Financial Performance - Revenue for the six months ended June 30, 2019, was HKD 84,573,000, a decrease of 5.8% compared to HKD 89,899,000 in the same period of 2018[3] - Gross profit decreased to HKD 37,202,000, down 21% from HKD 47,024,000 year-on-year[3] - Operating loss for the period was HKD 40,420,000, an improvement from a loss of HKD 59,664,000 in the previous year, indicating a reduction in operational losses[3] - Net loss attributable to owners of the company was HKD 57,860,000, compared to HKD 79,709,000 in the same period last year, reflecting a 27.5% improvement[3] - Total comprehensive loss for the period was HKD 60,128,000, down from HKD 90,218,000 in the previous year, showing a significant reduction in overall losses[4] - The basic and diluted loss per share for the period was HKD 0.0585, an improvement from HKD 0.0881 in the same period last year[3] - The company reported a net loss of HKD (79,709,000) for the period, compared to a loss of HKD (90,218,000) in the previous year[8] - The company recorded a revenue of approximately HKD 84.6 million for the first half of 2019, a decrease of about 5.9% compared to HKD 89.9 million in the same period of 2018[46] - The company reported a loss attributable to owners of approximately HKD 57.9 million for the first half of 2019, compared to a loss of HKD 79.7 million in the same period of 2018[46] Assets and Liabilities - Non-current assets as of June 30, 2019, totaled HKD 771,713,000, a slight decrease from HKD 788,990,000 at the end of 2018[5] - Current assets decreased to HKD 808,027,000 from HKD 832,814,000 at the end of 2018, indicating a decline in liquidity[5] - Total assets amounted to HKD 1,579,740,000, down from HKD 1,621,804,000 at the end of 2018[5] - The company's equity attributable to owners was HKD 696,850,000, a decrease from HKD 732,702,000 at the end of 2018[6] - As of June 30, 2019, the company's outstanding bank loans were approximately HKD 252.5 million, down from HKD 262.3 million at the end of 2018[48] - The company has a non-committed revolving loan facility of approximately HKD 240 million, which remains unchanged from the previous year[48] - The total amount of unconverted convertible bonds was HKD 174.8 million as of June 30, 2019, with a maximum potential conversion into 87,400,000 shares[51] - The debt ratio of the group was approximately 34.6% as of June 30, 2019, compared to 33.9% as of December 31, 2018[51] Cash Flow - Operating cash flow before changes in working capital was HKD (18,844,000), compared to HKD (15,342,000) in the previous year[9] - Net cash used in operating activities was HKD (29,836,000), significantly improved from HKD (86,547,000) in 2018[9] - Cash and cash equivalents at the end of the period were HKD 106,667,000, compared to HKD 98,838,000 at the end of June 2018[9] Revenue Sources - Revenue from lottery-related equipment sales increased to HKD 26,776,000, up 20.0% from HKD 22,152,000 in 2018[11] - Revenue from external customers in China was HKD 81,800,000, down from HKD 85,697,000 in the previous year[13] Market Overview - In the first half of 2019, China's lottery market sales reached RMB 212.596 billion, a year-on-year decline of 13.3%[31] - Welfare lottery sales amounted to RMB 97.757 billion, down 11.6% year-on-year, while sports lottery sales were RMB 114.839 billion, down 14.7%[31] - Video lottery sales increased by 7.8% year-on-year to RMB 25.190 billion, accounting for 11.8% of total lottery sales[34] - The sales of instant lottery tickets grew by 19.8% year-on-year, reaching RMB 13.812 billion, with a market share of 6.5%[31] - Guangdong province's computer lottery sales were approximately RMB 6 billion, maintaining the top position in the national welfare lottery market[38] Strategic Initiatives - The company is actively exploring new retail and artificial intelligence opportunities in the lottery industry to meet diverse user demands[40] - The company has increased its R&D efforts in artificial intelligence and other innovative technologies, developing a comprehensive solution called "Cloud AI Smart Lottery Store" that includes smart terminal products and management systems[40] - The company has entered into a strategic cooperation agreement with SoftBank China to enhance lottery and financial payment technology applications in international markets[43] - The company is preparing to expand its trade business to leverage existing networks and resources, aiming to create new revenue streams[44] - The company is focused on building a responsible and sustainable lottery ecosystem in China, recognizing the market's potential to be a trillion-dollar industry[45] Employee and Governance - The group had a total of 249 full-time employees as of June 30, 2019, down from 286 employees in 2018[55] - The company has maintained compliance with the corporate governance code, with some deviations noted regarding the roles of the chairman and CEO[75] - The audit committee has reviewed the unaudited interim results for the six months ended June 30, 2019[73] - The company has established a standard code for directors' securities trading behavior, which all directors confirmed compliance with as of June 30, 2019[77] Share Capital and Options - The company's share capital was consolidated from 1,600,000,000 shares of HKD 0.0025 each to 160,000,000 shares of HKD 0.025 each effective June 14, 2019[49] - There were 42,625,000 share options granted but not yet exercised as of June 30, 2019, following adjustments due to the share consolidation[56] - The company granted a total of 60,200,000 stock options during the period, with 26,500,000 options exercised and 17,265,000 options expired[57] - The total number of stock options available for exercise as of June 30, 2019, was 23,400,000 after accounting for expirations[61] Acquisitions - The company announced the acquisition of all issued shares of Qingyu International Holdings Limited for a total consideration of HKD 9,000,000, which includes HKD 3,000,000 in cash[70] - The acquisition aims to enhance the company's ability to produce and sell natural and health food products more efficiently and at a lower cost[70]
中国生态旅游(01371) - 2019 - 中期财报