朸浚国际(01355) - 2024 - 中期财报

Corporate Information Directors and Committees Post-reporting period, the company's board and committee members underwent multiple changes, including resignations and new appointments for executive directors, independent non-executive directors, and company secretary, all effective August 20, 2024 - The company underwent significant personnel changes on August 20, 2024, involving resignations and appointments of executive directors, CEO, independent non-executive directors, company secretary, and various committee members[2][3] Management Discussion and Analysis Business and Financial Overview In H1 2024, despite a 37.4% revenue decline due to a sluggish Chinese hotel market and weak consumption, the company achieved a net profit of HK$3.211 million by effectively controlling operating costs and a significant expected credit loss reversal, though core accommodation business metrics like occupancy and RevPAR significantly declined Key Financial Data for H1 2024 | Indicator | H1 2024 (HK$ thousands) | H1 2023 (HK$ thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Revenue | 19,104 | 30,524 | -37.41% | | Profit/(Loss) Attributable to Owners of the Company | 3,211 | (5,348) | Turned Profitable | | Total Operating Costs | 27,385 | 34,744 | -21.18% | - The primary driver for the company's return to profitability was a HK$11.283 million reversal of expected credit losses from recovered receivables, not an improvement in core operations[32][34][110] Key Operating Metrics for Accommodation Business | Indicator | H1 2024 | H1 2023 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Average Occupancy Rate | 51.81% | 74.74% | -22.93 percentage points | | Average Room Rate (ARR, RMB) | 255.1 | 286.4 | -10.9% | | Revenue Per Available Room (RevPAR, RMB) | 132.2 | 214.0 | -38.2% | Business Review The Group primarily engages in accommodation operations, consulting, and property facility management services, facing challenges in H1 2024 due to global economic instability, China's real estate slowdown, and consumption downgrade, prompting strategic adjustments, brand upgrades, and cost controls to stabilize performance amidst a slowing tourism sector and reduced consumer spending - The Group primarily engages in accommodation operations and related services, currently managing five leased accommodation projects[6][8] - Facing a macroeconomic environment of slowing Chinese economy and reduced consumer spending, the company is actively responding by adjusting strategies, developing personalized products, and optimizing costs[7][8] Financial Review Total revenue for the period was HK$19.104 million, a 37.41% year-on-year decrease, primarily due to a weak Chinese hotel market and expiring long-term contracts at the Huizhou branch; despite the revenue decline, profit attributable to owners turned from a HK$5.348 million loss to a HK$3.211 million profit, driven by a 21.18% reduction in operating costs and a HK$11.283 million reversal of financial asset impairment losses - The revenue decline is primarily attributed to the overall sluggish market sentiment in China's hotel industry and the expiration of some long-term customer contracts at the Huizhou branch, leading to lower occupancy rates[32][34] Operating Cost Details (HK$ thousands) | Cost Item | H1 2024 | H1 2023 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Depreciation of Right-of-Use Assets | 8,277 | 10,303 | -19.66% | | Depreciation of Property, Plant and Equipment | 3,954 | 4,521 | -12.54% | | Employee Benefit Expenses | 8,332 | 10,822 | -23.01% | | Utilities | 1,372 | 1,750 | -21.60% | | Other Operating Expenses | 5,450 | 7,348 | -25.83% | | Total | 27,385 | 34,744 | -21.18% | - Finance costs decreased from HK$3.531 million to HK$3.060 million, primarily due to the repayment of certain lease liabilities[40][42] Segment Operations Review Accommodation operations revenue decreased by 38.90% year-on-year to HK$17.978 million; while individual branches implemented flexible marketing and cost control strategies to counter market adversity, overall performance remained impacted by macroeconomic factors, as the Group continues to expand property facility management and accommodation consulting services to optimize its business portfolio and revenue base - Accommodation operations revenue decreased by 38.90% year-on-year to HK$17.978 million, primarily due to lower occupancy rates and the expiration of long-term customer contracts in Huizhou[9] - Each branch (Chengdu, Wuhan, Huizhou, Nanshan, Bao'an) adopted different strategies based on their market conditions, such as Chengdu's flexible adjustments, Nanshan's introduction of innovative products like e-sports rooms, and Bao'an's maintenance of stability through effective cost control[13][17][21][23][26] - The Group is actively expanding property facility management and accommodation consulting services, with plans to extend services to residential properties to diversify revenue streams[27][29][30] Outlook The company is actively evaluating business diversification opportunities, focusing on the healthcare and beauty industries in mainland China, and considering financing for these ventures, with no final agreements reached yet - To leverage its business experience and network in China, the company is actively exploring business diversification opportunities, with a particular focus on the healthcare and beauty industries[31][33] - The company is considering fundraising activities to support potential new business opportunities, but currently has no definitive plans[31][33] Liquidity, Capital, and Risk Management As of June 30, 2024, the Group faced severe liquidity pressure with net current liabilities of HK$66.941 million and net liabilities of HK$80.299 million; operations primarily relied on internal working capital and interest-free loans from the controlling shareholder, who committed to continuous financial support to ensure going concern, with no significant changes in capital structure and no dividends declared during the period - As of June 30, 2024, the Group recorded net current liabilities of HK$66.941 million and net liabilities of HK$80.299 million, indicating significant uncertainty regarding its ability to continue as a going concern[46][49] - The Group's working capital primarily originated from internal generation and HK$28.569 million in unsecured, interest-free, on-demand loans from the controlling shareholder, who has committed to providing continuous financial support[45][49] - The Group's principal assets, liabilities, income, and expenses are denominated in RMB and HKD, with no significant foreign exchange exposure[47][50] - No interim dividends were declared during the period, and the capital structure showed no significant changes compared to the end of 2023[51][52] Report on Review of Condensed Consolidated Financial Statements Auditor's Conclusion and Material Uncertainty HLB Hodgson Impey Cheng Limited issued a review conclusion on the interim financial statements, deeming them prepared in all material respects in accordance with HKAS 34; however, the auditor highlighted a 'material uncertainty related to going concern,' noting the Group's net current liabilities of HK$66.941 million and net liabilities of HK$80.299 million as of June 30, 2024, which may cast significant doubt on its ability to continue as a going concern, though this did not lead to a modified opinion - The auditor found no material aspects of the financial statements to be non-compliant with accounting standards[81][83] - The auditor specifically drew attention to a 'material uncertainty related to going concern'; as of June 30, 2024, the Group's net current liabilities were HK$66.941 million and net liabilities were HK$80.299 million, indicating significant doubt about its ability to continue as a going concern[82][84] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, the Group recorded revenue of HK$19.104 million, a 37.4% year-on-year decrease; however, due to a HK$11.283 million reversal of expected credit losses, operating profit turned to HK$4.287 million, ultimately achieving a profit for the period of HK$0.979 million, with profit attributable to owners of HK$3.211 million, successfully returning to profitability Profit or Loss Statement Summary (HK$ thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 19,104 | 30,524 | | Operating Profit/(Loss) | 4,287 | (3,530) | | Profit/(Loss) Before Tax | 1,227 | (7,061) | | Profit/(Loss) for the Period | 979 | (7,818) | | Profit/(Loss) Attributable to Owners of the Company | 3,211 | (5,348) | | Basic Earnings/(Loss) Per Share (HK cents) | 0.72 | (1.19) | Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets were HK$111.296 million and total liabilities were HK$191.595 million, resulting in a capital deficit (net liabilities) of HK$80.299 million; current liabilities (HK$75.304 million) significantly exceeded current assets (HK$8.363 million), forming net current liabilities of HK$66.941 million, indicating severe short-term solvency pressure Statement of Financial Position Summary (HK$ thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | 111,296 | 127,319 | | Non-current Assets | 102,933 | 118,101 | | Current Assets | 8,363 | 9,218 | | Total Liabilities | 191,595 | 210,060 | | Current Liabilities | 75,304 | 81,407 | | Non-current Liabilities | 116,291 | 128,653 | | Net Current Liabilities | (66,941) | (72,189) | | Net Liabilities (Capital Deficit) | (80,299) | (82,741) | Condensed Consolidated Statement of Cash Flows In H1 2024, the Group generated net cash inflow of HK$17.721 million from operating activities, largely consistent with the prior period; however, significant net cash outflow of HK$19.000 million from financing activities, primarily for repayment of lease liabilities and non-controlling interests, led to a decrease in cash and cash equivalents from HK$2.214 million at the beginning of the period to HK$1.369 million at period-end Cash Flow Statement Summary (HK$ thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 17,721 | 17,063 | | Net Cash Used in Investing Activities | (93) | (510) | | Net Cash Used in Financing Activities | (19,000) | (16,555) | | Net Decrease in Cash and Cash Equivalents | (1,372) | (2) | | Cash and Cash Equivalents at End of Period | 1,369 | 1,009 | Notes to the Condensed Consolidated Financial Statements Note 2: Going Concern Note 2 explicitly states that as of June 30, 2024, the Group had net current liabilities of HK$66.941 million and net liabilities of HK$80.299 million, which constitute a material uncertainty regarding its ability to continue as a going concern; the financial statements are prepared on a going concern basis, contingent on controlling shareholder Mr. Yuan Fui Yee's commitment to provide continuous financial support, including not demanding repayment of HK$28.569 million in shareholder loans and providing a HK$200 million credit facility (with HK$171 million unused at period-end) - Note 2 emphasizes the Group's net liability position, explicitly stating it constitutes a material uncertainty that may cast significant doubt on its ability to continue as a going concern[93][95] - The company's going concern is contingent on the controlling shareholder's financial support, who has committed not to demand repayment of loans provided and has offered a HK$200 million credit facility expiring in August 2025[94][95] Note 6: Impairment Assessment on Financial Assets During the period, the Group reversed a total of HK$11.283 million in expected credit loss provisions due to the recovery of certain outstanding receivables, which was a key factor in achieving profitability for the period Expected Credit Loss Reversal Details (HK$ thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Reversal of Other Receivables | 954 | – | | Reversal of Trade Receivables | 10,329 | – | | Total | 11,283 | – | Note 17 & 18: Borrowings and Material Related Party Transactions All of the Group's borrowings (HK$28.569 million) are from the controlling shareholder, unsecured, interest-free, and repayable on demand; additionally, the Group has multiple material related party transactions with entities controlled by the controlling shareholder Mr. Yuan Fui Yee, including revenue and lease expenses, further highlighting the Group's high reliance on the controlling shareholder, who also provided a HK$200 million credit facility - As of the period-end, the Group's HK$28.569 million in borrowings were entirely from the controlling shareholder, under unsecured, interest-free, and on-demand repayment terms[134][135] - The Group had material transactions with related parties controlled by the controlling shareholder, including HK$1.126 million in accommodation and consulting service revenue and HK$0.799 million in lease expenses[138] - The controlling shareholder provided the Group with a HK$200 million credit facility, of which HK$171 million remained available as of June 30, 2024, valid until August 27, 2025[139] Note 20: Events After the Reporting Period Post-reporting period, on August 19, 2024, the controlling shareholder pledged 269.56 million shares of the company (approximately 60.12% of total shares) to a third party as collateral for a personal RMB100 million loan, potentially posing a risk to the company's control stability - On August 19, 2024, the controlling shareholder pledged all 269,564,510 shares of the company (representing 60.12% of total shares) as collateral for a personal RMB100 million loan[141][144][70]