中国长远(00110) - 2023 - 中期财报

Company Information This section outlines the company's fundamental information, including board members, committees, registered office, and auditors - This report provides basic company information for China Everbright Holdings Limited (Stock Code: 0110), including board members, committee compositions, registered office, principal bankers, and auditors[4][5] Management Discussion and Analysis This section provides a comprehensive review of the group's financial performance, position, operations, and future outlook Financial Performance Review Revenue grew 37.7% to HKD 38.7 million for H1 2023, with net loss attributable to owners narrowing to HKD 5.3 million due to effective cost control Key Financial Indicators for H1 2023 | Indicator | For the Six Months Ended June 30, 2023 (HKD millions) | For the Six Months Ended June 30, 2022 (HKD millions) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 38.7 | 28.1 | +37.7% | | Gross Profit | 0.2 | 0.055 | +263.6% | | Gross Margin | 0.5% | 0.2% | +0.3 percentage points | | Administrative Expenses | 8.9 | 13.6 | -34.5% | | Loss Attributable to Owners of the Company | 5.3 | 7.5 | Loss narrowed by 29.3% | | Basic Loss Per Share (HK cents) | 2.90 | 4.06 | Loss narrowed | - The group's revenue structure significantly changed, with Hong Kong market contribution increasing from 18.9% to 89.7%, while Shanghai market contribution decreased from 81.1% to 10.3%, reflecting supply chain diversification[6][7] - Other income decreased by HKD 1.5 million year-on-year, primarily due to reduced database traffic monetization revenue from Beijing Daizhangmen's mobile application business[10] Financial Position Review As of June 30, 2023, the group's net current liabilities expanded to HKD 22.8 million, with increased trade and other receivables and payables, while cash and cash equivalents rose to HKD 10.0 million Balance Sheet Key Item Changes | Indicator | June 30, 2023 (HKD millions) | December 31, 2022 (HKD millions) | Change | | :--- | :--- | :--- | :--- | | Trade and Other Receivables | 11.2 | 1.3 | +9.9 | | Cash and Cash Equivalents | 10.0 | 6.2 | +3.8 | | Trade and Other Payables | 37.6 | 21.1 | +16.5 | | Net Current Liabilities | 22.8 | 15.5 | Net liabilities increased | | Current Ratio | 0.49x | 0.37x | Improved | - Other payables and accrued expenses increased by HKD 7.9 million, mainly due to approximately HKD 7.3 million in share subscription proceeds received at the end of the reporting period, which was completed on July 4, 2023[24] Other Operating Information During the reporting period, the group had no significant acquisitions, disposals, capital commitments, or contingent liabilities, employed 36 staff, and did not recommend an interim dividend - Post-reporting period, the company completed a share subscription on July 4, 2023, issuing 28,000,000 new shares at HKD 0.26 per share, raising approximately HKD 7.3 million in cash[30] - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2023[32] Operations Review This section reviews the group's market environment and business progress, noting the slowdown in China's mobile phone market despite 5G growth, and the full impairment of the mining business Market Overview China, the world's largest mobile phone market, is saturated but experiencing rapid 5G economic development with increasing users and base stations, though trade conflicts and reduced consumer spending are slowing the market - China's 5G development is rapid, with 561 million 5G mobile users by the end of 2022, accounting for approximately 33.3% of total mobile users, and is expected to have 26 5G base stations per 10,000 people by the end of 2025[34] - Despite 5G opportunities, the overall Chinese mobile phone market is slowing and contracting due to international trade conflicts and economic uncertainties[35] Business Review The group's mobile phone business faces intense market competition and US-China trade uncertainties, while the mining business, fully impaired in 2017 due to expired licenses, no longer impacts the group's financials - Mobile Phone Business: Market competition is intensifying, with customer focus shifting to shopping experience and integrated services, favoring large mobile telecom chain stores; the group plans to achieve growth by diversifying trade markets, products, and distribution channels[37] - Mining Business: The mining license expired years ago and could not be renewed; a full impairment provision of HKD 174.6 million for mining rights and HKD 9.0 million for related plant and equipment was made in 2017 as a precautionary measure[41] Prospects and Outlook The group anticipates an economic turnaround in China in 2023, leveraging 5G for new opportunities in big data, mobile OS, and mobile internet, while expanding into Hong Kong and ASEAN markets and promoting the "Daizhangmen" eco-bag machine business - The group believes 5G communication network technology will drive strong equipment demand, with China expected to lead the 5G market, and will closely monitor the economic environment to seize opportunities in Hong Kong and ASEAN trade markets[44] - The group will intensify efforts to promote the "Daizhangmen" business, which acquires offline traffic through free distribution of eco-bags and monetizes database traffic through advertising, a revenue model management believes holds significant commercial value and competitiveness[47][48] - To address future challenges, the group will maintain a sound financial position and lean operations, while closely monitoring new business opportunities to create long-term shareholder value[48] Other Information This section covers additional disclosures including directors' and shareholders' interests, share option schemes, and corporate governance practices Directors' and Shareholders' Interests This section discloses the shareholdings of directors, chief executives, and substantial shareholders as of June 30, 2023, noting Chairman Mr. Liu Xiaoying's 63.40% interest and no listed securities transactions during the period Major Shareholder Holdings (as of June 30, 2023) | Shareholder Name | Capacity | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Liu Xiaoying | Discretionary Trust and Beneficial Owner | 116,345,481 | 63.40% | | Mr. Li Wei | Held by Controlled Entity | 37,660,002 | 20.52% | Share Option Scheme The company adopted a share option scheme on May 28, 2014, valid until May 28, 2024, with no outstanding share options as of June 30, 2023 - As of June 30, 2023, no share options granted under the share option scheme were outstanding[53] Corporate Governance The company complied with the Corporate Governance Code during the reporting period, with two deviations: the Chairman and CEO roles are combined, and the Chairman is not subject to rotation, which the Board deems beneficial for business strategy execution - The company deviated from the Corporate Governance Code: the roles of Chairman and Chief Executive Officer are not separated, both held by Mr. Liu Xiaoying; and Chairman Mr. Liu Xiaoying is not subject to rotation, which the Board believes is beneficial for the group's development at this stage[59] - The Audit Committee, comprising three independent non-executive directors, has reviewed the group's unaudited interim financial statements for the six months ended June 30, 2023[60] Condensed Consolidated Financial Statements This section presents the group's condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, financial position, changes in equity, and cash flows Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2023, the group recorded revenue of HKD 38,703 thousand, a 37.7% year-on-year increase, with loss for the period narrowing to HKD 7,441 thousand due to effective cost control Condensed Consolidated Statement of Profit or Loss Summary | Item (HKD thousands) | For the Six Months Ended June 30, 2023 | For the Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Revenue | 38,703 | 28,110 | | Gross Profit | 190 | 55 | | Loss Before Income Tax | (7,441) | (11,167) | | Loss for the Period | (7,441) | (11,167) | | Loss Attributable to Owners of the Company | (5,332) | (7,454) | Condensed Consolidated Statement of Comprehensive Income During the reporting period, total comprehensive expense for the period, including exchange differences, amounted to HKD 7,477 thousand, with HKD 6,442 thousand attributable to owners of the company Condensed Consolidated Statement of Comprehensive Income Summary | Item (HKD thousands) | For the Six Months Ended June 30, 2023 | For the Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Loss for the Period | (7,441) | (11,167) | | Exchange Differences | (36) | (487) | | Total Comprehensive Expense for the Period | (7,477) | (11,654) | | Total Comprehensive Expense Attributable to Owners of the Company | (6,442) | (9,777) | Condensed Consolidated Statement of Financial Position As of June 30, 2023, the group's net current liabilities expanded to HKD 22,837 thousand, and equity attributable to owners of the company decreased to HKD 29,246 thousand from the end of 2022 Condensed Consolidated Statement of Financial Position Summary | Item (HKD thousands) | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Non-current Assets | 6,301 | 6,579 | | Current Assets | 22,007 | 9,168 | | Current Liabilities | 44,844 | 24,631 | | Net Current Liabilities | (22,837) | (15,463) | | Equity Attributable to Owners of the Company | 29,246 | 35,688 | Condensed Consolidated Statement of Changes in Equity As of June 30, 2023, total equity attributable to owners of the company decreased from HKD 35,688 thousand at the beginning of the year to HKD 29,246 thousand, primarily due to the loss for the period and a reduction in exchange reserves - Equity attributable to owners of the company decreased from HKD 35,688 thousand as of January 1, 2023, to HKD 29,246 thousand as of June 30, 2023, due to total comprehensive expense for the period of HKD 6,442 thousand[71] Condensed Consolidated Statement of Cash Flows During the reporting period, the group's cash and cash equivalents increased by HKD 3,909 thousand, with operating activities shifting from net cash outflow to inflow, and financing activities recording a net cash inflow from funds raised Condensed Consolidated Statement of Cash Flows Summary | Item (HKD thousands) | For the Six Months Ended June 30, 2023 | For the Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net Cash From/(Used in) Operating Activities | 1,116 | (10,574) | | Net Cash From Investing Activities | 34 | 56 | | Net Cash From/(Used in) Financing Activities | 2,759 | (4,332) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 3,909 | (14,850) | | Cash and Cash Equivalents at End of Period | 9,969 | 15,975 | Notes to the Condensed Consolidated Interim Financial Statements This section provides detailed notes to the condensed consolidated interim financial statements, covering basis of preparation, segment information, and key account details Basis of Preparation and Going Concern Assessment These financial statements are prepared on a going concern basis, despite significant uncertainties regarding the group's losses and net current liabilities, which management addresses through financial support commitments, share subscriptions, and cost control measures - Significant uncertainties exist: As of June 30, 2023, the group recorded a loss attributable to owners of approximately HKD 5,332 thousand, and current liabilities exceeded current assets by approximately HKD 22,837 thousand, which may cast significant doubt on the group's ability to continue as a going concern[77] - Management's response plan includes: obtaining a commitment letter from controlling shareholder Mr. Liu Xiaoying to provide sufficient funds; completing a share subscription of approximately HKD 7.3 million; seeking other financing; considering further share issuance; and implementing cost control measures[82] Segment Information and Revenue The group has two reportable segments: mobile phone business and mining business, with all revenue of HKD 38,703 thousand derived from the mobile phone business, primarily from Hong Kong, while the mining segment recorded a loss but no revenue Segment Revenue and Loss (For the Six Months Ended June 30, 2023) | Segment | Revenue (HKD thousands) | Segment Loss (HKD thousands) | | :--- | :--- | :--- | | Mobile Phone Business | 38,703 | (2,982) | | Mining Business | – | (516) | | Total | 38,703 | (3,498) | Revenue by Geographical Market | Geographical Market | Revenue (HKD thousands) | | :--- | :--- | | China | 4,008 | | Hong Kong | 34,695 | | Total | 38,703 | Notes to Major Accounts These notes detail various financial figures, including no income tax expense, a basic loss per share of HKD 2.90 cents, net trade receivables of HKD 9.84 million (all within 30 days), trade payables of HKD 9.815 million, no interim dividend declared, and fair value measurements for financial instruments primarily involving Level 3 non-listed equity and fund investments - Basic loss per share was HKD 2.90 cents, calculated based on a loss attributable to owners of the company of HKD 5,332,000 and a weighted average of 183,555,888 issued shares[109] - At the end of the reporting period, net trade receivables amounted to HKD 9.84 million, all aged within 0 to 30 days; trade payables were HKD 9.815 million, primarily aged within 0 to 90 days[112][113] - Total financial assets at fair value through profit or loss amounted to HKD 2.614 million, of which HKD 2.055 million in unlisted equity and fund investments were classified as Level 3 fair value measurements[121]