Revenue Growth - The revenue from wood-related business increased from approximately HK$96.9 million in the first half of 2023 to approximately HK$170.3 million in the first half of 2024, representing a growth of about 76%[5]. - Revenue from the processing and distribution of furniture wood amounted to approximately HK$152.5 million for the Reporting Period, compared to approximately HK$81.0 million in the same period of 2023, indicating an increase of approximately 88%[8]. - Revenue generated from the manufacturing and sales of antique-style wood furniture and other wooden products was approximately HK$17.8 million for the Reporting Period, up from approximately HK$15.9 million in the first half of 2023, reflecting a growth of about 12%[10]. - The company recorded a revenue of approximately HK$175.1 million for the reporting period, representing a 71% increase compared to HK$102.3 million for the six months ended June 30, 2023[43]. - For the six months ended June 30, 2024, the total revenue from external customers was HK$175,090,000, compared to HK$102,259,000 for the same period in 2023, representing a significant increase of approximately 71.3%[154]. - The wood-related business segment reported revenue of HK$170,268,000 for the first half of 2024, compared to HK$96,938,000 in 2023, reflecting an increase of approximately 75.7%[152]. Car Rental Business - The car rental business segment recorded a revenue of approximately HK$4.8 million for the Reporting Period, a decrease from approximately HK$5.3 million in the first half of 2023, representing a decline of about 9%[12]. - The car rental segment generated revenue of HK$4,822,000 for the six months ended June 30, 2024, down from HK$5,321,000 in 2023, indicating a decrease of about 9.4%[152]. - The Company is actively considering discontinuing the car rental business to allocate resources to more promising sectors[17]. Business Environment and Strategy - The overall business environment remains challenging due to the ongoing credit crisis in China's property sector, with new housing starts continuing to decline in the first half of 2024[3]. - The Group plans to continue developing its core wood-related business and expand operations in the foreseeable future, leveraging accumulated experience and expertise[13]. - The establishment of China Wood Green Resources (Shenzhen) Co., Limited has been pivotal in developing the Group's core wood-related business, focusing on supply chain management and wood processing[8]. - The Group's efforts in diversifying its customer base include designing affordable indoor wood products to attract general consumers[9]. - The Group is actively exploring strategic cooperation opportunities with market players in the wood-related business, including real estate developers and high-end furniture retailers[16]. - The Group is considering business diversification to mitigate risks associated with over-exposure to the wood-related business[17]. - The Group is studying opportunities in the functional food and beverage industry and the health and beauty industry in China[17]. Financial Restructuring - A restructuring agreement was entered into on February 16, 2022, involving capital reorganization and investor subscription[24]. - The Scheme was approved by the requisite statutory majorities of the creditors at the Scheme Meeting held on March 11, 2022[24]. - The Funding Agreement to provide funding for business development was sanctioned by the Cayman Court on October 17, 2022[25]. - The Cayman Court approved the application for withdrawal of the Petition and discharge of the appointment of the Joint Provisional Liquidators on 14 June 2023, allowing the Company to exit provisional liquidation[40]. - The Capital Reorganisation became effective on 17 May 2023 after fulfilling all conditions precedent[28]. - The Scheme has become unconditional following the completion of all necessary approvals and conditions[32]. - The successful completion of the Capital Reorganisation and the Investor's Subscription has eliminated the Company's imminent liquidity risk, allowing it to exit provisional liquidation[142]. - The Company has explored different options to restructure its debts, leading to the current restructuring approach[125]. Financial Performance - The cost of sales and services rendered increased by approximately 99% from HK$80.2 million for the six months ended June 30, 2023, to approximately HK$159.6 million for the reporting period[45]. - The gross profit decreased by approximately 30% to HK$15.5 million, with the gross profit margin dropping from 21.6% to 8.9% due to market slowdown in the wood-related business[45]. - Finance costs significantly decreased from approximately HK$64.7 million for the six months ended June 30, 2023, to approximately HK$1.2 million as a result of the debt restructuring scheme effective in July 2023[48]. - Administrative expenses increased by approximately 45% to HK$14.8 million for the reporting period, compared to HK$10.2 million in the prior interim[47]. - The Group incurred a loss of HK$2,361,000 for the six months ended 30 June 2024[145]. - The loss for the period ended June 30, 2024, was HK$2,361,000, a significant improvement compared to a loss of HK$58,210,000 for the same period in 2023, representing a reduction of approximately 96%[115]. - Total comprehensive income for the period was HK$(2,294,000), compared to HK$(63,786,000) in 2023, indicating a substantial recovery in overall financial performance[115]. Share Capital and Equity - The authorized share capital of the Company is HK$200,000,000 divided into 20,000,000,000 New Shares at HK$0.01 each, with issued capital of HK$3,425,728.57 divided into 342,572,857 New Shares[29]. - The Investor conditionally agreed to subscribe for 2,260,980,856 New Shares at an issue price of HK$0.044 per New Share[31]. - The Company will issue up to a maximum of 823,739,687 New Shares to Creditors at a rate of 1 New Share for every HK$1.80 of Admitted Claims[38]. - The total issued share capital of the Company as of June 30, 2024, is 342,729,340 shares[80]. - The company executed a share consolidation on June 18, 2024, reducing the number of issued shares from 3,427,293,400 to 342,729,340[175]. - The authorized share capital was adjusted from HK$200,000,000 to HK$20,000,000,000 following the share consolidation[175]. Cash Flow and Liquidity - As of June 30, 2024, cash and cash equivalents amounted to approximately HK$0.7 million, down from approximately HK$3.5 million as of December 31, 2023[48]. - The company's cash and bank balances significantly decreased to HK$701,000 from HK$3,522,000, a decline of approximately 80%[116]. - Cash used in operating activities amounted to HK$4,267,000 for the first half of 2024, a significant decrease from cash generated of HK$32,642,000 in the same period of 2023[121]. - The company raised HK$4,247,000 from other borrowings in the first half of 2024, compared to HK$47,387,000 in the same period of 2023[122]. - Net cash generated from financing activities was HK$1,390,000 in the first half of 2024, down from HK$16,496,000 in the same period of 2023[122]. - The Group is taking proactive measures to improve operating cash flow by controlling administrative costs and containing capital expenditure[75]. Governance and Compliance - The audit committee has reviewed the going concern issue and concurs with the Board's view[74]. - The Company resumed trading of its shares on the Stock Exchange on May 17, 2023, after fulfilling all resumption guidance[75]. - The company complied with the Corporate Governance Code throughout the reporting period, with minor exceptions regarding attendance at the annual general meeting[99][100]. - The unaudited condensed consolidated interim financial statements were approved by the Board on August 23, 2024, ensuring timely reporting[190]. - The Group had no related party transactions reported for the current period, maintaining transparency in financial dealings[184].
中木国际(01822) - 2024 - 中期财报