自然美(00157) - 2025 - 中期财报

Corporate Information BOARD OF DIRECTORS The Board of Directors, chaired by Dr. Lei Qian, provides overall strategic guidance and oversight, comprising executive, non-executive, and independent non-executive directors - Board members include Dr. Lei Qian (Chairperson), Mr. Lin Jiawei, Ms. Lin Yanling (Executive Directors); Ms. Lin Shuhua, Mr. Chen Shouhuang (Non-executive Directors); Mr. Chen Ruilong, Mr. Yang Shijian, Mr. Lin Cangxiang (Independent Non-executive Directors)[5] AUTHORISED REPRESENTATIVES Mr. Lin Jiawei serves as the authorized representative, with Ms. Li Meiyi appointed on August 5, 2025, following Ms. Guo Yanting's resignation, to handle listing rule authorizations - Ms. Guo Yanting resigned as authorized representative on August 5, 2025, and Ms. Li Meiyi was appointed on the same day[6] COMPANY SECRETARY Ms. Li Meiyi was appointed Company Secretary on August 5, 2025, succeeding Ms. Guo Yanting, who resigned on the same date, to manage corporate secretarial functions - Ms. Guo Yanting resigned as Company Secretary on August 5, 2025, and Ms. Li Meiyi was appointed on the same day[6] Committees The report details the composition of the Audit, Remuneration, Executive, and Nomination Committees, crucial for corporate governance, oversight, and decision-making - Mr. Chen Ruilong chairs the Audit Committee, Mr. Lin Cangxiang chairs the Remuneration Committee, Dr. Lei Qian chairs the Executive Committee, and Mr. Yang Shijian chairs the Nomination Committee[7][8][9] REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS The company's registered office is in the Cayman Islands, with its principal place of business in Hong Kong, defining its legal and operational headquarters - The registered office is located at P.O. Box 309, Ugland House, Grand Cayman, KY1–1104, Cayman Islands[9] - The principal place of business in Hong Kong is Unit 1916, 19/F, The Lee Gardens, 33 Hysan Avenue, Causeway Bay, Hong Kong[10] AUDITORS AND LEGAL ADVISERS RSM Hong Kong is the company's auditor, and Jingtian & Gongcheng is its Hong Kong legal adviser, ensuring independent financial audits and legal compliance - The auditor is RSM Hong Kong, registered under the Financial Reporting Council Ordinance (Cap. 588 of the Laws of Hong Kong)[10] - The Hong Kong legal adviser is Jingtian & Gongcheng[11] PRINCIPAL SHARE REGISTRAR AND TRANSFER AGENT Maples Fund Services (Cayman) Limited is the principal share registrar, with Hong Kong Registrars Limited as the branch registrar, managing shareholder registration and transfers - The principal share registrar and transfer agent is Maples Fund Services (Cayman) Limited[11] - The Hong Kong branch share registrar and transfer office is Hong Kong Registrars Limited[12] LISTING INFORMATION The company is listed on The Stock Exchange of Hong Kong Limited under stock code 00157, indicating its public trading status - The company is listed on The Stock Exchange of Hong Kong Limited, with stock code 00157[13] PRINCIPAL BANKERS The company's principal bankers include HSBC, Bank of Taipei, CTBC Bank, China Merchants Bank, Bank of Communications, and E.SUN Commercial Bank, covering financial institutions across Hong Kong, Taiwan, and mainland China - Principal bankers include The Hongkong and Shanghai Banking Corporation Limited, Bank of Taipei, CTBC Bank Co., Ltd., China Merchants Bank Co., Ltd., Bank of Communications Co., Ltd., and E.SUN Commercial Bank (China) Co., Ltd[13][14][15] WEBSITE The company's official website, www.ir-cloud.com/hongkong/00157/irwebsite, provides investor relations information - The company's official website is www.ir-cloud.com/hongkong/00157/irwebsite[14](index=14&type=chunk) Management Discussion and Analysis FINANCIAL REVIEW For the six months ended June 30, 2025, turnover increased by 68.7% to HK$264.5 million, driven by mainland China, with gross profit margin declining due to product mix, but profit for the period turned positive Turnover by Geographical Segment (1H 2025 vs 1H 2024) | Region | 1H 2025 (thousand HKD) | 1H 2025 (%) | 1H 2024 (thousand HKD) | 1H 2024 (%) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Mainland China | 216,872 | 82.0% | 107,833 | 68.8% | 109,039 | 101.1% | | Taiwan | 45,943 | 17.4% | 45,953 | 29.3% | (10) | 0.0% | | Others | 1,689 | 0.6% | 2,963 | 1.9% | (1,274) | -43.0% | | Total | 264,504 | 100% | 156,749 | 100.0% | 107,755 | 68.7% | - The Group's overall gross profit margin decreased from 59.5% in 1H 2024 to 55.6% in 1H 2025, primarily due to changes in product bundling sales mix in mainland China[21] Turnover by Business Segment (1H 2025 vs 1H 2024) | Business | 1H 2025 (thousand HKD) | 1H 2025 (%) | 1H 2024 (thousand HKD) | 1H 2024 (%) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Products | 262,625 | 99.3% | 155,626 | 99.3% | 106,999 | 68.8% | | Services | 1,879 | 0.7% | 1,123 | 0.7% | 756 | 67.3% | | Total | 264,504 | 100% | 156,749 | 100.0% | 107,755 | 68.7% | - Profit before tax turned from a loss of HK$28.7 million in 1H 2024 to a profit of HK$12.5 million in 1H 2025, representing a 143.6% increase[38] - Profit for the period turned from a loss of HK$30.5 million in 1H 2024 to a profit of HK$10.9 million in 1H 2025, representing a 135.7% increase[39] Liquidity and Financial Resources (June 30, 2025 vs December 31, 2024) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities (1H) | 14.0 million HKD | 26.5 million HKD | | Cash and cash equivalents | 93.5 million HKD | 109.0 million HKD | | Bank borrowings | 200.9 million HKD | 192.2 million HKD | | Gearing ratio | 41.4% | 43.0% | | Current ratio | 1.45 times | 1.54 times | - As of June 30, 2025, approximately 52.3% of the Group's bank balances and cash were denominated in New Taiwan Dollars, 29.4% in Renminbi, with the remainder in US Dollars, Hong Kong Dollars, and Malaysian Ringgit[46] BUSINESS REVIEW In 1H 2025, the Group achieved strong growth in mainland China and stable performance in Taiwan, with significant increases in franchised/self-operated spa and counter sales, while R&D focused on anti-aging, smart devices, and exosome technology - Mainland China market turnover increased by 101.1% to HK$216.9 million, but product sales gross profit margin decreased from 61.5% to 56.0% due to changes in product revenue mix[50] - Taiwan market turnover remained stable at HK$46.0 million, with product sales gross profit margin increasing from 55.9% to 56.3% due to changes in revenue mix from business channel adjustments[51] Turnover by Distribution Channel (1H 2025 vs 1H 2024) | Distribution Channel | 1H 2025 (thousand HKD) | 1H 2025 (%) | 1H 2024 (thousand HKD) | 1H 2024 (%) | Change (thousand HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | | Franchised/Self-operated Spa and Counters | 243,000 | 91.9% | 134,300 | 85.7% | 108,700 | | E-commerce, TV Shopping and Telemarketing | 21,500 | 8.1% | 22,400 | 14.3% | (900) | Number of Stores by Ownership (June 30, 2025 vs June 30, 2024) | Region | June 30, 2025 (Total) | June 30, 2024 (Total) | | :--- | :--- | :--- | | Mainland China | 1,653 | 1,298 | | Taiwan | 293 | 323 | | Others | 19 | 32 | | Total | 1,965 | 1,653 | During 1H 2025, the Group opened 244 new stores and closed 59 stores - R&D strategy focuses on anti-aging innovation upgrades (flagship "Diamond Peptide Series" fully upgraded), smart device applications (upgraded AI skin detection device launched), and deepening exosome technology (over 20 exosome products expected to be launched)[62][63][64][68] - Successfully developed an AI massage robot with visual recognition capabilities, capable of simulating professional manual techniques for standardized operations, enhancing service consistency and customer experience[69] - A new product launch event in April 2025 introduced 6 skincare items, 2 Diamond skincare gift sets, 5 health food products, and 4 hair care products, generating HK$58.0 million in sales, with health food series revenue growing by 109.3% to HK$28.0 million year-on-year[74][75][76] - Established a strategic partnership with Giffard Education Group, launching the first "Bio-up Fanity" biotechnology beauty SPA club in Xi'an, Shaanxi, pioneering cross-industry integration in the beauty sector[77][79] - As of June 30, 2025, the Group had 525 employees, with total remuneration of approximately HK$74.9 million (1H 2024: HK$64.0 million)[80] - Capital expenditure for 1H 2025 was HK$33.2 million, primarily for new factory construction in mainland China (HK$19.4 million) and new store renovation and equipment (HK$10.4 million)[82][86] OUTLOOK FOR 2025 Natural Beauty views 2025 as a pivotal year for structural breakthroughs, focusing on expanding into the broader health sector, diversifying business, and fully integrating AI technology across product innovation, digital stores, marketing, and management systems - 2025 is a crucial year for structural breakthroughs, with continued deep cultivation in the big health sector and steady expansion of diversified business segments, driving the company into a new stage of high-quality growth[89][91] - The number of new franchised stores in mainland China increased by 88.1% year-on-year, significantly enhancing channel penetration and consumer reach efficiency[89][91] - The Taiwan market will continue to advance a dual strategy of "multi-channel marketing" and "high repurchase products," actively deploying AI beauty instruments to help franchised stores upgrade their profit models[90][92] - The mainland China market will implement a multi-channel, multi-brand strategy, accelerate the layout of its agent system, and enhance market penetration efficiency through a "online live streaming + offline conference" integrated strategy[93] - Looking ahead to the second half, the Group will continue to implement its "AI Technology • Beauty Industry • Holistic Health" strategy, leveraging strategic partnerships with Baidu and Fudan University to fully utilize AI technology in product innovation, digital store development, marketing, and management system upgrades[94] Corporate Governance Highlights Commitment to Corporate Governance The company is committed to high-level corporate governance to protect and enhance shareholder interests, with established committees whose terms of reference comply with the Corporate Governance Code - The company is committed to high-level corporate governance, having established an Audit Committee, Executive Committee, Remuneration Committee, and Nomination Committee, with terms of reference compliant with the Corporate Governance Code in Appendix C1 of the Listing Rules[95][96] AUDIT COMMITTEE AND REVIEW OF INTERIM FINANCIAL STATEMENTS The Audit Committee reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, confirming compliance with accounting standards, legal requirements, and Listing Rules, with an independent review by RSM Hong Kong - The Audit Committee has reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, deeming them compliant with applicable accounting standards, legal requirements, and the Listing Rules[97] - The company's auditor, RSM Hong Kong, has conducted an independent review of the interim financial statements in accordance with Hong Kong Standard on Review Engagements 2410[98] REMUNERATION COMMITTEE The Remuneration Committee determines executive directors' remuneration policies, assesses performance, approves service contract terms, and advises the Board on compensation for directors and senior management - The Remuneration Committee's primary responsibilities include determining the remuneration policy and structure for executive directors, assessing their performance, approving service contract terms, and making recommendations to the Board on remuneration for directors and senior management[99][102] NOMINATION COMMITTEE The Nomination Committee establishes director nomination policies, annually reviews the Board's structure, size, composition, and diversity, recommends director candidates based on the Board Diversity Policy, and assesses the independence of independent non-executive directors - The Nomination Committee is responsible for determining director nomination policies, annually reviewing the Board's structure, size, composition and diversity, recommending director candidates, and assessing the independence of independent non-executive directors[103][108] EXECUTIVE COMMITTEE The Executive Committee formulates business policies, makes decisions on key business matters, assists in approving corporate actions, reviews financial, marketing, retail, operational, and other business performance, and approves annual budgets and KPIs - The Executive Committee's main duties include formulating business policies, making decisions on important business matters, assisting in approving corporate actions, reviewing financial, marketing, retail, operational and other business performance, and approving annual budgets and key performance indicators[104][109] COMPLIANCE WITH THE CG CODE The Board confirms the company fully complied with all code provisions of the Corporate Governance Code for the six months ended June 30, 2025, demonstrating its commitment to good governance - The Board believes the company has fully complied with all code provisions of the Corporate Governance Code for the entire six-month period ended June 30, 2025[106][110] COMPLIANCE WITH THE MODEL CODE The company adopted a code of conduct for securities transactions by directors no less stringent than the Model Code, confirming all directors and relevant employees complied during 1H 2025, ensuring regulatory adherence - The company has adopted a code of conduct for directors' securities transactions, with terms no less stringent than the Model Code set out in Appendix C3 of the Listing Rules[107][111] - All directors have confirmed compliance with the required standards of the Model Code for the entire six-month period ended June 30, 2025, and up to the date of this interim report[107][111] Disclosure of Information of Directors and Chief Executive Officer pursuant to Rule 13.51B(1) of the Listing Rules Disclosures under Listing Rule 13.51B(1) include Ms. Lin Shuhua's re-appointment as independent director of Cashbox Partyworld, Mr. Yang Shijian's cessation as independent director of Topkey Corporation, and Mr. Chen Ruilong's cessation as director of Tatung Company and Vice Chairman of Cross-Strait Entrepreneurs Summit - Non-executive Director Ms. Lin Shuhua was re-appointed as an independent director of Cashbox Partyworld Co., Ltd. on June 18, 2025[113][117] - Independent Non-executive Director Mr. Yang Shijian ceased to be an independent director of Topkey Corporation from May 28, 2025[114][117] - Independent Non-executive Director Mr. Chen Ruilong ceased to be a director of Tatung Company from May 28, 2025, and ceased to be Vice Chairman of the Cross-Strait Entrepreneurs Summit from July 17, 2025[115][119] CHANGES OF COMPANY SECRETARY AND AUTHORISED REPRESENTATIVE Ms. Guo Yanting resigned as Company Secretary and Authorized Representative on August 5, 2025, with Ms. Li Meiyi appointed on the same day, ensuring a smooth transition for these key roles - Ms. Guo Yanting resigned as Company Secretary and Authorized Representative on August 5, 2025, and Ms. Li Meiyi was appointed on the same day to succeed her[115][118] Other Information PURCHASE, SALE OR REDEMPTION OF THE LISTED SECURITIES OF THE COMPANY Neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the six months ended June 30, 2025, indicating no share buybacks or issuances - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025[121][124] INTERIM DIVIDEND No interim dividend was declared for the six months ended June 30, 2025, consistent with the prior year, indicating a focus on reinvestment - No interim dividend was declared for the six months ended June 30, 2025 (2024: nil)[122][125] DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS IN SHARES As of June 30, 2025, no directors, chief executives, or their close associates held any disclosable interests or short positions in the company's shares, underlying shares, or debentures under the SFO - As of June 30, 2025, no directors, chief executives, or their close associates held any interests or short positions in the company's shares, underlying shares, or debentures that are required to be notified to the company and the Stock Exchange[123][126] SHARE AWARDS The company adopted two share award schemes on May 25, 2022, to recognize contributions, incentivize, and retain key management and attract talent, with no awards granted during the six months ended June 30, 2025 - The company adopted two share award schemes (Scheme I and Scheme II) on May 25, 2022, aiming to recognize contributions, incentivize, retain key management, and attract talent[128][129][130][131] - No share awards were granted under the share award schemes for the six months ended June 30, 2025[132] - The maximum number of shares available for grant under the share award schemes is 60,006,027 shares[132] DIRECTORS' RIGHTS TO ACQUIRE SHARES OR DEBENTURES During the review period, neither the company nor its subsidiaries participated in any arrangements enabling directors to acquire shares or debentures, nor were any such rights granted or exercised by directors or their associates - During the review period, neither the company nor any of its subsidiaries was a party to any arrangement that would enable the directors to acquire benefits by means of the acquisition of shares or debentures of the company or any other body corporate[134][136] SUBSTANTIAL SHAREHOLDERS As of June 30, 2025, the report discloses substantial shareholders and their long positions in the company's shares and underlying shares, including Eastern Media International Corporation, Mr. Chao Shih-Heng, Dr. Tsai Yen-Yu, and her spouse Mr. Lee Ming-Ta, detailing their respective shareholding percentages Substantial Shareholders' Long Positions in the Company's Shares and Underlying Shares (June 30, 2025) | Substantial Shareholder Name | Nature of Interest | Number of Ordinary Shares Beneficially Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Eastern Media International Corporation | Interest in controlled corporation | 600,630,280(L) | 30.00% | | Far Eastern Silo & Shipping (Panama) S.A. | Beneficial owner | 600,630,280(L) | 30.00% | | CHAO Shih-Heng | Interest in controlled corporation | 455,630,196(L) | 22.76% | | Good Titanic Limited | Interest in controlled corporation | 455,630,196(L) | 22.76% | | Insbro Holdings Limited | Beneficial owner | 455,630,196(L) | 22.76% | | TSAI Yen-Yu | Interest in controlled corporation | 445,315,083(L) | 22.24% | | LEE Ming-Ta | Spouse's interest | 445,315,083(L) | 22.24% | | Next Focus Holdings Limited | Beneficial owner/Interest in controlled corporation | 445,315,083(L) | 22.24% | | Starsign International Limited | Interest in controlled corporation | 292,958,524(L) | 14.63% | | Standard Cosmos Limited | Beneficial owner/Interest in controlled corporation | 292,958,524(L) | 14.63% | Independent Review Report INTRODUCTION RSM Hong Kong reviewed the company's interim financial information for the six months ended June 30, 2025, including the condensed consolidated statement of financial position and profit or loss, prepared by the directors - RSM Hong Kong has reviewed the company's interim financial information for the six months ended June 30, 2025, including the condensed consolidated statement of financial position, statement of profit or loss and other comprehensive income, and other related statements[145][146] SCOPE OF REVIEW The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410, which is less extensive than an audit, thus no audit opinion is expressed, only a review conclusion - The review was conducted in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants, which is less extensive than an audit, and therefore no audit opinion is expressed[147][149] CONCLUSION Based on the review, no matters were identified that suggest the interim financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34, confirming the reliability of the financial report - Based on the review, nothing has come to the reviewer's attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34[148][150] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Financial Performance Overview For the six months ended June 30, 2025, the company achieved revenue of HK$264.5 million and gross profit of HK$147.2 million, turning a prior-year loss into a profit for the period of HK$10.9 million, with total comprehensive income reaching HK$37.1 million Summary of Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30, 2025) | Metric | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Revenue | 264,504 | 156,749 | | Cost of sales | (117,335) | (63,419) | | Gross profit | 147,169 | 93,330 | | Other income and gains | 2,020 | 3,810 | | Distribution and selling expenses | (92,815) | (82,045) | | Administrative expenses | (33,890) | (38,855) | | Other expenses and losses | (6,414) | (979) | | Operating profit/(loss) | 16,156 | (24,579) | | Profit/(loss) before tax | 12,456 | (28,673) | | Income tax expense | (1,526) | (1,781) | | Profit/(loss) for the period | 10,930 | (30,454) | | Exchange differences arising on translation of foreign operations | 26,150 | (17,686) | | Total comprehensive income for the period | 37,080 | (48,140) | | Basic earnings/(loss) per share | 0.55 HK cents | (1.52) HK cents | Condensed Consolidated Statement of Financial Position Assets and Liabilities Overview As of June 30, 2025, the Group's total assets less current liabilities were HK$627.6 million, with net assets of HK$484.7 million, reflecting an expanded asset base and changes in working capital, primarily driven by property, plant and equipment, investment properties, and increased trade and other receivables Summary of Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Metric | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Property, plant and equipment | 268,422 | 239,614 | | Investment properties | 196,719 | 190,021 | | Right-of-use assets | 36,278 | 34,871 | | Investment in an associate | 1,569 | – | | Deferred tax assets | 21,134 | 18,123 | | Total non-current assets | 525,872 | 484,172 | | Inventories | 92,487 | 81,204 | | Trade and other receivables | 135,895 | 89,614 | | Bank and cash balances | 97,163 | 116,507 | | Total current assets | 325,854 | 288,759 | | Trade and other payables | 125,165 | 93,452 | | Borrowings (current) | 72,475 | 68,209 | | Lease liabilities (current) | 6,899 | 6,090 | | Total current liabilities | 224,161 | 187,508 | | Net current assets | 101,693 | 101,251 | | Borrowings (non-current) | 128,420 | 124,043 | | Lease liabilities (non-current) | 14,472 | 13,787 | | Total non-current liabilities | 142,892 | 137,830 | | Net assets | 484,673 | 447,593 | | Total equity | 484,673 | 447,593 | Condensed Consolidated Statement of Changes in Equity Equity Movement Overview For the six months ended June 30, 2025, total equity attributable to owners increased from HK$447.6 million to HK$484.7 million, primarily due to total comprehensive income of HK$37.1 million, with a significant contribution from exchange reserve increases Summary of Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30, 2025) | Metric | January 1, 2025 (thousand HKD) | Total Comprehensive Income for the Period (thousand HKD) | June 30, 2025 (thousand HKD) | | :--- | :--- | :--- | :--- | | Share capital | 200,210 | – | 200,210 | | Capital surplus | 42,554 | – | 42,554 | | Share premium | 29,004 | – | 29,004 | | Statutory reserve | 180,448 | – | 180,448 | | Exchange reserve | 27,136 | 26,150 | 53,286 | | Property revaluation reserve | 29,157 | – | 29,157 | | Remeasurement of defined benefit retirement plan | 3,578 | – | 3,578 | | Retained profits | (64,494) | 10,930 | (53,564) | | Total | 447,593 | 37,080 | 484,673 | Condensed Consolidated Statement of Cash Flows Cash Flow Activities Overview For the six months ended June 30, 2025, net cash used in operating activities significantly decreased to HK$14.0 million, indicating improved operational efficiency, while investment and financing activities remained cash outflows, with a positive impact from exchange rate changes Summary of Condensed Consolidated Statement of Cash Flows (For the six months ended June 30, 2025) | Cash Flow Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Net cash used in operating activities | (13,952) | (26,532) | | Net cash used in investing activities | (21,099) | (16,781) | | Net cash used in financing activities | (4,070) | (11,585) | | Net decrease in cash and cash equivalents | (39,121) | (54,898) | | Effect of foreign exchange rate changes | 23,614 | (8,341) | | Cash and cash equivalents at January 1 | 109,038 | 158,743 | | Cash and cash equivalents at June 30 | 93,531 | 95,504 | Notes to the Condensed Financial Statements BASIS OF PREPARATION The condensed financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and Listing Rules, consistent with 2024 annual financial statements, ensuring reporting consistency and compliance - The condensed financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the applicable disclosure requirements of the Listing Rules[164][168] - The accounting policies and methods of computation used in the preparation of these condensed financial statements are consistent with those adopted in the annual financial statements for the year ended December 31, 2024[165][168] ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS The Group first applied amendments to HKAS 21 "Lack of Exchangeability" from January 1, 2025, without changing accounting policies or making retrospective adjustments, indicating limited impact on current financial reporting - The Group has first applied the amendments to Hong Kong Accounting Standard 21 "Lack of Exchangeability" from January 1, 2025[166][169] - The Group has not changed its accounting policies or made retrospective adjustments due to the aforementioned amended standards[166][169] FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS As of June 30, 2025, and December 31, 2024, no financial assets or liabilities were measured at fair value, with their carrying amounts approximating fair values, indicating stable valuation of the company's financial instruments - As of June 30, 2025, and December 31, 2024, no financial assets or financial liabilities were measured at fair value[167][170] - The carrying amounts of financial assets and financial liabilities reflected in the condensed consolidated statement of financial position approximate their respective fair values[167][170] SEGMENT INFORMATION The report segments the Group's revenue and results by geography, with mainland China contributing most revenue and segment profit, and non-current assets primarily concentrated in mainland China and Taiwan Revenue and Segment Profit/(Loss) by Geographical Segment (For the period ended June 30, 2025) | Region | Revenue from External Customers (thousand HKD) | Segment Profit/(Loss) (thousand HKD) | | :--- | :--- | :--- | | Mainland China | 216,872 | 15,162 | | Taiwan | 45,943 | 5,474 | | Others | 1,689 | (5,077) | | Total | 264,504 | 15,559 | | Unallocated corporate expenses | | (3,406) | | Unallocated income | | 303 | | Consolidated loss before tax | | 12,456 | Non-current Assets by Location of Assets (As of June 30, 2025) | Region | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Mainland China | 448,055 | 411,086 | | Taiwan | 56,683 | 52,137 | | Others | – | 2,826 | | Consolidated Total | 504,738 | 466,049 | REVENUE For the six months ended June 30, 2025, total revenue was HK$264.5 million, predominantly from product sales (HK$262.6 million), with service income of HK$1.9 million, primarily from mainland China and recognized at a point in time Revenue by Major Product or Service Category (For the six months ended June 30, 2025) | Product/Service | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Product sales | 262,625 | 155,626 | | Service income | 1,879 | 1,123 | | Total | 264,504 | 156,749 | Revenue by Major Geographical Market and Timing of Revenue Recognition (For the six months ended June 30, 2025) | Market/Timing | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Mainland China | 216,872 | 107,833 | | Taiwan | 45,943 | 45,953 | | Others | 1,689 | 2,963 | | Total | 264,504 | 156,749 | | At a point in time | 262,625 | 155,626 | | Over time | 1,879 | 1,123 | - As of June 30, 2025, the transaction price allocated to remaining performance obligations was HK$18,656 thousand, expected to be recognized as revenue within one year[189] PROFIT/(LOSS) FOR THE PERIOD For the six months ended June 30, 2025, the Group achieved a profit of HK$10.9 million, a significant improvement from the prior year's loss of HK$30.5 million, reflecting efforts in cost control and revenue growth Key Components of Profit/(Loss) for the Period (For the six months ended June 30, 2025) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 14,445 | 11,078 | | Depreciation of right-of-use assets | 3,847 | 2,308 | | Total staff costs (including directors' emoluments) | 74,930 | 63,978 | | Loss on disposal of property, plant and equipment | 1,304 | 35 | | Provision for obsolete inventories | 1,245 | 512 | | Cost of inventories recognized as cost of sales | 102,184 | 53,665 | | Net exchange loss/(gain) | 4,178 | (1,106) | | Research and development expenses | 3,269 | 2,419 | INCOME TAX EXPENSE For the six months ended June 30, 2025, total income tax expense was HK$1.5 million, primarily comprising Taiwan corporate income tax, Hong Kong profits tax, and withholding tax, reflecting varying tax burdens across jurisdictions Breakdown of Income Tax Expense (For the six months ended June 30, 2025) | Tax Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | China corporate income tax | 78 | – | | Taiwan corporate income tax | 1,314 | 793 | | Hong Kong profits tax and others | 947 | 797 | | Withholding tax | 1,231 | 88 | | Deferred tax | (2,044) | 103 | | Total | 1,526 | 1,781 | - China corporate income tax is accrued at a rate of 25%, and Taiwan corporate income tax at a rate of 20%[194] - Under Hong Kong's two-tiered profits tax regime, the first HK$2 million of assessable profits is taxed at 8.25%, with the remainder at 16.5%[196] DIVIDENDS No dividends were paid or proposed for the period ended June 30, 2025, consistent with the prior year, indicating the company's strategy to reinvest earnings into business development - No dividends were paid or proposed for the period ended June 30, 2025 (2024: HK$nil)[198][200] EARNINGS/(LOSS) PER SHARE For the six months ended June 30, 2025, basic earnings per share were 0.55 HK cents, a significant improvement from the prior year's loss of 1.52 HK cents, reflecting enhanced profitability - Basic earnings per share were 0.55 HK cents (2024: loss of 1.52 HK cents), calculated based on profit for the period attributable to owners of approximately HK$10.93 million and a weighted average of approximately 2,002,100,932 ordinary shares in issue[201][205][154] - Diluted earnings/(loss) per share are not presented as the company had no potential ordinary shares outstanding[202][208] PROPERTY, PLANT AND EQUIPMENT For the six months ended June 30, 2025, the Group acquired approximately HK$33.2 million in property, plant, and equipment, demonstrating continuous capital investment to support business expansion and operational needs - For the six months ended June 30, 2025, the Group acquired approximately HK$33.2 million (2024: HK$22.3 million) of property, plant and equipment[203][208] RIGHT-OF-USE ASSETS For the six months ended June 30, 2025, the Group added HK$4.6 million in right-of-use assets due to new lease agreements, primarily for office premises, reflecting increased leasing activities - For the six months ended June 30, 2025, the Group added HK$4.6 million (2024: HK$1.1 million) in right-of-use assets due to new lease agreements for office premises with lease terms of 2 to 5 years[204][206] TRADE AND OTHER RECEIVABLES As of June 30, 2025, net trade receivables increased to HK$107.5 million from HK$68.2 million at year-end 2024, reflecting sales growth and credit policies, with average credit terms of 30 to 150 days, and up to 3 years for some beauty equipment sales Trade and Other Receivables (As of June 30, 2025) | Item | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Trade receivables | 108,415 | 69,076 | | Less: provision for credit losses | (866) | (904) | | Net trade receivables | 107,549 | 68,172 | | Prepayments | 20,704 | 14,485 | | Deposits | 3,894 | 2,931 | | Other receivables | 3,748 | 4,026 | | Total | 135,895 | 89,614 | - The Group generally grants an average credit period of 30 to 150 days to trade customers, with credit sales of certain beauty equipment extending credit periods of 12 months to 3 years[211][214] Ageing Analysis of Trade Receivables (As of June 30, 2025) | Ageing | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within 30 days | 22,748 | 17,337 | | 31 to 150 days | 69,702 | 33,627 | | Over 150 days | 15,099 | 17,208 | | Total | 107,549 | 68,172 | TRADE AND OTHER PAYABLES As of June 30, 2025, total trade and other payables increased to HK$125.2 million from HK$93.5 million at year-end 2024, primarily due to increased trade payables and accrued expenses, reflecting expanded business activities Trade and Other Payables (As of June 30, 2025) | Item | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Trade payables | 43,376 | 25,604 | | Franchisee deposits | 20,350 | 26,207 | | Other taxes payable | 4,934 | 2,791 | | Accrued expenses | 35,150 | 32,190 | | Payables for property, plant and equipment | 10,968 | – | | Other payables | 10,387 | 6,660 | | Total | 125,165 | 93,452 | Ageing Analysis of Trade Payables (As of June 30, 2025) | Ageing | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within 90 days | 40,201 | 25,178 | | 91 to 365 days | 3,175 | 426 | | Total | 43,376 | 25,604 | BORROWINGS As of June 30, 2025, the Group's total bank borrowings were HK$200.9 million, with HK$72.5 million as current liabilities and HK$128.4 million as non-current liabilities, indicating reliance on external financing and its debt structure Bank Borrowings Analysis (As of June 30, 2025) | Term | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within one year | 57,339 | 57,215 | | Between one and two years | 12,035 | 11,693 | | Between two and five years | 116,385 | 112,350 | | Subtotal | 185,759 | 181,258 | | Portion of bank loans repayable within one year and containing a repayment on demand clause | 15,136 | 10,994 | | Total | 200,895 | 192,252 | | Less: Amount repayable within 12 months | (72,475) | (68,209) | | Amount repayable after 12 months | 128,420 | 124,043 | SHARE CAPITAL As of June 30, 2025, the company's authorized share capital was HK$400.0 million (4,000,000,000 ordinary shares of HK$0.1 each), with issued and fully paid share capital of HK$200.2 million (2,002,100,932 shares), maintaining a stable capital structure Share Capital Structure (As of June 30, 2025) | Category | Number of Shares | Share Par Value (thousand HKD) | | :--- | :--- | :--- | | Authorized ordinary shares (HK$0.1 each) | 4,000,000,000 | 400,000 | | Issued and fully paid ordinary shares (HK$0.1 each) | 2,002,100,932 | 200,210 | RELATED PARTY TRANSACTIONS For the six months ended June 30, 2025, the Group engaged in various related party transactions, including sales to Eastern Media International Corporation and Shanghai Fanity Health Technology Co., Ltd., and advertising expenses paid to Eastern New Media Holdings Co., Ltd., all conducted on normal commercial terms Summary of Related Party Transactions (For the six months ended June 30, 2025) | Related Party Name | Nature of Transaction | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | :--- | | Eastern Media International Corporation | Sales of goods | 1,480 | – | | Eastern New Media Holdings Co., Ltd. | Advertising expenses | 400 | 616 | | Shanghai Fanity Health Technology Co., Ltd. | Sales of goods | 2,553 | – | - Amounts payable to a related party (Eastern New Media) were unsecured, interest-free, and generally had a credit period of 120 days from invoice date, totaling HK$207 thousand as of June 30, 2025[225] - Remuneration for directors and other key management personnel during the period was HK$3,931 thousand (2024: HK$3,068 thousand)[225] CONTINGENT LIABILITIES As of June 30, 2025, the Group had no significant contingent liabilities, indicating a low level of potential financial risk - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[225][227] CAPITAL COMMITMENTS As of the reporting period end, contracted but unprovided capital commitments primarily for property, plant, and equipment amounted to HK$32.1 million, reflecting future investment plans in fixed assets Capital Commitments (As of June 30, 2025) | Item | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Property, plant and equipment | 32,117 | 8,008 | APPROVAL OF FINANCIAL STATEMENTS The interim financial statements were approved and authorized for issue by the Board of Directors on August 5, 2025, confirming review and endorsement by the company's top management - The interim financial statements were approved and authorized for issue by the Board of Directors on August 5, 2025[230][231]