Financial Performance - The Group's total revenue for the six months ended June 30, 2024, was approximately HK$227.7 million, a decrease of approximately 43.2% compared to HK$400.9 million for the same period in 2023[23]. - The Group recorded a gross profit of approximately HK$40.7 million, with a gross profit margin of approximately 17.9%, down from HK$80.0 million and 20.0% respectively in the previous year[23]. - The loss attributable to equity holders of the Company for the six months ended June 30, 2024, was approximately HK$7.9 million, compared to a profit of HK$20.6 million for the same period in 2023[23]. - Basic loss per share attributable to equity holders was approximately 1.28 HK cents, compared to earnings per share of 3.33 HK cents in the previous year[23]. - Revenue for the six months ended June 30, 2024, was approximately HK$227.7 million, a decrease of approximately HK$173.2 million, or 43.2%, from approximately HK$400.9 million for the same period in 2023[35]. - Integrated plastic solutions segment revenue for the same period was approximately HK$179.3 million, accounting for approximately 78.8% of total revenue, representing a decrease of approximately HK$139.3 million, or 43.7%, from approximately HK$318.6 million in 2023[35]. - E-cigarette products segment revenue for the six months ended June 30, 2024, was approximately HK$47.2 million, accounting for approximately 20.7% of total revenue, a decrease of approximately HK$34.7 million, or 42.4%, from approximately HK$81.9 million in 2023[36]. - Medical consumable products segment revenue for the same period was approximately HK$1.2 million, accounting for approximately 0.5% of total revenue, an increase of approximately HK$0.8 million, or 200.0%, from approximately HK$0.4 million in 2023[36]. - The total comprehensive loss for the period attributable to equity holders of the company was HK$11,923,000, compared to a loss of HK$4,440,000 in the prior year[99]. - The company reported a loss for the period of HK$7,944,000 for the six months ended June 30, 2024[104]. Operational Developments - The Group established a research and development center in Shenzhen, focusing on advancing core e-cigarette technologies, including atomization and coil technologies[22]. - The Group obtained the Authorised Economic Operator (AEO) Certificate from China Customs in 2023, enhancing operational efficiency[21]. - The Group distributes its products in domestic and overseas markets, including Europe, Asia, and the United States[21]. - The Group's medical consumable products segment includes the manufacturing and sales of disposable face masks under the brand "CAREWE"[21]. - The Group obtained a Tobacco Monopoly Production Enterprise License valid until 2025 for manufacturing e-cigarette products[28]. - The cleanroom facility in Huizhou has met pharmaceutical industry standards and has been certified for medical device manufacturing[32]. - The Group has made no material acquisitions or disposals of subsidiaries and associated companies during the six months ended June 30, 2024[59]. Financial Position - As of June 30, 2024, the Group had cash and cash equivalents of approximately HK$150.6 million, an increase from HK$132.6 million as of December 31, 2023[53]. - Interest-bearing borrowings amounted to HK$61.7 million as of June 30, 2024, with a weighted average effective interest rate of approximately 3.51% per annum[53]. - As of June 30, 2024, the Group's net asset value totaled approximately HKD 172.5 million, down from HKD 374.7 million as of December 31, 2023[66]. - The Group did not hold any significant investments in equity interests in other companies during the six months ended June 30, 2024[69]. - The Group has not purchased, redeemed, or sold any of its listed securities during the six months ended June 30, 2024[72]. - The Group employed 919 staff members as of June 30, 2024, with a compensation policy based on performance and company results[68]. - As of June 30, 2024, non-current assets totaled HK$619,742,000, a decrease of 4.25% from HK$647,253,000 as of December 31, 2023[101]. - Current assets increased to HK$335,059,000, up 2.83% from HK$327,128,000 at the end of 2023[101]. - Net current assets improved to HK$164,550,000, reflecting an increase of 7.25% compared to HK$153,442,000 at the end of 2023[101]. - Total assets less current liabilities decreased to HK$784,292,000, down 2.89% from HK$800,695,000 as of December 31, 2023[101]. - Net assets as of June 30, 2024, were HK$761,541,000, a decline of 2.71% from HK$782,764,000 at the end of 2023[102]. Governance and Compliance - The audit committee has reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2024[74]. - The Group has complied with the Corporate Governance Code during the reporting period[75]. - The chairman of the Board also serves as the chief executive officer, a deviation from typical governance practices, justified by the chairman's experience[74]. - There were no significant events after June 30, 2024, that could materially affect the Group's assets, liabilities, or future operations[67]. Shareholder Information - As of June 30, 2024, Mr. Chan Tsan Lam holds a total interest of 409,367,000 shares, representing approximately 66.03% of the company's issued ordinary shares[82]. - Oceanic Green, New Strength, Gold Alliance, and Treasure Line, all wholly owned by Mr. Chan, collectively hold 127,100,000 shares (20.5%) and 94,395,000 shares (15.2%) respectively[86]. - Ms. Fung Suk Yee May, spouse of Mr. Chan, is deemed to have an interest in 409,367,000 shares, equating to 66.03% of the company[87]. - The company has adopted a share option scheme on May 28, 2019, aimed at rewarding selected participants for their contributions[90]. - The total number of shares held by substantial shareholders includes 127,100,000 shares by Oceanic Green and New Strength, and 94,395,000 shares by Gold Alliance[86]. - The beneficial interest of Mr. Chan Tsan Lam in controlled corporations is noted, with a significant portion of shares held through these entities[84]. - The company has not disclosed any other substantial shareholders with interests exceeding 5% as of June 30, 2024[88]. - The share option scheme includes various eligible participants such as employees and directors, enhancing employee engagement and retention[90]. - The total interests of directors in shares and underlying shares are recorded in compliance with the Securities and Futures Ordinance[83]. Taxation and Regulatory Matters - The total income tax credit for the six months ended June 30, 2024, was HK$2,631,000, compared to an expense of HK$1,590,000 in the previous year[137]. - For the six months ended June 30, 2024, the assessable profits of the Hong Kong subsidiary were taxed at 8.25% for the first HK$2 million and 16.5% for profits above that[138][140]. - The Group's entities in Hong Kong and the Cayman Islands did not incur assessable profits for the six months ended June 30, 2023, resulting in no Hong Kong Profits Tax being provided[138][140]. - Huizhou Tian Chang Industrial Company Limited is recognized as a "New and High Technology Enterprise" and benefits from a preferential tax rate of 15% during its valid period[140][142]. - The PRC allows enterprises engaging in R&D to claim a maximum of 200% of their R&D expenses as "Super Deduction" for tax purposes[140][142]. Cash Flow and Investments - Cash and cash equivalents increased to HK$150,606,000, up 13.59% from HK$132,590,000 at the end of 2023[101]. - Net cash from operating activities for the six months ended June 30, 2024, was HK$22,394, a decrease of 64.3% compared to HK$62,644 in the same period of 2023[105]. - Net cash from investing activities was HK$8,267, compared to a net cash used of HK$578 in the prior year, indicating a significant improvement[105]. - The company reported a repayment of interest-bearing borrowings totaling HK$27,859, slightly down from HK$28,367 in the previous year[105]. - The company did not acquire any subsidiaries during the current period, contrasting with a previous acquisition that cost HK$70[105]. - The company incurred finance costs of HK$1,467,000 for the six months ended June 30, 2024, down from HK$3,123,000 in the same period of 2023, reflecting a decrease of approximately 53%[98]. Segment Performance - For the six months ended June 30, 2024, the total segment revenue was HK$227,680,000, with e-cigarettes contributing HK$47,142,000, integrated plastic solutions HK$179,307,000, and medical consumable products HK$1,231,000[109]. - The gross profit for the total segments was HK$40,682,000, with e-cigarettes at HK$5,737,000, integrated plastic solutions at HK$34,880,000, and medical consumable products at HK$65,000[109]. - The segment results showed a loss before tax of HK$10,575,000, with a total loss for the period amounting to HK$7,944,000[109]. - Selling and distribution costs totaled HK$2,416,000, with integrated plastic solutions accounting for HK$2,409,000[109]. - The company reported a reversal of loss allowance on trade receivables amounting to HK$151,000, primarily from the integrated plastic solutions segment[109]. Research and Development - Research and development expenses for the six months ended June 30, 2024, totaled HK$9,462, with HK$1,969 for e-cigarettes and HK$7,493 for integrated plastic solutions[113]. - The Group's segments include e-cigarettes products, integrated plastic solutions, and medical consumable products, with no aggregation of operating segments reported[108]. - The management does not anticipate substantial changes in accounting policies or material impacts on financial position from future HKFRS adoptions[107]. - The Group's financial performance and cash flow were not materially affected by the new accounting standards adopted[107].
天长集团(02182) - 2024 - 中期财报