华大酒店(00201) - 2024 - 中期业绩

I. Company Information and Performance Overview This section provides an overview of Grand Hotel Investments Limited's interim performance and key financial statements 1.1 Company Profile and Interim Performance Highlights Grand Hotel Investments Limited announced its H1 FY2024 results, with profit attributable to owners, before revaluation and depreciation, significantly increasing by 132% to HKD 42 million year-on-year - Company name: Grand Hotel Investments Limited (Stock Code: 201)[3] - Reporting period: Six months ended June 30, 2024[3] Net Profit Attributable to Owners of the Company Before Tax, Revaluation, and Depreciation of Land, Property & Equipment | Indicator | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | Change (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Profit | 42,000 | 18,000 | 24,000 | +132% | 1.2 Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2024, revenue increased by 37.1% to HKD 244 million, but loss for the period widened by 82.2% to HKD 32.55 million, mainly due to impairment of investment properties and increased finance costs Key Data from Condensed Consolidated Statement of Profit or Loss | Indicator | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 243,969 | 177,953 | +37.1% | | Gross Profit | 19,722 | 48,591 | -59.4% | | Impairment of Investment Properties | (5,000) | - | Not Applicable | | Administrative Expenses | (23,159) | (51,110) | -54.7% | | Finance Costs | (23,228) | (19,446) | +19.4% | | Loss Before Tax | (29,483) | (18,347) | +60.7% | | Loss for the Period | (32,546) | (17,861) | +82.2% | | Loss Attributable to Owners of the Company | (32,360) | (17,920) | +80.6% | | Basic Loss Per Share (HK cents) | (0.36) | (0.20) | +80.0% | 1.3 Condensed Consolidated Statement of Comprehensive Income In H1 2024, total comprehensive expense turned to HKD 47.23 million from total comprehensive income in the prior year, primarily due to exchange differences on foreign operations and fair value losses on equity investments Key Data from Condensed Consolidated Statement of Comprehensive Income | Indicator | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | | :--- | :--- | :--- | | Loss for the Period | (32,546) | (17,861) | | Fair Value (Loss) Gain on Equity Investments | (908) | 9,313 | | Exchange Differences on Translation of Foreign Operations | (13,773) | 53,257 | | Other Comprehensive (Expense) Income for the Period | (14,681) | 62,570 | | Total Comprehensive (Expense) Income for the Period | (47,227) | 44,709 | | Total Comprehensive (Expense) Income Attributable to Owners of the Company | (47,041) | 44,650 | 1.4 Condensed Consolidated Statement of Financial Position As of June 30, 2024, total assets slightly decreased, current assets significantly reduced, leading to an increase in net current liabilities and a slight decrease in total equity Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2024 (HKD Thousand) | December 31, 2023 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-Current Assets | 4,870,298 | 4,949,467 | -1.6% | | Current Assets | 168,113 | 336,905 | -50.1% | | Current Liabilities | 532,608 | 729,704 | -27.0% | | Net Current Liabilities | (364,495) | (392,799) | -7.2% | | Equity Attributable to Owners of the Company | 4,165,708 | 4,212,749 | -1.1% | | Total Equity | 4,172,785 | 4,220,012 | -1.1% | | Non-Current Liabilities | 333,018 | 336,656 | -1.1% | II. Notes to the Financial Statements This section details the basis of preparation, accounting policies, and specific components of the financial statements 2.1 Basis of Preparation The condensed consolidated financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, using 2023 annual financial information for comparison - Prepared in accordance with Hong Kong Accounting Standard 34 (Interim Financial Reporting) issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix D2 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[7] - The financial information for the year ended December 31, 2023, is extracted from the statutory annual consolidated financial statements, and the auditor's report was unqualified[7] 2.2 Principal Accounting Policies The condensed consolidated financial statements are prepared on a historical cost basis, except for investment properties and certain financial instruments, with accounting policies consistent with the 2023 annual financial statements, and the first-time application of HKFRS amendments had no significant impact - Prepared on a historical cost basis, except for investment properties and certain financial instruments measured at fair value[8] - Accounting policies and methods of computation are consistent with those used in the annual financial statements for the year ended December 31, 2023[8] - First-time application of amendments to Hong Kong Financial Reporting Standard 16, Hong Kong Accounting Standard 1, Hong Kong Accounting Standard 7, and Hong Kong Financial Reporting Standard 7 had no significant impact on the financial position and performance[9] 2.3 Revenue Composition Total revenue for H1 2024 was HKD 244 million, primarily from hotel operations (HKD 225 million, up 41% YoY) and property rental income (HKD 19.01 million, up 3% YoY) Revenue Source Analysis | Revenue Category | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Hotel Operating Revenue | 224,959 | 159,513 | +41.0% | | Property Rental Income | 19,010 | 18,395 | +3.3% | | Dividend Income | - | 45 | -100.0% | | Total Revenue | 243,969 | 177,953 | +37.1% | 2.4 Segment Information The company primarily operates in hotel services, property investment, and securities investment, with hotel services contributing the most to revenue and performance, though some hotels still recorded losses - Operating and reportable segments: Hotel services (including 8 hotels), property investment (commercial, hotel, and residential properties), and securities investment[11] Segment Revenue and Performance | Segment | H1 2024 Revenue (HKD Thousand) | H1 2023 Revenue (HKD Thousand) | H1 2024 Performance (HKD Thousand) | H1 2023 Performance (HKD Thousand) | | :--- | :--- | :--- | :--- | :--- | | Hotel Services | 224,959 | 159,513 | 712 | 30,151 | | - Best Western Plus Hotel Tsim Sha Tsui | 24,396 | 25,521 | (1,758) | 4,377 | | - Grand Hotel | 40,851 | 35,300 | 11,990 | 13,181 | | - Shanghai Grand Hotel | 10,523 | - | 1,555 | (7,427) | | - Grand View Hotel Causeway Bay | 24,514 | 21,995 | (850) | 1,877 | | - Ramada Hong Kong Harbour View | 40,936 | 40,268 | 11,373 | 16,421 | | - Ramada Hong Kong Grand | 41,658 | 36,429 | 2,637 | 1,722 | | - Grand Bay Hotel | 42,081 | - | (24,235) | - | | Property Investment | 19,010 | 18,395 | 14,010 | 18,395 | | Securities Investment | - | 45 | - | 45 | | Total | 243,969 | 177,953 | 14,722 | 48,591 | - Finance costs: Bank loan interest of HKD 10.764 million, interest on amounts due to immediate holding company of HKD 12.464 million, totaling HKD 23.228 million[12] 2.5 Income Tax Expense Income tax expense for H1 2024 was HKD 3.063 million, compared to a reversal of HKD 0.486 million in the prior year, primarily comprising current tax in Hong Kong and the UK Income Tax Expense (Reversal) Composition | Tax Category | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | | :--- | :--- | :--- | | Hong Kong Current Tax | 2,260 | 4,669 | | China Current Tax | - | 13 | | UK Current Tax | 2,459 | 2,722 | | Deferred Tax | (1,656) | (7,890) | | Total Income Tax Expense (Reversal) | 3,063 | (486) | - Hong Kong profits tax rate: 16.5% (H1 2023: 16.5%)[13] 2.6 Composition of Loss for the Period Loss for the period was primarily impacted by a significant increase in depreciation of property, plant and equipment, rising from HKD 35.426 million to HKD 68.541 million Items Deducted (Credited) in Arriving at Loss for the Period | Item | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | | :--- | :--- | :--- | | Depreciation of Right-of-Use Assets | 381 | 394 | | Depreciation of Property, Plant and Equipment | 68,541 | 35,426 | | Interest Income from Bank Deposits | (2,718) | (3,152) | | Loss (Gain) on Disposal of Property, Plant and Equipment | 741 | (7) | 2.7 Dividend Policy The Board decided not to declare an interim dividend for H1 2024, primarily due to challenging economic conditions, an unstable hotel market, and high operating and interest costs - No dividends were declared or paid for H1 2024 and H1 2023[16] - The Board does not recommend an interim dividend to conserve cash flow, address challenging economic conditions, an unstable hotel market, and high operating and interest costs[21] 2.8 Loss Per Share Basic loss per share for H1 2024 was 0.36 HK cents, widening from 0.20 HK cents in the prior year, mainly due to an increased loss attributable to owners of the company - Basic loss per share: 0.36 HK cents (H1 2023: 0.20 HK cents)[4][17] - Calculated based on loss attributable to owners of the company of HKD 32.36 million (H1 2023: HKD 17.92 million) and 8,947,051,000 ordinary shares in issue[17] - No diluted loss per share as there are no potential ordinary shares[17] 2.9 Trade and Other Receivables As of June 30, 2024, total trade and other receivables were HKD 7.509 million, a significant decrease from HKD 18.46 million on December 31, 2023, with trade receivables decreasing by 66% Trade and Other Receivables | Category | June 30, 2024 (HKD Thousand) | December 31, 2023 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Receivables | 5,254 | 15,569 | -66.2% | | Other Receivables | 2,255 | 2,891 | -22.1% | | Total | 7,509 | 18,460 | -59.3% | - Trade receivables aging analysis shows that most (HKD 5 million) are not yet due[19] - Credit period: 30 to 60 days for hotel travel agents and certain customers[18] 2.10 Trade and Other Payables and Accruals As of June 30, 2024, total trade and other payables and accruals were HKD 32.783 million, a decrease from HKD 41.111 million on December 31, 2023 Trade and Other Payables and Accruals | Category | June 30, 2024 (HKD Thousand) | December 31, 2023 (HKD Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Payables | 4,030 | 3,875 | +4.0% | | Other Payables and Accruals | 28,753 | 37,236 | -22.8% | | Total | 32,783 | 41,111 | -20.3% | - Trade payables aging analysis shows that the vast majority (HKD 4.017 million) are due within 30 days[20] III. Management Discussion and Analysis This section provides an in-depth review of the Group's business operations, financial performance, and future outlook 3.1 Business Review and Overall Performance The Group continues to engage in hotel investment, hotel management, property leasing, and property development, with H1 2024 net profit attributable to owners, before revaluation and depreciation, significantly increasing by 132% to HKD 42 million, driven by increased hotel revenue and reduced opening expenses for Grand Bay Hotel - Principal businesses: Hotel investment, hotel management, property leasing, and property development[22] - Net profit attributable to owners of the company before tax, revaluation, and depreciation of land, property, and equipment: HKD 42 million (H1 2023: HKD 18 million), a 132% increase[22] - Overall profit increase primarily due to a 41% increase in hotel revenue and the absence of opening, maintenance, and renovation costs for Grand Bay Hotel[23] 3.2 Revenue Performance Total revenue for H1 2024 increased by 36% year-on-year to HKD 246 million, with hotel operating revenue growing 41% to HKD 225 million and investment property revenue increasing 3% to HKD 19.01 million Revenue Analysis | Revenue Category | H1 2024 (HKD Thousand) | H1 2023 (HKD Thousand) | Change (%) | Reason | | :--- | :--- | :--- | :--- | :--- | | Hotel Operating Revenue | 224,959 | 159,513 | +41% | Increased room rates and operating costs for Grand Bay Hotel | | Investment Property Revenue | 19,010 | 18,395 | +3% | Appreciation of GBP rental income against HKD | | Other Income | 2,182 | 3,618 | -40% | Not Applicable | | Total | 246,151 | 181,526 | +36% | | 3.3 Hotel Operations Performance The Group owns eight hotels, with seven operating and one leased, maintaining an average hotel occupancy rate of over 90% in H1 2024, and successfully increasing the annual rent for Royal Scot Hotel in London by 34% - Number of hotels: Eight hotels owned, seven operating, one leased (Royal Scot Hotel in London)[25] - Average room occupancy rate: Consistently over 90%+[25][32] Average Room Occupancy Rate (%) for January-June 2024 | Hotel Name | Occupancy Rate (%) | | :--- | :--- | | Ramada Hong Kong Harbour View | 97 | | Ramada Hong Kong Grand | 98 | | Grand Hotel | 97 | | Grand View Hotel Causeway Bay | 95 | | Best Western Plus Hotel Tsim Sha Tsui | 87 | | Grand Bay Hotel | 93 | | Shanghai Grand Hotel | 80 | - Annual rent for Royal Scot Hotel in London: Successfully increased annual rent by 34% from GBP 3.546 million to GBP 4.737 million, with new rental income to be reflected in H2 2024[25][32] 3.4 Cost Analysis Hotel service costs increased by 64% to HKD 154.6 million in H1 2024, mainly due to the resumption of normal operations for quarantine hotels and increased staff for Grand Bay Hotel's opening, while administrative expenses decreased by 55% due to reduced opening and renovation costs - Hotel service costs: HKD 154.6 million (H1 2023: HKD 94 million), a 64% increase[26][27] - Cost increase reasons: Resumption of normal operations for quarantine hotels and the opening of Grand Bay Hotel, leading to an increase in employees from 455 to 550[26][31] - Cost of sales: HKD 1.6 million (H1 2023: HKD 0.4 million), increase primarily due to Grand Bay Hotel's operating costs[27] - Administrative expenses (excluding depreciation): HKD 22.3 million (H1 2023: HKD 50.2 million), a 55% decrease, mainly due to the absence of opening, maintenance, and renovation costs for Grand Bay Hotel and Shanghai Grand Hotel[28] - Depreciation of hotel properties: HKD 68 million (H1 2023: HKD 34.9 million), a 95% increase[28][29] Depreciation of Hotel Properties (HKD Million) | Hotel Name | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Ramada Hong Kong Harbour View | 3.0 | 3.1 | -0.1 | | Ramada Hong Kong Grand | 14.8 | 14.8 | - | | Best Western Plus Hotel Tsim Sha Tsui | 8.1 | 7.8 | +0.3 | | Grand Hotel | 2.0 | 2.1 | -0.1 | | Grand View Hotel Causeway Bay | 5.8 | 5.9 | -0.1 | | Grand Bay Hotel | 33.0 | - | +33.0 | | Shanghai Grand Hotel | 1.3 | 1.2 | +0.1 | | Total for the Period | 68.0 | 34.9 | +33.1 | 3.5 Financing Situation As of June 30, 2024, the Group's total debt decreased by 21.8% to HKD 684 million, with both the gearing ratio and external debt ratio declining, but finance costs increased due to rising interest rates - Total debt: HKD 684 million (December 31, 2023: HKD 875 million), a decrease of HKD 191 million (-21.8%)[30] Total Debt Analysis (HKD Million) | Category | December 31, 2023 | June 30, 2024 | Change | H1 2024 Interest Paid | | :--- | :--- | :--- | :--- | :--- | | Bank Loans | 330 | 348 | +18 | 10.8 | | Shareholder Loans | 545 | 336 | -209 | 12.4 | | Total Debt | 875 | 684 | -191 | 23.2 | - Gearing ratio: 7% (December 31, 2023: 9%), calculated as total debt relative to total revalued net assets[30] - External debt ratio: 3.5%, calculated as bank loans relative to total revalued net assets[30] - Debt-to-asset ratio: 16% (December 31, 2023: 21%), calculated as total debt relative to capital employed before revaluation of all hotel properties[30] - Finance costs: Total interest expense of HKD 23.2 million (H1 2023: HKD 19.4 million), increase primarily due to rising interest rates[30] - Bank loans are primarily denominated in HKD and GBP, with interest calculated at floating rates, exposing the Group to foreign exchange risk[31] 3.6 Key Business Achievements Despite challenges in Hong Kong visitor recovery, the Group's average hotel occupancy rate exceeded 90%, with Grand Bay Hotel and Shanghai Grand Hotel reopened, Royal Scot Hotel in London's annual rent successfully increased, and plans to renovate Wood Street Hotel in London - Overnight visitors to Hong Kong: Approximately 11 million in H1 2024, with about 7 million from mainland China, still below pre-pandemic levels (15 million in H1 2019)[32] - Tourism recovery challenges: Air capacity, global/China economy, foreign exchange rates, local labor shortages, and rising operating costs[32] - Hotel openings: Grand Bay Hotel commenced operations on August 1, 2023, and Shanghai Grand Hotel reopened on August 1, 2023, after renovation[32] - Average hotel occupancy rate: Consistently over 90%+[32] - Total revenue growth: Hotel revenue increased by 41% to HKD 225 million, and total revenue increased by 36% to HKD 246 million[32] - Annual rent for Royal Scot Hotel in London: Successfully increased annual rent by 34% to GBP 4.737 million[32] - Wood Street Hotel project in London: Acquired in 2020, planned for renovation into a luxury hotel with approximately 216 rooms[32] 3.7 Future Outlook The Group owns eight hotels and a London renovation project, facing future challenges from a weak Chinese economy and a high HKD-RMB exchange rate hindering Chinese visitor recovery, with management continuing efforts to increase revenue and control costs - Asset portfolio: Eight revenue-generating hotels (six in Hong Kong, one in Shanghai, one in London) and the Wood Street Hotel renovation project in London[33] - Future challenges: Weak Chinese economy, expensive HKD against RMB, and potentially difficult recovery of Chinese visitor numbers[33] - Response strategy: Management will continue efforts to increase revenue and control costs[33] IV. Other Information This section covers dealings in listed securities, corporate governance practices, and audit committee review 4.1 Dealings in Listed Securities In H1 2024, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - No activities involving the purchase, sale, or redemption of the company's listed securities[34] 4.2 Corporate Governance The company has complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, except for the combined roles of Chairman and Chief Executive Officer, which the Board believes facilitates effective strategy implementation and cost savings - Compliance with Corporate Governance Code: Except for the combined roles of Chairman and Chief Executive Officer, the company has complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules[35] - Deviation from Code Provision C.2.1: Mr. Cheng Kai Man holds both Chairman and Chief Executive Officer roles; the Board believes this provides strong and consistent leadership, facilitates strategy implementation, and significantly saves costs[35] - Compliance with Model Code: All Directors confirm compliance with the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules throughout the period[36] 4.3 Audit Committee Review The Audit Committee has reviewed the Group's unaudited financial results for the six months ended June 30, 2024 - The Audit Committee has reviewed the Group's unaudited financial results for the six months ended June 30, 2024[37]