高科桥(09963) - 2024 - 中期财报

Company Information The company is a Cayman Islands-incorporated investment holding company primarily engaged in manufacturing and selling optical fibers and cables in Hong Kong and Thailand - The company is an investment holding company incorporated in the Cayman Islands, with its shares listed on the Main Board of the Hong Kong Stock Exchange under the stock code 9963; the Group's principal business is the manufacturing and sale of optical fibers and cables in Hong Kong and Thailand[14] - The company's immediate holding company is Futong Fiber Optics (Hong Kong) Limited, and its ultimate holding company is Hangzhou Futong Investment Co, Ltd[14] Financial Highlights The Group's performance declined significantly in the first half of 2024, with a sharp drop in revenue and a shift from profit to loss Key Financial Indicators for the First Half of 2024 | Indicator | For the six months ended June 30, 2024 | For the six months ended June 30, 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | Approx HK$72.9 million | Approx HK$103.0 million | -29.2% | | Gross (Loss)/Profit and Gross Margin | Gross loss margin approx 3.8% | Gross profit margin 14.8% | -18.6 percentage points | | (Loss)/Profit Attributable to Owners of the Company | Loss approx HK$13.7 million | Profit approx HK$5.0 million | Shift from profit to loss | | Net (Loss) Margin | Net loss margin approx 18.8% | Net profit margin 4.9% | -23.7 percentage points | | Basic (Loss)/Earnings Per Share | Loss approx 5.3 HK cents | Earnings approx 1.9 HK cents | Shift from profit to loss | | Interim Dividend | Nil | Nil | No change | Condensed Consolidated Financial Statements The financial statements reflect a shift to a net loss, decreased total assets and equity, and negative operating cash flow during the period Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group shifted from profit to loss, with revenue down 29.2% to HK$72.9 million and gross profit turning into a HK$2.8 million gross loss Income Statement Summary (For the six months ended June 30) | Item (HK$ '000) | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 72,852 | 102,956 | | Cost of sales | (75,610) | (87,693) | | Gross (loss)/profit | (2,758) | 15,263 | | (Loss)/profit before tax | (14,168) | 6,013 | | (Loss)/profit for the period | (13,680) | 5,007 | | Basic (loss)/earnings per share (HK cents) | (5.3) | 1.9 | Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets and net assets decreased to HK$474.9 million and HK$419.2 million, respectively, primarily due to the period's loss Statement of Financial Position Summary (HK$ '000) | Item | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Non-current assets | 245,675 | 265,362 | | Current assets | 229,215 | 251,744 | | Total assets | 474,890 | 517,106 | | Current liabilities | 55,220 | 66,188 | | Non-current liabilities | 516 | 556 | | Total liabilities | 55,736 | 66,744 | | Net assets | 419,154 | 450,362 | Condensed Consolidated Statement of Changes in Equity Total equity decreased by HK$31.2 million during the period, driven by the net loss and negative currency translation differences - As of January 1, 2024, total equity was HK$450,362 thousand; total comprehensive expense for the period was HK$31,208 thousand, leading to a decrease in total equity to HK$419,154 thousand as of June 30, 2024[11] Condensed Consolidated Statement of Cash Flows The Group's operating activities turned to a net cash outflow, and cash and cash equivalents significantly decreased to HK$7.6 million by the end of the period Cash Flow Statement Summary (For the six months ended June 30, HK$ '000) | Item | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Net cash (used in)/from operating activities | (1,973) | 5,134 | | Net cash used in investing activities | (122) | (7,375) | | Net cash used in financing activities | (5,733) | (19,182) | | Net decrease in cash and cash equivalents | (7,828) | (21,423) | | Cash and cash equivalents at end of period | 7,593 | 36,216 | Notes to the Financial Statements These notes provide detailed breakdowns of revenue by segment, accounts receivable balances, and the composition of bank borrowings Note 3. Revenue and Segment Information Total revenue of HK$72.9 million was primarily from optical cables, with the Thailand segment profitable while the Hong Kong segment incurred a loss Revenue by Product Type (For the six months ended June 30, 2024) | Type of Goods | Revenue (HK$ '000) | | :--- | :--- | | Optical cables | 69,562 | | Optical fibers | 3,290 | | Total | 72,852 | Segment Results (For the six months ended June 30, 2024) | Segment | Segment Revenue (HK$ '000) | Segment Profit/(Loss) (HK$ '000) | | :--- | :--- | :--- | | Optical cables, cable cores and other related products (Thailand) | 72,852 | 2,036 | | Optical fibers (Hong Kong) | 9,932 | (14,345) | Note 13. Trade Receivables Net trade receivables decreased to HK$37.3 million as of June 30, 2024, after accounting for a loss allowance of HK$140.4 million Trade Receivables Status (HK$ '000) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Gross trade receivables | 177,692 | 189,020 | | Less: Loss allowance | (140,396) | (146,466) | | Net trade receivables | 37,296 | 42,554 | Note 17. Bank and Other Borrowings Total unsecured bank borrowings decreased to HK$30.3 million, consisting entirely of floating-rate loans due within one year - All bank borrowings are unsecured, bear floating interest rates, and are repayable within one year or on demand[55][56] Management Discussion and Analysis This section analyzes the Group's poor business performance, cautious outlook, financial results, tightening liquidity, and use of IPO proceeds Business Review The Group's performance declined in H1 2024, with revenue down 29.2% and a shift to a net loss of HK$13.7 million due to lower sales and market overcapacity - The decrease in revenue was mainly due to a 23.7% decrease in optical cable sales to approximately HK$69.2 million and a 70.7% decrease in optical fiber sales to approximately HK$3.6 million[66] - The market faces a major issue of oversupply in optical fiber and cable production, with excess inventory depressing selling prices[67] Segment Performance: Futong Thailand Futong Thailand's sales recovery was incomplete, with its gross margin falling sharply from 21.9% to 9.2% due to mixed pricing and volume effects - Futong Thailand's gross margin decreased from 21.9% in the prior-year period to approximately 9.2% during the reporting period[68] Segment Performance: Gaokejiao (Hong Kong) The Gaokejiao (Hong Kong) segment's losses widened due to weak demand and low prices, leading to a halt in production during the period - Due to weak market demand and low selling prices for optical fibers, production at Gaokejiao in Hong Kong was halted during the reporting period[69] Outlook Management sees potential benefits from 5G development but faces short-term challenges, with the Hong Kong operation remaining suspended in H2 2024 - The Group expects to benefit from 5G development and anticipates that market selling prices for optical fibers and cables will begin to rise after supply levels normalize[70] - Unless market conditions improve significantly, production at Gaokejiao will definitely not resume in the second half of the 2024 financial year[70] Financial Review The Group's revenue fell 29.2% and gross margin turned negative to -3.8%, resulting in a net loss attributable to owners of HK$13.7 million - Total revenue decreased by approximately 29.2% to HK$72.9 million, mainly due to a decrease in sales volume of optical cables despite a price increase, and a decrease in the selling price of optical fibers[71] - The gross margin decreased from 14.8% in the prior-year period to a gross loss margin of approximately 3.8% in the current period, primarily due to a 26.3% decrease in the gross margin of optical fibers[72] - Administrative expenses decreased by 11.4% year-on-year to HK$9.3 million, mainly due to reductions in professional fees and other expenses[76] Liquidity, Financial Resources, and Capital Structure The Group's liquidity tightened with cash decreasing to HK$7.6 million, while the gearing ratio slightly improved to 7.2% due to loan repayments Liquidity and Gearing Ratios | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | Approx HK$7.6 million | Approx HK$14.5 million | | Total bank and other borrowings | Approx HK$30.3 million | Approx HK$37.6 million | | Gearing ratio | Approx 7.2% | Approx 8.3% | Use of Proceeds Of the HK$91.8 million in net proceeds from the global offering, HK$87.6 million has been utilized, with HK$4.2 million for R&D remaining unspent Use of Proceeds Summary (HK$ million) | Item | Planned Use of Proceeds | Utilized Amount | Unutilized Amount | | :--- | :--- | :--- | :--- | | Expansion of new production facilities in Thailand | 73.4 | 73.4 | 0 | | Strengthening R&D capabilities | 4.6 | 0.4 | 4.2 | | Enhancing customer relationships and developing new customers | 4.6 | 4.6 | 0 | | General working capital | 9.2 | 9.2 | 0 | | Total | 91.8 | 87.6 | 4.2 | Other Information This section covers the disclosure of interests for directors and shareholders, the decision on interim dividends, and the role of the Audit Committee Disclosure of Interests of Directors and Substantial Shareholders There were no changes in the interests of directors, while substantial shareholder Futong Hong Kong holds a 75% stake in the company's issued share capital - Futong Hong Kong directly holds a 75% interest in the Company, beneficially owning 195,000,000 shares[102] Dividend The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 (Prior-year period: Nil)[105] Audit Committee The Audit Committee, comprising three independent non-executive directors, has reviewed the unaudited interim results for the period - The Audit Committee consists of three independent non-executive directors, and its primary duties are to assist the Board in reviewing financial information and overseeing the financial reporting system, risk management, and internal control systems[112]