Financial Performance - The Group recorded total revenue of approximately HK$133.34 million, a decrease of approximately 2.59% compared to HK$136.89 million for the same period in 2023[24]. - Profit before tax for the Group was approximately HK$25.39 million, a significant improvement from a loss of HK$153.21 million for the same period in 2023, mainly due to a gain on disposal of a subsidiary of approximately HK$83.41 million[25]. - Profit attributable to owners of the Company during the Period was approximately HK$24.79 million, compared to a loss of approximately HK$153.77 million for the corresponding period in 2023[25]. - The treasury investments segment recorded a profit of approximately HK$45.27 million, a turnaround from a loss of HK$133.30 million in the same period last year[30]. - The consolidated profit after taxation was partially offset by provisions for overdue financial assistances and losses from decreased operations in the PCB and treasury investments segments[13]. Market Conditions - The PCB market remained weak in the first quarter, with excess capacity and reduced demand, but showed slight recovery in the second quarter[12]. - There is an optimistic forecast for China's GDP growth in 2024, which could positively impact the PCB market[16]. - The Group's manufacturing segment is facing challenges due to the Sino-US trade war, Ukraine war, and rising labor and production costs, impacting competitiveness[104]. Risk Management and Compliance - The Group aims to enhance risk management and compliance while exploring opportunities in asset management and financial services[16]. - The Group will actively take actions to recover investments affected by global capital market fluctuations, including legal proceedings and debt restructuring[18]. - The Group's credit risk management includes a thorough review process for potential borrowers, assessing their background, creditworthiness, and collateral adequacy[87]. - The Group requires guarantees and/or collaterals with expected realized values exceeding the principal amount of loans or investments to minimize credit risks[90]. Financial Position - As of June 30, 2024, the Group reported a total equity deficit of approximately HK$47.05 million, improved from HK$104.59 million as of December 31, 2023[37]. - The Group's net debts amounted to approximately HK$1,592.95 million as of June 30, 2024, compared to HK$1,483.39 million as of December 31, 2023, resulting in a gearing ratio of 103.04%[37]. - The Group's net current liabilities were approximately HK$841.20 million as of June 30, 2024, down from HK$916.41 million as of December 31, 2023, with a current ratio of 0.49[37]. Borrowing and Debt Management - The Group's secured borrowings amounted to approximately HK$117.83 million as of June 30, 2024, significantly up from HK$16.96 million as of December 31, 2023[42]. - The total carrying amount of loan receivables and note receivables was approximately HK$583.61 million, down from HK$630.14 million as of December 31, 2023, reflecting a decrease of about 7.4%[69]. - The Group is actively working to maximize recovery of financial assistance through restructuring and legal actions against debtors[55]. Legal and Regulatory Matters - The Group has filed for arbitration to recover approximately HK$381.50 million from the Zhonghong Borrower due to breach of agreements, with no further impairment loss recognized during the period[60]. - The management has engaged legal advisors to assess the implications of the court ruling on its operations and financial status[129]. - The audit committee has reviewed and agreed with the audit qualifications regarding the receivables and other payables[146]. Corporate Governance - The Company complied with the Corporate Governance Code throughout the reporting period, except for the absence of independent non-executive Director Mr. Xu Xinwei at the annual general meeting due to other commitments[192]. - The Board and Audit Committee believe the Company's internal control system is effective and adequate as of the report date[167]. - The primary objective is to enhance long-term business returns for shareholders, emphasizing strong financial performance[197]. Employee and Operational Matters - As of June 30, 2024, the Group had 710 employees, a decrease from 752 employees as of December 31, 2023, with total staff costs amounting to approximately HK$40.15 million, down from HK$43.46 million in 2023[113][116]. - The Group's policy encourages subsidiaries to send employees to training related to its business, reflecting a commitment to employee development[113][116]. Future Outlook - The Group aims to recover investment losses from financial assistance and asset restructuring businesses over the next two years and plans to gradually cease significant engagements in these transactions[84]. - The Company intends to transform its business from debt investment to portfolio and equity investments to achieve short-term returns[85]. - The Group plans to obtain a money lender license in Hong Kong to enhance its treasury investments and financial services segments in the future[85].
融科控股(02323) - 2024 - 中期财报