Financial Performance - Revenue for the six months ended June 30, 2024, was HKD 8,651,000, a decrease of 48.8% compared to HKD 16,914,000 in the same period of 2023[5] - Gross profit for the same period was HKD 2,051,000, resulting in a gross margin of 23.7%, down from 28.7% in 2023[5] - The company reported a loss before tax of HKD 9,549,000, compared to a loss of HKD 8,175,000 in the previous year[9] - The company recorded a net loss attributable to shareholders of HKD 9,549,000, compared to HKD 8,443,000 in the same period last year[10] - The company reported a net loss of approximately HKD 9,549,000 for the six months ended June 30, 2024, compared to a loss of HKD 8,443,000 in the same period of 2023[26] - The company reported a total comprehensive loss of HKD (9,436,000) for the six months ended June 30, 2024, compared to HKD (8,165,000) in the previous year[16] - The company recorded a total segment loss of HKD (5,430,000) for the six months ended June 30, 2024, compared to a loss of HKD (4,887,000) in the same period of 2023[47] - The company reported a pre-tax loss of HKD (9,549,000) for the six months ended June 30, 2024, compared to a pre-tax loss of HKD (8,175,000) in the same period of 2023[47] Assets and Liabilities - Total assets as of June 30, 2024, were HKD 7,386,000, significantly down from HKD 14,033,000 as of December 31, 2023[6] - The company’s total liabilities amounted to HKD 74,838,000 as of June 30, 2024, compared to HKD 73,358,000 as of December 31, 2023[49] - The company’s total liabilities as of June 30, 2024, were not explicitly stated but can be inferred to have decreased alongside the lease liabilities and trade payables[72][78] - The company’s total liabilities as of June 30, 2024, amounted to HKD 19,220,000, compared to HKD 19,517,000 as of December 31, 2023[87] - The company’s financial statements indicate significant uncertainty regarding its ability to continue as a going concern due to ongoing losses and liabilities[26] Cash Flow and Liquidity - Cash and cash equivalents decreased to HKD 854,000 from HKD 997,000 at the end of 2023[12] - The net cash used in operating activities was HKD (290,000) for the six months ended June 30, 2024, compared to net cash generated of HKD 2,115,000 in the same period of 2023[18] - The company’s financing activities generated a net cash inflow of HKD 334,000 for the six months ended June 30, 2024, compared to a net cash outflow of HKD (3,083,000) in the same period of 2023[18] - The current ratio decreased to 0.12 from 0.20 year-over-year, indicating a decline in liquidity[6] Revenue Breakdown - Leather manufacturing business generated external customer revenue of HKD 8,353,000 for the six months ended June 30, 2024, a decrease of 49.3% from HKD 16,473,000 in the same period of 2023[47] - Leather retail business reported external customer revenue of HKD 298,000 for the six months ended June 30, 2024, down 32.4% from HKD 441,000 in the same period of 2023[47] - The leather manufacturing and retail business accounted for approximately 96.6% and 3.4% of total revenue, respectively, for the six months ended June 30, 2024[98] Impairment and Expenses - Impairment loss on right-of-use assets was HKD 1,224,000 for the six months ended June 30, 2024, compared to HKD 896,000 in the same period of 2023[51] - The company confirmed an impairment loss of approximately HKD 1,224,000 for manufacturing right-of-use assets for the six months ended June 30, 2024, compared to no impairment loss for the same period in 2023[69] - Administrative and other operating expenses decreased by approximately HKD 1,709,000 to about HKD 8,001,000, down from approximately HKD 9,710,000 in 2023[97] - The company’s sales and distribution costs decreased by approximately 14.1% to about HKD 887,000 for the six months ended June 30, 2024[97] Financing and Support - The company has received a commitment from an executive director to defer repayment of a loan amounting to HKD 8,000,000 until the company is able to repay[26] - The company has entered into a loan financing agreement with Mr. Zhao for an additional unsecured interest-free loan of up to HKD 20,000,000, which has been extended to May 27, 2026[30] - Mr. Zhao has provided a financial support letter agreeing not to demand repayment of shareholder loans and other amounts totaling approximately HKD 12,844,000 until the group is able to repay[31] - The company has established a loan financing agreement with an independent third party for a maximum loan of HKD 40,000,000, with an annual interest rate of 20%[34] Business Operations - The company is in the leather manufacturing, retail, and industrial hemp cultivation sectors, with no significant changes in the nature of its main business during the reporting period[20] - The company is exploring diversification into industrial hemp cultivation and hemp textile production, having obtained relevant permits and initiated pilot cultivation[105] - Management plans to implement strict cost control measures and optimize operations and financial management in response to the challenging business environment[104] Corporate Governance - The company has complied with the corporate governance code during the reporting period, with no significant deviations noted[132] - The audit committee, consisting of three independent non-executive directors, reviewed the financial reporting process and internal controls for the six months ending June 30, 2024[136] - The company has not established an internal audit function but will engage an independent third party annually for this purpose[133] Shareholder Information - The major shareholder, Zhao Jingfei, holds 62.04% of the company's shares, totaling 256,024,406 shares[120] - The company has not adopted any new stock option plans since the expiration of the previous plan on February 17, 2013[126] - No stock options were granted, exercised, lapsed, or canceled during the reporting period ending June 30, 2024[126]
中联发展控股(00264) - 2024 - 中期财报