Financial Performance - Revenue for the six months ended 30 June 2020 amounted to approximately HK$45.86 million, representing a decrease of approximately 45.79% compared to HK$84.60 million for the same period in 2019[17]. - Loss attributable to owners of the Company for the Period amounted to approximately HK$12.39 million, compared to a loss of approximately HK$6.83 million for the same period in 2019[17]. - Basic loss per share for the Period amounted to approximately HK1.24 cents, compared to approximately HK0.68 cents for the six months ended 30 June 2019[17]. - Revenue for the three months ended June 30, 2020, was HK$25,259,000, a decrease of 47.5% compared to HK$48,133,000 for the same period in 2019[20]. - Gross profit for the six months ended June 30, 2020, was HK$11,978,000, down 46.3% from HK$22,305,000 in the same period of 2019[20]. - Loss before taxation for the three months ended June 30, 2020, was HK$4,683,000, compared to a loss of HK$3,321,000 in the same period of 2019, representing a 41.0% increase in loss[20]. - Total comprehensive loss for the period attributable to owners of the Company was HK$5,231,000 for the three months ended June 30, 2020, compared to HK$3,560,000 in the same period of 2019, an increase of 47.0%[20]. - Total revenue for the first half of 2020 was HK$45,862,000, a decrease of 46% compared to HK$84,596,000 in the same period of 2019[42]. - Revenue for finished watches decreased by 32.2% to HK$21.85 million for the three months ended June 30, 2020, compared to HK$32.21 million in the same period of 2019[45]. - The Group incurred a loss before taxation of approximately HK$12.39 million for the six months ended June 30, 2020, compared to a loss of HK$6.83 million in the same period of 2019[52]. Assets and Liabilities - Non-current assets increased to HK$82,117,000 as of June 30, 2020, from HK$52,975,000 as of December 31, 2019, reflecting a growth of 55.5%[21]. - Current assets rose to HK$160,222,000 as of June 30, 2020, compared to HK$146,643,000 as of December 31, 2019, an increase of 9.2%[21]. - Net current assets improved to HK$21,475,000 as of June 30, 2020, from HK$11,745,000 as of December 31, 2019, representing an increase of 83.0%[21]. - Total equity decreased to HK$51,174,000 as of June 30, 2020, down from HK$62,977,000 as of December 31, 2019, a decline of 18.7%[22]. - Borrowings increased to HK$50,675,000 as of June 30, 2020, from HK$0 as of December 31, 2019, indicating a new debt acquisition[22]. - Trade receivables decreased to HK$36.87 million as of June 30, 2020, from HK$45.07 million as of December 31, 2019, reflecting a reduction of 18.5%[58]. - Trade payables decreased to HK$27.63 million as of June 30, 2020, from HK$39.64 million as of December 31, 2019, a decline of 30.4%[64]. Cash Flow - The company generated net cash from operating activities of HK$18,300,000 for the six months ended June 30, 2020, compared to a cash outflow of HK$12,379,000 in the same period of 2019[27]. - The net cash used in investing activities was HK$71,133,000 for the first half of 2020, a significant decrease from the cash generated of HK$17,341,000 in 2019[27]. - Financing activities generated net cash of HK$45,791,000 in the first half of 2020, compared to a cash outflow of HK$10,055,000 in the previous year[27]. - The company's cash and cash equivalents decreased to HK$14,346,000 at the end of June 2020, down from HK$35,946,000 at the end of June 2019[27]. - As of June 30, 2020, the Group had cash and cash equivalents of approximately HK$14.36 million, down from HK$35.95 million as of June 30, 2019[95]. Revenue Sources - Revenue from Hong Kong increased to HK$15,281,000 in the first half of 2020, a 105% increase from HK$7,457,000 in 2019[42]. - Revenue from India dropped significantly to HK$1,112,000 in 2020, down 92% from HK$14,838,000 in 2019[42]. Operational Insights - The company has been engaged in the design and development, manufacturing, and distribution of watch products on an original design manufacturing (ODM) basis[30]. - The company operates primarily in the manufacturing and trading business of watches, with no separate reportable segments identified[39]. - The Group plans to focus on core business and enhance product design and development capabilities, including the introduction of Augmented Reality (AR) technology[87]. - The Group expects a slow recovery in the global economy and its business as COVID-19 is contained in China and Europe, but still faces short-term sales pressure[86]. Expenses - Selling and distribution expenses decreased by approximately 27.45% compared to the same period in 2019, mainly due to reduced packing and exhibition expenses[88]. - Administrative expenses decreased by approximately 11.63%, primarily due to lower professional, advertising, and staff costs[88]. - Finance costs increased by approximately HK$2.25 million, an increase of 11.51% compared to the same period in 2019, mainly due to increased bank borrowings[88]. Corporate Governance - The company has established an Audit Committee on June 20, 2018, in compliance with GEM Listing Rules, with members including Mr. Yu Sau Ning Homer M.H., Mr. Zhao Zhipeng, and Ms. Yee Wai Fong Wendy[155]. - The Audit Committee's primary duties include recommending the appointment and removal of external auditors, reviewing financial statements, and overseeing internal control procedures[156]. - The company believes that the management structure, where the roles of chairman and CEO are held by Mr. Cheuk Sin Cheong Clement, is effective for operations and provides solid leadership[149]. - The company has adopted a code of conduct regarding securities transactions by Directors, ensuring compliance with GEM Listing Rules throughout the period[151]. - The company confirms that all Directors complied with the required standards of dealings regarding securities transactions during the reporting period[153]. - The report contains forward-looking statements regarding the financial conditions and business strategy of the Group, which are subject to risks and uncertainties[158]. - The company has met the provisions of the Corporate Governance Code throughout the reporting period, with specified deviations explained[148]. - The company emphasizes the importance of checks and balances in its management structure despite the deviation from the Corporate Governance Code[150]. Employment and Shareholding - The Group had a total of 147 employees as of June 30, 2020, down from 161 employees as of June 30, 2019[104]. - The Group did not declare an interim dividend for the period, consistent with the previous year[93]. - As of June 30, 2020, Mr. Cheuk and Mrs. Cheuk each hold a beneficial interest of 1 ordinary share, representing 50% of the total shares in the associated corporation Million Easy[123]. - Million Easy holds a long position of 620,000,000 ordinary shares, accounting for 62% of the total shares of the Company as of June 30, 2020[128]. Investments and Acquisitions - During the reporting period, the Company and its subsidiaries did not purchase, sell, or redeem any of the Company's listed securities[131]. - There were no significant investments, material acquisitions, or disposals of subsidiaries, associates, and joint ventures by the Company during the reporting period[132]. - The Group did not have plans for material investments or capital assets for the coming year, aside from those disclosed in the prospectus dated June 28, 2018[133]. Share Option Scheme - The Company has a share option scheme valid for 10 years, expiring on June 19, 2028, to incentivize and retain high-caliber employees[134]. - No share options have been granted since the adoption of the share option scheme during the six months ended June 30, 2019, and 2020[141]. - The total number of shares for which options may be granted under the scheme cannot exceed 10% of the shares in issue at any time without prior shareholder approval[140]. - None of the Directors or substantial shareholders engaged in any business that competes with the Group during the reporting period[142]. - As of June 30, 2020, the compliance adviser TC Capital had no interest in the securities of the Company[143].
恒伟集团控股(08219) - 2020 - 中期财报