保发集团(03326) - 2024 - 中期业绩

Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, the Group's revenue decreased by 11.1% to HKD 155 million, primarily due to a decline in the jewellery business, while profit for the period slightly increased to HKD 25.24 million due to an income tax credit Key Performance Indicators for H1 2024 | Indicator | For the Six Months Ended June 30, 2024 (HKD thousands) | For the Six Months Ended June 30, 2023 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 154,735 | 174,120 | -11.1% | | Gross Profit | 42,503 | 57,667 | -26.3% | | Profit before Income Tax | 17,574 | 26,931 | -34.7% | | Profit for the Period | 25,241 | 24,700 | +2.2% | | Profit Attributable to Owners of the Company | 25,429 | 25,549 | -0.5% | | Basic Earnings Per Share | 1.90 HK cents | 1.91 HK cents | -0.5% | Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets slightly decreased to HKD 818 million, with net assets at HKD 637 million, while net current assets of HKD 536 million indicate strong short-term solvency Summary of Financial Position | Indicator | As of June 30, 2024 (HKD thousands) | As of December 31, 2023 (HKD thousands) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 123,945 | 103,265 | +20.0% | | Current Assets | 694,453 | 734,260 | -5.4% | | Total Assets | 818,398 | 837,525 | -2.3% | | Current Liabilities | 158,046 | 162,532 | -2.8% | | Non-current Liabilities | 22,978 | 25,289 | -9.1% | | Total Liabilities | 181,024 | 187,821 | -3.6% | | Net Assets | 637,374 | 649,704 | -1.9% | Notes to the Financial Statements Company Information and Accounting Policies The Group operates in three main segments: jewellery, property investment and development in Foshan, China, and photovoltaic power generation, with financial statements prepared under HKAS 34 using consistent accounting policies - The company's core businesses span jewellery, property, and photovoltaic power generation sectors[5] - Interim financial statements are prepared under HKAS 34, with accounting policies consistent with the prior year and no significant impact from newly adopted standard amendments[6][8] Consolidation Accounting and Restatement The Group adopted consolidation accounting and restated comparative financial data for 2023 due to the acquisition of a 55% interest in Guangdong Kais New Energy Co., Ltd., a business combination under common control - The Group adopted consolidation accounting and retrospectively restated the 2023 comparative profit or loss and cash flow statements due to the acquisition of a target company under common control[10][11][46] Impact of Consolidation Accounting on H1 2023 Profit or Loss | Item | Previously Reported (HKD thousands) | Consolidation Adjustment (HKD thousands) | Restated (HKD thousands) | | :--- | :--- | :--- | :--- | | Revenue | 173,468 | 652 | 174,120 | | Gross Profit | 57,619 | 48 | 57,667 | | Profit for the Period | 24,895 | (195) | 24,700 | Revenue and Segment Information In H1 2024, total revenue decreased by 11.1% to HKD 155 million, primarily due to a 17.4% decline in the jewellery business, while property and PV power generation segments grew, and the PV segment turned profitable Revenue by Business Segment | Business Segment | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Jewellery Business | 128,275 | 155,244 | -17.4% | | Property Business | 24,717 | 18,224 | +35.6% | | Photovoltaic (PV) Power Generation Business | 1,743 | 652 | +167.3% | | Total | 154,735 | 174,120 | -11.1% | Results by Business Segment | Business Segment | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Jewellery Business | 16,937 | 27,582 | -38.6% | | Property Business | 3,722 | 6,367 | -41.5% | | Photovoltaic (PV) Power Generation Business | 794 | (66) | Swung to Profit | | Total | 21,453 | 33,883 | -36.7% | Notes on Key Financial Items This section details the composition and changes in key financial items, including profit before income tax, tax, dividends, EPS, receivables, payables, and share capital, noting an income tax credit from prior year over-provision and share repurchases Income Tax The Group recorded an income tax credit of HKD 7.67 million in H1 2024, primarily due to the reversal of an over-provision for prior year taxes in China - An income tax credit of HKD 7.67 million was recorded for the period, primarily due to the reversal of an over-provision for prior year taxes in China[28][74] Dividends The Board resolved not to declare an interim dividend for H1 2024, while the 2023 final dividend of HKD 0.02 per share, totaling HKD 26.79 million, was confirmed and paid during the period - The Board did not declare an interim dividend for 2024[31][86] - The 2023 final dividend of HKD 0.02 per share, totaling HKD 26.79 million, was paid during the period[31] Share Capital In April 2024, the company repurchased 1,587,000 of its own shares at an average price of HKD 0.190 per share, which remained pending cancellation as of June 30, 2024 - The company repurchased 1,587,000 shares in April 2024 for a total consideration of approximately HKD 0.3 million, which remained uncancelled at period-end[40][89] Disposal of a Subsidiary On April 1, 2024, the Group disposed of its wholly-owned property management subsidiary, Foshan Huaguanhui Property Management Co., Ltd., to an independent third party for approximately HKD 3.96 million, generating a gain of about HKD 2.83 million - The Group completed the disposal of its subsidiary, Foshan Huaguanhui Property Management, in April 2024, recording a gain of approximately HKD 2.83 million[43][44][48] Management Discussion and Analysis Business Review and Outlook In H1 2024, the Group's three core businesses showed mixed performance, with jewellery facing headwinds, property providing stable income, and PV power generation emerging as a new growth driver with ten grid-connected projects and future plans for energy storage systems Jewellery Business The jewellery business faced reduced customer demand due to geopolitical tensions, high interest rates, and record gold prices, prompting the Group to focus on overseas market expansion and new product development - Unfavorable macroeconomic conditions and high gold prices negatively impacted the jewellery business[50] - Future strategy will focus on strengthening overseas market expansion and product research and development[51] Property Business Property leasing and management services from the Baofa Jewellery Industrial Centre in Foshan provide stable income, with future plans to continue property sales or leasing and improve occupancy rates to enhance profitability - Property leasing and management services provide stable income for the Group[52] - Future plans include exploring disposal opportunities and increasing occupancy rates to expand profitability[53] Photovoltaic (PV) Power Generation Business The rapidly developing PV power generation business, a new diversified income source, completed ten grid-connected projects in China with a total capacity of 8,643 kW by June 30, 2024, and generated approximately 3 million kWh, with future plans to explore PV energy storage systems - As of June 30, 2024, the PV business completed ten grid-connected projects with a total capacity of approximately 8,643 kW[54] - The Group is optimistic about the long-term potential of PV power generation and actively researching PV energy storage system plans[55] Financial Review In H1 2024, total revenue decreased by 11.1% to HKD 155 million, primarily due to a 17.4% decline in the jewellery business, and overall gross margin fell to 27.5%, yet profit for the period slightly increased by 2.0% to HKD 25.2 million due to a gain on disposal of a subsidiary and income tax credit Revenue by Geographical Region | Region | H1 2024 (HKD thousands) | H1 2023 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Hong Kong | 95,579 | 108,759 | -12.1% | | Dubai | 27,299 | 45,995 | -40.6% | | China | 31,857 | 19,366 | +64.5% | | Total | 154,735 | 174,120 | -11.1% | - Revenue declined in Hong Kong and Dubai markets due to weak consumer sentiment, while China market revenue increased due to higher property sales and PV business growth[59] - Overall gross margin decreased from 33.1% to 27.5%, primarily impacted by declining gross margins in the jewellery and property businesses[60][61] Liquidity and Financial Resources As of June 30, 2024, the Group maintained a robust financial position with a current ratio of 4.4, strong short-term solvency, cash and cash equivalents of approximately HKD 135 million, and a low gearing ratio of 0.07, indicating controlled financial leverage Key Financial Ratios | Indicator | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 4.4 | 4.5 | | Gearing Ratio | 0.07 | 0.04 | - The Directors believe the Group has sufficient working capital to support its ongoing operations and business development[75] Corporate Governance and Other Information Human Resources As of June 30, 2024, the Group had 132 employees across Hong Kong, China, and Dubai, a decrease from 154 at the end of 2023, with total staff costs for H1 2024 at approximately HKD 14.5 million, and competitive remuneration packages including share option schemes - As of June 30, 2024, the Group had 132 employees, with total staff costs for H1 2024 amounting to HKD 14.5 million[83] Corporate Governance and Compliance During the reporting period, the company largely complied with the Corporate Governance Code, with a deviation noted for the combined roles of Chairman and CEO held by Mr. Kan Kin Kwong, and the Audit Committee and auditors have reviewed the interim results - The company complies with the Corporate Governance Code, though the roles of Chairman and Chief Executive Officer are not separated, both held by founder Mr. Kan Kin Kwong[87] - During the period, the company repurchased 1,587,000 ordinary shares from the market for a total consideration of HKD 0.3 million[89] - The Audit Committee has reviewed the unaudited interim financial statements, and the auditors have completed their review in accordance with relevant standards[91]