Financial Performance - Revenue for the six months ended March 31, 2025, was HKD 3,455,679,000, representing a 427.1% increase compared to HKD 655,608,000 for the same period in 2024[2] - Gross profit decreased to HKD 10,990,000, down 65.8% from HKD 32,141,000, resulting in a gross margin of only 0.3% compared to 4.9% in the previous year[2] - The company reported a loss before tax of HKD 12,300,000, a decline of 112.4% from a profit of HKD 99,266,000 in the prior year[2] - Basic and diluted loss per share was HKD (2.64), a significant drop from earnings of HKD 21.42 per share in the same period last year[5] - The company experienced a net loss of HKD 12,300,000 for the period, compared to a profit of HKD 101,167,000 in the same period last year[6] - The company reported a net loss attributable to shareholders of HKD 12,300,000 for the six months ended March 31, 2025, compared to a profit of HKD 99,813,000 in the same period of 2024[35] - The group reported a loss before tax of approximately HKD 12.3 million for the period 2025, compared to a profit of approximately HKD 99.3 million in 2024, primarily due to a decrease in other business income by approximately HKD 16.7 million, mainly from the suspension of cryptocurrency mining services[72] Cash and Equity - Cash and cash equivalents as of March 31, 2025, were HKD 61,856,000, a slight decrease of 0.7% from HKD 62,282,000 as of September 30, 2024[2] - Total equity decreased to HKD 275,485,000, down 2.3% from HKD 281,909,000 at the end of the previous reporting period[8] - The company’s total non-current assets are located entirely in China, including Hong Kong[26] - As of March 31, 2025, the company reported trade receivables of HKD 1,705,000, a decrease of 61% from HKD 4,384,000 as of September 30, 2024[41] - The company’s trade receivables from related parties amounted to HKD 1,007,000 as of March 31, 2025, down from HKD 2,759,000 as of September 30, 2024[40] - The company’s total assets related to trade and other receivables were HKD 190,958,000 as of March 31, 2025, compared to HKD 240,685,000 as of September 30, 2024[41] - As of March 31, 2025, the group had no outstanding borrowings, maintaining a debt-to-asset ratio of 0%[82] Acquisitions and Investments - The company has entered into agreements to acquire 100% of Avenir Asset Holding Limited for $30,462,086.38 and approximately 7.69% of BitTrade Inc. for $2,769,435.22, totaling approximately $33,231,521.60[10] - Avenir Asset Holding Limited will become a wholly-owned subsidiary, and BitTrade will be an indirect subsidiary, with their financial performance consolidated into the company's financial statements[11] - The acquisition of Avenir Asset Holding Limited and BitTrade is part of the company's strategy to expand its presence in the cryptocurrency trading business[10] - The company is committed to integrating the financial results of the acquired entities into its overall financial performance[11] - The group has completed the acquisition of over 50% of the shares in the compliant exchange BitTrade, which will result in an indirect ownership of 92.31% upon completion of the acquisition[100] Revenue Sources - Cryptocurrency trading business revenue was HKD 3,437,756,000, a substantial increase from HKD 620,989,000 in the previous year[4] - Cryptocurrency trading accounted for HKD 3,437,756,000 of the total revenue, compared to HKD 620,989,000 in the previous year, indicating a growth of around 453%[27] - Revenue from the asset management services was approximately HKD 12.8 million for the 2025 period, a decrease of approximately 25.7% from HKD 17.3 million in the 2024 period[62] - Revenue from the custody services increased to approximately HKD 0.6 million in the 2025 period, up approximately 64.3% from HKD 0.4 million in the 2024 period[64] - The technology solutions business generated revenue of approximately HKD 3.7 million in the 2025 period, compared to approximately HKD 2.9 million in the 2024 period[59] Operational Changes and Strategies - The company continues to focus on expanding its services in the virtual asset ecosystem, including asset management and cryptocurrency trading[9] - The group aims to enhance its one-stop virtual asset service ecosystem, focusing on compliance exchange operations and integrating custody, asset management, and quantitative product services[99] - The group plans to expand its asset management business in Hong Kong, offering a more diversified virtual asset investment fund structure to professional investors[101] - The group has implemented a series of network controls to mitigate digital asset custody risks, including two-factor authentication and daily wallet management[93] - The group is committed to adhering to anti-money laundering regulations, with ongoing monitoring and reporting procedures in place to reduce compliance risks[95] - The group is developing a comprehensive upgrade of its one-stop virtual asset service platform to optimize user experience and facilitate seamless asset management[99] - The group has introduced various quantitative trading strategies, including Delta neutral strategies and high-frequency trading strategies, to provide clients with stable returns and risk-neutral services[101] Governance and Compliance - The company has adopted new and revised Hong Kong Financial Reporting Standards that do not have a significant impact on its financial performance and position[16] - The new Hong Kong Financial Reporting Standard No. 18 will affect the presentation of the consolidated income statement and future disclosures in the consolidated financial statements[20] - The group has adopted all applicable corporate governance code provisions as of March 31, 2025[103] - The board of directors includes non-executive director Mr. Li Lin (Chairman), executive directors Mr. Du Jun (CEO) and Ms. Zhang Li, and independent non-executive directors Mr. Yu Junjie, Mr. Ye Weiming, and Dr. Lin Jiali[107] Market Risks - The group is facing unique risks related to the rapid development of the digital asset market, including regulatory changes and market volatility, and is implementing operational infrastructure to support business growth[92] Other Financial Information - The company did not recommend the payment of an interim dividend for the six months ended March 31, 2025[33] - The company’s financing costs for the six months ended March 31, 2025, were HKD 122,000, down from HKD 4,679,000 in the previous year[28] - The company incurred a loss of HKD 4,326,000 from foreign exchange differences during the reporting period[27] - The company recognized a loss provision of HKD 10,250,000 during the six months ended March 31, 2025, compared to no loss provision in the same period last year[40] - The company completed a claim submission for FTX deposits amounting to approximately USD 18,089,000 (equivalent to about HKD 141,748,000) which has been accepted by the liquidator[37] - The company entered into a sale agreement for the claim amount at a price of approximately USD 19,500,000 (equivalent to about HKD 152,125,000) on May 24, 2024[38] - The company increased its authorized share capital from 500,000,000 shares to 700,000,000 shares with a par value of HKD 0.001 per share[42] - The company issued 157,000,000 new ordinary shares at a subscription price of HKD 2.08 per share, raising approximately HKD 324,605,000 after expenses[43] - The group recorded total revenue of approximately HKD 3,455.7 million for the six months ended March 31, 2025, an increase of approximately 427.1% or HKD 2,800.1 million compared to HKD 655.6 million for the six months ended March 31, 2024[58] - The group reported a gross profit of approximately HKD 11.0 million for the 2025 period, down from approximately HKD 32.1 million in the 2024 period[58] - Other income and gains for the 2025 period amounted to approximately HKD 6.0 million, an increase of approximately HKD 7.0 million from a net loss of approximately HKD 0.9 million in the 2024 period[69] - Administrative expenses for the 2025 period were approximately HKD 39.3 million, a significant decrease of approximately 27.4% from approximately HKD 54.1 million in the 2024 period[70] - The net cash used in operating activities for the period 2025 was approximately HKD 46.2 million, a decrease from approximately HKD 52.3 million in 2024, attributed to reduced cash used in administrative expenses and the acquisition of cryptocurrency for operational purposes[76] - The net cash from investing activities for the period 2025 was approximately HKD 41.8 million, significantly up from approximately HKD 0.7 million in 2024[77] - The net cash used in financing activities for the period 2025 was approximately HKD 0.4 million, a substantial decrease from approximately HKD 223.0 million in 2024, mainly due to lease liability repayments[79] - Major customers accounted for 37.9% of total revenue, while the top five customers represented 90.2% of total revenue for the period 2025[86] - The group has no significant contingent liabilities as of March 31, 2025, apart from those disclosed in the previous annual report[85] - The group had cash and cash equivalents of approximately HKD 61.9 million as of March 31, 2025, compared to HKD 62.3 million as of September 30, 2024[89] - The average number of ordinary shares outstanding increased slightly from 465,960,665 shares in 2024 to 466,173,190 shares in 2025[34]
新火科技控股(01611) - 2025 - 中期业绩