Financial Performance - For the six months ended September 30, 2020, the revenue from continuing operations decreased by 67.7% to HKD 49,843,000 from HKD 154,425,000 in the same period last year[8]. - The loss for the six months ended September 30, 2020, increased by 25.4% to HKD 74,613,000 from HKD 59,479,000 in the same period last year, primarily due to a significantly weak market atmosphere[8]. - The gross profit from continuing operations dropped by 98.6% to HKD 800,000, with the gross margin falling from 35.1% to 1.6%[12]. - The company reported a basic and diluted loss per share of HKD 1.23 for the six months ended September 30, 2020, compared to HKD 0.98 in the same period of 2019, indicating a worsening in per-share performance[83]. - The company incurred a loss from continuing operations of HKD 73,689,000 for the six months ended September 30, 2020, compared to a loss of HKD 58,121,000 in the prior year, reflecting an increase in loss of approximately 26.7%[81]. - Total comprehensive loss for the period was HKD 42,306,000, compared to a loss of HKD 106,353,000 in the same period of 2019, showing an improvement of about 60.2%[83]. Revenue Breakdown - In the first half of the fiscal year 2021, the total revenue from Hong Kong, Mainland China, and Macau amounted to HKD 39,700,000, accounting for 79.7% of the group's total revenue[25]. - Revenue from Mainland China and Macau reached HKD 20,000,000 in the first half of fiscal year 2021, a decrease from HKD 65,100,000 in the same period last year, representing a 69.0% decline[26]. - Revenue from Hong Kong decreased by 69.7% to HKD 19,700,000 in the first half of fiscal year 2021[27]. - Revenue from other regions fell by 56.9% to HKD 5,800,000 in the first half of fiscal year 2021[28]. - The total revenue from the watch distribution segment was HKD 45,548,000 for the six months ended September 30, 2020[137]. Cost and Expenses - The cost of sales for the same period was HKD 49,058,000, compared to HKD 100,240,000 in 2019, indicating a reduction of about 51.1%[81]. - The total employee costs for the period were HKD 15,567,000, down from HKD 28,284,000 in the previous year, reflecting a reduction of approximately 45%[148]. - The company recorded a total of HKD 49,218,000 in cost of goods sold, which included inventory write-downs of HKD 8,739,000[148]. Assets and Liabilities - The company’s total assets decreased to HKD 726,209,000 as of September 30, 2020, from HKD 743,155,000 as of March 31, 2020, a decline of about 2.3%[89]. - The company’s total liabilities decreased to HKD 358,607,000 as of September 30, 2020, compared to HKD 346,038,000 as of March 31, 2020, reflecting an increase of approximately 3.6%[89]. - The company’s equity decreased to HKD 815,299,000 as of September 30, 2020, from HKD 857,605,000 as of March 31, 2020, a decline of about 4.9%[91]. Cash Flow and Liquidity - The company reported a net cash outflow from operating activities of HKD 5,649,000 for the six months ended September 30, 2020, compared to HKD 45,832,000 in the previous year, indicating a significant reduction in cash burn[99]. - The company’s cash and cash equivalents at the end of the period were HKD 44,437,000, down from HKD 65,818,000 at the end of the same period in 2019, a decrease of approximately 32.4%[99]. - As of September 30, 2020, the group maintained cash and bank balances of HKD 44,400,000, up from HKD 43,600,000 on March 31, 2020[34]. Shareholder Information - As of September 30, 2020, the company has 325,920,000 shares held by Sincere Watch Limited, which is fully owned by Be Bright Limited, and ultimately owned by Ms. Li Yuehua, representing approximately 9.8% of the total issued shares[54]. - Major shareholders include New Horizon Capital Limited and its controlled entities, holding a total of 2,078,490,000 shares, which is approximately 62.5% of the total issued shares[60]. - The company did not declare an interim dividend for the six months ended September 30, 2020, compared to no dividend in the same period last year[8]. Operational Changes - The company has ceased its food and beverage business as of March 31, 2020, and reclassified it as discontinued operations for the periods ended September 30, 2020, and 2019[116]. - The company operates two main business segments: watch distribution and property investment, with performance evaluated based on geographical sales locations[116]. - The company committed to using the government subsidies for salary expenses and will not reduce employee numbers below a specified level during the designated period[111]. Market Conditions - The impact of COVID-19 on the retail and tourism sectors significantly affected the company's operations, leading to a substantial decline in visitor numbers from mainland China[110]. - The company received government subsidies amounting to HKD 3,100,000 to support employee salaries and watch distribution business during the COVID-19 pandemic[111]. Governance and Compliance - The company has complied with the corporate governance code as per the listing rules during the six months ending September 30, 2020[68]. - The audit committee, consisting of four independent non-executive directors, reviewed the unaudited condensed consolidated financial statements for the six months ending September 30, 2020[70]. Asset Valuation - The fair value of investment properties as of September 30, 2020, was HKD 624,292,000, down from HKD 657,318,000 as of March 31, 2020, indicating a decrease of approximately 5.0%[164]. - The fair value change of investment properties for the period included a loss of HKD 59,317,000, reflecting ongoing market challenges[165]. - The group’s investment properties are measured at fair value and are leased to third parties to generate rental income, with valuation conducted by an independent qualified professional[165].
SINCEREWATCH HK(00444) - 2021 - 中期财报