珠江船务(00560) - 2024 - 中期财报

Chairman's Report Review In the first half of 2024, the Group significantly increased bulk cargo volume and cross-border passenger traffic by accelerating port and shipping logistics, optimizing passenger routes, and transforming traditional businesses, with the "Oriental Pearl" cruise business reaching a profit inflection point - Global economic recovery remains challenging, with limited trade recovery, pressure on Guangdong-Hong Kong waterway passenger transport, and a decline in local Hong Kong ferry passenger volume due to residents traveling north for consumption[3] - The Group focused on overcoming challenges, accelerating the layout of port and shipping logistics businesses, and significantly increasing bulk cargo volume[3] - Cross-border passenger transport maintained growth due to the recovery of visitors to Hong Kong and optimized route adjustments[3] - Pearl River Transit deepened cooperation with major engineering project companies, advanced the Hong Kong International Airport engineering material supply project, and actively expanded new business in the Southeast Asian market[4] - Pearl River Transit fully deployed 10 LNG multi-purpose vessels, embracing green shipping principles[4] - Oriental Pearl Cruise Co., Ltd. vigorously expanded charter and high-end tourism businesses, successfully reaching a profit inflection point[4] Outlook For the second half, the Group will focus on innovation, reform, and strategic optimization to unlock existing potential and penetrate new markets, including engineering logistics, overseas expansion, enhanced cross-border passenger services, and elevated marine tourism brand value - H2 strategy: innovation-driven, deepened reform, optimized layout, and new development, tapping existing potential and seeking breakthroughs in incremental markets[5] - Continuously focusing on the engineering logistics market, researching major HKSAR government projects, exploring M&A for network optimization, and transforming into a comprehensive logistics service provider[5] - Actively seeking overseas passenger and cargo investment opportunities, accelerating the overseas logistics network layout, exploring new service points in Indonesia and Thailand, entering new energy vehicle logistics, and expanding along the "Belt and Road" initiative[5] - Improving cross-border passenger service quality, deepening integrated control of port production factors, exploring a "single control center, multiple port operation points" model, and promoting additional immigration channels at Hong Kong International Airport SkyPier[6] - Enhancing cultural tourism brand value, consolidating ferry business revenue, continuously exploring the Victoria Harbour tourism market, and promoting synergy between cross-border passenger transport and Hong Kong's cultural tourism industry[6] Acknowledgements Chairman Liu Guanghui, on behalf of the Board, extended sincere gratitude to investors, partners, management, and all employees, pledging continued efforts to create greater shareholder value - Chairman Liu Guanghui, on behalf of the Board, expressed gratitude to investors, partners, management, and all employees[7] - The Group is committed to continuing efforts to create greater value for shareholders[7] Management Discussion and Analysis Business Review For the six months ended June 30, 2024, the Group's consolidated turnover increased by 12.6% to HKD 1.389 billion, with profit attributable to equity holders rising by 14.9% to HKD 67.115 million, driven by new business, optimized routes, and strong performance in fuel supply and corporate services despite a slowdown in international demand and declining Hong Kong container throughput Key Financial Performance H1 2024 | Indicator | H1 2024 (HKD Thousands) | H1 2023 (HKD Thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Consolidated Turnover | 1,388,711 | 1,233,130 | +12.6% | | Profit Attributable to Equity Holders of the Company | 67,115 | 58,387 | +14.9% | - International market demand continued to slow, investment activities were sluggish, trade recovery was slow, and Hong Kong's container throughput further declined year-on-year[8] - The Group continued to promote corporate reform, capturing market share in the Greater Bay Area and overseas markets, achieving high-quality development[8] I. Port and Shipping Logistics Business Amidst a sluggish Hong Kong transport and logistics sector, the port and shipping logistics business achieved significant growth in bulk cargo transport and handling volumes, with stable container transport, by developing new businesses, optimizing structures, and specializing terminals to reduce costs and secure major engineering logistics projects Port and Shipping Logistics Business Indicators (H1 2024) | Indicator | 2024 | 2023 | Change | | :--- | :--- | :--- | :--- | | Container Transport Volume (TEU) | 667,000 | 646,000 | +3.3% | | Bulk Cargo Transport Volume (Revenue Tons) | 614,000 | 202,000 | +204.0% | | Container Land Haulage Volume (TEU) | 92,000 | 90,000 | +2.2% | | Container Handling Volume (TEU) | 494,000 | 527,000 | -6.3% | | Bulk Cargo Handling Volume (Revenue Tons) | 4,191,000 | 3,222,000 | +30.1% | - Pearl River Transit maintained stable container transport and significantly increased bulk cargo transport volume year-on-year, driven by engineering logistics, through optimizing traditional business structures, accelerating transformation, and developing new businesses[12] - Zhaoqing area's bulk cargo handling volume increased by 46.1% year-on-year, Sihui Port successfully applied for temporary bulk cargo handling channel qualifications, and Kangzhou Port focused on developing sand and gravel clients to create a specialized bulk building materials handling terminal[16] - Hong Kong area's business volume significantly decreased, but Pearl River Transit utilized Tuen Mun warehouse and wharf berths to develop steel, new energy vehicle handling, and air freight import/export businesses[21] - Beicun Terminal, in collaboration with Pearl River Transit, reduced integrated logistics costs through resource integration, successfully undertaking large-scale engineering logistics projects such as subway rail components and municipal salvage vessels, aiming to become a specialized terminal serving Hong Kong's public and municipal engineering projects[22] II. Passenger Transport Business Passenger transport business gradually recovered, with a significant increase in cross-border passenger volume, while local ferry passenger volume declined due to Hong Kong residents traveling north for consumption and adverse weather; Pearl River Passenger Transport successfully resumed and opened new routes, deepened its Hong Kong Airport strategy, and its marine tourism business saw a substantial increase in passenger traffic, with the "Oriental Pearl" cruise business reaching a profit inflection point Passenger Transport Business Indicators (H1 2024) | Indicator | 2024 (Thousand Passengers) | 2023 (Thousand Passengers) | Change | | :--- | :--- | :--- | :--- | | Agency Passenger Volume | 877 | 647 | +35.5% | | Terminal Service Passenger Volume | 586 | 423 | +38.5% | | Local Ferry Passenger Volume | 5,751 | 6,333 | -9.2% | - Pearl River Passenger Transport successfully resumed the "Guangzhou Nansha – Hong Kong International Airport" route and opened the "Guangzhou Pazhou – Hong Kong Macau Ferry Terminal" route[10] - Pearl River Passenger Transport continued to deepen its Hong Kong Airport strategy, successfully renewing the SkyPier operation management contract and winning the bid again for the Hong Kong International Airport self-service check-in project[26] - Oriental Pearl marine tourism business accumulated 31,000 passengers, a significant 47.6% increase year-on-year, enhancing brand awareness through berthing operations at Central Pier 8[27] - Hong Kong-Zhuhai-Macao Bridge Shuttle Bus business passenger volume reached 9,697,000 passengers, exceeding pre-pandemic levels for the same period[28] III. Fuel Supply Business In fuel supply, Xin'gang Petroleum achieved significant growth in diesel sales by securing favorable prices and continuously providing bunkering services to HKSAR government vessels, though fuel oil sales declined notably due to increased market competition Fuel Supply Business Indicators (H1 2024) | Indicator | 2024 (Tons) | 2023 (Tons) | Change | | :--- | :--- | :--- | :--- | | Diesel Sales Volume (Tons) | 47,000 | - | +38.2% | | Fuel Oil Sales Volume (Tons) | 102,000 | - | -75.2% | - Xin'gang Petroleum successfully secured more favorable diesel prices, significantly increasing diesel sales volume to external customers[29] - Xin'gang Petroleum continued to provide bunkering services to HKSAR government vessels, including marine police, customs, and fire services, with highly recognized service quality[29] IV. Corporate and Other Businesses In corporate and other businesses, Zhuhai-Macau Engineering Technology Co., Ltd. saw increased revenue and profit year-on-year due to a new water pipeline project contract with Sands Group, and will continue to leverage its technical advantages to actively develop long-term stable new projects - Zhuhai-Macau Engineering Technology Co., Ltd. experienced year-on-year increases in revenue and profit, primarily due to securing a new phase contract for the Sands Group water pipeline project[30] - Zhuhai-Macau Engineering will continue to leverage its technical advantages, strengthen existing businesses, closely monitor bidding projects from Macau government agencies and enterprises, and actively develop new projects to enhance sustainable profitability[30] Other Information Liquidity, Financial Resources and Capital Structure The Group continuously monitors its liquidity and financial resources, maintaining a robust financial position with a current ratio of 2.1, a capital gearing ratio of 8.7%, and a debt ratio of 22.5% as of June 30, 2024, possessing sufficient cash and bank credit for future operations and expansion Liquidity and Capital Structure Indicators | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Credit Facilities (HKD) | 1,185,000,000 (HKD) + 131,412,000 (RMB equivalent) | 1,186,650,000 (HKD) + 135,527,000 (RMB equivalent) | | Current Ratio | 2.1 | 1.9 | | Cash and Cash Equivalents (HKD) | 963,975,000 | 1,038,838,000 | | Cash as % of Total Assets | 21.4% | 22.8% | | Capital Gearing Ratio | 8.7% | 8.8% | | Debt Ratio | 22.5% | 23.1% | - The Group possesses sufficient funds to meet future business operations, expansion, and general development capital requirements[31] Bank Loans and Asset Pledges As of June 30, 2024, the Group's total bank loans amounted to HKD 331,412,000, comprising unsecured floating-rate loans from Hong Kong banks and secured floating-rate loans from PRC banks, collateralized by land use rights, investment properties, and property, plant, and equipment Bank Loan Composition | Bank Loans | June 30, 2024 (HKD Thousands) | December 31, 2023 (HKD Thousands) | | :--- | :--- | :--- | | Hong Kong Banks (HKD) | 200,000,000 | 200,000,000 | | PRC Banks (RMB equivalent in HKD) | 131,412,000 | 135,527,000 | - PRC bank loans are secured by the Group's land use rights, investment properties, and property, plant, and equipment[32] - Hong Kong bank loans are at floating interest rates and are unsecured[32] Currency Structure The Group's cash and cash equivalents are primarily denominated in HKD, RMB, and USD, held in reputable banks, resulting in minimal short-term foreign exchange risk - The Group's cash and cash equivalents are primarily denominated in HKD, RMB, and USD, with minimal short-term foreign exchange risk[33][39] Capital Commitments As of June 30, 2024, the Group's outstanding capital commitments amounted to HKD 9,188,000, with sufficient financial resources to meet these obligations Capital Commitments | Item | June 30, 2024 (HKD Thousands) | December 31, 2023 (HKD Thousands) | | :--- | :--- | :--- | | Outstanding Capital Commitments | 9,188 | 15,227 | - The Group has sufficient financial resources to cover capital commitment expenditures[34] Significant Acquisitions and Disposals of Subsidiaries, Joint Ventures and Associates For the six months ended June 30, 2024, the Group did not undertake any other significant acquisitions or disposals beyond those disclosed in the interim report - The Group did not undertake any other significant acquisitions or disposals of subsidiaries, joint ventures, or associates during the period[35] Material Investments For the six months ended June 30, 2024, the Group held no other material investments beyond those disclosed in the interim report - The Group held no other material investments during the period[36] Contingent Liabilities As of June 30, 2024, the Group had no material contingent liabilities - The Group had no material contingent liabilities at the end of the period[37] Staff and Remuneration As of June 30, 2024, the Group employed 2,156 staff with employee costs of HKD 282,487,000, with remuneration and benefits determined by job responsibilities and market conditions, alongside various benefits and training Staff and Remuneration Data | Indicator | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Number of Employees | 2,156 | 2,207 | | Employee Costs (HKD Thousands) | 282,487 | 289,182 | - Employee remuneration and benefits include basic salary, discretionary bonuses, medical and insurance schemes, pension schemes, and share option schemes, along with staff training[38] Foreign Exchange Risk The Group's daily operations and investment activities are concentrated in Guangdong-Hong Kong-Macao, with revenue and expenditure primarily in HKD, supplemented by RMB and USD, resulting in minimal short-term foreign exchange risk under Hong Kong's linked exchange rate system - The Group's daily operations and investment activities are concentrated in Guangdong-Hong Kong-Macao, with revenue and expenditure primarily in HKD, supplemented by RMB and USD[39] - Under the stable Hong Kong Linked Exchange Rate System, the Group does not anticipate significant foreign exchange risk in the short term[39] Purchase, Redemption or Sale of the Company's Listed Securities During the period, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities - Neither the Company nor any of its subsidiaries purchased or sold any of the Company's listed securities, nor redeemed any shares during the period[40] Directors' Securities Transactions and Interests Held The Company has adopted a code of conduct for directors' securities transactions no less stringent than the Listing Rules' Model Code, which all directors complied with during the period; as of June 30, 2024, the Company was unaware of any discloseable interests or short positions in shares, underlying shares, or debentures held by directors and chief executives - The Company has adopted the Model Code as the standard for directors' securities transactions, and all directors complied with it during the period[41] - As of June 30, 2024, the Company was unaware of any interests or short positions in shares, underlying shares, or debentures held by directors and chief executives that require disclosure under the Securities and Futures Ordinance[42] Share-linked Agreements The Company has a share option scheme valid until December 7, 2025, with a total of 108,000,000 shares available for issuance; all previously granted share options have lapsed due to unmet performance targets, employee resignations, or retirements, with no new options granted or other share-linked agreements entered into during the period - The share option scheme is valid until December 7, 2025, with a total of 108,000,000 shares available for issuance, representing 9.6% of the Company's issued shares[45] - All previously granted share options have lapsed due to unmet performance targets, employee resignations, or retirements[45] - The Company did not grant any share options under the scheme, nor entered into any other share-linked agreements during the period[45] Major Shareholders' Interests or Short Positions in Company Shares As of June 30, 2024, Chu Kong Shipping Enterprises (Group) Company Limited and its wholly-owned Guangdong Provincial Port & Shipping Group Co., Ltd. were the Company's major shareholders, beneficially owning and deemed to own 71.0% of the shares in long positions, respectively Major Shareholder Holdings (June 30, 2024) | Shareholder Name | Capacity/Nature of Interest | Number of Shares (L) | Percentage of Holding | | :--- | :--- | :--- | :--- | | Chu Kong Shipping Enterprises (Group) Company Limited | Beneficial Owner | 796,035,520 | 71.0% | | Guangdong Provincial Port & Shipping Group Co., Ltd. | Interest of Controlled Corporation | 796,035,520 | 71.0% | - Guangdong Provincial Port & Shipping Group wholly owns Chu Kong Shipping Enterprises (Group), and is therefore deemed to have an interest in all shares held by it[48] Interim Dividend The Board declared an interim dividend of HKD 0.02 per ordinary share for 2024, totaling approximately HKD 22,423,000, payable in cash, with the record date set for September 20, 2024 Interim Dividend Declaration | Item | 2024 | 2023 | | :--- | :--- | :--- | | Interim Dividend (per ordinary share) | 2 HK Cents | Zero HK Cents | | Total (HKD) | 22,423,000 | Zero | - The interim dividend is expected to be paid in cash, with the record date on September 20, 2024[49] Closure of Register of Members To ensure eligibility for the interim dividend, the Company will suspend share transfer registration from September 17 to September 20, 2024, requiring shareholders to complete transfers before this period - Share transfer registration will be suspended from September 17 to September 20, 2024[50] - Shareholders must complete share transfers by 4:30 p.m. on September 16, 2024, to be eligible for the interim dividend[50] Audit Committee Review The Company's Audit Committee and independent auditor KPMG have reviewed the Group's unaudited condensed consolidated interim financial information for the six months ended June 30, 2024 - The Audit Committee and independent auditor KPMG have reviewed the Group's unaudited condensed consolidated interim financial information for the first half of 2024[51] - The interim financial report was prepared in accordance with HKAS 34 and reviewed by the independent auditor in accordance with HKSRE 2410[51] Corporate Governance The Company has adopted and complied with the Corporate Governance Code throughout the period, with the re-appointment of independent non-executive directors Mr. Chan Ki Cheung and Ms. Yau Lai Man, whose terms exceeded nine years, approved by shareholders via independent resolutions to ensure their independence - The Company has consistently complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules during the period[52] - Independent non-executive directors Mr. Chan Ki Cheung and Ms. Yau Lai Man, whose terms exceeded nine years, had their re-appointments approved by shareholders via independent resolutions, with the Board confident in their continued independence[52] Directors Mr. Zou Bingxing resigned as an independent non-executive director and from related committee positions due to retirement, effective April 1, 2024; as of this interim report date, the executive directors are Liu Guanghui, Zhou Jun, Liu Wuwei; non-executive director is Zhong Yan; and independent non-executive directors are Chan Ki Cheung, Yau Lai Man, and Chan Chung Ni - Mr. Zou Bingxing resigned as an independent non-executive director and member of related committees due to retirement, effective April 1, 2024[53] - The current executive directors are Mr. Liu Guanghui, Mr. Zhou Jun, and Mr. Liu Wuwei; the non-executive director is Ms. Zhong Yan; and the independent non-executive directors are Mr. Chan Ki Cheung, Ms. Yau Lai Man, and Mr. Chan Chung Ni[53] Review Report to the Board of Directors Introduction KPMG has reviewed Chu Kong Shipping Enterprises (Group) Company Limited's interim financial report for the six months ended June 30, 2024, prepared in accordance with the HKEX Listing Rules and HKAS 34, with the Board responsible for its preparation and presentation - KPMG has reviewed the Company's interim financial report for the six months ended June 30, 2024[54] - The interim financial report was prepared in accordance with the Listing Rules of The Stock Exchange of Hong Kong Limited and HKAS 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants[54] - The directors are responsible for the preparation and presentation of the interim financial report in accordance with HKAS 34[54] Scope of Review The review was conducted in accordance with HKSRE 2410, primarily involving inquiries and analytical procedures, with a scope narrower than an audit, thus no audit opinion is expressed - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[55] - The scope of a review is substantially less than that of an audit conducted in accordance with Hong Kong Standards on Auditing, and consequently, no audit opinion is expressed[55] Conclusion Based on the review, the auditor found no matters suggesting that the interim financial report as of June 30, 2024, was not prepared in all material respects in accordance with HKAS 34 - The auditor has not found anything that causes them to believe that the interim financial report as of June 30, 2024, is not prepared in all material respects in accordance with HKAS 34[56] Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets were HKD 4,510,691 thousand, total equity HKD 3,495,375 thousand, and total liabilities HKD 1,015,316 thousand, with net current assets of HKD 793,983 thousand, indicating a robust financial position Consolidated Statement of Financial Position Summary (HKD Thousands) | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Assets | | | | Non-current assets | 2,961,964 | 3,029,184 | | Current assets | 1,548,727 | 1,517,162 | | Total assets | 4,510,691 | 4,546,346 | | Equity | | | | Share capital | 1,415,118 | 1,415,118 | | Reserves | 1,766,982 | 1,771,788 | | Non-controlling interests | 313,275 | 311,136 | | Total equity | 3,495,375 | 3,498,042 | | Liabilities | | | | Non-current liabilities | 260,572 | 270,081 | | Current liabilities | 754,744 | 778,223 | | Total liabilities | 1,015,316 | 1,048,304 | | Net current assets | 793,983 | 738,939 | Consolidated Statement of Profit or Loss For the six months ended June 30, 2024, the Group's turnover was HKD 1,388,711 thousand, a 12.6% year-on-year increase; profit for the period was HKD 71,506 thousand, up 14.8%, with profit attributable to equity holders of the Company at HKD 67,115 thousand, and basic earnings per share at HKD 0.0599 Consolidated Statement of Profit or Loss Summary (HKD Thousands) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Turnover | 1,388,711 | 1,233,130 | | Gross profit | 108,153 | 122,507 | | Profit from operations | 64,723 | 65,431 | | Profit before income tax | 85,107 | 76,750 | | Income tax expense | (13,601) | (14,455) | | Profit for the period | 71,506 | 62,295 | | Profit attributable to equity holders of the Company | 67,115 | 58,387 | | Profit attributable to non-controlling interests | 4,391 | 3,908 | | Basic and diluted earnings per share (HK Cents) | 5.99 | 5.21 | Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, the Group's profit for the period was HKD 71,506 thousand; affected by currency exchange differences, other comprehensive income was a negative HKD 18,115 thousand, resulting in a total comprehensive income for the period of HKD 53,391 thousand, a significant improvement from the negative HKD 6,043 thousand in the prior year Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary (HKD Thousands) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Profit for the period | 71,506 | 62,295 | | Exchange differences on translating foreign operations (subsidiaries) | (15,845) | (56,555) | | Exchange differences on translating foreign operations (joint ventures and associates) | (2,270) | (11,783) | | Other comprehensive income for the period | (18,115) | (68,338) | | Total comprehensive income for the period | 53,391 | (6,043) | | Total comprehensive income attributable to equity holders of the Company | 51,252 | (5,422) | | Total comprehensive income attributable to non-controlling interests | 2,139 | (621) | Consolidated Statement of Changes in Equity As of June 30, 2024, total equity attributable to equity holders of the Company was HKD 3,182,100 thousand, a slight decrease from HKD 3,186,906 thousand on January 1, 2024; profit for the period was HKD 67,115 thousand, but total equity changed due to currency exchange differences and dividend payments Consolidated Statement of Changes in Equity Summary (HKD Thousands) | Item | January 1, 2024 | Profit for the period | Exchange differences on translating foreign operations (subsidiaries) | Exchange differences on translating foreign operations (joint ventures and associates) | Transfer to reserves | Total comprehensive income for the period | 2023 Final Dividend | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Total attributable to owners of the Company | 3,186,906 | 67,115 | (13,754) | (2,109) | – | 51,252 | (56,058) | 3,182,100 | | Non-controlling interests | 311,136 | 4,391 | (2,091) | (161) | – | 2,139 | – | 313,275 | | Total equity | 3,498,042 | 71,506 | (15,845) | (2,270) | – | 53,391 | (56,058) | 3,495,375 | Consolidated Statement of Cash Flows For the six months ended June 30, 2024, the Group generated HKD 9,561 thousand net cash from operating activities and HKD 22,446 thousand net cash from investing activities, while using HKD 85,363 thousand net cash in financing activities; cash and cash equivalents at period-end were HKD 930,649 thousand, a decrease of HKD 53,356 thousand from the beginning of the period Consolidated Statement of Cash Flows Summary (HKD Thousands) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net cash generated from operating activities | 9,561 | 80,056 | | Net cash generated from/(used in) investing activities | 22,446 | (40,520) | | Net cash used in financing activities | (85,363) | (60,599) | | Net decrease in cash and cash equivalents | (53,356) | (21,063) | | Cash and cash equivalents at beginning of period | 985,736 | 1,032,375 | | Effect of foreign exchange rate changes | (1,731) | (21,338) | | Cash and cash equivalents at end of period | 930,649 | 989,974 | Notes to the Unaudited Interim Financial Report 1 General Information Chu Kong Shipping Enterprises (Group) Company Limited is a Hong Kong-listed company primarily engaged in high-speed waterway passenger transport management in Guangdong-Hong Kong-Macao, inland river terminal operations in mainland China and Hong Kong, cargo transport, warehousing, fuel supply, property and equipment maintenance, and ferry services - The Company is a limited company incorporated in Hong Kong and listed on the Main Board of The Stock Exchange of Hong Kong Limited[68] - The Group's principal activities include high-speed waterway passenger transport management in Guangdong-Hong Kong-Macao, inland river terminal operation and management in mainland China and Hong Kong, cargo transport, warehousing, fuel supply, property and equipment maintenance, and ferry and vessel leasing services[68] 2 Basis of Preparation This interim financial report was prepared in accordance with the HKEX Listing Rules and HKAS 34, reviewed by KPMG, and adopts the same accounting policies as the 2023 annual financial statements, comprising condensed consolidated financial statements and selected explanatory notes - This interim financial report has been prepared in accordance with the applicable disclosure provisions of the Listing Rules of The Stock Exchange of Hong Kong Limited and HKAS 34 Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants[69] - This interim financial report has been prepared in accordance with the same accounting policies adopted in the 2023 annual financial statements and has been reviewed by KPMG[69][70] 3 Changes in Accounting Policies Several revised HKFRSs, effective for the current accounting period, including liability classification, non-current liabilities with covenants, lease liabilities in sale and leaseback, and supplier finance arrangement disclosures, had no material impact on the Group's current or prior period's results and financial position - Several revised Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants became effective for the Group's current accounting period for the first time[72] - These developments had no material impact on the preparation or presentation of the Group's results and financial position for the current or prior periods[73] 4 Financial Risk Management The Group's operating and financing activities are exposed to market risks (currency and interest rate), credit risk, and liquidity risk; risk management policies have remained unchanged since year-end, and the carrying amounts of financial assets and liabilities are reasonable approximations of their fair values - The Group's operating and financing activities are exposed to market risks (including currency risk and interest rate risk), credit risk, and liquidity risk[74] - There have been no changes in risk management policies since the end of last year[74] - The carrying amounts of financial assets and financial liabilities, net of impairment allowances where applicable, are reasonable approximations of their fair values[75] 5 Critical Accounting Estimates and Judgements Preparing the condensed consolidated interim financial information requires management to make judgments, estimates, and assumptions affecting the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses, with key sources consistent with the 2023 annual financial statements - The preparation of the condensed consolidated interim financial information requires management to make judgments, estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses[76] - The key sources of critical accounting estimates and judgments are the same as those applied in the annual financial statements for the year ended December 31, 2023[76] 6 Segment Information The Group categorizes its businesses into five segments—cargo transport, cargo handling and warehousing, passenger transport, fuel supply, and corporate and other businesses—based on internal reports reviewed by the chief operating decision-maker; segment performance is assessed by profit before income tax, with inter-segment sales conducted on similar terms - The Group's businesses are classified into five main segments: cargo transport, cargo handling and warehousing, passenger transport, fuel supply, and corporate and other businesses[77] - The Company's executive directors assess the operating segment performance based on profit before income tax expense for each segment[77] Segment Turnover and Profit Before Income Tax H1 2024 (HKD Thousands) | Segment | Turnover (from external customers) | Segment profit before income tax | | :--- | :--- | :--- | | Cargo transport | 830,052 | 12,494 | | Cargo handling and warehousing | 177,994 | 27,076 | | Passenger transport | 171,319 | 22,298 | | Fuel supply | 201,154 | 4,738 | | Corporate and other businesses | 8,192 | 18,501 | | Total | 1,388,711 | 85,107 | 7 Property, Plant and Equipment and Land Use Rights For the six months ended June 30, 2024, the Group recognized an increase in right-of-use assets of HKD 4,433 thousand, incurred HKD 17,604 thousand in property, plant, and equipment acquisition costs, and recorded a gain of HKD 1,570 thousand from the disposal of property, plant, and equipment Changes in Property, Plant and Equipment and Land Use Rights (HKD Thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Additions to right-of-use assets | 4,433 | 5,870 | | Cost of additions to property, plant and equipment | 17,604 | 22,428 | | Gain on disposal of property, plant and equipment | 1,570 | 270 | 8 Trade and Other Receivables As of June 30, 2024, the Group's total trade and other receivables increased to HKD 564,097 thousand from HKD 457,099 thousand at the end of 2023; net trade receivables were HKD 364,030 thousand, primarily due within three months, and amounts due from related parties were unsecured and interest-free Total Trade and Other Receivables (HKD Thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Trade receivables, net | 364,030 | 291,841 | | Other receivables | 200,067 | 165,258 | | Total | 564,097 | 457,099 | Trade Receivables Ageing Analysis (HKD Thousands) | Ageing | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within 3 months | 301,374 | 244,638 | | 4 to 6 months | 28,722 | 25,018 | | 7 to 12 months | 14,203 | 2,104 | | Over 12 months | 28,495 | 28,515 | | Less: Loss allowance | (8,764) | (8,434) | - Trade receivables from related parties are unsecured, interest-free, and on similar collection terms as those from third parties[87] 9 Share Capital As of June 30, 2024, and December 31, 2023, the Company's issued and fully paid ordinary shares remained unchanged at 1,121,167 thousand shares, with share capital at HKD 1,415,118 thousand Issued and Fully Paid Ordinary Shares | Item | Number of Shares (Thousand Shares) | Share Capital (HKD Thousands) | | :--- | :--- | :--- | | As at June 30, 2024 and December 31, 2023 | 1,121,167 | 1,415,118 | 10 Borrowings As of June 30, 2024, the Group's total borrowings amounted to HKD 331,412 thousand, comprising HKD 82,108 thousand in fixed-rate borrowings and HKD 249,304 thousand in floating-rate borrowings; secured bank loans are collateralized by land use rights, investment properties, and property, plant, and equipment Borrowings Composition (HKD Thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Fixed-rate borrowings: bank loans, secured | 82,108 | 82,697 | | Floating-rate borrowings: bank loans, unsecured | 200,000 | 200,000 | | Floating-rate borrowings: bank loans, secured | 49,304 | 52,830 | | Total | 331,412 | 335,527 | | Less: Current portion | (218,616) | (217,402) | | Non-current portion | 112,796 | 118,125 | - Secured bank loans are collateralized by the Group's land use rights, investment properties, and property, plant, and equipment[91] - Bank loan interest rates include HIBOR plus 0.25% to 0.4% and LPR minus 0.5%[92] 11 Trade Payables, Accruals and Other Payables As of June 30, 2024, the Group's total trade payables, accruals, and other payables decreased to HKD 457,793 thousand from HKD 486,937 thousand at the end of 2023; trade payables are primarily due within three months, and amounts due to related parties are unsecured and interest-free Total Trade Payables, Accruals and Other Payables (HKD Thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Trade payables | 299,785 | 290,961 | | Accruals and other payables | 150,247 | 190,252 | | Contract liabilities | 7,761 | 5,724 | | Total | 457,793 | 486,937 | Trade Payables Ageing Analysis (HKD Thousands) | Ageing | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within 3 months | 255,213 | 258,911 | | 4 to 6 months | 31,618 | 20,979 | | 7 to 12 months | 10,002 | 8,361 | | Over 12 months | 2,952 | 2,710 | - Trade payables, accruals, and other payables to related parties are unsecured and interest-free[94] 12 Amounts Due to Non-controlling Interests As of June 30, 2024, amounts due to non-controlling interests totaled HKD 40,360 thousand, representing unsecured, interest-free, HKD-denominated loans repayable on demand Amounts Due to Non-controlling Interests (HKD Thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Unsecured loans - interest-free | 40,360 | 40,360 | - This amount is denominated in HKD, unsecured, and repayable on demand[95] 13 Other Income For the six months ended June 30, 2024, the Group's total other income was HKD 94,038 thousand, primarily from government grants and subsidies, property rental income, and management fee income from Chu Kong Shipping Enterprises (Group) Other Income Composition (HKD Thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Management fee income from Chu Kong Shipping Enterprises (Group) Company Limited | 12,500 | 20,000 | | Property rental income | 11,354 | 9,855 | | Government grants and subsidies | 63,464 | 56,352 | | Others | 6,720 | 6,705 | | Total | 94,038 | 92,912 | 13 Other Gains/(Losses) – Net For the six months ended June 30, 2024, the Group recorded net other gains of HKD 4,304 thousand, primarily from gains on disposal of interests in joint ventures and property, plant, and equipment, but impacted by impairment losses on investments in associates Other Gains/(Losses) – Net (HKD Thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Exchange gains/(losses), net | 683 | (3,297) | | Gain on disposal of interests in a joint venture | 6,042 | 2,227 | | Gain on disposal of property, plant and equipment | 1,570 | 270 | | Loss allowance for trade receivables | (991) | (91) | | Impairment loss on investments in associates | (3,000) | – | | Total | 4,304 | (891) | 14 Profit Before Income Tax For the six months ended June 30, 2024, the Group's profit before income tax was stated after deducting expenses such as amortization of land use rights, amortization of intangible assets, depreciation of property, plant and equipment, depreciation of investment properties, depreciation of right-of-use assets, operating lease rental expenses, and staff costs Deductions from Profit Before Income Tax (HKD Thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Amortisation of land use rights | 6,769 | 6,853 | | Amortisation of intangible assets | 841 | 910 | | Depreciation of owned property, plant and equipment | 52,204 | 56,215 | | Depreciation of investment properties | 585 | 579 | | Depreciation of right-of-use assets | 12,949 | 14,971 | | Operating lease rental expenses – vessels and barges | 75,339 | 72,221 | | Operating lease rental expenses – buildings | 4,923 | 4,186 | | Staff costs (including directors' emoluments) | 282,487 | 289,182 | 15 Share of Profits Less Losses of Joint Ventures and Associates For the six months ended June 30, 2024, the Group's share of profits less losses of joint ventures and associates before income tax was HKD 26,267 thousand, with a share of income tax of HKD 4,943 thousand, resulting in a final share of profits less losses of HKD 21,324 thousand, an increase from the prior year Share of Profits Less Losses of Joint Ventures and Associates (HKD Thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Share of profits less losses before income tax – joint ventures | 10,850 | 6,368 | | Share of profits less losses before income tax – associates | 15,417 | 10,215 | | Total share of profits less losses before income tax | 26,267 | 16,583 | | Share of income tax – joint ventures | (2,854) | (1,357) | | Share of income tax – associates | (2,089) | (472) | | Total share of income tax | (4,943) | (1,829) | | Total share of profits less losses | 21,324 | 14,754 | 16 Income Tax Expense For the six months ended June 30, 2024, the Group's total income tax expense was HKD 13,601 thousand, primarily comprising Hong Kong profits tax, PRC enterprise income tax, Macau income tax, and deferred income tax expense Income Tax Expense Composition (HKD Thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Current income tax – Hong Kong profits tax | 3,744 | 5,092 | | Current income tax – PRC enterprise income tax | 8,538 | 8,407 | | Current income tax – Macau income tax | 757 | 380 | | Deferred income tax expense | 562 | 576 | | Total | 13,601 | 14,455 | - Hong Kong profits tax rate is 16.5%, PRC enterprise income tax rate is 25%, and Macau income tax rate is 12%[100] 17 Dividends The Board declared an interim dividend of HKD 0.02 per ordinary share for 2024, totaling HKD 22,423 thousand; additionally, a 2023 final dividend of HKD 0.05 per ordinary share, totaling HKD 56,058 thousand, was paid Dividends Declared and Paid (HKD Thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Interim dividend declared and payable after the interim period (HKD 0.02 per ordinary share) | 22,423 | – | | 2023 final dividend paid/payable (HKD 0.05 per ordinary share) | 56,058 | 44,847 | | 2023 special dividend payable (HKD 0.00 per ordinary share) | – | 22,423 | - The 2024 interim dividend was not recognized as a liability at the end of the reporting period[101] 18 Earnings Per Share For the six months ended June 30, 2024, profit attributable to equity holders of the Company was HKD 67,115 thousand, with basic earnings per share of HKD 0.0599; basic earnings per share equaled diluted earnings per share as no dilutive potential ordinary shares were issued Earnings Per Share Calculation | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Profit attributable to equity holders of the Company (HKD Thousands) | 67,115 | 58,387 | | Weighted average number of ordinary shares in issue (Thousand Shares) | 1,121,167 | 1,121,167 | | Basic earnings per share (HK Cents) | 5.99 | 5.21 | - Basic earnings per share is equal to diluted earnings per share as there were no dilutive potential ordinary shares in issue[104] 19 Commitments As of June 30, 2024, the Group's unfulfilled capital commitments not provided for in the interim financial report amounted to HKD 9,188 thousand, primarily for contracted but unprovided property, plant, and equipment Capital Commitments (HKD Thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Property, plant and equipment: contracted but not provided for | 9,188 | 15,227 | 20 Related Party Transactions The Group engages in various related party transactions with its direct holding company, Chu Kong Shipping Enterprises (Group), and its ultimate holding company, Guangdong Provincial Port & Shipping Group (a state-controlled enterprise of the PRC government), and their subsidiaries, including management service fees, shipping agency, passenger agency, fuel supply, leasing, and maintenance services, with transaction prices and terms based on market rates or mutual agreement - The Company's immediate holding company is Chu Kong Shipping Enterprises (Group) Company Limited, and its ultimate holding company is Guangdong Provincial Port & Shipping Group Co., Ltd., a state-controlled enterprise of the PRC government[106] - Significant transactions with entities controlled, jointly controlled, or significantly influenced by the PRC government primarily include bank deposits and interest income, as well as certain purchases and sales of goods and services[106] - Related party transactions include shipping agency, inland cargo transport, passenger agency, ferry terminal operation services, baggage handling services, management service fees, staff management service fees, vessel rental income, fuel supply income, bunkering service fees, consulting and software services, agency fee income, repair and maintenance services, cargo warehousing income, and ferry rental income[107][108][109] - Management service fees are calculated annually at HKD 20,000,000 or 3.25% of total assets (whichever is higher), capped at HKD 25,000,000, for the contract period from July 1, 2023, to June 30, 2026[113] Key Management Personnel Remuneration (HKD Thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Salaries and allowances | 3,518 | 3,377 | | Directors' emoluments | 448 | 410 | | Contributions to retirement benefit schemes | 51 | 45 | | Housing allowances | 325 | 303 | | Total | 4,342 | 4,135 | Company Information This chapter outlines the basic company information for Chu Kong Shipping Enterprises (Group) Company Limited, including Board members (executive, non-executive, independent non-executive directors), company secretary, committee members, auditor, principal bankers, share registrar, registered office, and head office - Executive Directors include Mr. Liu Guanghui (Chairman of the Board), Mr. Zhou Jun (General Manager), and Mr. Liu Wuwei[116] - Independent Non-executive Directors are Mr. Chan Ki Cheung, Ms. Yau Lai Man, and Mr. Chan Chung Ni[116] - The Auditor is KPMG[116] - Principal Bankers include Bank of China (Hong Kong), Nanyang Commercial Bank, The Bank of East Asia, The Hongkong and Shanghai Banking Corporation, Bank of Communications, China Minsheng Banking Corp., Ltd., and Industrial and Commercial Bank of China[116] - The Share Registrar is Tricor Tengis Limited, and both the Registered Office and Head Office are located at Chu Kong Shipping Tower, 143 Connaught Road Central, Hong Kong[116]