Financial Performance - For the six months ended June 30, 2021, the group's revenue was HKD 110,953,000, a slight increase of 3.5% compared to HKD 106,042,000 in the same period of 2020[6]. - The gross profit for the same period was HKD 74,757,000, remaining relatively stable compared to HKD 74,741,000 in 2020, indicating a consistent gross margin[6]. - The group reported a loss before tax of HKD 8,783,000 for the six months ended June 30, 2021, an improvement from a loss of HKD 11,913,000 in the same period of 2020, reflecting a 26.5% reduction in losses[6]. - Total comprehensive loss for the six months was HKD 8,484,000, compared to HKD 11,766,000 in the previous year, showing a 28.5% decrease[8]. - The loss per share for the six months was HKD 0.72, an improvement from HKD 0.83 in the same period of 2020[6]. - The company reported a loss attributable to owners of HKD 3,775,000 for the three months ended June 30, 2021, compared to a loss of HKD 2,781,000 in the same period of 2020[54]. - The loss attributable to owners of the company decreased to approximately HKD 8.8 million for the six months ended June 30, 2021, from approximately HKD 11.9 million for the same period in 2020, primarily due to increased revenue and reduced depreciation[94]. Assets and Liabilities - Non-current assets decreased to HKD 70,108,000 as of June 30, 2021, down from HKD 86,602,000 at the end of 2020, indicating a reduction of 19.0%[10]. - Current assets totaled HKD 47,072,000, a decrease from HKD 52,922,000 at the end of 2020, representing a decline of 11.1%[10]. - Current liabilities were HKD 174,843,000, slightly down from HKD 177,250,000 at the end of 2020, showing a decrease of 2.4%[10]. - The group reported a net asset deficit of HKD 65,487,000 as of June 30, 2021, compared to a deficit of HKD 57,003,000 at the end of 2020, indicating a worsening position[12]. - The total current liabilities exceeded current assets by approximately HKD 127,771,000 as of June 30, 2021, compared to HKD 124,328,000 at the end of 2020, indicating a slight increase in the liquidity gap[21]. - As of June 30, 2021, the company's cash and cash equivalents decreased to HKD 8,356,000 from HKD 11,692,000 at the end of 2020, a decline of 29.9%[21]. - The company's total bank borrowings amounted to approximately HKD 71,513,000 as of June 30, 2021, down from HKD 76,448,000 at the end of 2020, a decrease of 6.1%[21]. - The capital-to-debt ratio was approximately 156.4% as of June 30, 2021, compared to 145.0% as of December 31, 2020[125]. Revenue Breakdown - Revenue from restaurant operations for the six months ended June 30, 2021, was HKD 110,953,000, up from HKD 106,042,000 in the same period of 2020, reflecting a growth of 2.8%[32]. - Revenue for the three months ended June 30, 2021, was HKD 61,804,000, an increase of 28% compared to HKD 48,390,000 for the same period in 2020[33]. - Revenue for the six months ended June 30, 2021, was HKD 110,953,000, up 4% from HKD 106,042,000 in the prior year[33]. - Revenue from the "Dragon Emperor" brand decreased slightly to approximately HKD 68.9 million, a decline of about HKD 0.3 million or approximately 0.4% from HKD 69.2 million in the previous year[81]. - Revenue from the "Dragon Seal" brand increased by approximately HKD 2.3 million or approximately 18.1% to about HKD 15.0 million, attributed to effective COVID-19 control in Hong Kong[83]. - Revenue from the "Dragon Robe" brand rose by approximately HKD 1.6 million or approximately 16.0% to about HKD 11.6 million, also due to effective COVID-19 control measures[84]. - Revenue from the "Emperor Seal" brand significantly increased by approximately HKD 4.4 million or approximately 39.3% to about HKD 15.6 million, driven by the recovery from COVID-19 in China[85]. Cash Flow and Financing - For the six months ended June 30, 2021, the company reported a net cash inflow from operating activities of HKD 19,429,000, compared to HKD 10,205,000 for the same period in 2020, representing an increase of 90%[15]. - The company incurred net cash outflow from financing activities of HKD 22,453,000 for the six months ended June 30, 2021, compared to HKD 17,236,000 in the same period of 2020, indicating an increase in cash used for financing[15]. - Approximately HKD 30.5 million of the net proceeds from the share issuance has been utilized as of June 30, 2021, with HKD 6.8 million remaining unutilized[121]. Operational Strategies - Management is implementing various cost control measures to improve operational performance and cash flow, including delaying the opening of new branches or closing underperforming ones[21]. - The company plans to adopt a conservative approach to operations due to the economic downturn in Hong Kong and the ongoing challenges posed by COVID-19, including reduced tourist numbers and government restrictions[95]. - The company established an online sales platform at the end of 2020 to promote packaged foods and sauces, aiming to diversify revenue sources and reduce reliance on restaurant operations[96]. - The company intends to delay the opening of new restaurants until the overall economic and political environment is deemed suitable for expansion, which was initially planned for the end of 2021[121]. - The company is negotiating rent reductions with landlords due to the impact of COVID-19 on restaurant operations and reduced tourist numbers[95]. - The company will continue to evaluate market conditions and adjust its business strategies accordingly to balance the expansion of restaurants with the closure of underperforming locations[98]. Corporate Governance - The company has appointed Mr. Chen Gaozhang as the Compliance Officer and CEO, effective July 13, 2021[149]. - The company has adopted the GEM Listing Rules regarding the trading standards for directors, confirming compliance with no non-compliance incidents reported[155]. - The company has committed to non-competition agreements with its major shareholders to avoid potential conflicts of interest[152]. - The board believes that good corporate governance is essential for managing the company's business and affairs[163]. - The company has acknowledged deviations from the corporate governance code, particularly in providing monthly updates to the board[163]. - The company has only two independent non-executive directors and two audit committee members, which is below the minimum required by GEM Listing Rules[165]. - The audit committee is chaired by Ms. Leung Hoi Kei and includes Mr. Li Yiu Keung, both of whom are independent non-executive directors[166]. Miscellaneous - The company did not declare any interim dividend for the six months ended June 30, 2021, consistent with the previous year[53]. - The company purchased property, plant, and equipment for approximately HKD 0.4 million during the six months ended June 30, 2021, down from HKD 2.3 million in 2020[56]. - The company recognized rental concessions of approximately HKD 4,230,000, with about HKD 1,053,000 related to COVID-19[38]. - Trade receivables as of June 30, 2021, were HKD 1,975,000, a decrease from HKD 2,368,000 as of December 31, 2020[57]. - The company’s tax expense is calculated based on a two-tiered profit tax rate system, with the first HKD 2,000,000 of profits taxed at 8.25%[49]. - The group had no significant investments, acquisitions, or disposals of subsidiaries or associated companies as of June 30, 2021[127]. - The group maintained a prudent treasury policy to manage cash reserves and ensure readiness for future growth opportunities[130]. - The group reported no significant foreign exchange risk, with most revenues and expenses denominated in HKD and RMB[129]. - There were no purchases, sales, or redemptions of the company's listed securities by the company or its subsidiaries in the six months ending June 30, 2021[146]. - The group's unaudited consolidated performance for the six months ended June 30, 2021, has not been reviewed by the company's auditors[167].
龙皇集团(08493) - 2021 - 中期财报