Performance Summary This section presents a concise overview of the company's key financial results for the six months ended June 30, 2020 Performance Summary for the Six Months Ended June 30, 2020 | Indicator | Amount (Thousand HKD) | | :--- | :--- | | Revenue | 51,340 | | Loss for the period | 11,688 | | Loss attributable to owners of the Company | 11,597 | | Basic and diluted loss per share | 0.15 HK cents | | Proposed dividend | Not declared | Interim Results (Unaudited) This section provides the unaudited condensed consolidated financial statements, including the statements of profit or loss, financial position, changes in equity, and cash flows Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2020, the Group's revenue significantly decreased by 59.9% to HKD 51.34 million, while loss for the period narrowed substantially to HKD 11.69 million due to lower provisions in the prior year Key Indicators from Consolidated Statement of Profit or Loss | Indicator (Thousand HKD) | For the Six Months Ended June 30 (2020) | For the Six Months Ended June 30 (2019) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 51,340 | 127,945 | -59.9% | | Loss before income tax | (11,688) | (71,253) | -83.6% | | Loss for the period | (11,688) | (72,826) | -83.9% | | Loss attributable to owners of the Company | (11,597) | (69,424) | -83.3% | | Basic loss per share (HK cents) | (0.150) | (1.033) | N/A | Condensed Consolidated Statement of Financial Position As at June 30, 2020, the Group's total assets decreased by 10.1% to HKD 281.27 million, with net assets at HKD 221.98 million, primarily due to reductions in inventory and bank balances Key Indicators from Statement of Financial Position | Indicator (Thousand HKD) | June 30, 2020 | December 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Non-current assets | 71,108 | 72,960 | -2.5% | | Current assets | 210,160 | 239,913 | -12.4% | | Total Assets | 281,268 | 312,873 | -10.1% | | Current liabilities | 56,359 | 62,293 | -9.5% | | Non-current liabilities | 2,927 | 4,604 | -36.4% | | Total Liabilities | 59,286 | 66,897 | -11.4% | | Net Assets | 221,982 | 245,976 | -9.8% | | Equity attributable to owners of the Company | 221,735 | 238,548 | -7.0% | Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2020, equity attributable to owners of the Company decreased from HKD 239 million to HKD 222 million, mainly due to the period's loss and a HKD 4.99 million loss from exchange reserves - During the period, equity attributable to owners of the Company decreased by HKD 16.81 million, primarily due to the loss for the period and negative exchange differences18 Condensed Consolidated Statement of Cash Flows During the period, the Group experienced net cash outflows from operating, investing, and financing activities, resulting in a net decrease of HKD 48.23 million in cash and cash equivalents, with the period-end balance at HKD 64.83 million Cash Flow Statement Summary | Activity (Thousand HKD) | For the Six Months Ended June 30 (2020) | For the Six Months Ended June 30 (2019) | | :--- | :--- | :--- | | Net cash used in operating activities | (5,364) | (20,321) | | Net cash used in investing activities | (41,776) | (28,451) | | Net cash used in financing activities | (1,086) | (2,952) | | Net decrease in cash and cash equivalents | (48,226) | (51,724) | | Cash and cash equivalents at beginning of period | 113,059 | 153,054 | | Cash and cash equivalents at end of period | 64,833 | 101,330 | Notes to the Financial Statements This section provides detailed explanatory notes to the condensed consolidated financial statements, covering general information, segment performance, and key financial items General Information and Business Scope The Group primarily operates in four key business areas: precious metals spot trading, securities and futures brokerage, trading and proprietary investments in China and Hong Kong, and automotive sales and agency services in China - The Group's core businesses encompass financial services (precious metals, securities and futures), proprietary investments, and automotive sales across multiple regions24 Revenue and Segment Information Total revenue for the period was HKD 51.34 million, with automotive sales and agency services contributing over 98% at HKD 50.72 million, predominantly from the China market, and this segment turned profitable with HKD 1.48 million Revenue by Business Line (For the Six Months Ended June 30) | Business Line (Thousand HKD) | 2020 | 2019 | | :--- | :--- | :--- | | Securities and futures brokerage services | 363 | 243 | | Automotive sales | 48,768 | 126,778 | | Automotive trade agency fees | 1,947 | 642 | | Interest income from clients | 262 | 282 | | Total | 51,340 | 127,945 | Segment Results (For the Six Months Ended June 30) | Segment (Thousand HKD) | 2020 Segment Result | 2019 Segment Result | | :--- | :--- | :--- | | Brokerage and securities margin financing | (1,027) | (1,712) | | Precious metals spot trading and brokerage | (51) | (13) | | Trading and proprietary investments | (3,524) | (10,317) | | Sales of automobiles and provision of agency services | 1,482 | (49,372) | | Total | (3,120) | (61,414) | - Geographically, revenue from the China market amounted to HKD 50.72 million, accounting for 98.8% of total revenue, while revenue from the Hong Kong market was HKD 0.625 million35 Analysis of Key Financial Items The Group holds unlisted equity investments in biomedical and new drug development projects, with trade receivables increasing to HKD 46.95 million primarily from automotive trade, and onerous contract provisions slightly decreasing to HKD 15.31 million - The Group participates in new drug development projects through investments in limited partnerships, aiming to co-develop three new drugs and acquire drug patents61 - Trade receivables increased from HKD 31.84 million at the end of 2019 to HKD 46.95 million, with HKD 41.50 million originating from the automotive trade business6972 - Onerous contract provisions are primarily related to irrevocable automobile purchase contracts, with an ending balance of HKD 15.31 million84 Discontinued Operations The Group discontinued its electronic product and campus safety business by disposing of Shenzhen Tianxingtong Technology Co Ltd in October 2019, resulting in no loss from discontinued operations in the current period - The business of selling electronic products and related platforms has been classified as discontinued operations due to the disposal of the relevant subsidiary in October 201987 Management Discussion and Analysis This section provides management's perspective on the Group's business and financial performance during the period, along with its strategic outlook and future plans Business and Financial Review Despite a HKD 76.71 million decline in automotive sales revenue due to COVID-19, the Group's overall loss significantly narrowed from HKD 72.83 million to HKD 11.69 million, primarily due to no onerous contract provisions and the automotive segment's profitability, while new drug development projects remain in research - The significant reduction in loss is primarily attributable to: (i) no onerous contract provisions for automobiles compared to the same period in 2019; and (ii) the automotive sales and agency services segment recording a profit92 - The outbreak of COVID-19 and the implementation of prevention and quarantine control measures in China severely impacted the Group's automotive business operations in China, leading to a substantial decline in revenue for this segment9396 - The Group's investments in three new drugs (for treating lymphoma, cytoma, and colorectal cancer) remain in the research phase93 Outlook The Group's automotive business, accounting for 99% of revenue, faces uncertainties from the pandemic and trade tensions, but government policies may offer improvement, while the Group diversifies into China's new drug development market and remains optimistic about stock markets - The automotive business is affected by the pandemic, the US-China trade war, and government policies, but policies introduced by some provinces to expand automotive demand are expected to improve business performance99 - To achieve business diversification, the company has decided to reallocate resources to China's new drug development market through investments in limited partnerships100 Directors' Report This section details the Group's liquidity and financial resources, directors' and shareholders' interests in the company, and adherence to corporate governance practices Liquidity and Financial Resources As at June 30, 2020, the Group maintained a sound financial position with a current ratio of 3.7 times and a gearing ratio of 26.7%, indicating sufficient resources for current and future operations Liquidity and Financial Resources Indicators | Indicator | June 30, 2020 | December 31, 2019 | | :--- | :--- | :--- | | Current assets | HKD 210 million | HKD 240 million | | Current ratio | 3.7 times | 3.9 times | | Gearing ratio | 26.7% | 28.1% | | Cash and bank balances (total) | HKD 75.19 million | HKD 119 million | Directors' and Shareholders' Interests The report discloses directors' interests in the company's shares, with Chairman Mr Wang Jiawei beneficially owning approximately 27.13%, and all unexercised share options granted in 2010 expired during the period Directors' Shareholding (As at June 30, 2020) | Director's Name | Capacity | Number of Shares Held | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Wang Jiawei | Beneficial Owner | 2,102,255,935 | 27.13% | | Li Yu Mei | Beneficial Owner | 2,780,127 | 0.04% | | Liu Run Tong | Beneficial Owner | 2,646,000 | 0.03% | - All share options granted on April 13, 2010, under the old share option scheme, expired on April 13, 2020, as they were not exercised within their option period117124 Corporate Governance During the period, the company complied with all principles and provisions of the Corporate Governance Code, with the only deviation being the combined roles of Chairman and Chief Executive Officer held by Mr Wang Jiawei, and the Audit Committee reviewed the interim financial statements - The company deviated from Corporate Governance Code provision A.2.1, as the roles of Chairman and Chief Executive Officer are not segregated and are both held by Mr Wang Jiawei129 - The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's financial statements for the six months ended June 30, 2020134
华亿金控(08123) - 2020 - 中期财报