Interim Results Summary Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's unaudited interim results show total revenue decreased by 15.2% to HK$39,874 thousand, gross profit decreased by 34.4% to HK$7,296 thousand, and loss for the period narrowed by 13.6% to HK$37,653 thousand, with basic and diluted loss per share of 2.23 HK cents Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 39,874 | 47,023 | -15.2% | | Cost of Revenue | (32,578) | (35,893) | -9.2% | | Gross Profit | 7,296 | 11,130 | -34.4% | | Other Income | 90 | 113 | -20.4% | | Other Gains and Losses | (13,266) | (14,276) | -7.1% | | Administrative Expenses | (16,190) | (21,863) | -26.0% | | Impairment Losses | (559) | (2,655) | -79.0% | | Share of Results of Associates | (14,764) | (15,877) | -7.0% | | Finance Costs | (260) | (144) | +80.6% | | Loss Before Tax | (37,653) | (43,572) | -13.6% | | Income Tax Expense | – | (19) | -100.0% | | Loss for the Period | (37,653) | (43,591) | -13.6% | | Total Comprehensive Expense for the Period | (28,479) | (54,536) | -47.8% | | Basic and Diluted Loss Per Share | (2.23) HK Cents | (2.58) HK Cents | -13.6% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets were HK$359,365 thousand, an 8.4% decrease from December 31, 2024. Total liabilities were HK$46,963 thousand, an 8.9% decrease, and net assets declined to HK$312,402 thousand Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 295,946 | 324,253 | -8.7% | | Current Assets | 63,419 | 68,203 | -7.0% | | Total Assets | 359,365 | 392,456 | -8.4% | | Current Liabilities | 44,588 | 48,156 | -7.4% | | Non-current Liabilities | 2,375 | 3,419 | -30.6% | | Total Liabilities | 46,963 | 51,575 | -8.9% | | Share Capital | 168,730 | 168,730 | 0.0% | | Reserves | 143,672 | 172,151 | -16.5% | | Total Equity | 312,402 | 340,881 | -8.3% | Notes to the Condensed Consolidated Financial Statements Company Information The Company is a listed entity incorporated in the Cayman Islands with shares listed on the Hong Kong Stock Exchange, primarily engaged in sales of daily necessities, healthcare and hygiene products, food products and nutritional supplements, equity securities trading, property investment, investment holding, and money lending in Hong Kong and China - The company is a listed entity incorporated in the Cayman Islands, with shares listed on the Hong Kong Stock Exchange8 - Principal businesses include sales of daily necessities, healthcare and hygiene products, production and sales of food products and nutritional supplements, equity securities trading, property investment, investment holding, and money lending businesses8 Basis of Preparation and Accounting Policies The interim condensed consolidated financial statements are prepared in accordance with HKAS 34 and the Listing Rules, with accounting policies consistent with the 2024 annual consolidated financial statements, except for new standards effective January 1, 2025. Management exercised significant judgment and estimates in their preparation - The financial statements are prepared in accordance with HKAS 34 and the Listing Rules, with accounting policies largely consistent with the 2024 annual statements9 - The Group has not early adopted new or revised Hong Kong Financial Reporting Standards that have been issued but are not yet effective911 - Preparation of the statements involves significant management judgments and estimates, and actual results may differ912 Revenue Analysis Total revenue for the first half of 2025 was HK$39,874 thousand, a 15.2% year-on-year decrease, with customer contract revenue (mainly from sales of daily necessities, healthcare, and hygiene products) at HK$37,212 thousand and rental income at HK$2,662 thousand, primarily from the Hong Kong market Revenue Sources (For the six months ended June 30) | Revenue Source | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Sales of daily necessities, healthcare and hygiene products | 35,803 | 42,002 | -14.8% | | Sales of food products and nutritional supplements | 1,409 | 1,855 | -24.0% | | Rental income | 2,662 | 3,166 | -15.9% | | Total Revenue | 39,874 | 47,023 | -15.2% | - Revenue is primarily recognized when customers obtain control of goods, typically upon delivery and acceptance14 - Geographical revenue primarily originated from Hong Kong (HK$35,803 thousand), with China contributing HK$1,409 thousand14 Segment Information The Group is organized into three reportable segments based on operational nature: distribution, manufacturing, and investment. The finance lease segment has no related items this period as the associate is no longer classified as such. Segment results exclude certain other income, gains and losses, share of results of associates, and corporate expenses - The Group's principal operating segments include distribution (daily necessities, healthcare, and hygiene products in Hong Kong), manufacturing (food products and nutritional supplements in China), and investment (investment properties in China, Hong Kong securities, and money lending)17 - The finance lease segment had no related items during the current period, as Beijing Hengjia Group is no longer classified as an associate16 Segment Revenue and Results In the first half of 2025, the distribution segment reported HK$35,803 thousand in revenue and a loss of HK$1,792 thousand; the manufacturing segment had HK$1,409 thousand in revenue and a loss of HK$2,425 thousand; the investment segment generated HK$2,662 thousand in revenue and a loss of HK$11,632 thousand, with no revenue or results from the finance lease segment Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (HK$ Thousand) | 2024 Revenue (HK$ Thousand) | Revenue Change (%) | 2025 Results (HK$ Thousand) | 2024 Results (HK$ Thousand) | Results Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Distribution | 35,803 | 42,002 | -14.8% | (1,792) | (887) | +102.0% | | Manufacturing | 1,409 | 1,855 | -24.0% | (2,425) | (2,454) | -1.2% | | Investment | 2,662 | 3,166 | -15.9% | (11,632) | (14,348) | -19.0% | | Finance Lease | – | – | N/A | – | (15,553) | -100.0% | | Total | 39,874 | 47,023 | -15.2% | (15,849) | (33,242) | -52.3% | - All segment revenue was derived from external customers19 Segment Assets and Liabilities As of June 30, 2025, the distribution segment had assets of HK$42,250 thousand and liabilities of HK$4,556 thousand; the manufacturing segment had assets of HK$45,546 thousand and liabilities of HK$5,938 thousand; the investment segment had assets of HK$177,803 thousand and liabilities of HK$6,931 thousand, with interests in associates totaling HK$75,094 thousand Segment Assets and Liabilities (As of June 30) | Segment | 2025 Assets (HK$ Thousand) | 2024 Assets (HK$ Thousand) | Assets Change (%) | 2025 Liabilities (HK$ Thousand) | 2024 Liabilities (HK$ Thousand) | Liabilities Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Distribution | 42,250 | 46,567 | -9.2% | 4,556 | 7,315 | -37.7% | | Manufacturing | 45,546 | 46,376 | -1.8% | 5,938 | 5,946 | -0.1% | | Investment | 177,803 | 188,012 | -5.4% | 6,931 | 7,349 | -5.7% | | Interests in Associates | 75,094 | 91,442 | -17.9% | – | – | N/A | | Total | 359,365 | 392,456 | -8.4% | 46,963 | 51,575 | -8.9% | - Most assets and liabilities are allocated to reportable and operating segments, with the exception of a few corporate items22 Details of Other Financial Items This section details the composition and changes in other income, other gains and losses, impairment losses, finance costs, and loss for the period Other Income Other income for the first half of 2025 was HK$90 thousand, a 20.4% year-on-year decrease, primarily from interest income from banks and non-bank financial institutions and government grants Other Income (For the six months ended June 30) | Income Source | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Interest income from banks and non-bank financial institutions | 33 | 65 | -49.3% | | Government grants | 54 | – | N/A | | Miscellaneous income | 3 | 48 | -93.8% | | Total | 90 | 113 | -20.4% | Other Gains and Losses Net other gains and losses for the first half of 2025 amounted to a loss of HK$13,266 thousand, a 7.1% year-on-year decrease, primarily comprising fair value losses on investment properties of HK$10,876 thousand and fair value losses on financial assets at fair value through profit or loss of HK$1,823 thousand Other Gains and Losses (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Fair value changes on financial assets at fair value through profit or loss | (1,823) | (871) | +109.3% | | Fair value changes on investment properties | (10,876) | (12,991) | -16.3% | | Net exchange losses | (7) | (28) | -75.0% | | Write-off of property, plant and equipment | – | (145) | -100.0% | | Write-off of trade receivables | (31) | – | N/A | | Write-off of inventories | (192) | (129) | +48.8% | | Loss on remeasurement of assets classified as held for sale | (337) | – | N/A | | Others | – | (112) | -100.0% | | Total | (13,266) | (14,276) | -7.1% | Impairment Losses under Expected Credit Loss Model Total impairment losses for the first half of 2025 amounted to HK$559 thousand, a significant 79.0% year-on-year decrease, primarily due to impairment of other receivables, with no impairment losses on loans receivable this period Impairment Losses under Expected Credit Loss Model (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Loans receivable | – | 1,400 | -100.0% | | Other receivables | 559 | 1,255 | -55.5% | | Total | 559 | 2,655 | -79.0% | Finance Costs Finance costs for the first half of 2025 were HK$260 thousand, an 80.6% year-on-year increase, primarily due to higher interest on lease liabilities and bank borrowings Finance Costs (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Interest on bank borrowings | 51 | 23 | +121.7% | | Interest on lease liabilities | 155 | 63 | +146.0% | | Interest on other loans | 54 | 58 | -6.9% | | Total | 260 | 144 | +80.6% | Income Tax Expense Income tax expense for the first half of 2025 was zero, compared to HK$19 thousand in the same period of 2024, primarily due to a reduction in China corporate income tax Income Tax Expense (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Current tax – China corporate income tax | – | 22 | -100.0% | | Over-provision in prior years – Hong Kong profits tax | – | (3) | -100.0% | | Income Tax Expense | – | 19 | -100.0% | Components of Loss for the Period The loss for the first half of 2025 was primarily composed of cost of inventories sold of HK$32,578 thousand, staff costs of HK$8,349 thousand, and total depreciation of HK$2,543 thousand Components of Loss for the Period (For the six months ended June 30) | Item | 2025 (HK$ Thousand) | 2024 (HK$ Thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 353 | 128 | +175.8% | | Depreciation of right-of-use assets | 2,190 | 1,794 | +22.1% | | Total Depreciation | 2,543 | 1,922 | +32.3% | | Cost of inventories sold | 32,578 | 35,893 | -9.2% | | Staff costs | 8,349 | 11,154 | -25.2% | | Short-term lease expenses | 194 | 591 | -67.2% | Dividends and Loss Per Share The Board does not recommend an interim dividend for the first half of 2025, and basic and diluted loss per share for the period was 2.23 HK cents, a narrowing compared to the prior year Dividends The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 202530 Loss Per Share Attributable to Owners of the Company Loss attributable to owners of the Company for the period was HK$37,653 thousand, with basic and diluted loss per share of 2.23 HK cents, a narrowing compared to the same period last year Loss Per Share Attributable to Owners of the Company (For the six months ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the period attributable to owners of the Company | (37,653) HK$ Thousand | (43,591) HK$ Thousand | | Weighted average number of ordinary shares | 1,687,303 Thousand Shares | 1,687,303 Thousand Shares | | Basic and Diluted Loss Per Share | (2.23) HK Cents | (2.58) HK Cents | - The Company had no dilutive potential ordinary shares during the current and prior periods, thus diluted loss per share is the same as basic loss per share31 Receivables and Payables This section details the composition and aging analysis of trade receivables, other receivables, deposits and prepayments, and trade and other payables, illustrating changes in each account Trade Receivables As of June 30, 2025, net trade receivables amounted to HK$7,736 thousand, a 16.9% decrease from December 31, 2024, with an increase in receivables aged 31-90 days and 91-270 days Trade Receivables (As of June 30) | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade receivables | 7,910 | 9,760 | -18.9% | | Less: Impairment allowance | (174) | (457) | -61.9% | | Net Trade Receivables | 7,736 | 9,303 | -16.9% | Aging Analysis of Trade Receivables (As of June 30) | Aging | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | 0-30 days | 1,956 | 4,786 | -59.1% | | 31-90 days | 3,097 | 2,499 | +23.9% | | 91-270 days | 1,961 | 1,334 | +47.0% | | Over 270 days | 722 | 684 | +5.6% | | Total | 7,736 | 9,303 | -16.9% | - The credit period granted to customers ranges from 0 to 60 days32 Other Receivables, Deposits and Prepayments As of June 30, 2025, total other receivables, deposits, and prepayments amounted to HK$14,362 thousand, a 13.2% decrease from December 31, 2024, with impairment allowance increasing to HK$5,749 thousand Other Receivables, Deposits and Prepayments (As of June 30) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Other receivables | 11,709 | 12,589 | -7.0% | | Prepayments | 1,179 | 1,552 | -24.1% | | Prepayments for purchases of goods | 6,582 | 6,949 | -5.3% | | Deposits | 641 | 642 | -0.2% | | Subtotal | 20,111 | 21,732 | -7.5% | | Less: Impairment allowance | (5,749) | (5,190) | +10.8% | | Total | 14,362 | 16,542 | -13.2% | Trade and Other Payables As of June 30, 2025, total trade and other payables amounted to HK$20,638 thousand, a 15.2% decrease from December 31, 2024, with a significant reduction in trade payables aged 0-30 days and 31-90 days Trade and Other Payables (As of June 30) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade payables | 860 | 2,383 | -63.9% | | Accrued expenses | 6,300 | 8,050 | -21.7% | | Receipts in advance | 5,099 | 6,658 | -23.4% | | Deposits received | 1,380 | – | N/A | | Other payables | 6,999 | 7,263 | -3.6% | | Total | 20,638 | 24,354 | -15.2% | Aging Analysis of Trade Payables (As of June 30) | Aging | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change (%) | | :--- | :--- | :--- | :--- | | 0-30 days | 293 | 705 | -58.5% | | 31-90 days | 40 | 1,031 | -96.1% | | 91-270 days | 1 | 136 | -99.3% | | Over 270 days | 526 | 511 | +2.9% | | Total | 860 | 2,383 | -63.9% | - Deposits received include a deposit of RMB1,259,000 (approximately HK$1,380,000) for the disposal of an investment property classified as held for sale34 Management Discussion and Analysis Business Review The Group's total revenue decreased by 15.2% year-on-year, gross profit by 34.4%, and net loss narrowed by 13.6% in the first half of 2025, with all business segments (distribution, manufacturing, investment) facing challenges and declining revenue, though the investment segment's loss narrowed - The Group's total revenue was HK$39.9 million, a 15.2% year-on-year decrease; gross profit was HK$7.3 million, a 34.4% year-on-year decrease; and net loss was HK$37.7 million, a 13.6% year-on-year decrease36 - The Group operates three segments: distribution, manufacturing, and investment, in China and Hong Kong37 Distribution Segment The distribution segment's revenue decreased by 14.8% year-on-year to HK$35.8 million, recording a net loss of HK$1.8 million, primarily due to changing consumption patterns and reduced supply of traditional Chinese medicine products Distribution Segment Performance (For the six months ended June 30) | Metric | 2025 (HK$ Million) | 2024 (HK$ Million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 35.8 | 42.0 | -14.8% | | Net Loss | (1.8) | (0.9) | +100.0% | - The decrease in revenue was mainly due to underperformance of own-brand health and wellness products, and reduced supply of traditional Chinese medicine products due to packaging changes and the suspension of approval for continuing connected transactions38 Manufacturing Segment The manufacturing segment's revenue decreased by 26.3% year-on-year to HK$1.4 million, with a net loss of HK$2.4 million, a slight narrowing of loss, facing challenges from intense competition in the Chinese food market and limited production scale hindering cost reduction Manufacturing Segment Performance (For the six months ended June 30) | Metric | 2025 (HK$ Million) | 2024 (HK$ Million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1.4 | 1.9 | -26.3% | | Net Loss | (2.4) | (2.5) | -4.0% | - Extremely low sales and a recorded loss were primarily impacted by intense competition in the Chinese food market and limited production scale making product cost reduction difficult39 Investment Segment The investment segment's revenue decreased by 15.9% year-on-year to HK$2.7 million, mainly due to an early lease termination by a tenant, while net loss narrowed to HK$11.6 million, primarily benefiting from reduced fair value losses on investment properties, and the Group has signed an agreement to dispose of a property in Shanghai Investment Segment Performance (For the six months ended June 30) | Metric | 2025 (HK$ Million) | 2024 (HK$ Million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2.7 | 3.2 | -15.9% | | Net Loss | (11.6) | (14.3) | -19.0% | - The decrease in revenue was primarily due to an early lease termination by a tenant40 - The reduction in loss was mainly attributable to a decrease in fair value losses on investment properties in China from HK$13.0 million to HK$10.9 million40 - The Group has agreed to dispose of a property in Minhang District, Shanghai, for RMB6,295,842 (approximately HK$6,844,000), with completion expected on or before August 30, 202540 Financial Review This section provides a detailed analysis of changes in the Group's financial metrics, noting that total revenue declined due to Hong Kong daily necessities sales, gross margin decreased due to discounts and rising costs, administrative expenses significantly reduced due to staff cost control, and associate losses primarily stemmed from Top Insight Limited Revenue Revenue for the period was HK$39.9 million, a 15.2% year-on-year decrease, primarily due to lower sales of daily necessities, healthcare, and hygiene products in Hong Kong - Revenue was HK$39.9 million, a 15.2% year-on-year decrease, primarily due to lower sales of daily necessities, healthcare, and hygiene products in Hong Kong41 Gross Profit Gross profit for the period was HK$7.3 million, a 34.4% year-on-year decrease, with gross margin falling from 23.7% to 18.3%, mainly due to higher trade discounts offered to bulk buyers and increased costs for certain products - Gross profit was HK$7.3 million, a 34.4% year-on-year decrease42 - Gross profit margin decreased from 23.7% to 18.3%, attributed to higher trade discounts offered to bulk buyers and increased costs for certain products42 Other Income Other income for the period was HK$90 thousand, a 20.4% year-on-year decrease, primarily from bank fixed deposit interest income and a one-off Chinese government grant - Other income was HK$90 thousand, a 20.4% year-on-year decrease, primarily from bank fixed deposit interest income and a one-off Chinese government grant43 Other Gains and Losses Net other gains and losses for the period resulted in a HK$13.3 million loss, a 7.1% year-on-year decrease, primarily comprising fair value losses on investment properties of HK$10.9 million and fair value losses on financial assets at fair value through profit or loss of HK$1.8 million - Net other gains and losses resulted in a HK$13.3 million loss, a 7.1% year-on-year decrease44 - This primarily included fair value losses on investment properties of HK$10.9 million (a 16.2% year-on-year decrease) and fair value losses on financial assets at fair value through profit or loss of HK$1.8 million (a 100% year-on-year increase)44 Administrative Expenses Administrative expenses for the period were HK$16.2 million, a 25.9% year-on-year decrease, primarily comprising staff costs of HK$8.3 million, legal and professional fees, depreciation, and various administrative expenses - Administrative expenses were HK$16.2 million, a 25.9% year-on-year decrease45 - This primarily included staff costs of HK$8.3 million (a 25.6% year-on-year decrease), legal and professional fees, depreciation, and various administrative expenses45 Share of Results of Associates Share of results of associates for the period was a loss of HK$14.8 million, a 7.0% year-on-year decrease, primarily due to the share of loss from Top Insight Limited, with no related share of loss from Beijing Hengjia Group as it is no longer classified as an associate - Share of results of associates was a HK$14.8 million loss, a 7.0% year-on-year decrease46 - This primarily included a share of loss from Top Insight Limited of HK$14.7 million (compared to a profit of HK$800 thousand in the prior year) and a loss from Simagi Finance Company Limited of HK$34 thousand46 - Beijing Hengjia Group, no longer classified as an associate, had no related share of loss this period (compared to a HK$15.6 million loss in the prior year)46 Loss for the Period Attributable to Owners of the Company Net loss attributable to owners of the Company for the period was HK$37.7 million, a 13.6% year-on-year decrease, primarily due to tightened control over administrative expenses - Net loss for the period was HK$37.7 million, a 13.6% year-on-year decrease47 - The reduction in loss was primarily due to tightened control over administrative expenses47 Financial Position and Liquidity The Group's total assets and liabilities both decreased, while the gearing ratio and current ratio remained stable, with cash and cash equivalents declining primarily due to net cash outflow from operating activities Financial Position As of June 30, 2025, the Group's total assets were HK$359.4 million, an 8.4% year-on-year decrease; total liabilities were HK$47.0 million, an 8.9% year-on-year decrease, with both the gearing ratio and current ratio remaining stable Financial Position Overview (As of June 30) | Metric | June 30, 2025 (HK$ Million) | December 31, 2024 (HK$ Million) | Change (%) | | :--- | :--- | :--- | :--- | | Total Assets | 359.4 | 392.5 | -8.4% | | Total Liabilities | 47.0 | 51.6 | -8.9% | | Gearing Ratio | 13.1% | 13.1% | 0.0% | | Current Ratio | 1.4 | 1.4 | 0.0% | - The decrease in total assets was primarily due to fair value losses on investment properties in China and unsatisfactory operating results of associates48 - The decrease in total liabilities was mainly due to a reduction in trade and other payables48 Liquidity and Financial Resources As of June 30, 2025, the Group's cash and cash equivalents were approximately HK$8.7 million, a decrease of HK$4.5 million from the beginning of the period, primarily due to net cash outflow from operating activities, while short-term bank borrowings remained stable - Cash and cash equivalents were approximately HK$8.7 million, a HK$4.5 million decrease from December 31, 2024, primarily due to net cash outflow from operating activities50 - Short-term bank borrowings amounted to HK$2.8 million, remaining stable compared to the beginning of the period50 - The Group finances its business operations through funding from banks and other non-bank financial institutions, as well as internally generated cash flows50 Risk Management The Group faces no significant foreign exchange risk and has not engaged in hedging, with credit risk primarily stemming from loans receivable, for which policies and procedures are in place to mitigate risk, assessed using an expected credit loss model Foreign Exchange Risk The Group is not exposed to significant foreign currency exchange rate fluctuation risk, as major transactions are denominated in local currencies, and no foreign exchange hedging transactions or instruments were entered into during the reporting period - The Group is not exposed to significant foreign currency exchange rate fluctuation risk, as major transactions are denominated in local currencies51 - No foreign exchange hedging transactions or instruments were entered into during the reporting period51 Credit Risk The Group's primary credit risk arises from loans receivable, particularly money lending services, for which policies and procedures are established to mitigate risk, and assessments are conducted using a probability-weighted expected credit loss model - Primary credit risk originates from loans receivable, especially money lending services52 - The Group has established policies and procedures to mitigate credit risk and assesses the recoverability of loans receivable using a probability-weighted expected credit loss model5253 Legal and Commitments There were no pledged assets or significant contingent liabilities at the end of the reporting period, while the Group faces litigation related to Beijing Hengjia and has filed for its judicial dissolution, with capital commitments significantly reduced Pledged Assets As of June 30, 2025, and December 31, 2024, the Group had no pledged assets - As of June 30, 2025, and December 31, 2024, there were no pledged assets54 Contingent Liabilities As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities - As of June 30, 2025, and December 31, 2024, the Group had no significant contingent liabilities55 Litigation The Group has received a civil writ from Beijing Hengjia regarding unpaid registered capital of US$22.61 million, with the Board believing there are strong legal grounds to address the claim and having filed a lawsuit in a Chinese court for Beijing Hengjia's judicial dissolution - The Group has received a civil writ from Beijing Hengjia regarding unpaid registered capital of US$22.61 million56 - The Board believes there are strong legal grounds to address the claim and may realize the investment to eliminate litigation uncertainty56 - The Group has filed a lawsuit in a Chinese court seeking the judicial dissolution of Beijing Hengjia56 Capital Commitments As of June 30, 2025, the Group had no capital commitments, a significant reduction from HK$134 thousand as of December 31, 2024 - As of June 30, 2025, the Group had no capital commitments (December 31, 2024: HK$134 thousand for the acquisition of property, plant, and equipment)57 Prospects The Group's future performance is influenced by economic conditions in Hong Kong and China, with Hong Kong experiencing solid expansion but weak private consumption, and China facing domestic consumption and real estate market challenges. The Group plans to enhance performance and liquidity through product diversification, channel expansion, product optimization, conservative investment strategies, and potential property disposals, while actively seeking new growth opportunities - Hong Kong's economy expanded steadily in the first quarter of 2025, but private consumption expenditure saw a slight decline58 - China's economy faces risks including weak domestic consumption, a sluggish real estate market, Sino-US geopolitical tensions, and global trade protectionism59 - The Chinese government has introduced various support measures, such as subsidies for old-for-new home appliances and relaxed fiscal policies, to counter external threats, stimulate domestic demand, and support high-tech industries59 - The distribution segment aims to boost sales through product diversification, expanding distribution channels, and broadening its customer base60 - The manufacturing segment is stabilizing operations of new healthy instant noodle production lines, expanding product categories (e.g., low-GI certified instant noodles), increasing own-brand market exposure, and enriching nutritional supplement categories60 - The investment segment will adhere to a conservative strategy, closely evaluating and optimizing its investment portfolio, and may dispose of Chinese properties to replenish liquidity and mitigate market risks60 - For the second half of 2025, the Group anticipates optimizing business segments to enhance sales and profitability, seeking cost reductions, potentially exiting loss-making projects, disposing of properties, and reallocating resources to promising segments60 - The Group will prudently explore new potential growth opportunities, undervalued assets, and business expansion opportunities to diversify revenue streams, generate profits, and enhance shareholder value60 Other Information Employees and Remuneration As of June 30, 2025, the Group employed approximately 42 staff in Hong Kong and China, a decrease from 56 as of December 31, 2024, with remuneration determined by basic salary, bonuses, and benefits-in-kind, referencing industry practice and individual performance Number of Employees | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Number of Employees | 42 | 56 | -25.0% | - Staff remuneration is determined by basic salary, bonuses, and other benefits-in-kind, referencing industry practice and individual performance61 - The Group provides induction training for new staff and regular training for existing employees61 Events After Reporting Period Except as otherwise disclosed in this announcement, the Group had no significant events after the end of the reporting period - No significant events after the end of the reporting period were disclosed62 Purchase, Redemption or Sale of Listed Securities Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period - Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period63 Corporate Governance The Group generally complied with the Corporate Governance Code during the reporting period, with deviations noted in the unseparated roles of Chairman and Chief Executive Officer and the Remuneration Committee's terms of reference not covering senior management remuneration. All Directors confirmed compliance with the Model Code for Securities Transactions, and the Audit Committee reviewed and approved the interim financial statements Corporate Governance Practices The Group complied with all code provisions of Appendix C1 to the Listing Rules, "Corporate Governance Code," except for deviations regarding the unseparated roles of Chairman and Chief Executive Officer and the Remuneration Committee's terms of reference not covering senior management remuneration - The Group complied with all code provisions of Appendix C1 to the Listing Rules, "Corporate Governance Code," with two deviations64 - Deviation C.2.1: Mr. Wang Liping serves as both Chairman and Chief Executive Officer, and the company is seeking a suitable candidate; the Board believes the existing balance of power adequately safeguards shareholders' interests64 - Deviation E.1.2: The Remuneration Committee's terms of reference do not include reviewing senior management remuneration, as the Board believes executive directors are better suited for this role65 Model Code for Securities Transactions The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 to the Listing Rules, and all Directors confirmed compliance with the required standards throughout the review period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 to the Listing Rules66 - All Directors confirmed compliance with the required standards of the Model Code throughout the review period66 Review by Audit Committee The Audit Committee, established in accordance with the Corporate Governance Code and comprising three independent non-executive directors, has reviewed and approved the unaudited condensed consolidated financial statements for the six months ended June 30, 2025 - The Audit Committee has been established in accordance with the Corporate Governance Code and comprises three independent non-executive directors67 - The Audit Committee has reviewed and approved the unaudited condensed consolidated financial statements for the six months ended June 30, 202567 Publication of Interim Results and Report This interim results announcement has been published on the Company's website and the Stock Exchange's website, and the 2025 interim report containing all required information will be dispatched to shareholders and published on the aforementioned websites in due course - The interim results announcement has been published on the Company's website (www.egichk.com) and the Stock Exchange's website (www.hkexnews.hk)[68](index=68&type=chunk) - The 2025 interim report, containing all required information, will be dispatched to shareholders and published on the aforementioned websites in due course68
恒嘉融资租赁(00379) - 2025 - 中期业绩