Financial Performance - The company reported a loss attributable to owners of HK$151 million for the six months ended June 30, 2020, compared to a profit of HK$46 million in the same period of 2019, representing a change of (428.3%) [23] - Basic loss per share was (6.56) HK cents, a decrease of 426.4% compared to earnings of 2.01 HK cents per share in 2019 [24] - The profit attributable to the owners of the Company turned from approximately HK$46,319,000 in Period 2019 to a loss of approximately HK$151,150,000 in Period 2020, primarily due to a decrease in rental income and occupancy rates caused by the COVID-19 pandemic [92] - The profit from discontinued operations was approximately HK$78,280,000 in Period 2019, which was not recorded in Period 2020 following the merger completion [104] - The loss in the fair value of financial assets at fair value through profit or loss increased from approximately HK$32,073,000 in Period 2019 to approximately HK$73,434,000 in Period 2020 [98] Asset and Liability Management - Total assets decreased by 10.7% to HK$10,215 million from HK$11,444 million in 2019 [23] - Net assets decreased by 4.1% to HK$7,318 million from HK$7,632 million in 2019 [23] - Bank balances and cash decreased by 53.6% to HK$224 million from HK$483 million in 2019 [23] - The Group's total borrowings and Convertible Bonds amounted to approximately HK$2,227,968,000, an increase from HK$2,105,283,000 as of December 31, 2019 [146] - The Group's net borrowings were approximately HK$2,004,379,000 as of June 30, 2020, compared to HK$1,892,715,000 as of December 31, 2019 [154] Revenue and Income Sources - The Group's property leasing revenue was impacted by a decline in occupancy rates at East Gate Plaza due to COVID-19 preventive measures, leading to decreased rental income [65] - Rental income from the Group's leasing properties decreased from approximately HK$55,604,000 in 2019 to approximately HK$47,803,000 in 2020, with an average occupancy rate of approximately 87% [83] - Other income, gains, and losses increased to approximately HK$151,767,000 in Period 2020 from approximately HK$56,857,000 in Period 2019, mainly due to increased interest income from advances [98] Investment Strategy and Performance - The Group's investment business segment reported a profit of approximately HK$59,298,000 for the first half of 2020, compared to a loss of approximately HK$8,441,000 for the same period in 2019 [70] - The Group's strategy includes focusing on investments in non-performing assets, asset management, financial services, and other financial asset investments [70] - The Group intends to speed up the disposal of its investments in non-performing debt assets in the second half of 2020 while exploring opportunities in restructuring projects [91] - The Group's investment strategy will remain prudent, closely monitoring the performance of its investment portfolio [79] Operational Adjustments and Future Plans - The Group adjusted its property leasing strategy by positioning East Gate Plaza as a "Community Commercial Centre" to increase occupancy rates [65] - The Group plans to launch a financial services and asset management fund in Q4 2020 or early 2021, depending on the economic environment and COVID-19 developments [71] - The Group is actively expanding its investment reserve projects in the Guangdong-Hong Kong-Macao Greater Bay Area and the Beijing-Tianjin-Hebei Region despite market capital constraints caused by the pandemic [64] Financial Ratios and Metrics - The projected P/E ratio is (7.4x), a significant decrease of 119.4% from 38.1x in 2019 [24] - The return on capital employed was (4.7%), down from 1.4% in 2019, indicating a decline of 435.7% [24] - The current ratio improved to 5.3x from 2.3x, an increase of 130.4% [24] - The gearing ratio increased to 34.6% from 29.3%, reflecting an increase of 18.1% [24] - Interest coverage ratio decreased to (0.5x) from 2.7x, a decline of 118.5% [24] Market and Economic Outlook - The domestic economy in China is expected to continue its recovery in the second half of the year, but the rate of recovery is likely to be slow [85] - The Group's liquidity position is closely reviewed to ensure adequate liquidity to meet funding requirements at all times [1] Shareholder and Corporate Governance - The company entered into a placing agreement for convertible bonds with an aggregate principal amount of up to HK$200,000,000, with a conversion price of HK$2.33 per ordinary share [170] - The connected subscribers include individuals and entities that are defined as connected persons under the Listing Rules [192] - The company must comply with all requirements under the Listing Rules and the Takeovers Code issued by the Securities and Futures Commission [198]
银建国际(00171) - 2020 - 中期财报