Corporate Information This section discloses key corporate information including management, board members, registered offices, and auditors - The report discloses the company's core management, board of directors, committee members, and key corporate information such as the registered office, principal place of business, auditor, and share registrar46 - The company changed its name from "Wancheng Metal Packaging Company Limited" to "Hong Kong Entertainment International Holdings Limited" on June 4, 202414 - The company's auditor is ZHONGHUI ANDA CPA Limited, appointed on January 29, 20246 Financial Highlights This section presents a summary of key financial results and balance sheet positions for the reporting period Financial Highlights for the Six Months Ended June 30, 2024 | Indicator | H1 2024 | H1 2023 | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue | Approx. RMB 38.1 million | Approx. RMB 13.9 million | +174.1% | | Loss attributable to owners of the Company | Approx. RMB 11.1 million | Approx. RMB 5.2 million | Loss widened | | Interim dividend | Not recommended | Nil | - | Summary of Financial Position | Indicator | June 30, 2024 | December 31, 2023 | Change | | :--- | :--- | :--- | :--- | | Cash and bank balances | Approx. RMB 10.6 million | RMB 26.3 million | Decreased | | Gearing ratio | Approx. 29.3% | Approx. 24.6% | Increased | Financial Statements This section provides the unaudited condensed consolidated financial statements, including income, financial position, equity changes, and cash flows Consolidated Statement of Profit or Loss and Other Comprehensive Income Revenue grew significantly by 174.1%, but a decline in gross profit and wider other losses led to an increased loss attributable to company owners Key Items of Consolidated Statement of Profit or Loss (For the six months ended June 30) | Indicator (RMB'000) | 2024 (Unaudited) | 2023 (Unaudited) | Change (YoY) | | :--- | :--- | :--- | :--- | | Revenue | 38,080 | 13,923 | +174.1% | | Cost of sales | (37,284) | (12,851) | +190.1% | | Gross profit | 796 | 1,072 | -25.7% | | Other losses, net | (5,516) | (1,445) | +281.7% | | Loss before income tax | (11,133) | (5,153) | +116.0% | | Loss for the period attributable to owners of the Company | (11,133) | (5,153) | +116.0% | | Loss per share (RMB cents) | (6.96) | (3.22) | Loss widened | Consolidated Statement of Financial Position As of June 30, 2024, the company was in a net liability position of RMB 98.0 million, an increase from RMB 87.3 million at year-end Key Items of Consolidated Statement of Financial Position (RMB'000) | Indicator | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Non-current assets | 21,081 | 22,828 | | Current assets | 74,371 | 90,823 | | Current liabilities | 100,685 | 108,236 | | Net current liabilities | (26,314) | (17,413) | | Non-current liabilities | 92,750 | 92,750 | | Net liabilities | (97,983) | (87,335) | Consolidated Statement of Changes in Equity Total equity decreased from negative RMB 87.3 million to negative RMB 98.0 million, primarily due to the loss incurred during the period - The change in total equity was mainly driven by the loss for the period of RMB 11.1 million, partially offset by an increase in exchange reserve and the lapse of share options12 Consolidated Statement of Cash Flows The company experienced a net decrease in cash of RMB 12.6 million, driven by a significant increase in cash used in operating activities Summary of Statement of Cash Flows (For the six months ended June 30, RMB'000) | Activity Type | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | (14,409) | (4,346) | | Net cash from investing activities | 3,455 | – | | Net cash used in financing activities | (1,659) | (766) | | Net decrease in cash and cash equivalents | (12,613) | (5,112) | | Cash and cash equivalents at end of period | 7,999 | 25,870 | Notes to the Financial Information This section provides detailed explanations for the key items and accounting policies presented in the financial statements Note 1: General Information and Basis of Preparation A material uncertainty exists regarding the Group's ability to continue as a going concern due to its net loss and net liability position - The company's principal activities are the manufacturing and sale of tinplate packaging products in the PRC and the repackaging and sale of cosmetic products in Hong Kong14 - A material uncertainty related to going concern exists: as of June 30, 2024, the Group incurred a net loss of approximately RMB 11.1 million, had net current liabilities of approximately RMB 26.3 million, and net liabilities of approximately RMB 98.0 million16 - Management believes the Group will have sufficient working capital through measures like seeking other financial resources and tightening cost controls, thus the financial statements are prepared on a going concern basis16 Note 2: Revenue, Other Losses, and Segment Information All revenue was generated from the tinplate business in China, with a high concentration from a single customer contributing 37% of total revenue - During the period, all revenue of RMB 38.1 million was generated from the sale of tinplate packaging products and tinplates in the PRC, with no revenue from the cosmetics business1819 - Net other losses amounted to RMB 5.5 million, primarily comprising a loss of RMB 5.6 million on financial assets at fair value through profit or loss, and a gain of RMB 55,000 on the disposal of a subsidiary18 Revenue Contribution from Major Customers (RMB'000) | Customer | Revenue in H1 2024 | % of Total Revenue | | :--- | :--- | :--- | | Customer D | 14,094 | 37.0% | | Customer B | 5,636 | 14.8% | Note 12: Borrowings Total borrowings remained stable at RMB 120.75 million, with a significant unsecured, interest-free loan from a director forming the bulk of non-current liabilities Composition of Borrowings (RMB'000) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current Liabilities (Secured bank borrowings) | 28,000 | 28,000 | | Non-current Liabilities (Unsecured borrowings) | 92,750 | 92,750 | | Total | 120,750 | 120,750 | - The unsecured borrowing of RMB 92.75 million is due to a director of the Company's PRC subsidiary, is interest-free, and repayable on June 30, 202633 Note 15: Disposal of a Subsidiary The company disposed of a 51% equity interest in its cosmetics repackaging subsidiary for HK$180,000, resulting in a gain of RMB 55,000 - On May 22, 2024, the company sold a 51% equity interest in Wancheng Group Limited for HK$180,000 to leverage the purchaser's channels to expand the cosmetics business50 - Following the disposal, the company retained a 49% interest in Wancheng Group, which is classified as an interest in an associate50 - A gain on disposal of RMB 55,000 was recognized from this transaction51 Management Discussion and Analysis This section provides management's perspective on the company's business performance, financial condition, and future outlook Business Review and Outlook Revenue grew substantially due to economic recovery in China, but the net loss widened; future plans involve upgrading the tinplate business and expanding into food repackaging - Revenue growth was primarily driven by increased sales demand for tinplate packaging products as China's economy gradually recovered53 - The widened loss was mainly attributable to increases in selling expenses, administrative expenses, and other net losses53 - Future Strategy: - Tinplate Business: Upgrade production lines for steel pails and tin cans to enhance efficiency and competitiveness - New Business: Expand the repackaging and retail business by shifting focus from cosmetics to higher-margin food products like health foods and tea5354 Financial Review This review details the drivers behind financial changes, including revenue growth from economic recovery and a sharp decline in gross margin due to lower selling prices Revenue Revenue increased by 174.1% to approximately RMB 38.1 million, driven by higher product demand from China's economic recovery - Revenue grew by 174.1% year-on-year, primarily due to increased sales demand for the Group's products amid China's economic recovery56 Gross Profit and Gross Profit Margin Gross profit margin declined sharply from 7.7% to 2.1% as a result of a decrease in the average selling price of the Group's products Gross Profit and Margin Changes | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Gross Profit | Approx. RMB 0.8 million | Approx. RMB 1.1 million | | Gross Profit Margin | 2.1% | 7.7% | Other Losses, Net Net other losses increased from RMB 1.4 million to RMB 5.6 million, mainly due to fair value losses on financial assets - Net other losses increased from approximately RMB 1.4 million to approximately RMB 5.6 million, primarily consisting of fair value losses on financial assets59 Finance Costs Finance costs rose by 112.5% to RMB 1.7 million, largely due to increased use of bills payable associated with higher procurement volumes - Finance costs increased by 112.5% from approximately RMB 0.8 million to approximately RMB 1.7 million, mainly due to the increased use of bills payable62 Loss for the Period The loss for the period widened from RMB 5.2 million to RMB 11.1 million, driven by higher finance costs, other losses, and lower gross profit - The loss increased from approximately RMB 5.2 million to approximately RMB 11.1 million, mainly due to (i) an increase in finance costs; (ii) an increase in other losses, net; and (iii) a decrease in gross profit63 Liquidity and Financial Resources The Group's liquidity tightened as cash balances decreased, while the gearing ratio rose from 25% to 29%, indicating higher leverage Changes in Liquidity Indicators | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total cash and bank balances | Approx. RMB 8.0 million | RMB 20.3 million | | Gearing ratio | Approx. 29% | Approx. 25% | Other Information Disclosure This section covers additional corporate governance and compliance matters, including the share option scheme and the audit committee's review Share Option Scheme As of June 30, 2024, 10,775,352 share options remained outstanding, with 2,064,000 options having lapsed during the period Share Option Movements (For the six months ended June 30, 2024) | Item | Number of Share Options | | :--- | :--- | | Outstanding at beginning of period | 12,839,352 | | Lapsed during the period | (2,064,000) | | Outstanding at end of period | 10,775,352 | Audit Committee The Audit Committee, comprising two independent non-executive directors, has reviewed the unaudited interim financial information for the period - The Audit Committee consists of Mr. Wong Shui Chi (Chairman) and Mr. Wu Chi King, both of whom are independent non-executive directors86 - The Audit Committee has reviewed with management the condensed consolidated interim financial information of the Group for the six months ended June 30, 202486
港娱国际(08291) - 2024 - 中期财报