通达集团(00698) - 2025 - 中期业绩

Summary The group's revenue decreased by 16.8% to HKD 2.48 billion, while profit attributable to owners of the company surged by 393.9% | Metric | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 2,483,216 | 2,986,005 | -16.8% | | Profit attributable to owners of the company | 63,421 | 12,842 | +393.9% | | Basic earnings per share (HK cents) | 0.65 | 0.13 | +400.0% | | Interim dividend | Not recommended | Not recommended | - | Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss The group's revenue for the six months ended June 30, 2025, was approximately HKD 2.48 billion, with profit attributable to owners of the company surging by 393.9% to HKD 63.42 million | Metric | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 2,483,216 | 2,986,005 | | Cost of sales | (2,119,826) | (2,361,167) | | Gross profit | 363,390 | 624,838 | | Other income and gains, net | 74,305 | 70,575 | | Selling and distribution expenses | (25,252) | (32,246) | | General and administrative expenses | (309,410) | (655,541) | | Net gain on disposal of a subsidiary | – | 146,420 | | Other operating income/(expenses), net | 14,630 | (16,205) | | Finance costs | (25,413) | (75,001) | | Profit before tax | 92,250 | 56,976 | | Income tax expense | (8,665) | (20,680) | | Profit for the period | 83,585 | 36,296 | | Profit attributable to owners of the company | 63,421 | 12,842 | | Non-controlling interests | 20,164 | 23,454 | | Basic earnings per share (HK cents) | 0.65 | 0.13 | | Diluted earnings per share (HK cents) | 0.65 | 0.13 | Condensed Consolidated Statement of Comprehensive Income Total comprehensive income significantly improved to HKD 151.62 million from a negative HKD 100.10 million, primarily due to favorable exchange differences | Metric | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Profit for the period | 83,585 | 36,296 | | Property revaluation loss | (4,708) | (3,871) | | Exchange differences on translation of overseas operations | 71,964 | (189,640) | | Release of exchange fluctuation reserve upon disposal of a subsidiary | – | 58,671 | | Other comprehensive income/(expense) for the period (after tax) | 68,037 | (136,392) | | Total comprehensive income/(expense) for the period | 151,622 | (100,096) | | Attributable to owners of the company | 115,673 | (107,868) | | Non-controlling interests | 35,949 | 7,772 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets slightly decreased, but net current assets and total equity increased, reflecting continuous financial improvement | Metric | As of June 30, 2025 (HKD thousands) | As of December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Total non-current assets | 2,702,798 | 2,716,395 | | Total current assets | 4,448,538 | 4,437,841 | | Total current liabilities | 3,486,820 | 3,660,518 | | Net current assets | 961,718 | 777,323 | | Total non-current liabilities | 609,369 | 588,875 | | Net assets | 3,055,147 | 2,904,843 | | Total equity | 3,055,147 | 2,904,843 | Notes to the Condensed Consolidated Interim Financial Statements Company Information The company, registered in the Cayman Islands, primarily engages in investment holding, with subsidiaries manufacturing various consumer electronics and home products - The company is registered in the Cayman Islands, primarily engaged in investment holding[12] - Subsidiaries' main businesses include manufacturing and selling mobile phone casings and precision components, smart appliance casings, home and sports products, and network communication equipment[12] Basis of Presentation Interim financial statements comply with HKEX Listing Rules Appendix D2 and HKAS 34 "Interim Financial Reporting" - The interim financial statements comply with Appendix D2 of the HKEX Listing Rules and HKAS 34[13] Accounting Policies Accounting policies are consistent with annual consolidated financial statements, with new HKFRSs having no impact on these interim financial statements - Accounting policies are consistent with the annual consolidated financial statements[14] - Initial adoption of HKAS 21 (Amendment) "Lack of Exchangeability" has no impact on these interim financial statements[14][15] Operating Segment Information The group operates two reportable segments: consumer electronics structural components and home & sports products, with performance assessed based on adjusted profit before tax Segment Business The group's two segments are consumer electronics structural components (e.g., phone casings, network equipment) and home & sports products (e.g., household durables, sports goods) - Consumer electronics structural components segment covers mobile phone casings, precision components, smart appliance panels, network communication equipment, and other consumer electronics[17] - Home and sports products segment includes household durables, home tools, and sports products[17] Revenue and Results Analysis Consumer electronics structural components revenue decreased, while home & sports products revenue increased, with overall segment performance impacted by depreciation and amortization | Segment | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Segment Revenue: | | | | Consumer electronics structural components | 1,902,809 | 2,478,496 | | Home and sports products | 580,407 | 507,509 | | Segment Results: | | | | Consumer electronics structural components | 7,422 | 63,390 | | Home and sports products | 51,618 | 56,756 | | Consolidated segment results | 59,040 | 120,146 | Assets and Liabilities Analysis As of June 30, 2025, consumer electronics structural components saw decreased assets and liabilities, while home & sports products experienced slight asset growth and liability reduction | Segment | As of June 30, 2025 (HKD thousands) | As of December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Segment Assets: | | | | Consumer electronics structural components | 4,372,703 | 4,453,580 | | Home and sports products | 1,600,159 | 1,573,611 | | Consolidated total assets | 7,151,336 | 7,154,236 | | Segment Liabilities: | | | | Consumer electronics structural components | 2,495,922 | 2,750,254 | | Home and sports products | 351,953 | 377,509 | | Consolidated total liabilities | 4,096,189 | 4,249,393 | Geographical Information The group's revenue primarily originates from China, with smaller contributions from Asia Pacific (excluding China) and the United States | Region | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | China | 1,765,475 | 2,317,515 | | Asia Pacific (excluding China) | 258,260 | 253,473 | | United States | 5,795 | 6,028 | | Other | 453,686 | 408,989 | | Consolidated total revenue | 2,483,216 | 2,986,005 | Major Customer Information Customer A was a major customer in 2024 but not in 2025, while Customer B's revenue contribution increased, mainly from consumer electronics structural components | Customer | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Customer A | Not applicable | 381,029 | | Customer B | 357,927 | 304,210 | | Total | 357,927 | 685,239 | - Customer A is no longer a major customer in 2025, while Customer B's revenue contribution increased[22] Profit Before Tax Profit before tax is influenced by depreciation, R&D costs, salaries, and net exchange differences, with significant decreases in depreciation and R&D costs | Item | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 123,407 | 319,192 | | Depreciation of right-of-use assets | 7,586 | 7,776 | | Amortisation of intangible assets | 380 | 389 | | Research and development costs | 120,473 | 372,080 | | Salaries and wages | 561,299 | 666,761 | | Net exchange differences | (26,630) | 11,541 | | Interest income | (7,337) | (15,175) | Income Tax Income tax expense primarily from Hong Kong and other regions, benefiting from high-tech enterprise preferential rates, with a significant reduction in total tax expenses - Hong Kong profits tax rate is 16.5%, with some subsidiaries (e.g., Tongda Precision Technology) subject to a two-tiered tax rate of 8.25% for the first HKD 2 million[24] - Mainland China enterprise income tax rate is 25%, with certain subsidiaries eligible for a preferential tax rate of 15% as high-tech enterprises[24] | Item | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Current – Hong Kong | 323 | 3,287 | | Current – Other regions | 10,017 | 20,377 | | Deferred | (1,675) | (2,984) | | Total tax expense for the period | 8,665 | 20,680 | Disposal of a Subsidiary The group disposed of its precision business on April 3, 2024, for HKD 2.015 billion, recording a net gain of HKD 146.4 million and generating HKD 1.615 billion net cash inflow - The group completed the disposal of its precision micro-components business on April 3, 2024, for a total consideration of HKD 2.015 billion[26] | Item | Amount (HKD thousands) | | :--- | :--- | | Consideration received | 1,904,250 | | Net assets disposed of | (1,608,783) | | Release of exchange fluctuation reserve | (58,671) | | Gain on disposal of a subsidiary | 347,546 | | Transaction costs directly attributable to the disposal | (53,037) | | Income tax expense | (148,089) | | Net gain on disposal of a subsidiary | 146,420 | | Item | As of June 30, 2024 (HKD thousands) | | :--- | :--- | | Net cash and cash equivalents inflow from disposal of a subsidiary (after tax) | 1,614,526 | Business Combination The company acquired Credence Technology Limited for HKD 60 million to expand and create synergies, with the target committing to an EBITDA of at least HKD 12 million for FY2024 - The group acquired Credence Technology Limited for HKD 60 million on January 3, 2024[32][33] - The acquisition aims to expand and create synergies with the existing appliance business[33] - The target company committed to an EBITDA of not less than HKD 12 million for the financial year ended December 31, 2024[33] | Item | Fair Value (HKD thousands) | | :--- | :--- | | Net identifiable assets acquired | 60,000 | | Total consideration paid in cash | 60,000 | | Net cash outflow arising from the acquisition | (51,695) | - The target company and its subsidiaries contributed HKD 161 million in revenue and HKD 3.01 million in profit to the group from the acquisition date to June 30, 2024[35] Dividends The Board does not recommend paying any interim dividend for the six months ended June 30, 2025 - The Board of Directors does not recommend the payment of any interim dividend[36] Earnings Per Share Basic and diluted earnings per share attributable to owners of the company were HKD 0.65 cents, a significant increase, with both being identical due to no potential dilutive ordinary shares | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Profit for basic and diluted earnings per share (HKD thousands) | 63,421 | 12,842 | | Weighted average number of ordinary shares (thousands) | 9,735,607 | 9,735,607 | | Basic and diluted earnings per share (HK cents) | 0.65 | 0.13 | - For the six months ended June 30, 2025, basic and diluted earnings per share were identical, with no adjustments made[38] Property, Plant and Equipment and Intangible Assets The group added HKD 88.25 million in PPE, disposed of HKD 6.11 million in assets, and recorded a HKD 4.71 million revaluation deficit, with no write-down for consumer electronics assets - During the period, HKD 88.25 million was added to property, plant and equipment, and items with a net book value of HKD 6.11 million were disposed of[39] - Revaluation of Hong Kong leased buildings and related right-of-use assets resulted in a deficit of HKD 4.71 million, leading to a reduction in deferred tax liabilities of HKD 0.781 million[40] - After assessment, the carrying amount of assets in the consumer electronics structural components segment did not require write-down to their estimated recoverable amount[42] - Cash flow forecasts used a compound annual growth rate for revenue between 1.5% and 5.2% over the next five years, with a pre-tax discount rate between 13.6% and 16.3%[43] Inventories As of June 30, 2025, total inventories decreased to HKD 655.29 million from HKD 713.83 million, mainly due to reductions in work-in-progress and finished goods | Item | As of June 30, 2025 (HKD thousands) | As of December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Raw materials | 161,284 | 157,212 | | Work-in-progress | 159,334 | 180,300 | | Finished goods | 334,681 | 376,327 | | Total inventories | 655,299 | 713,839 | Trade and Bills Receivables As of June 30, 2025, total trade and bills receivables were HKD 2.092 billion, slightly lower than HKD 2.119 billion, with credit terms of 1-3 months and strict monitoring | Item | As of June 30, 2025 (HKD thousands) | As of December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade receivables | 1,411,801 | 1,515,435 | | Impairment allowance | (23,220) | (25,378) | | Bills receivables | 703,587 | 628,474 | | Total trade and bills receivables | 2,092,168 | 2,118,531 | - The group generally offers credit terms of 1 to 3 months and maintains strict monitoring over outstanding receivables[45] | Ageing | As of June 30, 2025 (HKD thousands) | As of December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within 3 months | 1,613,812 | 1,976,360 | | 4 to 6 months | 361,855 | 138,970 | | 7 to 9 months | 119,539 | 5,499 | | 10 to 12 months | 4,274 | 2,775 | | Over 1 year | 15,908 | 20,305 | | Total | 2,115,388 | 2,143,909 | | Impairment allowance | (23,220) | (25,378) | | Net | 2,092,168 | 2,118,531 | Financial Assets at Fair Value Through Profit or Loss Financial assets at fair value through profit or loss, including structured bank deposits and fund investments, have fair value changes recognized in "Other income and gains, net" - Financial assets at fair value through profit or loss refer to bank structured deposits and fund investments[47] - Changes in their fair value are recognized in "Other income and gains, net" in the condensed consolidated statement of profit or loss[47] Trade and Bills Payables As of June 30, 2025, total trade and bills payables decreased to HKD 2.295 billion from HKD 2.525 billion, with non-interest bearing trade payables settled within 60-90 days | Item | As of June 30, 2025 (HKD thousands) | As of December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade payables | 1,264,981 | 1,527,152 | | Bills payables | 1,029,775 | 997,934 | | Total trade and bills payables | 2,294,756 | 2,525,086 | - Trade payables are non-interest bearing and generally settled within 60 to 90 days[48] | Ageing | As of June 30, 2025 (HKD thousands) | As of December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Within 3 months | 1,691,085 | 1,821,013 | | 4 to 6 months | 560,006 | 656,634 | | 7 to 9 months | 16,334 | 18,873 | | 10 to 12 months | 4,427 | 3,645 | | Over 1 year | 22,904 | 24,921 | | Total | 2,294,756 | 2,525,086 | Management Discussion and Analysis Financial Review Total revenue decreased by 16.8% due to the precision components business disposal, but profit attributable to owners surged by 395.3%, driven by reduced finance costs, R&D, and depreciation Revenue Revenue decreased by 16.8% to HKD 2.483 billion due to the precision components business disposal; excluding this, revenue only slightly decreased by 0.5% | Metric | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | Change (%) | | :--- | :--- | :--- | :--- | | Total revenue | 2,483.2 | 2,986.0 | -16.8% | - Revenue decrease primarily due to the disposal of the precision components business, with its revenue no longer consolidated from April 3, 2024[50] - Excluding the contribution from the disposed business, revenue for the period only slightly decreased by 0.5% compared to the adjusted revenue of the prior period[50] Gross Profit and Gross Profit Margin Gross profit decreased by 41.8% to HKD 363.4 million, with margin declining by 6.3 percentage points to 14.6%, due to market competition and precision business disposal, partially offset by lower depreciation | Metric | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | Change (%) | | :--- | :--- | :--- | :--- | | Gross profit | 363.4 | 624.8 | -41.8% | | Gross profit margin | 14.6% | 20.9% | -6.3 percentage points | - Decrease in gross profit and gross profit margin primarily due to intense market competition and the disposal of the high-margin precision components business[51] - Significant reduction in depreciation expenses during the period, resulting from fixed asset impairment at the end of 2024, partially offset the decrease in gross profit and gross profit margin[51] Other Income and Gains, Net Other income and gains, net, increased by 5.2% to HKD 74.3 million, mainly from increased rental income after precision business disposal, partially offset by lower interest income | Metric | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | Change (%) | | :--- | :--- | :--- | :--- | | Other income and gains, net | 74.3 | 70.6 | +5.2% | - Increase primarily due to increased rental income after the disposal of the precision components business[52] - Part of the increase was offset by a decrease in interest income earned during the period compared to the prior period[52] Selling and Distribution Expenses Selling and distribution expenses decreased by 21.4% to HKD 25.3 million, consistent with revenue decline, maintaining a stable proportion of revenue | Metric | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | Change (%) | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 25.3 | 32.2 | -21.4% | | Percentage of revenue | 1.0% | 1.1% | -0.1 percentage points | - The decrease is consistent with the reduction in the group's turnover[53] General and Administrative Expenses General and administrative expenses significantly decreased by 52.8% to HKD 309.4 million, mainly due to reduced R&D expenses post-disposal and lower bank charges from early loan repayment | Metric | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | Change (%) | | :--- | :--- | :--- | :--- | | General and administrative expenses | 309.4 | 655.5 | -52.8% | | Percentage of revenue | 12.5% | 22.0% | -9.5 percentage points | - Decrease primarily due to reduced R&D expenses during the period, as related R&D expenses are no longer incurred after the disposal of the precision components business[54] - Early repayment of a significant portion of long-term bank loans led to a substantial reduction in bank charges[54] Other Operating Income/(Expenses), Net The group recorded net other operating income of HKD 14.6 million, compared to net expenses of HKD 16.2 million last year, primarily due to HKD 26.6 million in exchange gains | Metric | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | | :--- | :--- | :--- | | Other operating income/(expenses), net | 14.6 (income) | (16.2) (expenses) | | Exchange gains/(losses) | 26.6 (gains) | (11.5) (losses) | - Primarily due to recording exchange gains of HKD 26.6 million during the period, compared to exchange losses of HKD 11.5 million in the prior period[55] Finance Costs Finance costs significantly decreased by 66.1% to HKD 25.4 million, mainly due to the group's early repayment of substantial long-term bank loans in 2024 | Metric | Six Months Ended June 30, 2025 (HKD millions) | Six Months Ended June 30, 2024 (HKD millions) | Change (%) | | :--- | :--- | :--- | :--- | | Finance costs | 25.4 | 75.0 | -66.1% | - The decrease is primarily due to the group's early repayment of a significant portion of long-term bank loans in 2024[56] Liquidity, Financial Resources and Capital Structure Liquidity primarily from cash, operating cash flow, and interest-bearing borrowings; as of June 30, 2025, cash and equivalents slightly increased, total assets stable, and net current assets and equity grew - The group primarily generates working capital from cash on hand, net cash generated from operating activities, and interest-bearing bank and other borrowings[57] | Metric | As of June 30, 2025 (HKD millions) | As of December 31, 2024 (HKD millions) | | :--- | :--- | :--- | | Cash and cash equivalents | 1,629.3 | 1,615.7 | | Of which pledged | 264.1 | 249.5 | | Total assets | 7,151.3 | 7,154.2 | | Net current assets | 961.7 | 777.3 | | Equity | 3,055.1 | 2,904.8 | - 76.9% of cash and bank balances are denominated in RMB, 11.5% in USD, and 11.6% in other currencies[58] Capital Expenditure Total capital expenditure for the period was HKD 88.3 million, primarily for PPE acquisition to expand the home and sports products segment | Metric | Six Months Ended June 30, 2025 (HKD millions) | As of December 31, 2024 (HKD millions) | | :--- | :--- | :--- | | Total capital expenditure | 88.3 | 454.0 | - Primarily used for the acquisition of property, plant and equipment to expand the home and sports products segment[59] Treasury Policy The group monitors foreign exchange and interest rate risks, considering hedging when necessary, given sales in RMB/USD and purchases in RMB - The group will continue to monitor overall foreign exchange risk and interest rate risk, considering hedging these risks when necessary[60] - Sales are primarily denominated in RMB and USD, while purchases are primarily transacted in RMB[60] Pledge of Group Assets The group pledged bank deposits, leased buildings, right-of-use assets, and Tongda Creative Living shares as collateral for bank financing - Pledged bank deposits of HKD 264.1 million (December 31, 2024: HKD 249.5 million)[61] - Pledged leased buildings and related right-of-use assets in Hong Kong and Mainland China with a carrying value of approximately HKD 646.9 million (December 31, 2024: HKD 569.7 million)[61] - Pledged 17.2 million issued shares of Tongda Creative Living[61] Human Resources As of June 30, 2025, the group had approximately 9,000 employees, with total salaries and wages of HKD 561.3 million, offering diverse compensation, benefits, and training | Metric | As of June 30, 2025 | As of June 30, 2024 | | :--- | :--- | :--- | | Number of permanent employees | Approximately 9,000 | Approximately 10,000 | | Total salaries and wages (HKD millions) | 561.3 | 666.8 | - The group determines remuneration based on employee performance, experience, and industry practice, providing MPF schemes, pension schemes, medical insurance, training courses, and share awards/discretionary bonuses[62] Significant Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures The group completed the disposal of its precision components business and the acquisition of Credence Technology Limited, with no other significant M&A activities - Completed the disposal of the precision micro-components business on April 3, 2024, for a consideration of HKD 2.015 billion[63] - Completed the acquisition of all issued shares of Credence Technology Limited for HKD 60 million on January 3, 2024[64] - No other significant acquisitions or disposals of subsidiaries, associates, or joint ventures occurred during the period[65] Gearing Ratio and Borrowings The group's gearing ratio is not applicable; as of June 30, 2025, total bank and other borrowings were HKD 1.11 billion, with HKD 661 million repayable within one year at 1.8% to 7.0% interest - The group's gearing ratio is not applicable[66] | Metric | As of June 30, 2025 (HKD millions) | As of December 31, 2024 (HKD millions) | | :--- | :--- | :--- | | Interest-bearing bank and other borrowings (current portion) | 661.3 | 548.0 | | Interest-bearing bank borrowings (non-current portion) | 448.8 | 432.4 | | Total borrowings | 1,110.1 | 980.4 | - Bank borrowings bear interest at annual rates ranging from 1.8% to 7.0%[66] Business Review Overall Business Performance As a precision structural components supplier, the group's revenue decreased by 16.8% due to business disposal, but profit attributable to owners surged by 395.3%, driven by reduced finance, R&D, and depreciation costs - The group's revenue was approximately HKD 2.483 billion, a year-on-year decrease of 16.8%, or a slight decrease of 0.5% if excluding the revenue contribution from the disposed precision components business[67] - Profit attributable to owners of the company was HKD 63.4 million, a year-on-year increase of approximately 395.3%[67] - The increase in profit was primarily due to substantial reductions in finance costs and bank charges, a significant decrease in R&D costs, and a substantial reduction in depreciation expenses resulting from fixed asset impairment[67][68] - The one-off net gain of approximately HKD 146.4 million from the disposal of the precision components business in the prior period partially offset the increase in profit for the current period[68] Business Segments The group's business is divided into consumer electronics structural components and home & sports products segments, each showing distinct growth trends and strategic adjustments Consumer Electronics Structural Components This segment's sales were approximately HKD 1.903 billion, down 23.2%, due to business disposal and smartphone market decline; the group is optimizing its layout and opened a new Vietnam factory for network communication equipment - This segment's sales amounted to approximately HKD 1.903 billion, accounting for approximately 76.6% of total revenue, a year-on-year decrease of 23.2%[71] - Excluding the contribution from the disposed precision components business, this segment's revenue decreased by 4.3% year-on-year[71] - Smartphone market shipments declined by 0.6%, with economic uncertainty suppressing consumers' willingness to upgrade phones[71] - The group is actively integrating and optimizing its existing business layout and has commenced production at a new network communication equipment factory in Vietnam[71][72] Home and Sports Products This segment's sales were approximately HKD 580 million, up 14.4%, driven by broadened customer base, deepened core relationships, and enhanced efficiency from a new Malaysian Industry 4.0 factory - This segment's sales amounted to approximately HKD 580 million, a year-on-year increase of 14.4%, accounting for approximately 23.4% of total revenue[73] - Primarily produces household durables, home tools, sports products, and healthcare products for well-known European and American brands[73] - Actively broadening its customer base, deepening relationships with core customers, and advancing its international production base layout, with the new Malaysian factory having commenced production[73] Total Revenue by Product Category The proportion of consumer electronics structural components in total revenue decreased, while home and sports products increased | Product Category | 2025 | 2024 | | :--- | :--- | :--- | | Consumer electronics structural components | 76.6% | 83.0% | | Home and sports products | 23.4% | 17.0% | Outlook Smartphone Market The group expects the smartphone market to benefit from generative AI and new materials, leveraging partnerships and technology to seize growth opportunities - Generative AI is rapidly becoming a core driver for enhancing phone value[76] - The group has established long-term partnerships with major global phone brands and actively participates in the development of next-generation smartphone casings and accessories[76] - Actively exploring new materials and advanced processes, such as glass fiber phone casings, to meet market demand for a balance of strength and weight[76] Home and Sports Products Segment The home and sports products segment sees rapid growth from "product design + smart manufacturing," "plastics + hardware" integration, and stable US tariff policies, with Malaysian and Vietnamese factories boosting growth - This segment benefits from its "product design + smart manufacturing" system and "plastics + hardware" integrated development, demonstrating strong competitiveness in sports outdoor equipment, home living products, and healthcare products[77] - Key drivers include consumption upgrades, the advancement of smart manufacturing in China, and stable US tariff policies towards Southeast Asia[77] - Malaysian and Vietnamese factories will help customers more accurately forecast order demand, expected to further drive business growth[77] Future Strategies The group will achieve long-term sustainable growth by optimizing management, enhancing quality and efficiency, deepening customer cooperation, and expanding potential areas with innovative technologies - Continuously optimize internal management, enhance product quality, and improve production efficiency to effectively maintain market share and increase capacity utilization[78] - Closely monitor market changes, deepen cooperation with core customers, and further expand potential business areas with innovative technologies and leading processes[78] - Drive long-term sustainable growth and unlock asset value through efficient customer interaction, precise resource allocation, and continuously optimized manufacturing processes[78] Supplementary Information Interim Dividend The Board does not recommend paying any interim dividend for the period - The Board of Directors does not recommend the payment of any interim dividend for the period (2024: nil)[80] Purchase, Sale or Redemption of the Company's Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the period[81] Share Option and Share Award Schemes The group uses share option and award schemes to attract talent; the 2013 option scheme expired, a new one adopted, some awarded shares lapsed, and Tongda Creative Living established a restricted A-share incentive plan Share Option Scheme The 2013 share option scheme expired, and a new one was adopted to attract talent and promote business success, with grants not exceeding 10% of issued share capital - The 2013 share option scheme expired on June 24, 2023, and no further share options will be granted thereunder[82] - The company adopted a new share option scheme to attract and retain talent and promote the overall success of the group's business[82] - The total number of shares that may be granted under the new share option scheme shall not exceed 10% of the company's issued share capital (excluding treasury shares) as of the approval date[83] - Granting of share options to directors, chief executives, or substantial shareholders requires approval from independent non-executive directors, and further grants exceeding 0.1% require approval from shareholders in a general meeting[83][84] - No share options were granted under the new share option scheme during the period and up to the date of this report[85] Share Award Scheme Established by the Company The company adopted a share award scheme to foster "risk-sharing, benefit-sharing" with management and retain talent; 29.05 million awarded shares lapsed due to unfulfilled vesting conditions - The share award scheme aims to establish a "risk-sharing, benefit-sharing" mechanism with middle and senior management and to attract and retain core talent for the group[88] - The total number of shares awarded under the share award scheme shall not exceed 10% of the company's total issued shares as of the adoption date of the scheme[89] - A total of 29.05 million awarded shares lapsed during the period due to unfulfilled vesting conditions[89] - No awarded shares were granted under the share award scheme for the six months ended June 30, 2025, and 2024[90] Share Award Scheme Established by a Subsidiary Tongda Creative Living established a restricted A-share incentive plan for long-term management incentives; 1.8676 million restricted A-shares were granted, with 307,000 reserved for December 2024 - Tongda Creative Living established a restricted A-share incentive plan to provide long-term incentives for middle and senior management[91] - The total number of shares granted under the incentive plan does not exceed 10% of Tongda Creative Living's total issued shares[91] - 1.8676 million restricted A-shares were granted to 76 participants on January 4, 2024, at a grant price of HKD 14.31 per share[91] - An additional 307,000 restricted A-shares were reserved for grant to 17 participants in December 2024, at a grant price of RMB 11.65 per share[92] Corporate Governance Code The company complied with all applicable Corporate Governance Code provisions, with combined Chairman and CEO roles providing strong and consistent leadership - The company complied with all applicable code provisions of the Corporate Governance Code during the period[95] - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Wang Yanan, which the Board believes provides strong and consistent leadership[95] Audit Committee The Audit Committee, comprising three independent and one non-executive director, advises on accounting, monitors auditor independence, and reviews risk management and internal controls - The Audit Committee comprises three independent non-executive directors and one non-executive director, with Mr. Ding Lianghui serving as Chairman[96] - The committee is responsible for providing accounting and financial advice, monitoring the independence of external auditors, and reviewing and monitoring the group's risk management and internal control systems[96] - The Audit Committee and the company's auditors have reviewed the group's unaudited interim results for the period[96] Model Code for Securities Transactions The company adopted the Model Code for Securities Transactions, and all directors confirmed full compliance during the period - The company has adopted the Model Code for Securities Transactions as set out in Appendix C3 of the Listing Rules[97] - All directors have confirmed full compliance with the standards set out in the Model Code throughout the period[97] Events After the Reporting Period - No significant post-reporting period events affecting the company or its subsidiaries require disclosure[98] Publication of Interim Results Announcement and Interim Report - This announcement will be published on the HKEX and the company's website[99] - The full interim report will be available on the HKEX and the company's website at the appropriate time[99] Acknowledgement - The Chairman thanks all employees, management, customers, and suppliers for their support, anticipating the group's modern and advanced development[100]