Financial Performance - For the six months ended June 30, 2024, the Group reported revenue of approximately HK$23.3 million, representing an increase of approximately 11.6% compared to HK$20.9 million for the same period in 2023[5]. - The Group's loss for the period attributable to owners of the Company was approximately HK$9.6 million, a decrease of approximately 49.0% from HK$18.8 million in the same period of 2023, primarily due to a net unrealised gain on an investment in a private equity fund of approximately HK$4.9 million[6]. - The Group's total comprehensive loss for the period was HK$9,573,000, a decrease from HK$18,755,000 in the prior year, showing improved financial performance[96]. - The loss attributable to owners of the company for the six months ended June 30, 2024, was HK$9,572,000, a decrease from HK$18,753,000 for the same period in 2023[145]. - The loss before tax for the six months ended June 30, 2024 was HK$9,577,000, compared to a loss of HK$18,747,000 for the same period in 2023, indicating a significant reduction in losses[96]. Cash and Liquidity - As of June 30, 2024, the Group's cash and cash equivalents amounted to approximately HK$112.7 million, slightly up from approximately HK$112.4 million as of December 31, 2023[18]. - The net increase in cash and cash equivalents for the six months ended June 30, 2024, was HK$215,000, while there was a decrease of HK$ (6,156,000) in 2023[106]. - Cash and cash equivalents at the end of the period were HK$112,651,000 for June 30, 2024, compared to HK$112,975,000 for the same period in 2023[106]. - Net cash used in operating activities for the six months ended June 30, 2024, was HK$ (5,738,000), compared to HK$ (421,000) in 2023, indicating a significant increase in cash outflow[104]. - Cash flows from investing activities generated a net cash inflow of HK$11,415,000 for the six months ended June 30, 2024, compared to a cash outflow of HK$ (27,000) in 2023[104]. Investments - The Group made an investment of HK$60.9 million in the Investment Fund as of June 30, 2024, representing approximately 67.0% of the total capital contribution of the Investment Fund[24]. - The fair value of the Investment Fund was approximately HK$17.6 million as of June 30, 2024, down from approximately HK$23.9 million as of December 31, 2023, representing about 10.0% of the total assets of the Group[24]. - The Group's capital contribution to the Investment Fund was reduced by HK$11.1 million due to the withdrawal of capital contribution[58]. - The Group's investment in the private equity fund is classified as a financial asset at fair value through profit or loss, reflecting the nature of its cash flows[167]. - The Investment Fund disposed of substantially all AMC equity securities, generating proceeds of HK$2,829,000 during the six months ended June 30, 2024[163]. Financial Services Business - The Group's financial services business includes licenses for Type 1, Type 4, Type 6, and Type 9 regulated activities under the Securities and Futures Ordinance[4]. - The Financial Services Business recorded revenue of approximately HK$23.3 million for the six months ended June 30, 2024, representing an increase of 11.4% compared to HK$20.9 million for the same period in 2023[36]. - External Asset Management (EAM) services generated revenue of approximately HK$18.6 million during the six months ended June 30, 2024, up 46.5% from HK$12.7 million in the same period of 2023[37]. - The Group continues to maintain a minimal scale in securities services to minimize operating costs during uncertain economic conditions[41]. - The Group's Financial Services Business is optimistic about benefiting from the recovery of the Hong Kong economy, as indicated by a gradual revenue recovery for the six months ended June 30, 2024[50]. Employee and Operational Costs - Staff costs for the six months ended June 30, 2024, were approximately HK$10.4 million, down from approximately HK$12.1 million for the same period in 2023[30]. - The Group had 31 full-time employees as of June 30, 2024, an increase from 26 employees as of December 31, 2023[30]. - The group incurred employee benefit expenses of HK$7,570,000 in 2024, down from HK$9,111,000 in 2023, suggesting a reduction in workforce costs[131]. - Other operating expenses totaled HK$4,589,000 in 2024, a decrease from HK$4,795,000 in 2023, reflecting cost control measures[135]. - Depreciation expenses increased to HK$723,000 in 2024 from HK$489,000 in 2023, indicating higher asset utilization costs[131]. Audit and Compliance - The independent auditor's review report for the six months ended June 30, 2024, contains a qualified conclusion due to scope limitations on the carrying values of the Group's investments[80]. - The management believes that resolving the audit qualification is contingent upon realizing the EV Bond and completing the liquidation by the end of 2024[72]. - The Group has adopted several enhanced internal control measures to prevent similar issues in future investments[75]. - Management faced limitations in assessing the fair value of the EV Bond due to insufficient financial information from the issuer, which could impact future financial results[92]. - The audit conclusion on the interim condensed consolidated financial statements remains modified due to the possible effect of unresolved matters on comparability[59]. Debt and Indebtedness - As of June 30, 2024, the Group's indebtedness was approximately HK$99.2 million, a decrease from approximately HK$103.2 million as of December 31, 2023[19]. - The gearing ratio increased to 202.2% as of June 30, 2024, up from 176.0% as of December 31, 2023, primarily due to an 11.5% decrease in reserves resulting from a loss attributable to owners of approximately HK$9.6 million for the six months ended June 30, 2024[19]. - The intended use of the net proceeds from the Share Subscription includes repayment of indebtedness of HK$31.5 million and payment of royalty, license, and management fees of HK$30.1 million[18]. - As of June 30, 2024, HK$24.7 million of the intended repayment of indebtedness had been utilized, leaving HK$4.2 million unutilized[18]. - The principal portion of lease payments amounted to HK$ (4,802,000) and interest paid was HK$ (500,000) for the six months ended June 30, 2024, compared to HK$ (4,275,000) and HK$ (1,172,000) respectively in 2023[104]. Market Conditions and Future Outlook - The Group's financial services continue to face challenges due to geopolitical tensions, high interest rates, and unfavorable market prospects in Hong Kong[50]. - The overall business environment is anticipated to remain challenging due to geopolitical tensions, high interest rates, and global inflation pressures[76]. - The Group plans to strategically adjust resource allocation within the Financial Services Business to maximize shareholder returns[76]. - The Group is exploring new opportunities in emerging financial markets to further develop its Financial Services Business[54]. - The Group will continue to develop and enhance income streams from its Financial Services Business despite current challenges[50].
贝森金融(00888) - 2024 - 中期财报