Financial Performance - For the six months ended June 30, 2020, the group recorded revenue of HKD 111.9 million, a decrease of 32.4% compared to HKD 165.4 million for the same period in 2019, primarily due to the impact of COVID-19 [9] - The net loss for the group decreased by 9.6% to HKD 36.6 million from HKD 40.5 million in the same period last year, attributed to active cost-saving measures and reduced losses in the securities investment sector [9] - The toy division reported a loss of HKD 29.3 million for the period, a significant decline from a profit of HKD 13.1 million in the same period of 2019, mainly due to production halts caused by COVID-19 [10] - The securities investment sector improved its losses by 68.0%, with losses decreasing from HKD 9.9 million to HKD 3.1 million compared to the same period in 2019 [11] - Revenue for the six months ended June 30, 2020, was HKD 111,870,000, a decline of 32.4% from HKD 165,402,000 in the same period of 2019 [20] - The gross loss for the period was HKD 8,547,000, compared to a gross profit of HKD 11,714,000 in the prior year [20] - The net loss for the period was HKD 36,579,000, slightly improved from a net loss of HKD 40,502,000 in the previous year [23] - The company reported a loss of approximately HKD 36,579,000 for the six months ended June 30, 2020, compared to a loss of HKD 40,502,000 for the same period in 2019, representing a 4.7% improvement in losses year-over-year [39] - The company reported a pre-tax loss of HKD 35,972,000 for the six months ended June 30, 2020, compared to a pre-tax loss of HKD 38,366,000 for the same period in 2019, indicating a slight improvement [55] - The company’s toy segment reported a pre-tax loss of HKD 29,348,000 for the six months ended June 30, 2020, compared to a loss of HKD 13,065,000 in the same period of 2019 [55] - The company reported a loss attributable to owners of HKD 36,579,000 for the six months ended June 30, 2020, compared to a loss of HKD 40,502,000 in the same period of 2019, showing an improvement of approximately 10% [67] Assets and Liabilities - As of June 30, 2020, the group's current assets were HKD 263.98 million, down from HKD 333.36 million as of December 31, 2019, with cash and cash equivalents at HKD 24.67 million [16] - The group's current ratio was maintained at 0.64 as of June 30, 2020, compared to 0.84 as of December 31, 2019 [16] - The total amount of loans was HKD 260.1 million as of June 30, 2020, compared to HKD 254.4 million as of December 31, 2019 [16] - The company's attributable equity decreased by 33% to HKD 80,598,000 as of June 30, 2020, compared to HKD 120,279,000 as of December 31, 2019, primarily due to losses recorded during the period [17] - The capital-to-debt ratio increased to approximately 82% as of June 30, 2020, up from 71% as of December 31, 2019 [17] - The total liabilities as of June 30, 2020, amounted to HKD 413,376,000, compared to HKD 399,013,000 as of December 31, 2019 [25] - The company's cash and cash equivalents decreased to HKD 24,666,000 from HKD 89,280,000 as of December 31, 2019 [25] - As of June 30, 2020, the company's total equity was HKD 80,598,000, a decrease from HKD 164,337,000 as of January 1, 2020, indicating a decline of 51% [29] - The company has a net current liability of approximately HKD 149,394,000 as of June 30, 2020, with bank balances and cash of HKD 24,666,000 and pledged bank deposits of HKD 34,752,000 against loans of HKD 260,098,000 due within the next twelve months [39] - The total cost of inventory recognized as an expense was HKD 119,743,000, down from HKD 155,764,000 in the previous year, reflecting a decrease of approximately 23% [64] - The company’s total assets as of June 30, 2020, included issued share capital of HKD 366,186,000 and share premium of HKD 942,400,000 [29] - As of June 30, 2020, total assets amounted to HKD 524,071,000, a decrease from HKD 595,752,000 as of December 31, 2019, representing a decline of approximately 12% [56] - Reportable segment assets for the toy division were HKD 370,517,000, down from HKD 436,890,000 in the previous year, indicating a decrease of about 15% [56] Cash Flow and Investments - The net cash outflow from operating activities for the six months ended June 30, 2020, was HKD 85,836,000, an improvement from HKD 102,859,000 in the same period of 2019, reflecting a 16.6% reduction in cash burn [32] - The company reported a net cash inflow from investing activities of HKD 19,804,000 for the six months ended June 30, 2020, compared to a net cash outflow of HKD 29,399,000 in the same period of 2019 [32] - The company is negotiating with lenders to extend the maturity of existing loans, with an agreement to extend the due date to May 11, 2021 [41] - The company is implementing cost-saving measures to improve operational cash flow and meet working capital needs [41] - The company is considering liquidating certain investment properties and/or listed securities to strengthen cash flow if necessary [41] - The company recognized rental income of HKD 156,000 from a related party during the six months ended June 30, 2020, consistent with the previous year [97] Corporate Governance and Compliance - Major shareholders include Zhongce Group Limited with a 17.80% stake and Mr. Ji with a 13.57% stake as of June 30, 2020 [107] - The company maintained compliance with all applicable corporate governance code provisions during the six months ended June 30, 2020 [110] - The company has adopted a set of self-regulatory guidelines for directors' securities transactions, which are not less stringent than the standard guidelines outlined in the listing rules [111] - The audit committee has reviewed the accounting principles and policies adopted by the company, confirming that the unaudited condensed consolidated results for the six months ended June 30, 2020, were prepared in accordance with applicable accounting standards [113] - During the six months ended June 30, 2020, the company or any of its subsidiaries did not purchase, sell, or redeem any of the company's listed shares [114] Employee and Operational Expenses - Employee benefits expenses totaled HKD 54,411,000, down from HKD 59,728,000 in the previous year, indicating a decrease of about 9% [64] - Total short-term employee benefits for key management personnel decreased to HKD 2,042,000 in 2020 from HKD 3,424,000 in 2019 [99] - The company recognized government subsidies of HKD 84,000 related to COVID-19, which were part of the employment support scheme provided by the Hong Kong government [58] Investment Properties and Securities - The fair value of the group's securities portfolio decreased to HKD 3.5 million as of June 30, 2020, down from HKD 6.9 million at the end of 2019 [11] - The fair value of financial assets measured at fair value through profit or loss was approximately HKD 3,537,000 as of June 30, 2020, down from HKD 6,891,000 as of December 31, 2019 [95] - The company’s investment properties are held for rental income or capital appreciation, with valuations conducted by independent valuers [70] - The company’s investment properties in Suzhou were valued using the depreciated replacement cost method and direct comparison method, reflecting a strategic approach to property valuation [71]
瀛晟科学(00209) - 2020 - 中期财报