consideration for the acquisition of Diamond Motto Limited increased from HK$14,500,000 to HK$25,628,000, indicating a significant rise in the valuation[59]. - The Group completed the acquisition of DML Group in February 2021, which provides interior design and decoration services, aiming to diversify its business portfolio and increase income sources[137]. - The Group has entered the horse trading and breeding business in Australia, expecting to generate revenue and profit in the first half of 2022[81]. Share Capital and Equity - As of September 30, 2021, the total equity amounted to HK$91,360,000, reflecting an increase from HK$49,642,000 as of September 30, 2020[12]. - The company issued rights shares amounting to HK$17,200,000 during the period, contributing to the increase in equity[12]. - The company’s share capital increased from HK$12,000,000 as of September 30, 2020, to HK$20,457,000 as of September 30, 2021[12]. - As at 30 September 2021, the Company's issued share capital amounted to approximately HK$20.5 million, divided by 409,141,860 shares of HK$0.05 each[125][127]. Corporate Governance and Management - The Group's chairman and CEO was under investigation by the ICAC, but the directors believe this does not have a material impact on the financial statements[24][26]. - The board believes that strong corporate governance practices are essential for safeguarding shareholder interests and ensuring accountability[166]. - The company has complied with the corporate governance code provisions for the nine months ended September 30, 2021, except for a deviation from code provision A.2.1[171]. - The Audit Committee consists of three independent non-executive Directors, ensuring no conflicts of interest with previous auditors[186]. - The unaudited third quarterly results for the nine months ended September 30, 2021, have been reviewed by the Audit Committee[186]. Market Conditions and Future Outlook - The Group has faced difficulties in its principal business of manufacturing and selling sewing threads due to the COVID-19 pandemic and ongoing trade conflicts between China and the U.S.[136]. - The Group anticipates that the trade conflict and COVID-19 will continue to impact its business in the coming year[136]. - The Group expects to generate revenue from equine services in the first half of 2022, with a cost of sales of HK$0.9 million recorded for this segment[98]. - The increase in revenue is mainly attributable to the successful completion of the acquisition of DML Group and the recovery of the sewing threads business as COVID-19 tensions seem to be abating[85]. Shareholder Information - As of September 30, 2021, Mr. Wong Kwok Wai, Albert holds 120,000,000 shares, representing 29.33% of the issued share capital of the Company[145]. - Three Gates Investment holds 120,000,000 shares, representing 29.33% of the issued share capital, and is wholly owned by Mr. Wong Kwok Wai, the chairman[157]. - Gold-Face Finance Limited, Upbest Credit and Mortgage Limited, Good Foundation Company Limited, Upbest Strategic Company Limited, and Upbest Financial Holdings Limited each hold 80,000,000 shares, accounting for 19.55% of the issued share capital[157]. - The total number of shares held by substantial shareholders is significant, indicating a concentrated ownership structure[157].

Financial Performance - For the six months ended June 30, 2021, the Group recorded revenue of approximately HK$32.6 million, an increase from HK$17.5 million in the same period of 2020, representing an 86% year-over-year growth[8]. - The Group reported a loss after taxation of approximately HK$21.6 million for the six months ended June 30, 2021, compared to a loss of HK$5.3 million in the same period of 2020, indicating a significant increase in losses[9]. - Basic and diluted loss per share for the six months ended June 30, 2021, was approximately HK6.55 cents, compared to HK3.01 cents for the same period in 2020, reflecting a 117% increase in loss per share[9]. - Total comprehensive loss for the period attributable to owners of the parent was HK$21.2 million for the six months ended June 30, 2021, compared to HK$6.6 million in the same period of 2020, representing a 221% increase in comprehensive loss[10]. - The company reported a loss for the period of HK$21,602,000 for the six months ended June 30, 2021[15]. - Loss before tax for the six months ended June 30, 2021, was HK$21,602,000, compared to a loss of HK$5,316,000 in the same period of 2020[16]. - The Group recorded a loss before income tax of approximately HK$21.6 million for the six months ended June 30, 2021, an increase of approximately 306.3% from approximately HK$5.3 million for the same period in the previous year[154]. - For the six months ended June 30, 2021, the Group recognized a loss before tax of HK$20,768,000, compared to a loss of HK$14,531,000 for the same period in 2020, reflecting an increase of 42.9%[74]. Revenue and Segments - Revenue from external customers for the three months ended June 30, 2021, was HK$18,387,000, an increase from HK$9,409,000 in the same period of 2020, representing a growth of 95.5%[52]. - For the six months ended June 30, 2021, total revenue reached HK$32,573,000, up from HK$17,523,000 in the same period of 2020, marking an increase of 85.9%[53]. - Revenue from the manufacturing and trading of threads increased to approximately HK$25.3 million for the six months ended June 30, 2021, up approximately 44.1% from approximately HK$17.5 million for the same period in 2020[133]. - The revenue attributable to the interior design and decoration segment for the six months ended June 30, 2021, was HK$7.3 million, as this segment was newly acquired on February 9, 2021[134]. - Revenue from the PRC for the three months ended June 30, 2021, was HK$8,468,000, up from HK$6,694,000 in the same period of 2020, reflecting a growth of 26.5%[56]. - Revenue from Hong Kong for the three months ended June 30, 2021, was HK$4,547,000, significantly higher than HK$600,000 in the same period of 2020, showing an increase of 658.3%[56]. Expenses and Losses - The Group's selling and distribution expenses increased to HK$3.4 million for the six months ended June 30, 2021, compared to HK$2.6 million in the same period of 2020, reflecting a 29% increase[9]. - Administrative expenses rose to HK$11.5 million for the six months ended June 30, 2021, compared to HK$6.5 million in the same period of 2020, indicating a 77% increase[9]. - Unallocated corporate expenses for the six months ended June 30, 2021, were HK$16,233,000, compared to HK$1,894,000 in the same period of 2020, indicating a substantial rise in expenses[53]. - Employee benefit expenses (excluding directors' remuneration) rose to HK$9,987,000 for the six months ended June 30, 2021, compared to HK$6,875,000 in 2020, marking an increase of 45.9%[74]. - The cost of inventories sold increased to HK$20,768,000 for the six months ended June 30, 2021, up from HK$14,531,000 in 2020, representing a rise of 42.6%[74]. Assets and Liabilities - Total non-current assets increased significantly to HK$37,800,000 as of June 30, 2021, compared to HK$12,997,000 as of December 31, 2020, reflecting a growth of 190%[12]. - Current assets rose to HK$68,346,000, up from HK$48,143,000, marking an increase of 42%[12]. - Total consolidated assets as of June 30, 2021, amounted to HK$106,146,000, a significant increase from HK$61,681,000 as of December 31, 2020[59]. - The total liabilities as of June 30, 2021, were HK$41,005,000, compared to HK$15,532,000 as of December 31, 2020, indicating a rise in liabilities[59]. - Total current liabilities rose to HK$38,788,000 from HK$12,690,000, an increase of 205%[12]. - Trade payables totaled HK$18,923,000, a significant increase from HK$5,510,000 as of December 31, 2020, reflecting a growth of 243%[99]. - Other payables and accruals rose to HK$9,763,000 as of June 30, 2021, compared to HK$4,555,000 as of December 31, 2020, indicating an increase of 114%[101]. Cash Flow and Financing - Net cash flows used in operating activities amounted to HK$13,208,000 for the first half of 2021, compared to HK$9,160,000 in the same period of 2020[16]. - New bank loans raised during the period were HK$6,881,000, while repayments of bank loans were nil, contrasting with HK$31,589,000 in repayments in the same period of 2020[17]. - The company issued new shares for acquisition totaling HK$25,628,000, contributing to net cash flows from financing activities of HK$46,430,000[17]. - The Group's cash and bank balances amounted to approximately HK$17.6 million as at June 30, 2021, compared to approximately HK$11.9 million as at December 31, 2020[165]. - The Group's gearing ratio increased to approximately 25.7% as at June 30, 2021, from 6.1% as at December 31, 2020[167]. Acquisitions and Investments - The company completed the acquisition of 100% equity interest in Diamond Motto Limited on February 9, 2021, through the issuance of 67,441,860 shares at a par value of HK$0.05 each[114]. - The Group completed the acquisition of 100% equity interest in Diamond Motto Limited on February 9, 2021, to diversify its business focus into interior design and decoration services[124]. - The Group won several bids to acquire horses at the 2021 Gold Coast National Broodmare Sale, marking a strategic investment in the horse breeding business[181]. Accounting and Reporting - The unaudited interim condensed consolidated financial statements for the six months ended June 30, 2021, were prepared in accordance with Hong Kong Accounting Standard 34[29]. - The Group's consolidated financial statements for the six months ended June 30, 2021, are prepared in accordance with Hong Kong Financial Reporting Standards and relevant regulations[33]. - The Group has not yet applied new HKFRSs that have been issued but are not effective, and is assessing their potential impact on operations and financial position[44]. - The investigation by the Independent Commission Against Corruption (ICAC) is not expected to have a significant impact on the financial statements[34]. Operational Insights - The company experienced a fair value gain on financial assets of HK$73,000 during the period[16]. - The Group's customers are located in the PRC, Hong Kong, and overseas, including the UAE, Mauritius, and Switzerland, with a focus on garment manufacturers and wholesalers[123]. - The Group's production facilities for sewing threads are located in Liwan, Guangzhou, where the manufacturing process is conducted[123]. - The equine services business is expected to generate revenue and profit in the first half of 2022 following the acquisition of quality broodmares and stallions in Australia[127].

Financial Performance - Revenue for the three months ended March 31, 2021, amounted to approximately HK$14.2 million, an increase from HK$8.1 million in the same period of 2020, representing a growth of 75.5%[8] - Loss after taxation for the three months ended March 31, 2021, was approximately HK$15.2 million, compared to a loss of HK$2.9 million in the same period of 2020, indicating a significant increase in losses[8] - Basic and diluted loss per share for the three months ended March 31, 2021, was approximately HK4.99 cents, compared to HK1.79 cents in the same period of 2020[10] - Total comprehensive loss for the period was HK$15.7 million, compared to HK$4.0 million in the same period of 2020, indicating a worsening financial position[11] - The company reported a loss before tax of HK$15.2 million for the three months ended March 31, 2021, compared to a loss of HK$2.9 million in the same period of 2020[10] - The company reported a loss for the period of HK$15,193,000 for the three months ended March 31, 2021, compared to a loss of HK$2,857,000 for the same period in the previous year[13] - The total comprehensive loss for the period was HK$15,656,000, which includes an exchange difference loss of HK$463,000[13] - The Group recorded a loss before income tax of approximately HK$15.2 million for the three months ended March 31, 2021, representing an increase of approximately 431.8% from approximately HK$2.9 million for the same period in the preceding year[102] - Total comprehensive loss attributable to owners of the parent was approximately HK$15.7 million for the three months ended March 31, 2021, compared to a total comprehensive loss of approximately HK$4.0 million for the corresponding period in 2020[103] Revenue Breakdown - For the three months ended March 31, 2021, the total revenue was HK$14,186,000, a significant increase of 75.1% compared to HK$8,114,000 in the same period of 2020[34] - The manufacturing and trading of threads segment generated revenue of HK$11,642,000, up from HK$8,114,000 in 2020, while the interior design and decoration segment reported revenue of HK$2,544,000[34] - Revenue from the PRC was HK$6,151,000, an increase from HK$4,366,000 in 2020, while overseas revenue rose to HK$4,477,000 from HK$2,948,000[40] - Revenue from the interior design and decoration segment for the three months ended March 31, 2021 was HK$2.5 million, covering the period from the acquisition date to the end of the reporting period[84] - The Group's total revenue for the three months ended 31 March 2021 was HK$14.2 million, with the manufacturing and trading of threads contributing 82.1% and interior design and decoration contributing 17.9%[79] Expenses and Costs - Gross profit for the three months ended March 31, 2021, was approximately HK$2.5 million, up from HK$1.3 million in the same period of 2020, reflecting a gross margin improvement[10] - The Group's cost of inventories sold for the three months ended 31 March 2021 was HK$9,487,000, an increase from HK$6,843,000 in the same period in 2020[56] - The Group's employee benefit expenses (excluding directors' remuneration) for the three months ended March 31, 2021 were HK$5,062,000, compared to HK$3,645,000 for the same period in 2020[56] - Administrative expenses rose to HK$5.1 million for the three months ended March 31, 2021, compared to HK$3.3 million in the same period of 2020, indicating increased operational costs[10] - Selling and distribution expenses increased to HK$1.5 million for the three months ended March 31, 2021, compared to HK$1.4 million in the same period of 2020[10] - The cost of sales for the manufacturing and trading of threads increased to approximately HK$9.5 million for the three months ended March 31, 2021, an increase of approximately 38.6% from approximately HK$6.8 million for the same period in 2020[88] - The cost of sales for the interior design and decoration segment was HK$2.1 million for the three months ended March 31, 2021, with no revenue recorded for the same period in 2020 due to the timing of the acquisition[89] Goodwill and Impairment - The impairment loss on goodwill for the three months ended March 31, 2021, was HK$11.1 million, which was not present in the same period of 2020[10] - The Group recognized an impairment loss of HK$11,128,000 related to goodwill from the acquisition of Diamond Motto Limited during the three months ended March 31, 2021[48] - The acquisition of Diamond Motto Limited resulted in an increase in goodwill and share premium by approximately HK$11,128,000 due to the difference between the fair value and issue price of consideration shares[49] - The total consideration for the acquisition of Diamond Motto Limited increased unexpectedly from HK$14,500,000 to HK$25,628,000, indicating potential goodwill impairment[50] - An impairment loss on goodwill of HK$11,128,000 was charged to profit or loss during the three months ended 31 March 2021[51] Corporate Governance and Management - The company has confirmed that none of the directors or controlling shareholders are engaged in any competing businesses[144] - The board is committed to strong corporate governance practices to safeguard shareholder interests[145] - The corporate governance code has been adopted, with regular reviews to ensure compliance and meet shareholder expectations[146] - The roles of chairman and CEO are held by Mr. Wong Kwok Wai, ensuring strong leadership and effective operations[148] - The company has adopted the corporate governance code as per GEM Listing Rules Appendix 15, ensuring compliance with the standards and expectations of shareholders and stakeholders[149] - The board will continue to review the separation of the roles of Chairman and CEO when it is deemed beneficial for the overall group[149] Share Capital and Ownership - As of March 31, 2021, the total equity of the company was HK$69,501,000, a decrease from HK$45,608,000 as of January 1, 2021, primarily due to a loss for the period[13] - As at 31 March 2021, the Company's issued share capital amounted to approximately HK$17.8 million, divided by 355,441,860 Shares of HK$0.05 each[112] - The company's total issued ordinary share capital is HK$17,772,093, divided into 355,441,860 shares at HK$0.05 each[140] - Mr. Wong Kwok Wai, the chairman, holds a 33.76% interest in the Company through Three Gates Investment, which owns 120,000,000 shares[131] - Gold-Face Finance Limited, Upbest Credit and Mortgage Limited, Good Foundation Company, Upbest Strategic Company, and Upbest Financial Holdings each hold 80,000,000 shares, accounting for 22.51% of the issued share capital[138] - Mr. Leung King Yue holds a beneficial ownership of 10,000,000 shares, representing 2.81% of the Company[131] - Mr. Leong Chi Wai and Glory Radiance International Limited each hold 17,875,972 shares, which is 5.03% of the issued share capital[140] - Fung Wing Cheung, Tony holds 24,000,000 shares, representing 6.75% of the issued share capital[140] Future Outlook and Strategy - The Group expects the new line of business in interior design to diversify its portfolio and increase income sources[125] - The Group is conducting a feasibility study to invest in thoroughbred horse racing and breeding operations, aiming to enhance shareholder returns[126] - The Group will continue to review existing businesses to improve operations and financial position[126] - The Board believes seeking suitable investment opportunities will maximize returns for shareholders[126] - The Group is closely monitoring the impacts of trade conflicts and COVID-19 on its financial status and cash flow[127] - The Group's existing sewing thread manufacturing and sales business faces challenges due to the COVID-19 pandemic and ongoing US-China trade conflicts, which are expected to continue impacting financial performance[127] Miscellaneous - The company was incorporated in the Cayman Islands and has its registered office in Grand Cayman[15] - The company's headquarters is located in Tsim Sha Tsui East, Kowloon, Hong Kong[172] - The principal place of business in China is situated at No. 386 Zeng Nan Road, Fang Cun, Liwan District, Guangzhou[171] - The stock code for Shen You Holdings Limited is 8377[173] - The company is audited by Asian Alliance (HK) CPA Limited[171] - The principal bank for the company is The Hongkong and Shanghai Banking Corporation Limited[171] - The Hong Kong branch share registrar and transfer office is Tricor Investor Services Limited[172] - The principal share registrar and transfer office is Ocorian Trust (Cayman) Limited[172] - The company's website is www.shenyouholdings.com[173]

Financial Performance - The Group's revenue for the year ended 31 December 2020 decreased to approximately HK$45.0 million, representing a decrease of approximately 23.4% compared to HK$58.7 million for the year ended 31 December 2019[19]. - The Group's net loss for the year ended 31 December 2020 decreased to approximately HK$15.6 million, a reduction of approximately 18.9% from HK$19.2 million for the year ended 31 December 2019[19]. - The decrease in net loss was primarily due to a reduction in impairment losses on financial assets by approximately HK$3.0 million[19]. - The finance cost also decreased by approximately HK$0.9 million during the year ended 31 December 2020 compared to the previous year[19]. - The Group's gross profit decreased to approximately HK$10.4 million for the year ended 31 December 2020, down from approximately HK$11.3 million for the year ended 31 December 2019, representing a decrease of approximately 8.0%[48]. - The Group's cost of sales decreased to approximately HK$34.5 million for the year ended 31 December 2020, down from approximately HK$47.4 million for the year ended 31 December 2019, representing a decrease of approximately 27.2%[44]. - Selling and distribution expenses decreased to approximately HK$5.7 million for the year ended 31 December 2020, down from approximately HK$7.4 million for the year ended 31 December 2019[50]. - Administrative expenses increased to approximately HK$15.4 million for the year ended 31 December 2020, up from approximately HK$13.5 million for the year ended 31 December 2019, representing an increase of approximately 14.1%[51]. - The Group recorded other losses, net of approximately HK$4.4 million for the year ended 31 December 2020, compared to other losses of approximately HK$2.7 million for the year ended 31 December 2019, representing an increase of approximately 64.1%[49]. - The total comprehensive expenses attributable to the owners of the parent decreased to approximately HK$11.5 million for the year ended 31 December 2020, down from approximately HK$20.6 million for the year ended 31 December 2019, representing a decrease of approximately 44.2%[60]. Revenue and Sales - The Group's overseas sales decreased by approximately 32.2%, while sales to the PRC decreased by approximately 20.9% compared to the previous year[23]. - Sales to the PRC market and overseas market decreased by 20.9% and 32.2% respectively due to the outbreak of Covid-19[43]. - The Group's revenue decreased to approximately HK$45.0 million for the year ended 31 December 2020, down from approximately HK$58.7 million for the year ended 31 December 2019, representing a decrease of approximately 23.4%[43]. Cash Flow and Assets - The Group's cash and bank balances decreased from approximately HK$34.5 million as of December 31, 2019, to approximately HK$11.9 million as of December 31, 2020[69]. - The current ratio improved from approximately 1.8 as of December 31, 2019, to approximately 3.8 as of December 31, 2020, due to the Rights Issue and settlement of bank borrowings[70]. - The Group's gearing ratio increased from approximately 3.1% as of December 31, 2019, to approximately 6.1% as of December 31, 2020[75]. - The Group had net current assets of approximately HK$35.5 million as of December 31, 2020, compared to approximately HK$28.0 million as of December 31, 2019[70]. Corporate Actions and Investments - The Group completed an acquisition of a new subsidiary engaged in interior design, fitting out, and decoration services in February 2021, aiming to diversify its business portfolio[24]. - The Group is conducting a feasibility study to invest in a new business related to quality thoroughbred horse racing and breeding operations[25]. - The Group completed the acquisition of Diamond Motto Limited on February 9, 2021, as part of its future plans for material investments[90]. - The Group aims to seek suitable investment opportunities to enhance its value and maximize returns to shareholders[25]. 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[178]. - The Board believes that strong corporate governance practices are essential for safeguarding shareholder interests and ensuring accountability[177]. - The company is committed to regularly reviewing its corporate governance practices to meet the rising expectations of shareholders and stakeholders[178]. - The company has complied with the code provisions for the year ended December 31, 2020, except for a deviation from code provision A.2.1[179]. - The independent non-executive Directors have provided written confirmations of their independence, as required by the GEM Listing Rules[188]. Management and Staff - The Group's management is confident in the steady performance of its sewing threads business due to long-term relationships with customers and suppliers[32]. - The Group employed a total of 157 employees as of December 31, 2020, down from 172 employees in the previous year[104]. - The Group's total staff costs for the two years ended December 31, 2020, were approximately HK$17.3 million and HK$14.5 million, respectively[104]. - The financial controller is responsible for the financial control of the company, ensuring effective management of financial resources[168]. - The sales manager is primarily responsible for the sales and marketing strategies of the company, contributing to revenue growth[173]. Risk Management - The Group's treasury policies focus on reducing credit risk and managing liquidity risk through ongoing evaluations and monitoring[93]. - The Group is exposed to foreign currency risk related to transactions not denominated in its functional currency, primarily in the PRC[98]. - The Group has not granted any share options under its Share Option Scheme since its adoption on November 24, 2017[105]. Future Plans and Strategies - The Group plans to upgrade its industrial machinery for the production of 100% spun polyester sewing threads, with an expected utilisation of HK$20.3 million, of which HK$3.1 million has been utilised[126]. - The Group has allocated HK$7.7 million for upgrading machinery for domestic use, with HK$2.2 million already utilised[126]. - The Group has made repayments of approximately HK$20 million from the unutilised net proceeds towards banking facilities[128]. - The Group will continue to implement expansion plans in a prudent and conservative manner based on market conditions[135]. - The Directors will monitor and assess the situation and may modify expansion plans if they no longer suit the Group's operations[136].

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].