Financial Performance - The group's revenue decreased by approximately HKD 23.59 million or 26.54%, from about HKD 88.89 million for the six months ended June 30, 2019, to about HKD 65.30 million for the six months ended June 30, 2020[14]. - The gross profit decreased by approximately HKD 3.30 million or 22.45%, from about HKD 14.71 million for the six months ended June 30, 2019, to about HKD 11.41 million for the six months ended June 30, 2020[14]. - The group recorded a loss of approximately HKD 0.39 million for the six months ended June 30, 2020, compared to a loss of approximately HKD 0.37 million for the same period in 2019[18]. - The net profit for the six months ended June 30, 2020, was a loss of HKD 394,000, compared to a loss of HKD 372,000 in the same period of 2019[38]. - Total customer contract revenue for the six months ended June 30, 2020, was HKD 65,298,000, down 26.6% from HKD 88,888,000 in the same period of 2019[49]. Cost and Expenses - The sales cost decreased by approximately HKD 20.29 million or 27.35%, from about HKD 74.18 million for the six months ended June 30, 2019, to about HKD 53.89 million for the six months ended June 30, 2020[14]. - Administrative expenses decreased by approximately HKD 2.23 million or 19.77% to about HKD 9.05 million for the six months ended June 30, 2020, mainly due to reduced employee costs and travel expenses[17]. - Financing costs decreased by approximately HKD 149,000 or 16.40% to about HKD 760,000 for the six months ended June 30, 2020, primarily due to reduced bank charges for short-term leasing services[18]. - The group incurred research and development expenses of HKD 1,042,000 for the six months ended June 30, 2020, down from HKD 1,325,000 in 2019, reflecting a decrease of 21.4%[55]. - Total remuneration for directors and key management personnel for the six months ended June 30, 2020, was HKD 858,000, a decrease of 13.9% compared to HKD 997,000 in the same period of 2019[67]. Revenue Sources - Transformers continued to be the flagship product, accounting for approximately 57.55% of the group's sales for the six months ended June 30, 2020, compared to 44.06% for the same period in 2019[9]. - The contribution of switching power supplies to the group's sales was approximately 1.72% for the six months ended June 30, 2020, down from 10.76% for the same period in 2019[9]. - Electronic components and other products accounted for approximately 40.13% of the group's sales for the six months ended June 30, 2020, compared to 34.93% for the same period in 2019[9]. - The group's revenue from transformer sales for the six months ended June 30, 2020, was HKD 37,581,000, a decrease of 4.0% compared to HKD 39,166,000 in the same period of 2019[49]. - Sales of switch power supplies dropped significantly to HKD 1,125,000 for the six months ended June 30, 2020, down 88.2% from HKD 9,561,000 in 2019[49]. Government Support and Market Conditions - The group received government subsidies to support the manufacturing sector during the economic difficulties caused by the COVID-19 pandemic[10]. - Other income increased by approximately HKD 0.88 million or 314.29% to about HKD 1.16 million for the six months ended June 30, 2020, primarily due to increased government subsidies[15]. - The management is actively monitoring market conditions and is confident in accelerating business growth once market demand begins to recover[21]. Assets and Liabilities - As of June 30, 2020, the group's net asset value was approximately HKD 51.17 million, compared to approximately HKD 52.10 million as of December 31, 2019[22]. - The current ratio as of June 30, 2020, was approximately 1.73, with current assets of about HKD 94.35 million and current liabilities of about HKD 54.50 million[22]. - The group maintained a cash and bank balance of approximately HKD 7.01 million as of June 30, 2020, compared to approximately HKD 3.01 million as of December 31, 2019[24]. - Trade receivables as of June 30, 2020, amounted to HKD 29,465,000, a decrease from HKD 31,853,000 as of December 31, 2019[60]. - The total assets less current liabilities as of June 30, 2020, were HKD 51,296,000, a slight decrease from HKD 52,424,000 as of December 31, 2019[40]. Employment and Workforce - The group had approximately 390 employees as of June 30, 2020, down from approximately 490 employees as of December 31, 2019[32]. Corporate Governance - The company has adopted a code of conduct for directors regarding securities trading, which is more lenient than the GEM listing rules[86]. - The audit committee, consisting of three independent non-executive directors, reviewed the unaudited consolidated financial performance for the six months ended June 30, 2020[89]. - The company has complied with the corporate governance code as per GEM listing rules during the reporting period[93]. - The board believes that integrating core elements of good corporate governance into the management structure and internal control procedures benefits shareholders, customers, and employees[92]. Shareholder Information - The group did not declare any dividends for the interim period ended June 30, 2020, and 2019[58]. - As of June 30, 2020, Mr. Zhong Zhiheng held a controlled corporation interest of 126,000,000 shares, representing 63.0% of the company's equity[72]. - The company has a share option scheme in place, allowing for a maximum of 20,000,000 shares to be issued, which is 10% of the total issued shares following the completion of a placement[78]. - No share options were granted, exercised, or cancelled under the share option scheme during the period from January 1, 2020, to June 30, 2020[81].
侨洋国际控股(08070) - 2020 - 中期财报