Financial Performance - The total revenue for the six months ended June 30, 2021, was HKD 53.7 million, an increase of approximately HKD 32.3 million or 150.8% compared to HKD 21.4 million for the same period in 2020[6]. - Revenue from mobile phone trading contributed HKD 20.2 million, accounting for 94.3% of total revenue, while revenue from promoting mobile applications was HKD 1.2 million, representing 5.7% of total revenue[6]. - Gross profit decreased by 92.6% to approximately HKD 54,000, with a gross profit margin dropping from 3.4% to 0.1%[7]. - The net loss attributable to the owners of the company for the six months ended June 30, 2021, was HKD 3.5 million, compared to a loss of HKD 2.9 million for the same period in 2020[14]. - Basic loss per share for the reporting period was HKD 0.021, compared to HKD 0.0298 for the same period last year[15]. - The company reported a loss before tax of HKD 4,791,000 for the six months ended June 30, 2021, an improvement of 14.6% compared to a loss of HKD 5,615,000 in the prior year[57]. - Total comprehensive loss for the period was HKD 5,084,000, compared to a loss of HKD 2,815,000 in the same period last year, reflecting ongoing financial challenges[58]. Cash Flow and Liquidity - As of June 30, 2021, the total cash and cash equivalents amounted to HKD 37,400,000, an increase from HKD 30,100,000 as of December 31, 2020, with additional capital raised of approximately HKD 15,600,000 from a rights issue[19]. - Cash and cash equivalents increased to HKD 37,384,000 as of June 30, 2021, up from HKD 30,122,000 at the end of 2020, indicating improved liquidity[59]. - The net cash used in operating activities was HKD (4,542,000), compared to HKD (3,952,000) for the same period in 2020, indicating a decline in operational cash flow[63]. - The net cash generated from financing activities increased significantly to HKD 11,684,000 in 2021 from HKD 5,841,000 in 2020, reflecting improved financing conditions[63]. Expenses and Cost Management - Administrative expenses decreased by 33.2% to HKD 5.6 million from HKD 8.4 million in the previous year[11]. - Financing costs decreased to HKD 200,000 from HKD 500,000 in the previous year[12]. - The company reported a decrease in employee costs, totaling HKD 3,292,000 in 2021 compared to HKD 5,105,000 in 2020[79]. Shareholder Information - The board of directors did not recommend any interim dividend for the six months ended June 30, 2021, consistent with the previous year[27]. - The company raised approximately HKD 48,600,000 through a rights issue at a subscription price of HKD 0.53 per share, issuing 91,777,944 shares, completed on February 10, 2021[42]. - As of June 30, 2021, Mr. Liu Xiaoying held 116,345,481 shares, representing 63.40% of the company's issued share capital[45]. - The company has not issued any stock options under the stock option plan since its adoption on May 28, 2014, and no options were granted as of June 30, 2021[47]. Market and Industry Insights - The mobile phone market in China is experiencing a slowdown due to international trade conflicts and the COVID-19 pandemic, with expectations of continued decline in the coming years, although partially offset by 5G development[30]. - By the end of 2020, China had built approximately 1,000,000 5G base stations, with around 160,000,000 users utilizing applications based on 5G networks[29]. - The telecommunications industry in China saw fixed asset investment increase by over 15% year-on-year in 2020, with about one-third of total investment allocated to 5G technology[29]. - China's mobile phone market remains strong, with approximately 1.6 billion mobile phone users, reflecting significant opportunities in mobile applications and commerce[39]. - The company expects strong demand for 5G equipment as the technology matures, with an upward revision of short-term 5G forecasts[40]. Governance and Compliance - The company has established an audit committee in compliance with listing rules, enhancing governance and oversight[54]. - There were no reported violations of the securities trading code by employees during the reporting period, indicating adherence to compliance standards[55]. - The company complied with the corporate governance code, with Mr. Liu Xiaoying serving as both Chairman and CEO, which is a deviation from the code's recommendation[52]. Asset and Liability Management - Trade receivables and other receivables decreased by 68.7% to approximately HKD 1 million from HKD 3.3 million as of December 31, 2020[18]. - Trade payables and other payables decreased by 4.3% from approximately HKD 22,000,000 as of December 31, 2020, to approximately HKD 21,100,000 as of June 30, 2021, primarily due to a reduction in accrued expenses[20]. - The company's total assets less current liabilities stood at HKD 16,591,000, a significant increase from HKD 3,124,000 at the end of 2020, showing better financial health[59]. - The total liabilities for the mobile phone segment were HKD (6,044,000) and for the mining segment were HKD (15,492,000), resulting in total segment liabilities of HKD (21,536,000)[70]. Impairments and Legal Matters - The mining rights were fully impaired at HKD 174.6 million, along with related plant and equipment impairment of HKD 9 million, due to the inability to renew mining licenses[33]. - A total of HKD 33.7 million in prepayments to mobile phone suppliers was recognized as an impairment loss of HKD 24.9 million as of December 31, 2017[35]. - The arbitration ruling resulted in a recovery of HKD 10.2 million from a supplier, with a total claim of HKD 19.8 million against the Chongqing supplier[36]. - The Guangzhou supplier's total outstanding liabilities were approximately HKD 455 million, leading to a court-ordered liquidation[37].
中国长远(00110) - 2021 - 中期财报