TE HEALTHCARE(06877) - 2024 - 中期业绩

Financial Statements and Notes This section presents the Group's interim financial statements, highlighting a significant revenue decrease but overall profit growth due to business restructuring and a robust financial position Consolidated Financial Statements This section provides an overview of the Group's financial performance and position, showing a decrease in revenue from continuing operations but an increase in overall profit, alongside a stable asset and equity structure Condensed Consolidated Interim Statement of Comprehensive Income For the six months ended June 30, 2024, the Group's revenue from continuing operations decreased by 60.9% to HKD 55.501 million, but overall profit increased by 12.7% to HKD 6.260 million due to the absence of losses from discontinued operations, with basic earnings per share at 0.31 HK cents 2024 Interim Performance Overview (HKD thousands) | Indicator | 2024 Interim | 2023 Interim (Restated) | Change | | :--- | :--- | :--- | :--- | | Revenue from Continuing Operations | 55,501 | 141,895 | -60.9% | | Profit from Continuing Operations | 6,260 | 6,932 | -9.4% | | Loss from Discontinued Operations | 0 | (1,378) | N/A | | Profit for the Period | 6,260 | 5,554 | +12.7% | | Basic Earnings Per Share (HK cents) | 0.31 | 0.27 | +14.8% | Condensed Consolidated Interim Statement of Financial Position As of June 30, 2024, the Group's total assets increased by 4.1% to HKD 262.097 million from the end of 2023, with total equity rising to HKD 245.606 million and ample cash reserves of HKD 225.013 million, maintaining a robust financial position Key Financial Position Data (HKD thousands) | Indicator | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Total Assets | 262,097 | 251,775 | +4.1% | | Total Liabilities | 16,491 | 11,910 | +38.5% | | Total Equity | 245,606 | 239,865 | +2.4% | | Cash and Bank Balances | 225,013 | 223,574 | +0.6% | Notes to the Interim Financial Information The financial statement notes clarify the Group's complete business transformation, with healthcare as the sole continuing segment and margin trading fully terminated in 2023, also disclosing an ongoing lawsuit with a former IT service provider for which no provision is deemed necessary, and no interim dividend declared - The Group's business structure has undergone significant changes, with the complete termination of margin trading businesses in New Zealand, Australia, and Hong Kong in 2023, leaving healthcare as the sole continuing operation segment[8] - The company is involved in a legal dispute with former IT service provider "Sheng Hui Information Technology Co., Ltd.", with the trial scheduled for January 2026, and the board believes no provision is required based on legal advice[31][32] - The Board resolved not to declare any dividend for the six months ended June 30, 2024[20] Segment Profit/(Loss) Summary (HKD thousands) | Business Segment | 2024 Interim | 2023 Interim (Restated) | | :--- | :--- | :--- | | Healthcare Business (Continuing) | 8,401 | 8,597 | | Margin Trading (Discontinued) | 0 | (1,378) | Management Discussion and Analysis This section reviews the Group's financial performance, business transformation to healthcare, future development plans, liquidity, and significant post-reporting events Financial Performance and Business Review Despite a 61% year-on-year decline in total revenue due to a 63% drop in healthcare sales and the termination of margin trading, the Group increased net profit by 13% by focusing on high-margin B2C healthcare business, successfully launching its first ODM products during the period and committing to further market expansion 2024 Interim Key Operating Results | Item | 2024 Interim (HKD thousands) | 2023 Interim (HKD thousands) | Period-on-Period Change | | :--- | :--- | :--- | :--- | | Total Revenue | 55,501 | 143,008 | -61% | | Profit Before Tax | 7,436 | 6,858 | +8% | | Profit Attributable to Owners of the Company | 6,260 | 5,554 | +13% | - The revenue decline is primarily due to a decrease in healthcare business revenue from HKD 138 million in the prior period to HKD 50.69 million[40] - The increase in net profit is attributed to the Group's enhanced focus on high-margin B2C business, which improved the gross profit of the healthcare segment[43] Healthcare Business The healthcare business is now the Group's core, with the successful launch of 11 original design manufacturing (ODM) products in February 2024 through strategic collaborations, marking a significant step in product development and brand building - The Group has formed strategic partnerships with Beijing Tong Ren Tang (Hong Kong) and Zhongke Molecular for the design and global distribution of ODM products[46] - The first batch of 11 ODM products was launched in February 2024, utilizing Zhongke Molecular's Plant Effective Ingredient Efficient Separation and Purification Integrated System (PLEESIT)[47] Future Development The Group plans to expand its healthcare business by increasing resources in marketing, inventory, and logistics, focusing on targeted marketing with KOLs in China and recruiting talent to deepen the promising ODM product line - Plans include allocating more resources across staff, marketing, inventory, and logistics to expand the healthcare business scale[47] - Will collaborate with Key Opinion Leaders (KOLs) for marketing activities on virtual platforms to enhance brand awareness and market share in China[48] - Plans to recruit talent to expand the ODM product team and develop more tailored formulations to meet market demand[49] Liquidity and Capital Resources The Group maintains a healthy financial position with ample liquidity, operating primarily on self-generated capital and operating cash flow, holding HKD 224 million in cash and equivalents as of June 30, 2024, with zero bank debt and a robust capital structure Liquidity and Capital Structure | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and Bank Balances (HKD thousands) | 223,850 | 222,390 | | Debt-to-Equity Ratio | Zero | Zero | Significant Events Post-reporting period, controlling shareholder CITIC Securities International announced a proposed transfer of 28% to 40% of the company's shares, and the company's shares resumed trading on the HKEX on July 19, 2024, after meeting all resumption guidance, while a legal dispute with a former IT vendor remains ongoing - Post-reporting event: Controlling shareholder CITIC Securities International Limited notified on July 12, 2024, its intention to transfer 28% to 40% of the company's shares through public solicitation[34][50] - The company's shares resumed trading on the Stock Exchange on July 19, 2024, after being suspended for failing to maintain sufficient operations[49] - The lawsuit with Sheng Hui Information Technology Co., Ltd. is ongoing, with the trial scheduled for January 2026, and the Board believes no provision is required[31][32] Corporate Governance and Other Disclosures This section covers the Board's dividend decision, the company's compliance with corporate governance standards, and the audit committee's review of financial results Dividend and Compliance The Board decided not to declare an interim dividend for 2024, and the company complied with relevant corporate governance code provisions throughout the reporting period, with the audit committee reviewing the unaudited financial results - The Board has resolved not to declare any dividend for the 2024 interim period[51] - The company has complied with the Corporate Governance Code set out in Appendix C1 to the Listing Rules throughout the 2024 interim period[53] - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim results[58]