合丰集团(02320) - 2024 - 中期财报

Corporate Information This section provides an overview of the company's key corporate details, including its board, committees, auditors, offices, bankers, stock code, and website Board of Directors The Board comprises executive directors Xu Senping (Chairman), Xu Sentai (CEO), Xu Yuling (newly appointed), and independent non-executive directors Cao Siwei, Huang Zhuliang, and Zhou Shuming - Ms. Xu Yuling was appointed as an executive director on August 30, 2024[3] Committees and Representatives The company has audit, remuneration, and nomination committees, all composed of independent non-executive directors, with changes in authorized representatives and company secretary in March 2024 - Mr. Chan Wai Man was appointed as authorized representative and company secretary on March 19, 2024, replacing Mr. Wong Ming Chun on the same day[3] Auditor The company's auditor is ZHONGHUI ANDA CPA Limited Offices and Registrars The company maintains offices in Hong Kong and a registered office in the Cayman Islands, with share registrars in both locations Principal Bankers The company's principal bankers include Standard Chartered Bank, DBS Bank (Hong Kong) Limited, Agricultural Bank of China Limited, and Bank of China Limited Stock Code and Website The company's stock code is 2320, and its official website is www.hopfunggroup.com Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This section presents the company's financial performance, including revenue, gross profit, and net loss for the period Financial Performance Overview For the six months ended June 30, 2024, the Group's revenue slightly increased, gross profit significantly improved, but a loss of HK$43.677 million was recorded due to reduced other income and higher other expenses, narrowing the loss from the prior year Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | H1 2024 (HK$ Thousand) | H1 2023 (HK$ Thousand) | Change (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 107,821 | 106,232 | 1,589 | 1.50 | | Cost of sales | (98,586) | (101,893) | 3,307 | -3.25 | | Gross Profit | 9,235 | 4,339 | 4,896 | 112.84 | | Other income | 1,120 | 6,214 | (5,094) | -81.98 | | Other gains and losses | 175 | (7,347) | 7,522 | -102.38 | | Sales and distribution costs | (5,867) | (5,604) | (263) | 4.69 | | Administrative Expenses | (17,983) | (22,218) | 4,235 | -19.06 | | Other Expenses | (29,546) | (31,930) | 2,384 | -7.47 | | Finance Costs | (1,831) | (1,857) | 26 | -1.40 | | Loss Before Tax | (44,697) | (58,403) | 13,706 | -23.47 | | Income tax (credit)/(expense) | 1,020 | (662) | 1,682 | -254.08 | | Loss for the Period | (43,677) | (59,065) | 15,388 | -26.05 | | Basic loss per share (HK Cents) | (5.34) | (7.22) | 1.88 | -26.04 | - Total comprehensive expense attributable to owners was HK$66.401 million, a decrease from HK$80.828 million in the prior year[8] Condensed Consolidated Statement of Financial Position This section outlines the company's assets, liabilities, and equity at the reporting date, highlighting changes in financial position Asset and Liability Overview As of June 30, 2024, the Group's total assets less current liabilities were HK$869.206 million, a slight decrease from year-end 2023, with net current assets improving from a net liability position Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2024 (HK$ Thousand) | Dec 31, 2023 (HK$ Thousand) | Change (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Non-current assets | 847,550 | 895,817 | (48,267) | -5.39 | | Current assets | 118,530 | 124,603 | (6,073) | -4.87 | | Current liabilities | 96,874 | 148,740 | 51,866 | -34.87 | | Net Current Assets/(Liabilities) | 21,656 | (24,137) | 45,793 | -189.72 | | Non-current liabilities | 92,715 | 28,788 | 63,927 | 222.06 | | Net assets | 776,491 | 842,892 | (66,401) | -7.88 | | Total equity attributable to owners | 776,491 | 842,892 | (66,401) | -7.88 | - Bank balances and cash increased from HK$47.272 million at year-end 2023 to HK$50.894 million as of June 30, 2024[9] - Total bank borrowings changed from HK$52.959 million (current) and HK$19.872 million (non-current) at year-end 2023 to HK$4.266 million (current) and HK$85.608 million (non-current) as of June 30, 2024, indicating a significant increase in non-current borrowings[9][10] Condensed Consolidated Statement of Changes in Equity This section details the movements in the company's equity attributable to owners, including profit/loss and other comprehensive income Equity Movements For the six months ended June 30, 2024, total equity attributable to owners decreased from HK$842.892 million to HK$776.491 million, primarily due to the loss for the period and negative exchange reserve impact Key Data on Equity Movements | Metric | Jan 1, 2024 (HK$ Thousand) | Loss for the Period (HK$ Thousand) | Exchange Reserve Movement (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Share Capital | 81,764 | - | - | 81,764 | | Share Premium | 492,392 | - | - | 492,392 | | Special Reserve | (107,444) | - | - | (107,444) | | Statutory Reserve | 850 | - | - | 850 | | Exchange Reserve | (3,054) | - | (22,724) | (31,778) | | Share Option Reserve | 2,513 | - | - | 2,503 | | Retained Profits | 381,871 | (43,677) | - | 338,204 | | Total | 842,892 | (43,677) | (22,724) | 776,491 | - Other comprehensive expense for the period primarily resulted from exchange differences on translating foreign operations, amounting to a negative HK$22.724 million[11] - According to relevant PRC laws, subsidiaries in China are required to transfer at least 10% of their net profit after tax to a non-distributable reserve fund until the reserve balance reaches 50% of their registered capital[15] Condensed Consolidated Statement of Cash Flows This section summarizes the company's cash flows from operating, investing, and financing activities for the period Cash Flow Overview For the six months ended June 30, 2024, the Group saw reduced net cash outflow from operating activities, net cash outflow from investing activities, and net cash inflow from financing activities, resulting in a net increase in cash and cash equivalents Key Data from Condensed Consolidated Statement of Cash Flows | Metric | H1 2024 (HK$ Thousand) | H1 2023 (HK$ Thousand) | Change (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (9,124) | (18,453) | 9,329 | -50.56 | | Net cash (used in)/generated from investing activities | (1,104) | 1,870 | (2,974) | -159.04 | | Net cash generated from/(used in) financing activities | 15,275 | (45,712) | 60,987 | -133.41 | | Net increase/(decrease) in cash and cash equivalents | 5,047 | (62,295) | 67,342 | -108.10 | | Effect of exchange rate changes | (1,425) | (81) | (1,344) | 1659.26 | | Cash and cash equivalents at June 30 | 50,894 | 48,420 | 2,474 | 5.11 | - The decrease in cash outflow from operating activities was mainly due to reduced inventories, trade and other receivables, and deposits and prepayments[16] - Cash flow from financing activities shifted from a net outflow to a net inflow, primarily due to new bank loans of HK$71.492 million[17] Notes to the Condensed Consolidated Financial Statements This section provides detailed explanations and breakdowns of the figures presented in the condensed consolidated financial statements 1. General Information The company is an exempted company incorporated in the Cayman Islands, with its shares listed on The Stock Exchange of Hong Kong Limited - The company was incorporated under the Cayman Islands Companies Law and is listed on the Hong Kong Stock Exchange[18][20] 2. Basis of Preparation The financial statements are prepared in accordance with HKAS 34, and despite continuous losses and significant contingent liabilities, directors believe the company can continue as a going concern based on cash flow forecasts and bank letters of intent - The Group recorded continuous losses for the six months ended June 30, 2024, and 2023, amounting to HK$43.677 million and HK$59.065 million respectively[23] - The Group faces significant contingent liabilities related to tax payments required by the PRC tax authorities, which may cast substantial doubt on its ability to continue as a going concern[23] - The company has obtained letters of intent from its principal bankers for loan facilities up to approximately RMB300 million to support its continued operations[24] 3. Principal Accounting Policies The condensed consolidated financial statements are prepared on a historical cost basis, with accounting policies consistent with the 2023 annual financial statements, and new HKFRS amendments had no significant impact - The adoption of newly revised HKFRSs in the current period did not result in significant changes to the Group's accounting policies, financial statement presentation, or reported amounts[28] 4. Revenue and Segment Information The Group's operating segments primarily involve manufacturing and sales of containerboard and corrugated packaging, with corrugated packaging contributing all external sales revenue for the six months ended June 30, 2024, while containerboard recorded a loss - The Group's reportable and operating segments include the manufacturing and sales of containerboard (corrugating medium and kraftliner) and corrugated packaging (corrugated boards and cartons)[32] Segment Revenue and Results (H1 2024) | Metric | Containerboard (HK$ Thousand) | Corrugated Packaging (HK$ Thousand) | Consolidated (HK$ Thousand) | | :--- | :--- | :--- | :--- | | External Sales | – | 107,821 | 107,821 | | Segment Loss | (31,336) | (3,341) | (34,677) | | Central Administrative Expenses | | | (8,189) | | Finance Costs | | | (1,831) | | Loss Before Tax | | | (44,697) | Segment Revenue and Results (H1 2023) | Metric | Containerboard (HK$ Thousand) | Corrugated Packaging (HK$ Thousand) | Consolidated (HK$ Thousand) | | :--- | :--- | :--- | :--- | | External Sales | – | 106,232 | 106,232 | | Segment Loss | (35,497) | (10,565) | (46,062) | | Central Administrative Expenses | | | (10,484) | | Finance Costs | | | (1,857) | | Loss Before Tax | | | (58,403) | 5. Other Expenses For the six months ended June 30, 2024, total other expenses were HK$29.546 million, a decrease from HK$31.930 million in the prior year, mainly due to reduced depreciation expenses Breakdown of Other Expenses | Item | H1 2024 (HK$ Thousand) | H1 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Other PRC Taxes | 1,771 | 1,650 | | Depreciation | 24,864 | 27,660 | | Legal and Professional Fees | 2,210 | 865 | | Other | 701 | 1,755 | | Total | 29,546 | 31,930 | 6. Finance Costs For the six months ended June 30, 2024, finance costs were HK$1.831 million, a slight decrease from HK$1.857 million in the prior year, primarily from bank borrowings interest Breakdown of Finance Costs | Item | H1 2024 (HK$ Thousand) | H1 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Interest on bank borrowings | 1,826 | 1,834 | | Interest on lease liabilities | 5 | 23 | | Total | 1,831 | 1,857 | 7. Income Tax (Credit)/Expense For the six months ended June 30, 2024, the Group recorded an income tax credit of HK$1.020 million, compared to an expense of HK$0.662 million in the prior year, mainly due to deferred tax credits Breakdown of Income Tax (Credit)/Expense | Item | H1 2024 (HK$ Thousand) | H1 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Current tax: Hong Kong profits tax | 390 | 65 | | Current tax: PRC corporate income tax | – | 296 | | Deferred tax (credited)/charged | (1,410) | 301 | | Total | (1,020) | 662 | - In H1 2024, the Group made no provision for PRC corporate income tax as it generated no taxable profits in China[42] - One of the company's PRC subsidiaries qualifies as a high-tech enterprise, enjoying a preferential tax rate of 15% for the 2024 fiscal year[47] 8. Loss for the Period The loss for the period is calculated after accounting for depreciation, staff costs, and inventory costs, and includes gains from termination of lease contracts and exchange gains Key Items Affecting Loss for the Period | Item | H1 2024 (HK$ Thousand) | H1 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 25,652 | 27,963 | | Depreciation of right-of-use assets | 342 | 582 | | Gain on termination of lease contracts | (10) | – | | Staff costs (including directors' emoluments) | 19,574 | 23,898 | | Cost of inventories recognized as expense | 98,586 | 101,893 | | Exchange (gain)/loss, net | (81) | 141 | 9. Loss Per Share For the six months ended June 30, 2024, basic and diluted loss per share attributable to owners was HK 5.34 cents, an improvement from HK 7.22 cents in the prior year Loss Per Share Data | Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Loss (HK$ Thousand) | (43,677) | (59,065) | | Weighted average number of ordinary shares | 817,644,000 | 817,644,000 | | Basic and diluted loss per share (HK Cents) | (5.34) | (7.22) | - The calculation of diluted loss per share did not assume the exercise of share options because their exercise price was higher than the average market price of the shares[50] 10. Dividends No dividends were declared or proposed by the company for the six months ended June 30, 2024, or 2023 - No dividends were declared or proposed during the reporting period or at period-end[49][51] 11. Property, Plant and Equipment For the six months ended June 30, 2024, the Group acquired property, plant, and equipment totaling approximately HK$1.06 million, a significant decrease from HK$8.5 million at year-end 2023 - Acquisitions of property, plant, and equipment amounted to HK$1.06 million in H1 2024, compared to HK$8.5 million for the full year 2023[51][53] 12. Right-of-Use Assets As of June 30, 2024, the carrying amount of right-of-use assets was HK$17.937 million, a decrease from HK$19.223 million at year-end 2023, primarily due to the termination of an office lease in Macau Carrying Amount and Depreciation of Right-of-Use Assets | Item | June 30, 2024 (HK$ Thousand) | Dec 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Carrying Amount | 17,937 | 19,223 | | Depreciation Expense (H1) | 342 | 582 | - The Group derecognized right-of-use assets and lease liabilities of HK$636 thousand due to early termination of a Macau office lease agreement, recognizing a gain on lease termination[54][55] 13. Inventories As of June 30, 2024, total inventories were HK$15.836 million, a decrease from HK$22.068 million at year-end 2023, mainly reflecting a reduction in raw materials Breakdown of Inventories | Item | June 30, 2024 (HK$ Thousand) | Dec 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Raw Materials | 15,580 | 21,834 | | Finished Goods | 256 | 234 | | Total | 15,836 | 22,068 | 14. Trade and Other Receivables As of June 30, 2024, total trade and other receivables were HK$45.776 million, a slight decrease from HK$47.598 million at year-end 2023, with a small proportion of overdue amounts considered recoverable Breakdown of Trade and Other Receivables | Item | June 30, 2024 (HK$ Thousand) | Dec 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Trade receivables, net | 36,267 | 37,828 | | Other receivables | 9,509 | 9,770 | | Total | 45,776 | 47,598 | - The average age of trade receivables was 62 days, consistent with year-end 2023[61] - As of June 30, 2024, total overdue trade receivables amounted to HK$14.748 million, with HK$842 thousand overdue for 90 days or more[61] 15. Trade and Other Payables As of June 30, 2024, total trade and other payables were HK$90.858 million, a slight decrease from HK$92.451 million at year-end 2023, with accrued salaries and wages being a major component of accrued expenses Breakdown of Trade and Other Payables | Item | June 30, 2024 (HK$ Thousand) | Dec 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Trade payables | 26,128 | 27,483 | | Payables for acquisition of property, plant and equipment | 4,805 | 3,121 | | Other PRC taxes payable | 12,515 | 12,576 | | Accrued expenses | 44,204 | 46,758 | | Other payables | 3,206 | 2,513 | | Total | 90,858 | 92,451 | - The Group grants suppliers credit terms of 30 to 90 days and has financial risk management policies to ensure timely settlement[61] 16. Due to a Director As of June 30, 2024, the amount due to a director was zero, compared to HK$1.365 million at year-end 2023, with the prior amount being interest-free, unsecured, and without fixed repayment terms - As of June 30, 2024, the amount due to a director has been cleared to zero[9] 17. Lease Liabilities As of June 30, 2024, total lease liabilities were HK$0.215 million, a significant decrease from HK$0.934 million at year-end 2023, with most due within one year Breakdown of Lease Liabilities | Item | June 30, 2024 (HK$ Thousand) | Dec 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Within one year | 150 | 611 | | More than one year but not exceeding two years | 65 | 323 | | Total | 215 | 934 | 18. Bank Borrowings As of June 30, 2024, total bank borrowings increased to HK$89.874 million from HK$72.831 million at year-end 2023, primarily due to a significant increase in borrowings due in over two years Analysis of Bank Borrowings Repayment Period | Repayment Period | June 30, 2024 (HK$ Thousand) | Dec 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Within one year | 4,266 | 52,959 | | More than one year but not exceeding two years | 4,266 | 1,092 | | More than two years but not exceeding five years | 81,342 | 18,780 | | Total | 89,874 | 72,831 | - Non-current bank borrowings significantly increased from HK$19.872 million at year-end 2023 to HK$85.608 million as of June 30, 2024[68] 19. Share Capital As of June 30, 2024, the company's issued and fully paid share capital was HK$81.764 million, comprising 817,644,000 ordinary shares of HK$0.10 each, consistent with year-end 2023