FIRST CREDIT(08215) - 2024 - 中期业绩

Company Information and Declarations This section outlines the company's interim results, board composition, and directors' responsibilities for GEM market compliance Announcement Overview and Board Composition This announcement details First Credit Finance Group's H1 2024 unaudited results, board, and directors' responsibilities - This announcement covers First Credit Finance Group Limited's unaudited results for the six months ended June 30, 2024[1] - The Board of Directors comprises three executive directors, including CEO Ms. Ho Yuen Mei, and five independent non-executive directors[1] GEM Market Characteristics and Directors' Responsibilities The GEM market for SMEs carries high investment risks, with directors fully responsible for the report's accuracy - The GEM market targets small and medium-sized enterprises, carrying higher investment risks and market volatility[2][5] - The company's directors collectively and individually bear full responsibility for the accuracy, completeness, and non-misleading nature of the report's information[4][5] Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, including income, balance sheet, equity, and cash flows Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For H1 2024, the company saw significant revenue decline, expanded losses, and increased loss per share Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Metric | Six Months Ended June 30, 2024 (HKD) | Six Months Ended June 30, 2023 (HKD) | | :--- | :--- | :--- | | Revenue | 912,469 | 17,159,460 | | Other losses | (166,813) | (2,155,283) | | Administrative expenses | (2,619,878) | (6,006,282) | | Net impairment losses on loans receivable | (37,512,734) | (31,430,381) | | Operating loss | (41,751,941) | (25,290,244) | | Loss before tax | (41,804,195) | (25,393,117) | | Loss and total comprehensive expenses for the period attributable to owners of the Company | (41,804,195) | (25,402,909) | | Basic loss per share (HK cents) | (1.15) | (0.70) | - Revenue decreased significantly by 94.7% year-on-year, from HKD 17,159,460 to HKD 912,469[6] - Net impairment losses on loans receivable increased by 19.3% year-on-year, from HKD 31,430,381 to HKD 37,512,734[6] Condensed Consolidated Statement of Financial Position As of June 30, 2024, total assets and net assets declined due to reduced loans receivable, decreasing net current assets and total equity Condensed Consolidated Statement of Financial Position Key Data | Metric | June 30, 2024 (HKD) | December 31, 2023 (HKD) | | :--- | :--- | :--- | | Total non-current assets | 22,020,948 | 27,051,070 | | Total current assets | 62,408,954 | 99,431,611 | | Total current liabilities | 1,792,520 | 1,966,960 | | Net current assets | 60,616,434 | 97,464,651 | | Total assets less current liabilities | 82,637,382 | 124,515,721 | | Net assets | 82,637,382 | 124,441,577 | | Total equity | 82,637,382 | 124,441,577 | - Total current assets decreased by 37.2%, from HKD 99,431,611 to HKD 62,408,954[9] - Total equity decreased by 33.6%, from HKD 124,441,577 to HKD 82,637,382[9] Condensed Consolidated Statement of Changes in Equity For H1 2024, total equity decreased due to comprehensive loss, further expanding accumulated losses Condensed Consolidated Statement of Changes in Equity Key Data | Metric | June 30, 2024 (HKD) | January 1, 2023 (HKD) | | :--- | :--- | :--- | | Share capital | 72,576,000 | 72,576,000 | | Accumulated losses | (701,360,565) | (506,603,055) | | Total equity | 82,637,382 | 279,602,892 | - As of June 30, 2024, accumulated losses increased to HKD 701,360,565, compared to HKD 506,603,055 on January 1, 2023[10] - The total comprehensive loss for the period was HKD 41,804,195, leading to a corresponding reduction in total equity[10] Condensed Consolidated Statement of Cash Flows For H1 2024, operating activities consumed cash, and despite investment inflows, net cash and cash equivalents significantly decreased Condensed Consolidated Statement of Cash Flows Key Data | Metric | Six Months Ended June 30, 2024 (HKD) | Six Months Ended June 30, 2023 (HKD) | | :--- | :--- | :--- | | Net cash used in operating activities | (3,495,247) | (20,812,486) | | Net cash from investing activities | 1,368,601 | 7,072,379 | | Net cash used in financing activities | (122,402) | (834,986) | | Net decrease in cash and cash equivalents | (2,249,048) | (14,575,093) | | Cash and cash equivalents at end of period | 1,491,092 | 5,261,618 | - Net cash used in operating activities significantly improved year-on-year, decreasing from HKD 20,812,486 to HKD 3,495,247[11] - Cash and cash equivalents at the end of the period were HKD 1,491,092, a significant decrease from HKD 5,261,618 in the prior year period[11] Notes to the Financial Statements This section details the basis of preparation, accounting policies, fair value measurements, segment information, and other notes Basis of Preparation and Accounting Policies These interim financial statements comply with HKAS 34 and GEM Listing Rules, consistent with 2023, and incorporate new HKFRS amendments - The financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and the GEM Listing Rules[12] - This period marks the first application of amendments to HKFRS, including revisions to HKFRS 16, HKAS 1, HKAS 7, and HKFRS 7[12] - The company's shares remain suspended from trading[12] Fair Value Measurement and Segment Information Financial assets and liabilities approximate fair value using a three-level hierarchy; all revenue from Hong Kong credit financing is highly concentrated - Fair value measurement is categorized into three levels, with the carrying amounts of the company's financial assets and liabilities approximating their fair values[13] - All revenue is derived from credit financing business in Hong Kong, primarily loan interest income[13] - As of June 30, 2024, the top five customers contributed 84.0% of revenue, with the largest customer contributing 24.6%[13] Revenue and Other Income/Losses Current revenue is mainly loan interest, with zero from credit-impaired loans; other income is minimal, and other losses are from fair value losses Revenue and Other Income/Losses | Metric | Six Months Ended June 30, 2024 (HKD) | Six Months Ended June 30, 2023 (HKD) | | :--- | :--- | :--- | | Interest income from loan financing | 912,469 | 17,159,460 | | Interest income from credit-impaired loans receivable | Nil | 13,036,219 | | Bank interest income | 3,518 | 3,145 | | Net fair value loss on financial assets at fair value through profit or loss | (210,987) | (2,120,408) | | Total other losses | (166,813) | (2,155,283) | - Interest income from loan financing decreased by 94.7% year-on-year[14] - Net fair value loss on financial assets at fair value through profit or loss significantly decreased by 89.9% year-on-year[19] Finance Costs and Taxation Current finance costs, mainly bond and lease interest, decreased year-on-year, with no income tax expense Finance Costs and Income Tax Expense | Metric | Six Months Ended June 30, 2024 (HKD) | Six Months Ended June 30, 2023 (HKD) | | :--- | :--- | :--- | | Total finance costs | 52,254 | 102,873 | | Interest on bonds payable | 42,384 | – | | Interest on lease liabilities | 9,870 | 102,873 | | Income tax expense | – | 9,792 | - Total finance costs decreased by 49.2% year-on-year, primarily due to a significant reduction in interest on lease liabilities[21] - There was no income tax expense for the current period, compared to HKD 9,792 in the prior year period[23] Loss Per Share and Dividends For H1 2024, basic and diluted loss per share increased to 1.15 HK cents due to expanded loss, with no interim dividend Loss Per Share | Metric | Six Months Ended June 30, 2024 (HK cents) | Six Months Ended June 30, 2023 (HK cents) | | :--- | :--- | :--- | | Basic loss per share | (1.15) | (0.70) | | Diluted loss per share | (1.15) | (0.70) | - Basic loss per share increased from 0.70 HK cents to 1.15 HK cents, reflecting an expanded loss[6][27] - Diluted loss per share is the same as basic loss per share due to the absence of potential dilutive ordinary shares[28][31] - The directors do not recommend the payment of any interim dividend[24][26] Property, Plant and Equipment For H1 2024, the company neither acquired nor disposed of property, plant, and equipment, nor recorded related losses - No property, plant and equipment were acquired in the current period, compared to total acquisitions of HKD 645,500 in the prior year period[29][32] - No loss on disposal of property, plant and equipment was recorded in the current period, compared to HKD 274,751 in the prior year period[29][32] Loans Receivable As of June 30, 2024, total loans receivable decreased, impairment provisions increased, reducing net loans receivable, and total impaired loans rose Loans Receivable Key Data | Metric | June 30, 2024 (HKD) | December 31, 2023 (HKD) | | :--- | :--- | :--- | | Fixed-rate loans receivable | 576,645,956 | 580,940,605 | | Accrued interest receivable | 96,751,727 | 96,101,425 | | Less: Individually assessed expected credit losses | (429,012,171) | (395,033,294) | | Less: Collectively assessed expected credit losses | (183,261,444) | (183,261,444) | | Less: Expected credit losses on accrued interest receivable | (2,160,000) | (2,160,000) | | Net loans receivable | 58,964,068 | 96,587,292 | | Total impaired loans | 671,323,724 | 655,830,162 | - Net loans receivable decreased by 38.9%, from HKD 96,587,292 to HKD 58,964,068[34] - Individually assessed expected credit loss provisions increased by 8.6% year-on-year, from HKD 395,033,294 to HKD 429,012,171[34] - Total impaired loans increased by 2.4%, from HKD 655,830,162 to HKD 671,323,724[37] Financial Assets at Fair Value Through Profit or Loss As of June 30, 2024, the company held no financial assets at fair value through profit or loss, compared to HKD 1.53 million in 2023 Financial Assets at Fair Value Through Profit or Loss | Metric | June 30, 2024 (HKD) | December 31, 2023 (HKD) | | :--- | :--- | :--- | | Financial assets mandatorily at fair value through profit or loss | – | 1,531,896 | | －Hong Kong listed equity securities | – | 1,531,896 | - As of the current period end, there are no financial assets at fair value through profit or loss, indicating disposal or zero valuation of related investments[40] Share Capital and Related Party Transactions Share capital structure is unchanged, consistent with 2023, and key management remuneration slightly decreased Share Capital | Metric | June 30, 2024 (HKD) | December 31, 2023 (HKD) | | :--- | :--- | :--- | | Authorized share capital (250,000,000,000 shares of HKD 0.02 each) | 5,000,000,000 | 5,000,000,000 | | Issued and fully paid share capital (3,628,800,000 shares of HKD 0.02 each) | 72,576,000 | 72,576,000 | Key Management Personnel Remuneration | Metric | Six Months Ended June 30, 2024 (HKD) | Six Months Ended June 30, 2023 (HKD) | | :--- | :--- | :--- | | Short-term employee benefits | 1,191,720 | 1,200,000 | | Pension scheme contributions | 15,000 | 15,000 | | Total | 1,206,720 | 1,215,000 | - Total key management personnel remuneration slightly decreased by 0.68% year-on-year[45] Contingent Liabilities As of June 30, 2024, the company recorded no significant contingent liabilities, consistent with 2023 - As of June 30, 2024, the Group had no significant contingent liabilities[47][48] Management Discussion and Analysis This section reviews the company's business, financial performance, liquidity, capital structure, and operational aspects Business Review and Outlook During the period, the company focused on Hong Kong money lending, adopting a conservative strategy due to economic slowdown, decreasing interest income; future plans include stricter client screening and debt collection - The company continues to focus on money lending business in Hong Kong, providing secured and unsecured loans to individuals, corporations, and foreign domestic helpers[50] - Due to slower-than-expected economic recovery in Hong Kong and global recession, the company adopted a more conservative lending strategy, leading to decreased interest income in FY2023 and FY2024[50] - The company plans to focus resources on identifying quality individual customers, implementing stricter client selection criteria, and enhancing debt collection in H2 2024[50] Financial Review During the period, revenue declined, net interest margin narrowed, expenses decreased, but increased impairment losses led to an expanded loss Financial Review Key Data | Metric | Six Months Ended June 30, 2024 (HKD) | Six Months Ended June 30, 2023 (HKD) | | :--- | :--- | :--- | | Revenue | 910,000 (approx) | 17,160,000 (approx) | | Net interest margin | 8.19% | 13.44% | | Other losses | 170,000 (approx) | 2,160,000 (approx) | | Administrative expenses | 2,620,000 (approx) | 6,010,000 (approx) | | Impairment losses on loans receivable | 37,510,000 (approx) | 31,430,000 (approx) | | Other operating expenses | 2,370,000 (approx) | 2,860,000 (approx) | | Finance costs | 50,000 (approx) | 100,000 (approx) | | Loss for the period | 41,800,000 (approx) | 25,400,000 (approx) | - Revenue decreased by approximately 94.7% year-on-year, primarily due to reduced accrued interest on credit-impaired loans receivable[52] - Net interest margin decreased from 13.44% to 8.19% in the prior year period[52] - Impairment losses on loans receivable increased by approximately 19.3% year-on-year, mainly due to an increase in overdue loans receivable[59] - Loss for the period expanded by approximately 64.6% year-on-year, primarily impacted by increased impairment losses on loans receivable and decreased revenue[66][70] Revenue and Net Interest Margin During the period, revenue significantly decreased due to lower accrued interest on credit-impaired loans, narrowing the net interest margin - During the review period, revenue significantly decreased to approximately HKD 0.91 million (2023: approximately HKD 17.16 million), primarily from loan interest income in the money lending business[52] - The decrease in revenue is mainly attributable to reduced accrued interest on credit-impaired loans receivable[52] - Net interest margin was approximately 8.19%, lower than approximately 13.44% in the prior year period[52] Other Losses and Administrative Expenses Other losses decreased due to reduced fair value losses on listed securities, and administrative expenses declined due to lower employee and depreciation costs - Other losses decreased to approximately HKD 0.17 million (2023: approximately HKD 2.16 million), primarily due to reduced fair value losses on listed securities investments[53][56] - Administrative expenses decreased to approximately HKD 2.62 million (2023: approximately HKD 6.01 million), mainly due to reduced employee expenses and depreciation costs[54][57] Impairment Losses on Loans Receivable Impairment losses on loans receivable increased due to overdue loans, assessed by collective and monthly individual methods - Impairment losses on loans receivable increased to approximately HKD 37.51 million (2023: approximately HKD 31.43 million), primarily due to an increase in overdue loans receivable during the review period[59] - Impairment assessment combines collective assessment (based on loan type, probability of default, and loss given default) and monthly individual assessment (based on discounted cash flows and fair value of collateral)[60][61][63] Other Operating Expenses and Finance Costs Other operating expenses decreased due to reduced fees, and finance costs declined due to lower lease interest - Other operating expenses decreased to approximately HKD 2.37 million (2023: approximately HKD 2.86 million), primarily due to reduced promotion and professional fees[64] - Finance costs decreased to approximately HKD 0.05 million (2023: approximately HKD 0.10 million), primarily comprising interest on lease liabilities and interest on bonds payable[65][69] Loss for the Period The unaudited consolidated loss expanded, primarily due to increased impairment losses and decreased revenue - The unaudited consolidated loss attributable to owners of the Company was approximately HKD 41.80 million (2023: approximately HKD 25.40 million)[66][70] - The primary reasons for the expanded loss are increased impairment losses on loans receivable and decreased revenue[66][70] Liquidity, Financial Resources and Capital Structure As of June 30, 2024, bank and cash balances, net current assets, and current ratio decreased due to reduced loans receivable; no bank borrowings, potential external financing Liquidity and Capital Structure Key Data | Metric | June 30, 2024 (HKD) | December 31, 2023 (HKD) | | :--- | :--- | :--- | | Bank and cash balances | 1,490,000 (approx) | 3,740,000 (approx) | | Net current assets | 60,620,000 (approx) | 97,460,000 (approx) | | Current ratio | 34.82 times (approx) | 50.55 times (approx) | - Bank and cash balances decreased by 60.1% year-on-year[71] - Current ratio decreased from 50.55 times to 34.82 times, primarily due to reduced loans receivable[71] - The company has no bank borrowings and may raise funds through loans, credit facilities, or issuance of equity/loan notes[71] Significant Investments and Asset Disposals As of June 30, 2024, no significant investments (over 5% of assets), no major acquisitions/disposals, and no specific future investment plans - As of June 30, 2024, the company held no significant investments exceeding 5% of total assets[73][76] - There were no significant acquisitions or disposals of subsidiaries, associates, and joint ventures during the review period[74][76] - As of June 30, 2024, the company had no specific future major investment or capital asset plans[74][76] Employee Information As of June 30, 2024, employee count and remuneration significantly decreased; compensation policies are performance-based with regular training Employee Information | Metric | June 30, 2024 (Number of employees) | December 31, 2023 (Number of employees) | | :--- | :--- | :--- | | Total number of employees | 8 | 23 | | Total employee remuneration (including directors' emoluments) | 2,250,000 (approx) | 4,180,000 (approx) | - Total number of employees decreased by 65.2%, from 23 to 8[77] - Total employee remuneration decreased by approximately 46.1% year-on-year[77] - The company's remuneration policy is based on performance, qualifications, and experience, referencing market conditions, offering fixed monthly salaries and discretionary year-end bonuses[77] Pledge of Assets and Gearing Ratio As of June 30, 2024, HKD 8 million in loans receivable were pledged; the company transitioned from net cash to net debt with a 0.36% gearing ratio - As of June 30, 2024, the company pledged approximately HKD 8 million in loans receivable as collateral for bonds[79][83] Gearing Ratio | Metric | June 30, 2024 (HKD) | December 31, 2023 (HKD) | | :--- | :--- | :--- | | Net debt | 300,000 (approx) | (1,700,000) (approx) | | Gearing ratio | 0.36% (approx) | Not applicable | - The company transitioned from a net cash position at year-end 2023 to a net debt position of approximately HKD 0.3 million as of June 30, 2024, with a gearing ratio of 0.36%[80][84] Exchange Rate Risk and Contingent Liabilities The company's HKD-denominated Hong Kong money lending business faces minimal exchange rate risk, uses no hedging, and has no significant contingent liabilities - The company primarily engages in money lending in Hong Kong, with business revenue and costs denominated in HKD, resulting in negligible exchange rate fluctuation risk[81][85] - No financial instruments were used for exchange rate hedging during the review period[81][85] - As of June 30, 2024, the company had no significant contingent liabilities[82][86] Directors' and Major Shareholders' Interests As of June 30, 2024, directors and chief executives held no interests in shares or debentures; major shareholder Xiao Guoliang held a 29.50% long position - As of June 30, 2024, none of the company's directors or chief executives held any interests or short positions in the company's shares, related shares, or debentures[87][88] Major Shareholders' Shareholding | Name | Nature of interest | Number of ordinary shares held | Approximate percentage of issued share capital | | :--- | :--- | :--- | :--- | | Xiao Guoliang | Beneficial owner | 1,070,400,000 | 29.50% | Corporate Governance Practices The company adheres to GEM Corporate Governance Code, but the vacant Chairman position leads to non-compliance with specific rules; the Board remains effective, with an Executive Director chairing the AGM - The company has complied with all code provisions of the Corporate Governance Code, but the vacant Chairman position leads to non-compliance with rules C.2.1-C.2.9 and F.2.2[91][93] - The Board, composed of experienced directors, operates effectively, with major decisions made by the Board as a whole and daily operations overseen by the Chief Executive Officer[92] - Executive Director Mr. Lui Cheuk Fung chaired the Annual General Meeting on June 21, 2024, addressing shareholder questions[93][95] - The company has adopted the Model Code for Securities Transactions by Directors, with all directors confirming compliance[96] Suspension of Trading in Shares Shares have been suspended since Nov 24, 2017, and will remain so; the company is communicating with SFC for resumption, but no specific timetable is available - Trading in the company's shares has been suspended since November 24, 2017, and will remain suspended until further notice[98] - The company is actively engaging with the SFC to resume share trading as soon as possible[98] - No specific timetable for resumption of trading can be provided at present, as the resumption application is still under review[98] Audit Committee The Audit Committee, composed of four independent non-executive directors, reviewed the report and interim results, confirming compliance with accounting standards, GEM rules, and legal requirements - The Audit Committee comprises four independent non-executive directors, with Mr. Wong Shui Yeung as Chairman[100][101] - The Audit Committee has reviewed this report and interim results, confirming that the financial information complies with applicable accounting standards, GEM Listing Rules, and legal requirements, with adequate disclosures[100][101]