达利国际(00608) - 2025 - 中期业绩

Chairman's Statement Global Economy and Business Challenges In the first half of 2025, the global economy and trade were impacted by US tariff policies and geopolitical changes, posing severe challenges to the global apparel industry and the Group's business - The global economy and trade were significantly affected by aggressive US tariff policies and geopolitical changes, leading to severe and difficult challenges for the global apparel industry, with the Group's business inevitably experiencing deeper impacts[2] - The Group implemented deeper reforms, actively promoted the "Dali Culture" of adapting to new times and laws, and actively explored new markets to seize growth opportunities in emerging and high-end markets[3] Key Financial Indicators for H1 2025 | Indicator | Amount (HKD) | | :--- | :--- | | Profit attributable to shareholders | 41.7 million | | Ratio of non-current liabilities to shareholders' equity | 39.3% | | Current ratio | 1.2 | | Basic earnings per share | 0.14 | | Net asset value per share | 10.36 | | Interim dividend | 0.035/share | Strategic Direction and Future Outlook The Group focuses on sustainable new products, technological innovation (AI and digital transformation), and stable management of the "Dali International Industrial Park" project, aiming for long-term development with flexible strategies - Dali focuses on the low-carbon economy, circular fashion, and healthy lifestyles, promoting the research and development of high-performance and recyclable new materials, and developing more innovative products in sports fashion and daily wear[5] - The Group continues to advance AI and digital transformation, with the core objective of enhancing supply chain speed and rapid response capabilities, strengthening quick response, and promoting design and R&D innovation[5] - The "Dali International Industrial Park" project maintains stable operations, laying a solid foundation for the long-term development of high-tech talent and resources, with the Group pursuing development with a long-term and forward-looking perspective[5] Performance Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement reports the unaudited condensed consolidated profit or loss and other comprehensive income for the six months ended June 30, 2025, showing year-on-year decreases in total revenue, profit for the period, and EPS, but a turnaround from loss to profit in total comprehensive income Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 1,507,792 | 1,643,045 | -8.23% | | Operating Gross Profit | 288,312 | 337,983 | -14.70% | | Profit Before Tax | 44,209 | 67,348 | -34.37% | | Profit for the Period | 42,067 | 53,081 | -20.75% | | Total Comprehensive Income (Expense) for the Period | 74,801 | (30,637) | Turnaround from loss to profit | | Profit Attributable to Shareholders of the Company | 41,747 | 53,305 | -21.68% | | Basic Earnings Per Share | HKD 0.14 | HKD 0.17 | -17.65% | Unaudited Condensed Consolidated Statement of Financial Position This statement provides the unaudited condensed consolidated financial position as of June 30, 2025, presenting the period-end balances of total assets, total liabilities, and shareholders' equity, reflecting changes in the company's asset structure and solvency Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (HKD thousand) | December 31, 2024 (HKD thousand) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 4,121,906 | 4,012,922 | +2.72% | | Current Assets | 2,138,741 | 2,166,125 | -1.26% | | Current Liabilities | 1,839,570 | 1,836,301 | +0.18% | | Net Current Assets | 299,171 | 329,824 | -9.30% | | Net Assets | 3,165,859 | 3,091,058 | +2.42% | | Equity Attributable to Shareholders of the Company | 3,190,866 | 3,116,385 | +2.39% | Notes to the Condensed Consolidated Financial Statements Basis of Preparation The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" issued by the HKICPA and applicable disclosure requirements of Appendix D2 of the HKEX Listing Rules - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of Appendix D2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[12] Significant Accounting Policies The report is prepared on a historical cost basis, with accounting policies consistent with the prior year's financial report, except for investment properties and some financial instruments measured at fair value, and new/revised standards having no material impact - The condensed consolidated financial statements have been prepared on a historical cost basis, except for investment properties and certain financial instruments which are measured at fair value, and the accounting policies are consistent with those used in the preparation of the Group's annual financial statements for the year ended December 31, 2024[13] - The application of the revised Hong Kong Financial Reporting Standards has no material impact on the Group's financial position and financial performance for the current period and prior periods and/or the disclosures contained in these condensed consolidated financial statements[14] Revenue and Segment Information This section details the Group's revenue by customer contracts and geographical areas, as well as revenue and results for the two business segments: garment manufacturing and trading, and property investment and development, explaining the calculation of segment profit Total Revenue and Geographical Breakdown (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | 1,507,792 | 1,643,045 | -8.23% | | Revenue from China | 848,670 | 955,137 | -11.14% | | Revenue from USA | 233,556 | 213,707 | +9.29% | | Revenue from Europe | 184,066 | 195,125 | -5.77% | | Revenue from Other Regions | 241,500 | 279,076 | -13.46% | Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (HKD thousand) | 2024 Revenue (HKD thousand) | 2025 Result (HKD thousand) | 2024 Result (HKD thousand) | | :--- | :--- | :--- | :--- | :--- | | Garment Manufacturing and Trading | 1,477,516 | 1,577,545 | 41,511 | 73,467 | | Property Investment and Development | 30,276 | 65,500 | (843) | 13,772 | - Segment profit refers to the profit earned by each segment but excludes fair value changes of derivative financial instruments and investment properties, certain central administrative expenses, and other expenses, primarily used for resource allocation and performance evaluation[19] Other Net Gains and Losses This section discloses other net gains and losses for the six months ended June 30, 2025, primarily influenced by fair value changes of investment properties and derivative financial instruments, showing a significant year-on-year increase Other Net Gains and Losses (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Fair Value Change of Investment Properties | 28,969 | 3,436 | +743.0% | | Fair Value Change of Derivative Financial Instruments | 3,641 | (1,261) | Turnaround from loss to gain | | Net Exchange Gain | 1,749 | 1,028 | +70.1% | | Total | 33,608 | 2,582 | +1209.4% | Finance Costs This section discloses finance costs for the six months ended June 30, 2025, primarily comprising interest on bank loans and overdrafts, with the total amount decreasing year-on-year Finance Costs (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Interest on Bank Loans and Overdrafts | 35,752 | 42,242 | -15.36% | | Total Borrowing Costs | 36,304 | 43,168 | -15.90% | | Less: Amount Capitalized for Qualifying Assets | (2,836) | (1,714) | +65.46% | | Total | 33,468 | 41,454 | -19.27% | Income Tax Expense This section discloses income tax expense for the six months ended June 30, 2025, showing significant decreases in tax expenses for both Hong Kong and Mainland China, leading to a substantial reduction in total tax expense Income Tax Expense (For the six months ended June 30) | Tax Source | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Hong Kong | 2,006 | 5,566 | -63.90% | | Mainland China | 504 | 12,975 | -96.12% | | Total Current Period Tax Expense | 2,510 | 18,541 | -86.47% | | Total Income Tax Expense | 2,142 | 14,267 | -84.99% | Profit for the Period This section explains certain items deducted from or included in the profit for the period, including depreciation, inventory provisions, and interest income, reflecting changes in cost structure and revenue sources Items Deducted From (Included In) Profit for the Period (For the six months ended June 30) | Item | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Depreciation of Property, Plant and Equipment | 35,033 | 28,528 | +22.80% | | Depreciation of Right-of-Use Assets | 3,019 | 2,832 | +6.60% | | Net Provision for (Reversal of) Inventory | 536 | (10,701) | Turnaround from reversal to provision | | Interest Income | (4,462) | (9,769) | -54.34% | Earnings Per Share This section provides data for the calculation of basic and diluted earnings per share for the six months ended June 30, 2025, showing a year-on-year decrease in EPS and explaining the assumptions for diluted EPS calculation Earnings Per Share Calculation Data (For the six months ended June 30) | Indicator | 2025 (HKD thousand/shares) | 2024 (HKD thousand/shares) | YoY Change | | :--- | :--- | :--- | :--- | | Profit Attributable to Shareholders of the Company | 41,747 | 53,305 | -21.68% | | Number of Ordinary Shares (thousands) | 305,616 | 305,616 | 0% | | Basic and Diluted Earnings Per Share | HKD 0.14 | HKD 0.17 | -17.65% | - In calculating diluted earnings per share for the six months ended June 30, 2025, and June 30, 2024, the exercise of share options was not assumed as the exercise price of these share options was higher than the average market price of the shares[24] Dividends This section discloses the interim dividend distribution for the six months ended June 30, 2025, which remained consistent with the prior year, and notes that no final dividend was declared - The Board declared an interim dividend of HKD 0.035 per share for the six months ended June 30, 2025, which is the same as the dividend for the six months ended June 30, 2024[25] - No final dividend for the year ended December 31, 2024, was declared or paid during this interim period[25] Trade and Other Receivables This section describes the composition of trade and other receivables and credit period policies, providing an aging analysis as of June 30, 2025, showing that receivables within 90 days constitute the largest portion - Trade and other receivables primarily include receivables from garment sales and property leases, with credit terms granted to garment trading customers mainly ranging from 30 to 90 days[26] Aging Analysis of Trade and Other Receivables (As of June 30, 2025) | Aging | June 30, 2025 (HKD thousand) | December 31, 2024 (HKD thousand) | | :--- | :--- | :--- | | Within 90 days | 550,341 | 584,142 | | 91 to 180 days | 34,154 | 33,112 | | 181 to 360 days | 18,491 | 23,746 | | Over 360 days | 18,049 | 6,083 | | Total | 621,035 | 647,083 | Trade and Other Payables This section provides an aging analysis of trade and other payables as of June 30, 2025, indicating that payables within 90 days represent the largest share, with a significant amount of accrued purchases Aging Analysis of Trade and Other Payables (As of June 30, 2025) | Aging | June 30, 2025 (HKD thousand) | December 31, 2024 (HKD thousand) | | :--- | :--- | :--- | | Within 90 days | 421,903 | 392,707 | | 91 to 180 days | 46,435 | 48,252 | | 181 to 360 days | 13,061 | 4,244 | | Over 360 days | 11,033 | 12,563 | | Accrued Purchases | 191,894 | 218,112 | | Total | 684,326 | 675,878 | Management Discussion and Analysis Business Review Facing a complex international landscape, the Group deepened digital management, implemented sustainable development strategies, optimized market and customer structures, expanded into new markets, and continuously advanced AI technology to enhance production efficiency and product innovation - The Group adheres to a management philosophy of steady progress and continuous innovation, actively optimizing market and customer structures and exploring emerging market opportunities through deepened digital management and sustainable development strategies[29] - The Group continuously advances the application of AI technology, significantly enhancing production flexibility and cost control through smart workshops and process automation, while accurately forecasting market trends[29] - In sustainable development, the Group actively practices green concepts, providing one-stop solutions and enhancing product durability through "Innocell" fabric technology and "Silkology" patented technology[30] - The Hangzhou "Dali International Industrial Park," despite being affected by the domestic real estate downturn, maintained stable rental income and gradually leveraged its platform value for technological and industrial synergy[30] Financial Review This section summarizes the Group's H1 2025 performance, noting year-on-year decreases in revenue and gross profit, but significant growth in other net gains, increased administrative and selling expenses as a percentage of revenue, reduced finance costs, and a decline in EPS Key Financial Performance (For the six months ended June 30) | Indicator | 2025 (HKD) | 2024 (HKD) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1.5078 billion | 1.643 billion | -8.23% | | Gross Profit | 288.3 million | 338 million | -14.70% | | Gross Profit Margin | 19.1% | 20.6% | -1.5 percentage points | | Profit for the Period | 42.1 million | 53.1 million | -20.72% | | Other Net Gains | 33.6 million | 2.6 million | +1209.4% | | Basic Earnings Per Share | 0.14 | 0.17 | -17.65% | | Net Asset Value Per Share (2025/06/30) | 10.36 | 10.11 (2024/12/31) | +2.47% | Revenue Breakdown by Region (For the six months ended June 30) | Region | 2025 Revenue (HKD) | 2025 Share | 2024 Revenue (HKD) | 2024 Share | | :--- | :--- | :--- | :--- | :--- | | China | 848.7 million | 56.3% | 955.1 million | 58.1% | | USA and Europe | 417.6 million | 27.7% | 408.8 million | 24.9% | | Other Countries | 241.5 million | 16.0% | 279.1 million | 17.0% | - Finance costs decreased from HKD 41.5 million in the first six months of 2024 to HKD 33.5 million in the first six months of 2025, primarily due to a reduction in interest on bank loans and overdrafts[32] Segment Information This section provides revenue and segment results by major business and region, detailing operational highlights and strategic directions for garment manufacturing and trading, and property investment and development businesses Garment Manufacturing and Trading Business The garment manufacturing and trading business experienced year-on-year declines in revenue and profit, but the Group continues to optimize operational performance and gain market recognition through sustainable development practices, enhanced process efficiency, and digital transformation Garment Manufacturing and Trading Business Performance (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 1,477,516 | 1,577,545 | -6.47% | | Profit | 41,511 | 73,467 | -43.50% | - The Group has systematically integrated sustainable development practices into its comprehensive product development and manufacturing framework, continuously optimizing operational performance through enhanced process efficiency and digital transformation[34] Property Investment and Development The property investment and development business saw a significant year-on-year decrease in revenue, but the completion of Phase II of the Hangzhou "Dali International Industrial Park" is expected to generate stable rental income and long-term development returns through optimized enterprise portfolios and industrial synergy Property Investment and Development Business Performance (For the six months ended June 30) | Indicator | 2025 (HKD thousand) | 2024 (HKD thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 30,276 | 65,500 | -53.77% | | Profit | (843) | 13,772 | Turnaround from profit to loss | - With the completion of Phase II of the Hangzhou "Dali International Industrial Park," the Group continues to optimize its tenant portfolio, attracting diverse high-quality talent and capital to build an innovative ecosystem that promotes collaborative R&D and technological development[35] Environmental, Social and Governance (ESG) Responsibility The Group deeply integrates sustainable development into its core business strategy, actively promotes green transformation, innovative recycling technologies, and high-value-added product R&D, setting six-year sustainability goals, while also focusing on employee development, fair management, and integrity culture - The Group deeply integrates sustainable development concepts into its core business strategy, actively establishing strategic alliances with global fashion brands to jointly promote the industry's green transformation and build a sustainable fashion circular model[36] - In green product development, the Group implements green sustainable development concepts, with its INNOCELL®T2T series products providing comprehensive fashion circular solutions for the industry and initiating a pilot production line for textile waste recycling[37] - The Group has set six-year sustainable development goals covering green energy, diversity and inclusion, safe workplace, community integration, and social contribution, with specific action plans formulated[37] - The Group adheres to its core values of "Achieving Self and Others, Benefiting Self and Others," valuing employee development, fostering a harmonious, inclusive, equal, and respectful work environment, and implementing competitive compensation strategies[37] - The Group upholds principles of integrity, maintaining zero tolerance for any corruption and fraudulent activities, regularly providing anti-corruption training for new employees and board members, and establishing transparent and compliant internal complaint channels and customer privacy protection systems[38] Financial Position and Risk Management This section details the Group's cash and bank balances, bank loan composition and usage, debt ratios, and current ratios, analyzing foreign currency risk, pledged assets, capital expenditures, capital commitments, and contingent liabilities, emphasizing a robust capital base and liquidity management Liquidity and Debt Ratios (As of June 30, 2025) | Indicator | June 30, 2025 (HKD) | December 31, 2024 (HKD) | Change | | :--- | :--- | :--- | :--- | | Total Cash and Cash Equivalents, Short-term Bank Deposits, and Other Financial Assets at FVTPL | 573 million | 593.8 million | -3.50% | | Bank Loans | 1.623 billion | 1.6 billion | +1.44% | | Ratio of Non-current Liabilities to Shareholders' Equity | 39.3% | 40.2% | -0.9 percentage points | | Current Ratio | 1.2 | 1.2 | No change | - Bank loans are primarily used for various property construction and development projects, as well as fixed asset investments for developing and upgrading production facilities in Mainland China[39] - Net cash inflow from operating activities was approximately HKD 69.1 million, and management is confident in the Group's ability to maintain good working capital and liquidity levels[39] - Foreign currency risk is mainly related to RMB and USD; as HKD is pegged to USD, the Group considers the related foreign exchange risk to be minimal[40] - The Group has pledged property, plant and equipment of HKD 31.6 million, investment properties of HKD 2.1952 billion, and certain deposits of HKD 122.1 million for bank borrowings[41] Capital Expenditures and Commitments (As of June 30, 2025) | Item | H1 2025 (HKD) | H1 2024 (HKD) | June 30, 2025 (HKD) (Commitment) | December 31, 2024 (HKD) (Commitment) | | :--- | :--- | :--- | :--- | :--- | | Investment in Manufacturing Capacity and Environmental Equipment | 34.2 million | 47.7 million | - | - | | Investment in Property Development and Construction Projects | 40.3 million | 36.8 million | - | - | | Capital Expenditure Commitments (Unreflected) | - | - | 261.4 million | 394.4 million | - As of June 30, 2025, the Group had no significant contingent liabilities[44] Other Information Human Resources The Group employs approximately 5,000 staff, with management highly prioritizing employee development through robust training programs, performance appraisal frameworks, and competitive compensation and benefits to enhance professional capabilities and team cohesion - As of June 30, 2025, the Group employed approximately 5,000 staff[45] - Management highly values employee development, enhancing professional capabilities and knowledge through sound training programs, comprehensive performance appraisal frameworks, and competitive compensation strategies[45] Interim Dividend The Board declared an interim dividend of HKD 0.035 per share for the six months ended June 30, 2025, totaling approximately HKD 10.697 million, consistent with the prior year - The Board declared an interim dividend of HKD 0.035 per share for the six months ended June 30, 2025, totaling approximately HKD 10.697 million[46] - The dividend will be paid on October 3, 2025, to shareholders whose names appear on the register of members on September 12, 2025[46] Closure of Register of Members To determine eligibility for the interim dividend, the company will suspend its share transfer registration from September 11 to September 12, 2025 - The company's share transfer registration will be suspended from Thursday, September 11, 2025, to Friday, September 12, 2025, both days inclusive, to determine shareholders entitled to the interim dividend[47] Corporate Governance For the six-month accounting period ended June 30, 2025, the company applied and complied with all principles and applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules - For the six-month accounting period ended June 30, 2025, the company applied and complied with all principles and applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[48] Review by Audit Committee The company's Audit Committee has reviewed the Group's unaudited condensed consolidated financial information and interim report for the six months ended June 30, 2025 - The company's Audit Committee has reviewed the Group's unaudited condensed consolidated financial information and interim report for the six months ended June 30, 2025[49] Purchase, Sale or Redemption of the Company's Listed Securities During the six-month period ended June 30, 2025, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the six-month period ended June 30, 2025, the company did not redeem any of its listed securities, and neither the company nor its subsidiaries purchased or sold any of the company's listed securities[50] Publication of Results Announcement and Interim Report The results announcement has been published on the company's and HKEX websites, and the interim report will be published and dispatched to shareholders on or before September 30, 2025 - This announcement is published on the company's website (www.highfashion.com.hk) and the HKEX website (www.hkexnews.hk)[51](index=51&type=chunk) - The 2025 Interim Report will be published and dispatched to the company's shareholders on or before Tuesday, September 30, 2025[51] Appointment of Nomination Committee Members Ms. Leung Wing Man and Mr. Wong Chun Cheong were appointed as members of the Nomination Committee effective August 26, 2025 - Effective August 26, 2025, Ms. Leung Wing Man, a non-executive director, and Mr. Wong Chun Cheong, an independent non-executive director, were appointed as members of the company's Nomination Committee[52]