鸿兴印刷集团(00450) - 2024 - 中期财报

Financial Performance - Revenue for the six months ended 30 June 2024 was HK$1,095,702,000, a decrease of 8.1$1,192,964,000 in the same period in 2023[6] - Gross profit for the six months ended 30 June 2024 was HK$153,064,000, a decrease of 25.8$206,435,000 in the same period in 2023[6] - Operating loss for the six months ended 30 June 2024 was HK$8,500,000, compared to an operating profit of HK$115,065,000 in the same period in 2023[6] - Loss before income tax for the six months ended 30 June 2024 was HK$10,882,000, compared to a profit before income tax of HK$111,618,000 in the same period in 2023[6] - Loss for the period attributable to equity shareholders of the company was HK$4,472,000, compared to a profit of HK$82,377,000 in the same period in 2023[6] - Basic loss per share for the six months ended 30 June 2024 was HK$0.5, compared to earnings per share of HK$9.1 in the same period in 2023[6] - Total comprehensive loss for the six months ended 30 June 2024 was HK$56,317,000, compared to a total comprehensive income of HK$37,706,000 in the same period in 2023[7] - Total comprehensive loss attributable to equity shareholders of the company was HK$49,028,000, compared to a total comprehensive income of HK$44,075,000 in the same period in 2023[7] - Profit for the period was HK$82,377,000 for the six months ended 30 June 2023[11] - Other comprehensive income, net of tax, was a loss of HK$38,302,000 for the six months ended 30 June 2023[11] - Total comprehensive income for the six months ended 30 June 2023 was HK$44,075,000[11] - Total comprehensive income for the period was a loss of HK$56,317 thousand[13] - The company reported a profit for the period of HK$79,972,000, with a profit before income tax of HK$111,618,000[22] - Profit attributable to equity shareholders in 2023 was HK$82,377,000, compared to a loss of HK$4,472,000 in 2024[34] - Profit attributable to equity shareholders of the Company for the six months ended 30 June 2023 was HK$82,377,000[36] - The Group recorded a loss attributable to equity shareholders of approximately HK$4 million for the six months ending 30 June 2024, compared to a profit of HK$82 million in the same period last year, mainly due to the absence of a one-off income of HK$90 million from land resumption in Wuxi, China[65] Assets and Liabilities - Non-current assets increased to HK$1,661,908,000 as of 30 June 2024, compared to HK$1,605,603,000 on 31 December 2023[8] - Current assets decreased to HK$2,149,305,000 as of 30 June 2024, from HK$1,975,113,000 on 31 December 2023[8] - Net current assets stood at HK$1,591,187,000 as of 30 June 2024, compared to HK$1,509,626,000 on 31 December 2023[8] - Total assets less current liabilities were HK$3,253,095,000 as of 30 June 2024, up from HK$3,115,229,000 on 31 December 2023[8] - Net assets decreased to HK$3,175,155,000 as of 30 June 2024, from HK$3,037,687,000 on 31 December 2023[9] - Total equity attributable to equity shareholders of the company was HK$3,046,006,000 as of 30 June 2024, down from HK$2,915,827,000 on 31 December 2023[9] - Non-controlling interests decreased to HK$129,149,000 as of 30 June 2024, from HK$121,860,000 on 31 December 2023[9] - Total trade receivable, net of loss allowance, at 30 June 2024 was HK$568,152,000, compared to HK$522,738,000 at 31 December 2023[40] - Aging analysis of total trade receivable at 30 June 2024 showed 1-30 days: HK$285,832,000, 31-60 days: HK$136,575,000, 61-90 days: HK$97,097,000, and over 90 days: HK$48,648,000[41] - Cash and cash equivalents at 30 June 2024 were HK$587,133,000, compared to HK$799,660,000 at 31 December 2023[43] - Trade payable at 30 June 2024 was HK$166,407,000, compared to HK$112,909,000 at 31 December 2023[45] - Other payable and accrued liabilities at 30 June 2024 were HK$179,840,000, compared to HK$214,720,000 at 31 December 2023[45] - Accounts receivable within 1-30 days increased to HK$125,236,000 as of 30 June 2024, up from HK$82,406,000 at 31 December 2023[46] - Total accounts receivable rose to HK$166,407,000 as of 30 June 2024, compared to HK$112,909,000 at 31 December 2023[46] - Term loans maturing in 2024 decreased to HK$14,000,000 from HK$30,000,000, while those maturing in 2026 decreased to HK$79,135,000 from HK$96,004,000[48] - The company's issued and fully paid shares remained constant at 907,864,974 shares as of 30 June 2024 and 31 December 2023[51] - The Group's total cash on hand as of 30 June 2024 was HK$843 million, including HK$245 million in structured deposits, with net cash on hand of HK$750 million[76] - The Group's RMB-linked structured bank deposits increased to HK$245 million in 2024, with 79% of total cash held in RMB[77] - The Group's total bank borrowings as of 30 June 2024 were HK$93 million, with a reduced gearing ratio of 3.1$142,038 thousand[14] - Net cash generated from investing activities was HK$58,416 thousand[14] - Net cash used in financing activities was HK$126,403 thousand[14] - Cash and cash equivalents decreased by HK$210,025 thousand to HK$587,133 thousand at 30 June 2024[14] - Dividends paid to equity shareholders amounted to HK$81,708 thousand[14] - Interest received from investments was HK$9,307 thousand[14] - Purchases of property, plant and equipment totaled HK$15,918 thousand[14] Business Segments - The company's principal activities include book and package printing, consumer product packaging, corrugated box, and trading of paper[15] - The company is organized into four business segments: Book and Package Printing, Consumer Product Packaging, Corrugated Box, and Paper Trading[19] - Revenue from external customers is reported after eliminating inter-segment revenue, which is charged based on mutually agreed terms[19] - Segment performance is assessed based on gross profit, revenue less distribution costs, administrative and selling expenses, and other net gains allocated to each segment[19] - Sales between segments are conducted at arm's length basis[19] - Segment results exclude corporate finance costs, other corporate income and expenses, and share of results of associates[19] - Total revenue for the period was HK$1,095,702,000, with sales to external customers contributing HK$761,703,000 from Packaging, HK$150,740,000 from Corrugated, and HK$86,413,000 from Box Paper Trading[21] - Inter-segment sales amounted to HK$175,438,000, with significant contributions from Box Paper Trading (HK$141,537,000) and Corrugated (HK$30,358,000)[21] - Revenue from external customers in the United States was HK$428,960,000, while revenue from Hong Kong and the People's Republic of China was HK$147,385,000 and HK$263,662,000 respectively[23] - Revenue from the United Kingdom was HK$73,931,000, while revenue from other countries totaled HK$181,764,000[23] - The company's total revenue for the previous period was HK$1,192,964,000, with sales to external customers contributing HK$865,219,000 from Packaging, HK$150,124,000 from Corrugated, and HK$88,222,000 from Box Paper Trading[22] - Revenue for the Book and Packaging Printing (BPP) unit declined by 12$761.7 million in 2024 compared to HK$865.2 million in 2023[72] - Profit contribution for the BPP unit decreased to HK$26.4 million in 2024 due to lower sales and increased logistic charges[72] - The Consumer Products Packaging (CPP) business posted a loss of HK$24.3 million, with revenue remaining flat year-over-year[74] - The Corrugated Box (CB) business experienced a 2$8.4 million[74] - The Paper Trading (PT) business saw an 8% increase in revenue to HK$96.8 million, achieving a profit of HK$0.5 million compared to a loss of HK$1.3 million last year[75] Sustainability and Environmental Initiatives - Hung Hing's sustainability initiatives won the Top Prize at the Green Dot Award, surpassing over 20 global companies[69] - The company installed solar panels in the majority of its manufacturing plants to reduce carbon footprint[69] - Hung Hing's sustainability practices include renewable energy use, green materials, vehicle electrification, and smart energy-saving processes[69] - The company is preparing for the EU's Regulation on Deforestation Free Products (EUDR), set to take effect by the end of 2024[70] - Total installed solar power capacity increased to 6,504 kWp across five locations, generating 2,556,069 kWh of electricity in H1 2024, offsetting approximately 959 tons of carbon emissions[80] - Electricity consumption rose by 11$12,417,000 in 2024 from HK$12,401,000 in 2023[54] - Share-based payments decreased to HK$557,000 in 2024 from HK$1,446,000 in 2023[54] Dividends and Shareholder Information - Dividends paid to equity shareholders amounted to HK$81,708 thousand[14] - Interim dividend declared was HK 4 cents per ordinary share for both 2023 and 2024[37] - The company will pay an interim dividend of HK4 cents per share, unchanged from 2023, to be paid on 18 October 2024[94] - The Register of Members will be closed from 23 September 2024 to 26 September 2024 for the interim dividend qualification[95] - No shares of the company or its subsidiaries were purchased, redeemed, or sold during the period[96] - As of 30 June 2024, director Yum Chak Ming, Matthew held 57,465,254 shares, representing 6.33% of the company's issued shares[97] - Director Yum Christopher Carson held 9,398,874 shares, representing 1.04% of the company's issued shares as of 30 June 2024[97] - Substantial shareholders with 5% or more of the company's issued shares include C.H. Yam International Limited (32.03%), C.H. Yam Holding Limited (21.95%), and Rengo Co., Ltd. (29.91%)[105] - C.H. Yam International Limited owns 100% of Hung Tai Industrial Company Limited through its subsidiary, C.H. Yam Holding Limited[105] Corporate Governance and Compliance - The company has complied with the Corporate Governance Code, except for the separation of chairman and CEO roles, which are both held by Mr. Yum Chak Ming, Matthew[107] - The company has adopted the Model Code for Securities Transactions, and directors have complied with the required standards throughout the accounting period[108] - The audit committee reviewed the interim results for the six months ended 30 June 2024, focusing on accounting principles, internal controls, and financial reporting[109] Market and Economic Conditions - The Red Sea crisis and conflicts in Eastern Europe and the Middle East significantly increased freight rates, disrupting export trade and straining customer cash flow[64] - The slower-than-expected post-COVID economic recovery has led to reduced market demand and more cautious consumer spending[64] - The global economy faces challenges from high interest rates and geopolitical uncertainties, negatively impacting business performance[85] - The company remains optimistic about China's long-term economic growth, supported by infrastructure projects like the Shenzhen-Zhongshan Bridge[86] Strategic Initiatives and Future Plans - The Wuxi plant is expanding its domestic market footprint, and a new food packaging production line has been completed at the Zhongshan facility[87] - A second manufacturing facility in Vietnam is planned, expected to commence operations by the end of 2025[87] - The education business, STEM Plus, will leverage its school network to organize events like the GBA Through-train Schools Expo and Formula Edge Inter-school competition[88] - Active Minds Ltd (AML) completed the renovation and expansion of its Book Castle bookstore at Ocean Terminal in Tsim Sha Tsui, targeting both local and mainland Chinese visitors[90] - Hung Hing is exploring advanced digital post-press options to meet market demands for shorter production runs and greater customization[91] - Yum Me Print launched an upgraded model capable of printing documents, receiving positive feedback at the GBA school expo[92] - Beluga Ltd's PAPERY™ brand received accolades from FUJIFILM Business Innovation and the Hong Kong Smart Design Awards for creativity and business effectiveness[92] - Hung Hing is leveraging AI applications to enhance operational excellence and product design, with workforce training to adapt to technological advancements[93] - The company foresees AI integration improving productivity and business performance[93] - Hung Hing continues to drive innovation amidst geopolitical and economic uncertainties in 2024[93] - The upgraded Book Castle store is part of AML's efforts to rebrand and reposition its book retail chains[90] - Hung Hing aims to offer enhanced "speed-to-market" through an integrated print and binding workflow[91] - The company is collaborating with customers on a larger scale to explore new opportunities[93] Share-Based Payments and Restricted Share Awards - The Company renewed the Restricted Share Award Scheme effective from 1 July 2024 to 30 June 2027, with a term of three years[98] - The maximum number of restricted shares that can be granted under the Scheme is 18,157,299 shares, representing 2% of the total issued share capital as of 1 July 2021[98] - As of 1 January 2024 and 30 June 2024, the total number of shares available for restricted share awards was 15,887,637[98] - Each participant's maximum entitlement under the Scheme is capped at 0.25% of the total issued share capital as of 1 July 2021[98] - Restricted share awards vest in three equal tranches, with the first tranche vesting within 60 days after the first anniversary of the grant date, and the remaining two tranches vesting on the second and third anniversaries respectively[99] - Restricted share awards granted to five highest paid individuals, including executive directors and senior management, totaling 1,624,651 shares[103] - The weighted average closing price of shares immediately before the vesting dates was HK$1.19[103] - Restricted share awards vest in three equal tranches, with the first tranche vesting within 60 days after the first anniversary of the grant date[102] - No restricted share awards were cancelled, lapsed, or forfeited during the period ended 30 June 2024[101] - The fair value of restricted share awards granted was determined based on the closing price of shares immediately before the grant date[101] - Restricted share awards were granted at nil consideration and will be transferred to grantees upon vesting at nil consideration[100] - The vesting period for restricted share awards is 3 years[100] - The number of unvested restricted share awards as of 1 January 2024 was 95,084 for executive director Yum Chak Ming, Matthew[100] - The number of unvested restricted share awards as of 30 June 2024 was 756,554 for senior management[100] - The fair value of restricted share awards granted to Yum Chak Ming, Matthew was HK$1.33 per share[100] - The company's executive directors are eligible participants of the Restricted Share Award Scheme, with details outlined in note 19 of the financial information[104] - As of 30 June 2024, no rights to acquire shares or benefits were granted to directors or their families, and no such rights were exercised[104] Other Financial Information - Dep