升柏控股(02340) - 2024 - 中期业绩

Financial Overview Core Financial Indicators The Group's consolidated revenue decreased by 40.0% to HKD 47.5 million, while gross profit increased by 61.2% to HKD 7.9 million due to cost savings, though increased legal fees led to a 34.7% rise in operating expenses and an expanded loss of HKD 10.5 million for the period Financial Overview for the Six Months Ended June 30, 2024 | Indicator | H1 2024 (Million HKD) | H1 2023 (Million HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 47.5 | 79.2 | ↓ 40.0% | | Gross Profit | 7.9 | 4.9 | ↑ 61.2% | | Gross Profit Margin | 16.6% | 6.2% | ↑ 10.4 percentage points | | Operating Expenses | (19.8) | (14.7) | ↑ 34.7% | | Operating Loss | (11.9) | (9.8) | ↑ 21.4% | | Loss for the Period | (10.5) | (7.9) | ↑ 32.9% | | Basic Loss Per Share (HK cents) | (2.5) | (1.9) | ↑ 31.6% | - Gross profit growth was primarily driven by cost savings from subcontractors accepting more realistic final payments for several completed projects[2] - Increased operating expenses were mainly due to high legal fees incurred from completed projects in the interior decoration and special projects business[2] Business Review and Outlook Business Segment Overview The Group's operations are primarily composed of two main segments: interior decoration and special projects, and China property and facility management - The Group's two core business segments are interior decoration and special projects, and China property and facility management[3] Segment Business Performance During the period, interior decoration revenue declined 42.9% while gross profit grew 86.2%; China property management saw strong growth with revenue up 68.2% and gross profit up 25.0%, yet overall operating loss expanded due to a 93.4% surge in core business operating expenses Segment Performance Summary (Million HKD) | Segment | Indicator | H1 2024 | H1 2023 | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interior Decoration & Special Projects | Revenue | 43.9 | 77.0 | ↓ 42.9% | | | Gross Profit | 5.4 | 2.9 | ↑ 86.2% | | | Operating Loss | (9.3) | (4.7) | ↑ 97.9% | | China Property & Facility Management | Revenue | 3.7 | 2.2 | ↑ 68.2% | | | Gross Profit | 2.5 | 2.0 | ↑ 25.0% | | | Operating Profit/(Loss) | 0.2 | (0.1) | ↑ 300.0% | Interior Decoration and Special Projects Business Analysis As a core business, this segment's revenue fell 42.9% to HKD 43.9 million due to market conditions and project completions, yet gross profit rose to HKD 5.4 million from cost control; however, legal fees caused a 93.4% surge in operating expenses, expanding the operating loss to HKD 9.3 million, though new contracts totaling over HKD 85 million and a backlog of HKD 148 million indicate future improvement - Revenue decline was attributed to an uncertain economic environment, reduced investment appetite, cautious bidding, project delays, and the completion of several large projects in Q1 2024[5] - The expanded operating loss was due to increased legal fees from related legal cases, leading to a 93.4% year-on-year increase in operating expenses[6] - Business outlook shows significant improvement with new contracts totaling over HKD 85 million in H1 2024; as of June 30, 2024, the total outstanding contract backlog was approximately HKD 148 million, with most expected to be recognized within the next two years[6] - Future market strategy will continue to focus on the luxury residential and renovation segments, which are relatively less affected by economic downturns[7] China Property and Facility Management Business Analysis Benefiting from China's economic recovery, this segment's revenue grew 68.2% to HKD 3.7 million, gross profit increased 25.0% to HKD 2.5 million, and it achieved a profit of HKD 0.3 million; the Group plans a conservative approach while exploring new opportunities amidst a complex and competitive environment - Performance growth was driven by securing a one-year property management contract in Qingdao and a consulting contract in Shanghai[9] - Future strategy involves a conservative approach to maintain the existing structure and explore new or alternative business development opportunities due to uncertainties in the Chinese market[9] Group Overall Outlook The Group anticipates continued local economic challenges but is confident in securing stable development opportunities due to its strong track record in luxury and commercial properties and robust financial position; management maintains a positive outlook on overall financial performance, committed to long-term shareholder value, sustainable development, and risk management - Despite an uncertain economic outlook, the Group believes it possesses sufficient competitive advantages in the development and renovation of luxury, commercial, and local residential properties[10] - The Group believes its solid foundation and dedicated management team will enable it to overcome challenges, maintain stable growth, and create long-term shareholder value[10] Financial and Human Resources Financial Position and Risk Management As of June 30, 2024, the Group had no outstanding bank loans, relying on retained earnings from operations for funding; with net assets of HKD 174 million and a current ratio of 2.2, liquidity is healthy, and foreign exchange risk is minimal as operations are primarily in Hong Kong Financial Position Summary (Thousand HKD) | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | 313,416 | 348,600 | | Current Assets | 310,669 | 346,528 | | Current Liabilities | 139,124 | 163,493 | | Net Assets | 173,737 | 184,428 | | Current Ratio | 2.2 | 2.1 | - The Group had no bank loans at the end of the reporting period, with funding primarily from retained earnings from operating activities[11] - The Group's operations are primarily in Hong Kong, with most assets and liabilities denominated in HKD, resulting in minimal foreign exchange risk[13] Human Resources As of June 30, 2024, the Group employed 311 staff in Hong Kong and China, committed to retaining talent through competitive compensation and benefits, and promoting workplace wellness programs to support sustainable business development - As of June 30, 2024, the Group had a total of 311 employees (including directors)[15] - The Group's long-term objective is to retain top talent through competitive compensation and benefits to maintain high-quality services[15] Interim Dividend The Board resolved not to declare an interim dividend for the six months ended June 30, 2024 - The Board resolved not to declare an interim dividend for 2024, consistent with the same period in 2023[16] Condensed Consolidated Financial Statements Consolidated Statement of Profit or Loss For the six months ended June 30, 2024, the Group reported revenue of HKD 47.55 million and gross profit of HKD 7.89 million; due to increased general and administrative expenses, the loss before tax and loss for the period both amounted to HKD 10.49 million Condensed Consolidated Statement of Profit or Loss (Thousand HKD) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 47,547 | 79,205 | | Gross Profit | 7,889 | 4,905 | | General and Administrative Expenses | (20,839) | (15,667) | | Loss Before Tax | (10,492) | (7,935) | | Loss for the Period | (10,489) | (7,916) | | Basic Loss Per Share (HK cents) | (2.5) | (1.9) | Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets were HKD 313 million, total liabilities HKD 140 million, and net assets (total equity) HKD 174 million, with net current assets at HKD 172 million Condensed Consolidated Statement of Financial Position (Thousand HKD) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Non-current Assets | 2,747 | 2,072 | | Total Current Assets | 310,669 | 346,528 | | Total Current Liabilities | 139,124 | 163,493 | | Total Non-current Liabilities | 555 | 679 | | Net Assets | 173,737 | 184,428 | Summary of Notes to Financial Statements The notes to the financial statements detail accounting policies, segment performance, revenue and expense composition, loss per share calculation, and specifics of key balance sheet items including trade receivables aging, fair value of financial assets, and restricted cash Segment Information The notes detail the performance of the two main business segments, with interior decoration and special projects recording a pre-tax loss of HKD 9.03 million, while China property and facility management achieved a pre-tax profit of HKD 0.29 million H1 2024 Segment Performance (Thousand HKD) | Item | Interior Decoration & Special Projects Business | China Property & Facility Management Business | Total | | :--- | :--- | :--- | :--- | | Revenue | 43,887 | 3,660 | 47,547 | | Gross Profit | 5,381 | 2,508 | 7,889 | | Operating (Loss)/Profit | (9,320) | 208 | (9,112) | | Loss/(Profit) Before Tax | (9,027) | 288 | (8,739) | Loss Per Share For the period, basic loss per share was HKD 2.5 cents, calculated from a HKD 10.49 million loss and 425 million weighted average ordinary shares; diluted loss per share was HKD 2.1 cents after considering potential convertible preference shares Loss Per Share Calculation | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Loss Attributable to Ordinary Equity Holders (Thousand HKD) | (10,489) | (7,916) | | Weighted Average Number of Ordinary Shares (Thousand Shares) | 424,850 | 424,850 | | Basic Loss Per Share (HK cents) | (2.5) | (1.9) | | Weighted Average Number of Ordinary Shares for Diluted Loss Calculation (Thousand Shares) | 504,850 | 504,850 | | Diluted Loss Per Share (HK cents) | (2.1) | (1.6) | Aging Analysis of Trade Receivables As of June 30, 2024, total trade receivables were HKD 36.87 million, with the largest portion, HKD 28.11 million, being over 90 days past due, indicating collection risk Aging Analysis of Trade Receivables (Thousand HKD) | Aging | June 30, 2024 | | :--- | :--- | | 0 to 30 Days | 6,452 | | 31 to 60 Days | 1,918 | | 61 to 90 Days | 388 | | Over 90 Days | 28,111 | | Total | 36,869 | Restricted Cash Deposits The Group has HKD 62.62 million in cash deposits restricted by court order, held in designated interest-bearing bank accounts for potential claims related to a custodian court case - As of June 30, 2024, the Group had HKD 62.62 million in restricted cash deposits, frozen due to a court case and not yet released[38] Other Disclosures Compliance and Review During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities, and no significant post-period events occurred; the interim results were reviewed by the Audit Committee and external auditor, and the Company complied with all corporate governance codes and standard securities dealing codes for directors - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[41] - No events with a material impact on the Company's financial position occurred after the reporting period[42] - The unaudited interim results have been reviewed by the Company's Audit Committee and external auditor, BDO Limited[43] - The Company has complied with all code provisions set out in Appendix C1 of the Listing Rules, the Corporate Governance Code[45]