电子交易集团(08036) - 2021 - 中期财报

Company Information This section provides essential corporate details, including board composition, professional advisors, and registration information Board of Directors and Committees The company's board comprises executive and independent non-executive directors, supported by audit, remuneration, and nomination committees for robust governance - Board members include Mr. Chan Lap Tak (Chairman), Mr. Lo Chi Ho (Chief Executive Officer) as executive directors, and Mr. Chan Chi Kwong, Mr. Liu Kin Sing, Mr. Au Yeung Po Fung as independent non-executive directors[6] - The company has an Audit Committee (Chairman: Mr. Au Yeung Po Fung), a Remuneration Committee (Chairman: Mr. Liu Kin Sing), and a Nomination Committee (Chairman: Mr. Chan Lap Tak)[6] Professional Advisors and Registration Information The company engages Somerley Capital Limited as compliance advisor and Addo C.P.A. Limited as auditor, with key banking and registration details provided - The compliance advisor is Somerley Capital Limited, and the auditor is Addo C.P.A. Limited[6] - The principal bankers are DBS Bank (Hong Kong) Limited[6] - The Hong Kong share registrar is Tricor Investor Services Limited[9] - The company's stock code is 8036, and its official website is www.ebrokersystems.com[9](index=9&type=chunk) Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (Unaudited) This section presents the unaudited condensed consolidated financial performance, including revenue, profit/loss, and other comprehensive income Overview of Financial Performance for the Period For the six months ended June 30, 2021, revenue increased by 1.4% to HK$20,070 thousand, and profit attributable to owners surged by 206.9% to HK$132 thousand, despite a loss in the three-month period Financial Performance for the Three Months Ended June 30, 2021 | Metric | 2021 (HK$'000) | 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 9,388 | 10,175 | -7.7% | | Operating (Loss)/Profit | (695) | 154 | -551.3% | | (Loss)/Profit for the Period Attributable to Owners of the Company | (736) | 20 | -3780.0% | | Basic (Loss)/Earnings Per Share (HK cents) | (0.06) | 0.002 | -3100.0% | Financial Performance for the Six Months Ended June 30, 2021 | Metric | 2021 (HK$'000) | 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 20,070 | 19,802 | 1.4% | | Operating (Loss)/Profit | 209 | 235 | -11.1% | | (Loss)/Profit for the Period Attributable to Owners of the Company | 132 | 43 | 206.9% | | Basic (Loss)/Earnings Per Share (HK cents) | 0.01 | 0.004 | 150.0% | Condensed Consolidated Statement of Financial Position (Unaudited) This section presents the unaudited condensed consolidated financial position, detailing assets, liabilities, and equity Analysis of Asset and Liability Structure As of June 30, 2021, the Group's non-current and current assets increased, alongside current liabilities, while net assets and total equity maintained steady growth Financial Position as of June 30, 2021 | Metric | June 30, 2021 (HK$'000) | December 31, 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 21,301 | 18,066 | 17.9% | | Current Assets | 46,548 | 45,873 | 1.5% | | Current Liabilities | 7,616 | 6,860 | 11.0% | | Net Current Assets | 38,932 | 39,013 | -0.2% | | Net Assets | 58,072 | 56,958 | 2.0% | | Total Equity | 58,072 | 56,958 | 2.0% | Condensed Consolidated Statement of Changes in Equity (Unaudited) This section presents the unaudited condensed consolidated statement of changes in equity, detailing movements in various equity components Changes in Equity For the six months ended June 30, 2021, total equity increased from HK$56,958 thousand to HK$58,072 thousand, driven by share-based payment reserve and other comprehensive income Changes in Equity for the Six Months Ended June 30, 2021 | Metric | January 1, 2021 (HK$'000) | June 30, 2021 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Share Capital | 1,230 | 1,230 | 0 | | Share Premium | 61,921 | 61,921 | 0 | | Capital Reserve | (54,333) | (54,333) | 0 | | Exchange Fluctuation Reserve | 1,244 | 1,516 | 272 | | Shares Held for Share Award Scheme | (21,805) | (21,805) | 0 | | Share-based Payment Reserve | – | 710 | 710 | | Retained Profits | 68,701 | 68,833 | 132 | | Total Equity | 56,958 | 58,072 | 1,114 | - Shares granted under the share award scheme led to an increase of HK$710 thousand in share-based payment reserve[19] - Other comprehensive income for the period was HK$272 thousand, primarily from exchange differences on translation of financial statements of overseas subsidiaries[19] Condensed Consolidated Statement of Cash Flows (Unaudited) This section presents the unaudited condensed consolidated statement of cash flows, detailing cash movements from operating, investing, and financing activities Cash Flow Analysis For the six months ended June 30, 2021, net cash used in operating, investing, and financing activities significantly decreased, resulting in a narrower net decrease in cash and cash equivalents, with an ending balance of HK$26,007 thousand Cash Flows for the Six Months Ended June 30, 2021 | Metric | 2021 (HK$'000) | 2020 (HK$'000) | Change (HK$'000) | | :--- | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (663) | (6,648) | 5,985 | | Net Cash Used in Investing Activities | (1,743) | (10,951) | 9,208 | | Net Cash Used in Financing Activities | (149) | (1,139) | 990 | | Net Decrease in Cash and Cash Equivalents | (2,555) | (18,738) | 16,183 | | Cash and Cash Equivalents at June 30 | 26,007 | 28,205 | -2,198 | - Exchange rate changes had a positive impact of HK$561 thousand on cash and cash equivalents, compared to a negative impact in the prior period[22] Notes to the Condensed Consolidated Financial Statements This section provides detailed notes to the unaudited condensed consolidated financial statements, offering context and explanations for reported figures 1. General Information E-Broker Systems Limited was incorporated in the Cayman Islands on May 23, 2016, and listed on GEM of the Hong Kong Stock Exchange on February 19, 2019 - The company was incorporated in the Cayman Islands on May 23, 2016[24] - The company's shares were listed on GEM of The Stock Exchange of Hong Kong on February 19, 2019[24] 2. Basis of Preparation The unaudited condensed consolidated financial statements are prepared in accordance with HKAS 34 and GEM Listing Rules, consistent with 2020 audited financial statements - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" and the GEM Listing Rules[25] - The principal accounting policies are consistent with those adopted in the 2020 audited consolidated financial statements, except for new and revised standards first applied in the current period[25] 3. Adoption of New and Revised Hong Kong Financial Reporting Standards The adoption of new and revised HKFRSs effective January 1, 2021, is not expected to materially impact current or prior period results, with ongoing assessment for future standards - The adoption of new and revised Hong Kong Financial Reporting Standards effective January 1, 2021, is not expected to have a material impact on the results and financial position for the current and prior periods[26] - The Group is assessing the potential impact of new Hong Kong Financial Reporting Standards that are not yet effective or have not been early adopted[26] 4. Revenue The Group's revenue primarily stems from front-end trading, back-office settlement, installation, customization, and managed cloud services, with total revenue increasing by 1.4% for the six months ended June 30, 2021, notably driven by a 78.9% rise in installation and customization services Revenue Breakdown for the Six Months Ended June 30, 2021 | Service Line | 2021 (HK$'000) | 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Front-end Trading Solution Services Revenue | 9,924 | 11,012 | -9.9% | | Back-office Settlement Solution Services Revenue | 5,067 | 5,052 | 0.3% | | Installation and Customization Services Revenue | 2,090 | 1,168 | 78.9% | | Managed Cloud Services Revenue | 1,631 | 1,791 | -8.9% | | Others | 1,358 | 779 | 74.3% | | Total | 20,070 | 19,802 | 1.4% | Revenue by Major Geographic Market for the Six Months Ended June 30, 2021 | Region | 2021 (HK$'000) | 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Hong Kong | 19,545 | 19,137 | 2.1% | | Macau | 525 | 665 | -21.1% | | Total | 20,070 | 19,802 | 1.4% | 5. Other Income, and Net Other Gains and Losses For the six months ended June 30, 2021, other income significantly decreased by 87.4% to HK$82 thousand due to lower bank interest and government subsidies, while fair value losses in net other gains and losses narrowed Other Income for the Six Months Ended June 30, 2021 | Item | 2021 (HK$'000) | 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Interest income from bank deposits | 14 | 326 | -95.7% | | Management fee from a joint venture | – | 64 | -100.0% | | Employment Support Scheme | – | 263 | -100.0% | | Government grants | 68 | – | N/A | | Total | 82 | 653 | -87.4% | Net Other Gains and Losses for the Six Months Ended June 30, 2021 | Item | 2021 (HK$'000) | 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Fair value loss on financial assets at fair value through profit or loss – listed equity investments | 104 | (240) | N/A (Turned to gain) | | Fair value loss on financial assets at fair value through profit or loss – derivatives | (337) | (817) | 58.8% (Loss reduced) | | Total | (233) | (1,057) | 78.0% (Loss reduced) | 6. Segment Information The Group operates in a single reportable segment, providing financial software solutions, with Hong Kong as its primary market and no individual customer contributing over 10% of total revenue - The Group has only one reportable segment, which is the provision of services to customers[33] - During the period, no individual customer contributed more than 10% of the Group's total revenue[33] 7. Income Tax Expense For the six months ended June 30, 2021, income tax expense decreased by 43.5% to HK$48 thousand due to lower taxable profit, with no provision for PRC corporate income tax due to carried forward tax losses Income Tax Expense for the Six Months Ended June 30, 2021 | Metric | 2021 (HK$'000) | 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Current tax – Hong Kong Profits Tax Provision for the period | 48 | 85 | -43.5% | - Hong Kong Profits Tax is calculated at a two-tiered rate of 8.25% on the first HK$2 million of assessable profits and 16.5% on assessable profits above HK$2 million[35] - No provision for PRC corporate income tax has been made for the PRC subsidiaries due to carried forward tax losses available to offset against taxable profits[36] 8. (Loss)/Profit for the Period The Group's (loss)/profit for the period is stated after deducting items such as auditor's remuneration, cost of inventories sold, depreciation of property, plant and equipment, and right-of-use assets, with finance costs primarily comprising interest on lease liabilities Key Deductions for the Six Months Ended June 30, 2021 | Item | 2021 (HK$'000) | 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Auditor's remuneration | 325 | 400 | -18.8% | | Cost of inventories sold | 256 | – | N/A | | Depreciation of property, plant and equipment | 504 | 264 | 90.9% | | Depreciation of right-of-use assets | 317 | 1,153 | -72.5% | Finance Costs for the Six Months Ended June 30, 2021 | Item | 2021 (HK$'000) | 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Other interest expenses | – | 13 | -100.0% | | Interest on lease liabilities | 29 | 94 | -69.1% | | Total | 29 | 107 | -72.9% | 9. (Loss)/Earnings Per Share For the six months ended June 30, 2021, basic earnings per share increased to HK$0.01 cents, with no diluted (loss)/earnings per share calculated due to the absence of potentially dilutive ordinary shares (Loss)/Earnings Per Share for the Six Months Ended June 30, 2021 | Metric | 2021 (HK$'000) | 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Profit attributable to owners of the Company | 132 | 43 | 206.9% | | Weighted average number of ordinary shares ('000) | 1,117,700 | 1,110,000 | 0.7% | | Basic (Loss)/Earnings Per Share (HK cents) | 0.01 | 0.004 | 150.0% | - Diluted (loss)/earnings per share were not calculated as there were no potentially dilutive ordinary shares[40] 10. Dividends The directors do not recommend the payment of any dividend for the six months ended June 30, 2021 - The directors do not recommend the payment of any dividend for the six months ended June 30, 2021 (2020: nil HKD)[41] 11. Contract Assets and Contract Liabilities As of June 30, 2021, the Group's contract assets decreased due to fewer completed but unbilled works, while contract liabilities increased, primarily from higher customer prepayments for installation projects Changes in Contract Assets | Metric | June 30, 2021 (HK$'000) | December 31, 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Contract assets related to provision of services | 184 | 508 | -63.8% | Changes in Contract Liabilities | Metric | June 30, 2021 (HK$'000) | December 31, 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Contract liabilities related to provision of services | 4,030 | 2,873 | 40.3% | - As of June 30, 2021, revenue recognized from contract liabilities balances at the beginning of the period amounted to HK$1,619 thousand[46] 12. Trade and Other Receivables As of June 30, 2021, the Group's total trade and other receivables increased to HK$14,456 thousand, with higher impairment losses on trade receivables and a significant increase in amounts due from an associated company Trade Receivables and Impairment Losses | Metric | June 30, 2021 (HK$'000) | December 31, 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables | 5,394 | 5,166 | 4.4% | | Impairment losses on trade receivables | (143) | (96) | 49.0% | - As of June 30, 2021, approximately HK$2,658 thousand of trade receivables from brokers were due from an associated company beneficially owned by Mr. Chan Lap Tak (December 31, 2020: HK$91 thousand)[48] Ageing Analysis of Trade Receivables (Net of Provision) | Ageing | June 30, 2021 (HK$'000) | December 31, 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | 0 to 30 days | 3,174 | 2,628 | 20.8% | | 31 to 60 days | 255 | 1,309 | -80.5% | | 61 to 90 days | 435 | 111 | 291.9% | | 91 to 120 days | 9 | 375 | -97.6% | | Over 120 days | 1,378 | 647 | 112.9% | | Total | 5,251 | 5,070 | 3.6% | 13. Trade and Other Payables As of June 30, 2021, the Group's total trade and other payables decreased to HK$2,313 thousand from HK$3,759 thousand at the end of 2020, with a healthy ageing structure for trade payables, mostly within 60 days Changes in Trade and Other Payables | Metric | June 30, 2021 (HK$'000) | December 31, 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 350 | 359 | -2.5% | | Accruals and other payables | 1,963 | 3,400 | -42.3% | | Total | 2,313 | 3,759 | -38.5% | Ageing Analysis of Trade Payables | Ageing | June 30, 2021 (HK$'000) | December 31, 2020 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | 0 to 30 days | 235 | 92 | 155.4% | | 31 to 60 days | 104 | 157 | -33.8% | | 61 to 90 days | 9 | 86 | -89.5% | | Over 90 days | 2 | 24 | -91.7% | | Total | 350 | 359 | -2.5% | 14. Share Capital The Group aims to ensure continuous operation and maximize shareholder returns through capital management, with a total liabilities to total assets ratio of 14.4% and unchanged issued share capital as of June 30, 2021 - The Group's capital management objective is to ensure its ability to continue as a going concern and to maximise returns to shareholders through optimising the debt and equity balance[56] - As of June 30, 2021, the Group's total liabilities to total assets ratio was approximately 14.4% (December 31, 2020: approximately 10.9%)[56] Share Capital Structure | Metric | Par Value Per Share (HKD) | Number of Shares ('000) | Amount (HK$'000) | | :--- | :--- | :--- | :--- | | Authorised ordinary shares | 0.001 | 5,000,000 | 5,000 | | Issued and fully paid ordinary shares | 0.001 | 1,230,000 | 1,230 | - As of June 30, 2021, the total number of shares included 112,300,000 shares held by the trustee and 7,700,000 shares held by the trustee on behalf of selected grantees under the share award scheme[58] 15. Right-of-Use Assets For the six months ended June 30, 2021, the Group added approximately HK$3,150 thousand in right-of-use assets and recognized approximately HK$317 thousand in depreciation expense - The Group added approximately HK$3,150 thousand in right-of-use assets[60] - Approximately HK$317 thousand in depreciation expense for right-of-use assets was recognized[60] 16. Property, Plant and Equipment For the six months ended June 30, 2021, the Group acquired approximately HK$522 thousand in property, plant and equipment - The Group acquired approximately HK$522 thousand in property, plant and equipment[61] 17. Reserves The Group's reserve amounts and corresponding changes for the current and prior periods are presented in the condensed consolidated statement of changes in equity - Reserve amounts and changes are presented in the condensed consolidated statement of changes in equity[62] 18. Related Party Transactions For the six months ended June 30, 2021, the Group had no related party transactions, unlike the prior period which included management fees from a joint venture and rental expenses to a related party - For the six months ended June 30, 2021, the Group had no related party transactions[63] Related Party Transactions for the Six Months Ended June 30, 2020 | Type of Transaction | 2020 (HK$'000) | | :--- | :--- | | Management fee received from a joint venture | 64 | | Rental expenses paid to a related party | 1,080 | 19. Contingent Liabilities As of June 30, 2021, the Group had no significant contingent liabilities - As of June 30, 2021, the Group had no significant contingent liabilities[66] 20. Events After the Reporting Period No significant events occurred between June 30, 2021, and the date of this report - No significant events occurred between June 30, 2021, and the date of this report[67] 21. Approval of Financial Statements The condensed consolidated financial statements for the six months ended June 30, 2021, were approved and authorized by the Board of Directors on August 9, 2021 - The condensed consolidated financial statements were approved and authorized by the Board of Directors on August 9, 2021[68] Management Discussion and Analysis This section provides management's perspective on the Group's operational and financial performance, outlook, and key risks Business Review The Group, a financial software solutions provider in Hong Kong, saw its turnover increase by 1.4% to HK$20.1 million and profit attributable to owners surge by 207% to HK$132 thousand for the six months ended June 30, 2021, primarily due to higher installation and customization service revenue - The Group is principally engaged in providing financial software solution services to financial institutions in Hong Kong[70] - For the six months ended June 30, 2021, turnover was approximately HK$20.1 million, representing an increase of approximately 1.4% compared to the same period last year[70] - Profit attributable to owners of the Company reached approximately HK$132 thousand, an increase of approximately 207% compared to the same period last year, mainly attributable to an increase of approximately HK$0.9 million in installation and customization service revenue[70] Outlook The Group plans to enhance competitiveness by expanding wealth management solutions, improving user trading applications, and extending managed cloud services, while prudently managing costs and risks amid ongoing pandemic, geopolitical, and economic recovery challenges - The Group intends to focus on (i) expanding its customer base for wealth management solutions; (ii) improving user trading applications; and (iii) extending its managed cloud services to local brokerage clients[71] - This year is expected to continue to be affected by factors such as the novel coronavirus pandemic, ongoing geopolitical tensions, and a difficult economic recovery[71] - The Group will continue to focus on executing and implementing its business strategies while maintaining a prudent approach to cost control and risk management[71] Financial Review This section reviews the Group's financial performance, covering revenue, inventory, profit before tax, other income, staff costs, depreciation, other operating expenses, and income tax, highlighting key drivers of profit attributable to owners - For the six months ended June 30, 2021, the Group's revenue was approximately HK$20.1 million, an increase of approximately 1.4% compared to last year, mainly attributable to significant increases in installation and customization services and back-office settlement solution services[74] - Installation and customization service revenue grew by 78.9% to approximately HK$2.1 million, while front-end settlement solution service revenue decreased by 9.9% to approximately HK$9.9 million[74] - Profit before tax increased by 40.6% to approximately HK$180 thousand, mainly due to increased installation and customization service revenue[77] - Other income decreased to approximately HK$82 thousand, mainly due to reduced interest income and government employment support scheme subsidies[78] - Depreciation decreased by 42.1% to approximately HK$0.8 million, mainly due to reduced depreciation expense for right-of-use assets[80] - Profit attributable to owners of the Company for the period significantly increased by 207% to approximately HK$132 thousand, mainly attributable to increased installation and customization service revenue[85] Liquidity and Financial Resources The Group's operations are primarily funded by cash generated from operations, reporting net current assets of HK$38.9 million as of June 30, 2021, with no interest-bearing borrowings and HK$5.0 million in unutilized bank facilities - The Group's operations are primarily funded by cash generated from operating activities[86] - As of June 30, 2021, the Group recorded net current assets of approximately HK$38.9 million (December 31, 2020: approximately HK$39.0 million)[86] - The Group had no interest-bearing and non-interest-bearing borrowings, and had HK$5.0 million in unutilized bank facilities, secured by HK$5.0 million in bank deposits[86] Key Risks and Uncertainties The Group faces key risks including the inability of R&D to keep pace with technological advancements, trade receivables recovery, and various financial risks such as credit, liquidity, and interest rate fluctuations - The Group's research and development may not keep pace with technological advancements essential for maintaining its competitiveness[87] - The Group may not be able to collect its trade receivables in a timely manner and may have to record impairment losses[87] - The Group's business faces various financial risks, including credit risk, liquidity risk, and interest rate risk[87] Capital Structure The company's capital structure, primarily comprising issued share capital and reserves, has remained unchanged since its GEM listing on February 19, 2019 - The company's capital structure has remained unchanged since its listing on GEM of the Stock Exchange on February 19, 2019[89] - The company's capital structure primarily comprises issued share capital and reserves[89] Purchase, Sale or Redemption of Securities by the Company and its Subsidiaries For the six months ended June 30, 2021, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's securities - For the six months ended June 30, 2021, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's securities[90] Pledged Assets As of June 30, 2021, the Group pledged HK$5 million in bank deposits to secure HK$5 million in overdraft facilities - As of June 30, 2021, the Group pledged HK$5 million in bank deposits to secure HK$5 million in overdraft facilities granted to the Group[91] Material Acquisitions and Disposals For the six months ended June 30, 2021, the Group made no material investments, acquisitions, or disposals of subsidiaries - For the six months ended June 30, 2021, the Group made no material investments in, or material acquisitions and disposals of, subsidiaries[92] Capital Commitments and Contingent Liabilities As of June 30, 2021, the Group had no significant capital commitments or contingent liabilities - As of June 30, 2021, the Group had no significant capital commitments or contingent liabilities[93] Exchange Rate Fluctuation Risk The Group's revenue and costs are primarily denominated in HKD, with some costs in RMB; while currently without a foreign currency hedging policy, the directors continuously monitor exchange rate risks and consider hedging when necessary - The Group's revenue and costs are primarily denominated in Hong Kong Dollars, with some costs denominated in Renminbi[94] - The Group currently has no foreign currency hedging policy, but the directors continuously monitor relevant foreign exchange risks and will consider hedging when necessary[94] Credit Risk The Group's credit risk primarily arises from cash and cash equivalents and receivables from customer contracts; management anticipates no significant credit risk due to bank balances held with recognized banks and comprehensive credit policies - The Group's credit risk primarily arises from cash and cash equivalents, and receivables and contract assets from contracts with customers[97] - Management expects no significant credit risk, as all bank balances are held with recognized banks in Hong Kong and are complemented by the Group's comprehensive credit policies[97] Liquidity Risk The Group continuously monitors funding and anticipated liquidity needs to ensure sufficient cash reserves for both short-term and long-term requirements - The Group's policy is to continuously monitor funding and anticipated liquidity requirements to ensure sufficient cash reserves to meet its short-term and long-term liquidity needs[98] Interest Rate Risk The Group's interest rate risk stems from bank deposits bearing floating interest rates, but it faces no significant interest rate risk, as its income and operating cash flows are largely unaffected by floating rate changes - The Group's interest rate risk arises from its bank deposits, which bear interest at floating rates[99] - The Group has no significant interest rate risk, and its income and operating cash flows are largely unaffected by changes in floating interest rates[99] Human Resources and Remuneration Policy As of June 30, 2021, the Group had 55 full-time employees, with remuneration based on qualifications, function, experience, performance, and market conditions, supported by share option and share award schemes for incentives - As of June 30, 2021, the Group had 55 full-time employees (2020: 56 employees)[100] - Employee remuneration is determined based on qualifications, function, experience, performance, and local market conditions[100] - For the six months ended June 30, 2021, the Group's total employee benefit expenses were approximately HK$12.3 million (2020: approximately HK$11.5 million)[100] - The company adopted a share option scheme on January 22, 2019, and a share award scheme on August 12, 2019[100] Use of Proceeds The net proceeds from the share offer were HK$23.3 million; as of June 30, 2021, HK$13.96 million has been utilized, with the remaining HK$9.34 million allocated for expanding wealth management solutions, improving user trading applications, extending managed cloud services, and establishing a China R&D center - The net proceeds from the share offer were approximately HK$23.3 million[105] Use of Listing Proceeds (as of June 30, 2021) | Description of intended use of proceeds | Net proceeds (HK$ million) | Approximate percentage of net proceeds | Actual use (HK$ million) | Unutilized amount (HK$ million) | Expected timeline for full utilization of remaining net proceeds | | :--- | :--- | :--- | :--- | :--- | :--- | | Expand wealth management solution business | 2.6 | 11% | 1.08 | 1.52 | Before December 31, 2022 | | Improve user trading applications | 6.8 | 29% | 1.60 | 5.20 | Before December 31, 2022 | | Expand managed cloud services for local brokerage clients | 2.6 | 11% | 1.23 | 1.37 | Before December 31, 2022 | | Establish a research and development center in China | 10.7 | 46% | 9.45 | 1.25 | Before December 31, 2022 | | General working capital | 0.6 | 3% | 0.6 | – | Before December 31, 2022 | | Total | 23.3 | 100% | 13.96 | 9.34 | | Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures As of June 30, 2021, Mr. Chan Lap Tak and Mr. Lo Chi Ho held long positions in the company's shares, with no other directors or chief executives having disclosable interests or short positions Directors' and Chief Executive's Long Positions (as of June 30, 2021) | Name of Director | Capacity and Nature of Interest | Number of Shares Held | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Chan Lap Tak | Interest of spouse | 2,291,420 | 0.19% | | Mr. Lo Chi Ho | Beneficial interest | 9,830,010 | 0.8% | - Mr. Lo Chi Ho's interest includes 9,100,010 shares vested under the share award scheme and 730,000 underlying shares[107] Substantial Shareholders' Interests and Short Positions in Shares, Underlying Shares and Debentures As of June 30, 2021, Quantsmile (BVI) Limited, Eagle Enterprise Consultants Limited, Good Steward Foundation, Financial Data Technologies Limited, Mr. Nip Fan Ki, and Bank of Communications Trustee Limited were substantial shareholders holding long positions in varying proportions Substantial Shareholders' Long Positions (as of June 30, 2021) | Name/Company Name | Capacity and Nature of Interest | Number of Shares Held | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Quantsmile (BVI) Limited | Beneficial interest | 411,902,870 | 33.49% | | Eagle Enterprise Consultants Limited | Beneficial interest/Interest of controlled corporation | 664,296,910 | 54.01% | | Good Steward Foundation | Interest of controlled corporation | 664,296,910 | 54.01% | | Financial Data Technologies Limited | Beneficial interest | 130,000,000 | 10.57% | | Mr. Nip Fan Ki | Interest of controlled corporation | 130,000,000 | 10.57% | | Bank of Communications Trustee Limited | Trustee | 112,300,000 | 9.13% | - Eagle Enterprise Consultants Limited is deemed to be interested in the shares of the company held by Quantsmile (BVI) Limited[111] - Bank of Communications Trustee Limited is the trustee appointed by the company for the share award scheme[114] Share Option Scheme The company adopted a share option scheme on January 22, 2019, but no share options were granted for the six months ended June 30, 2021 - The company adopted a share option scheme on January 22, 2019[115] - No share options were granted for the six months ended June 30, 2021[115] Share Award Scheme The company adopted a share award scheme on August 12, 2019; as of June 30, 2021, the trustee held 112,300,000 shares, and the Board resolved to grant 21,400,000 award shares to 50 selected grantees, vesting in two tranches - The company adopted a share award scheme on August 12, 2019[116] - As of June 30, 2021, the trustee held 112,300,000 shares[116] - The Board resolved to grant a total of 21,400,000 award shares to 50 selected grantees under the share award scheme[116] - The award shares will vest in two tranches: 50% on December 31, 2021, and the remaining 50% on December 31, 2022[116] Competing Interests and Non-Competition Undertaking Each controlling shareholder entered into a non-competition undertaking with the company on January 22, 2019, and for the six months ended June 30, 2021, no director or controlling shareholder had interests in any business competing with the Group - Each controlling shareholder entered into a non-competition undertaking with the company as beneficiary on January 22, 2019[118] - For the six months ended June 30, 2021, no director or controlling shareholder had any interest in any business directly or indirectly competing with the Group's business[118] Corporate Governance Practices The company is committed to achieving high standards of corporate governance and has adopted and complied with the principles and code provisions of the Corporate Governance Code in Appendix 15 of the GEM Listing Rules - The company is committed to achieving high standards of corporate governance[119] - The company has adopted and complied with the principles and code provisions of the Corporate Governance Code set out in Appendix 15 to the GEM Listing Rules[119] Directors' Securities Transactions Following specific inquiries, all directors confirmed compliance with the required standard of dealings for the six months ended June 30, 2021 - All directors confirmed their compliance with the required standard of dealings for the six months ended June 30, 2021[120] Interests of Compliance Advisor The Group appointed Somerley Capital Limited as its compliance advisor, and apart from the compliance advisor agreement, neither the advisor nor its associates hold any disclosable interests related to the company - The Group appointed Somerley Capital Limited as its compliance advisor[123] - Save for the compliance advisor agreement, neither the compliance advisor, its directors, employees, nor close associates have any interests in relation to the company that are required to be notified to the Group under Rule 6A.32 of the GEM Listing Rules[123] Events After Reporting Period No significant events occurred from June 30, 2021, up to the date of this report for the company or the Group - No significant events occurred from June 30, 2021, up to the date of this report for the company or the Group[124] Audit Committee The company's Audit Committee reviewed the report and the Group's unaudited condensed consolidated financial results for the six months ended June 30, 2021, confirming compliance with applicable accounting standards and GEM Listing Rules - The company's Audit Committee reviewed this report and the Group's unaudited condensed consolidated financial results for the six months ended June 30, 2021[125] - The Audit Committee believes these results were prepared in compliance with applicable accounting standards, the GEM Listing Rules, and other applicable legal requirements, and that adequate disclosures have been made[125] Dividends The directors do not recommend the payment of any dividend for the six months ended June 30, 2021 - The directors do not recommend the payment of any dividend for the six months ended June 30, 2021 (2020: nil HKD)[126] Definitions This section provides definitions for key terms used throughout the report to ensure consistent understanding for readers Definitions of Key Terms This section defines key terms such as "Board," "China," "Company," "Controlling Shareholder," "Directors," "GEM Listing Rules," "Group," "HKD," "Hong Kong," "Listing," "Listing Date," "Prospectus," "SFO," "Shares," "Shareholder," "%," "Share Award Scheme," "Share Option Scheme," and "Stock Exchange" - This section defines key terms such as "Board", "China", "Company", "Controlling Shareholder", "Directors", "GEM Listing Rules", "Group", "HKD", "Hong Kong", "Listing", "Listing Date", "Prospectus", "SFO", "Shares", "Shareholder", "%", "Share Award Scheme", "Share Option Scheme", and "Stock Exchange"[128][130][131]