龙记集团(00255) - 2025 - 中期财报

Condensed Interim Financial Statements Review Report Review Scope and Conclusion Deloitte Touche Tohmatsu reviewed the Group's condensed consolidated financial statements for the six months ended June 30, 2025, finding no material non-compliance with HKAS 34 - The auditor has reviewed the condensed consolidated financial statements in accordance with Hong Kong Standard on Review Engagements 2410, and the scope of the review is less than an audit[8] - The auditor has not found any matters indicating that the condensed consolidated financial statements are not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[9] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's revenue decreased by 12.3% to HKD 688,654 thousand, but loss significantly narrowed by 85.1% to HKD 3,553 thousand Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Key Data | Indicator | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 688,654 | 785,212 | -12.3% | | Other income, gains and losses | 11,516 | 6,188 | +86.1% | | Loss before tax | (1,865) | (27,757) | -93.3% | | Loss for the period | (3,553) | (23,915) | -85.1% | | Total comprehensive income (expense) for the period | 40,380 | (63,300) | N/A | | Basic loss per share (HK cents) | (0.56) | (3.79) | -85.2% | - Exchange differences arising from translation of overseas operations turned from a loss of HKD 39,385 thousand in the same period of 2024 to a gain of HKD 43,933 thousand in the same period of 2025, significantly impacting total comprehensive income[11] Condensed Consolidated Statement of Financial Position As of June 30, 2025, total net assets were HKD 1,600,452 thousand, a decrease from December 31, 2024, with robust net current assets and ample cash Condensed Consolidated Statement of Financial Position Key Data | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 767,609 | 809,141 | -5.26% | | Current assets | 1,117,440 | 1,162,485 | -3.9% | | Current liabilities | 193,312 | 201,476 | -4.05% | | Net current assets | 924,128 | 961,009 | -3.84% | | Net assets | 1,600,452 | 1,673,543 | -4.37% | | Bank balances and cash | 518,076 | 546,648 | -5.39% | - Fair value of investment properties decreased by HKD 3,100 thousand, and the net value of property, plant and equipment decreased, reflecting changes in the asset structure[12] Condensed Consolidated Statement of Changes in Equity Total equity decreased from HKD 1,673,543 thousand to HKD 1,600,452 thousand, mainly due to loss and dividends, partially offset by exchange reserve increase Condensed Consolidated Statement of Changes in Equity Key Data | Indicator | January 1, 2025 (HKD thousands) | June 30, 2025 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Total equity | 1,673,543 | 1,600,452 | -73,091 | | Loss for the period | - | (3,553) | (3,553) | | Exchange differences arising from translation of overseas operations | - | 43,933 | 43,933 | | Final dividend | - | (37,901) (75,802) | (113,703) | - Exchange reserve increased from HKD 121,938 thousand as of January 1, 2025, to HKD 165,871 thousand as of June 30, 2025, reflecting the positive impact of exchange rate changes[14] - Equity-settled share-based payments of HKD 232 thousand were recognized, increasing the share-based payment reserve[14] Condensed Consolidated Statement of Cash Flows Net cash from operating activities was HKD 89,431 thousand, but investing and financing outflows led to a net decrease of HKD 42,301 thousand in cash and cash equivalents Condensed Consolidated Statement of Cash Flows Key Data | Indicator | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Net cash from operating activities | 89,431 | 93,119 | -3,688 | | Net cash used in investing activities | (15,949) | (7,358) | -8,591 | | Cash used in financing activities | (115,783) | (33,611) | -82,172 | | Net (decrease) increase in cash and cash equivalents | (42,301) | 52,150 | -94,451 | | Bank balances and cash at end of period | 518,076 | 470,541 | +47,535 | - Cash outflow from financing activities significantly increased, mainly due to dividends paid rising from HKD 31,533 thousand in the same period of 2024 to HKD 113,625 thousand in the same period of 2025[16] - Cash outflow for the purchase of property, plant and equipment increased from HKD 13,102 thousand in the same period of 2024 to HKD 20,808 thousand in the same period of 2025, reflecting increased capital expenditure[16] Notes to the Condensed Consolidated Financial Statements Basis of Presentation and Principal Accounting Policies Interim financial statements are prepared under HKAS 34 and Listing Rules, using historical cost except for fair-valued investment properties, with no material impact from new HKFRS standards - The condensed consolidated financial statements are prepared in accordance with Hong Kong Accounting Standard 34 and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[17] - The statements are prepared on the historical cost basis, except for investment properties which are measured at fair value[18] - Revisions to Hong Kong Financial Reporting Standards accounting standards issued by the Hong Kong Institute of Certified Public Accountants were first applied in this interim period but had no material impact on the Group's financial position and performance[19] Revenue and Segment Information The Group manufactures mould bases, recognizing revenue upon delivery, operates as a single segment, with most non-current assets in China and no dominant customer - The Group primarily engages in the manufacturing and sale of mould bases and related products, with revenue recognized upon delivery of goods to customers[20][21] - The Group has only one operating segment, and its consolidated results include all revenue, expenses, and tax expenses[22] Revenue by Customer Delivery Location | Region | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | China | 594,866 | 694,610 | | Others | 93,788 | 90,602 | | Total | 688,654 | 785,212 | Other Income, Gains and Losses Total other income, gains and losses reached HKD 11,516 thousand, significantly increasing due to a positive shift in net exchange gains Details of Other Income, Gains and Losses | Item | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Interest income | 3,030 | 4,578 | | Rental income | 2,206 | 1,432 | | Miscellaneous income | 1,776 | 970 | | Gain on disposal of property, plant and equipment | 1,829 | 913 | | Net exchange gains (losses) | 2,675 | (1,705) | | Total | 11,516 | 6,188 | - Net exchange gains turned from a loss of HKD 1,705 thousand in the same period of 2024 to a gain of HKD 2,675 thousand in the same period of 2025, being the main reason for the increase in other income and losses[26] Other Expenses Total other expenses decreased by 16.9% to HKD 163,642 thousand, driven by reductions in transportation, maintenance, utilities, and subcontracting fees Details of Other Expenses | Item | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Tooling costs | 43,197 | 44,250 | | Transportation expenses | 26,096 | 31,062 | | Repair and maintenance expenses | 20,501 | 30,241 | | Utilities | 22,001 | 25,398 | | Subcontracting fees | 702 | 3,548 | | Total | 163,642 | 196,977 | - Subcontracting fees significantly decreased from HKD 3,548 thousand in the same period of 2024 to HKD 702 thousand in the same period of 2025[28] Income Tax (Expense) Credit The Group recorded an income tax expense of HKD 1,688 thousand, a shift from a credit, due to higher non-Hong Kong taxes and reduced deferred tax credits Details of Income Tax (Expense) Credit | Item | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong tax | 56 | (179) | | Tax in jurisdictions outside Hong Kong | (4,543) | (819) | | Deferred tax | 2,799 | 4,840 | | Total | (1,688) | 3,842 | - The tax rate for Chinese subsidiaries is 25%, and a 5% withholding tax rate applies to dividends distributed from retained profits of Chinese foreign-invested enterprises[29][30] Loss for the Period and Dividends The period's loss was net of HKD 577,097 thousand in inventory costs, with an interim dividend of HKD 8 cents per share declared, alongside prior final and special dividends Items Deducted from Loss for the Period | Item | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Cost of inventories recognized as expense | 577,097 | 685,156 | | (Reversal) recognition of inventory provision | (452) | 56 | - The Board decided to declare an interim dividend of HKD 8 cents per share (2024: HKD 5 cents per share), totaling HKD 50,534 thousand[33] - Final dividend of HKD 6 cents per share (HKD 37,901 thousand) and a special final dividend of HKD 12 cents per share (HKD 75,802 thousand) for 2024 were declared and paid during the period[34] Loss Per Share Basic and diluted loss per share significantly narrowed to HKD 0.56 cents, reflecting a reduced loss attributable to owners of the Company Loss Per Share Data | Indicator | Six Months Ended June 30, 2025 (HK cents) | Six Months Ended June 30, 2024 (HK cents) | | :--- | :--- | :--- | | Basic loss per share | (0.56) | (3.79) | | Diluted loss per share | (0.56) | (3.79) | - Loss per share is calculated based on the loss attributable to owners of the Company of HKD 3,553 thousand (2024: HKD 23,915 thousand) and 631,677,303 ordinary shares in issue[35] - Diluted loss per share calculation did not assume the exercise of share options as the exercise price was higher than the average market share price[35] Changes in Investment Properties and Property, Plant and Equipment Investment property fair value decreased by HKD 3,100 thousand, while the Group disposed of assets for a gain and acquired new equipment to enhance production - Fair value of investment properties decreased by HKD 3,100 thousand (2024: HKD 5,100 thousand) and was recognized directly in profit or loss[36] - Cash proceeds of HKD 1,829 thousand were received from the disposal of property, plant and equipment, resulting in a gain on disposal of HKD 1,829 thousand[36] - Acquisitions during the period included plant and machinery of HKD 18,727 thousand, furniture and equipment of HKD 667 thousand, and motor vehicles of HKD 4,283 thousand, for enhancing production facilities[37] Trade, Bills and Other Receivables Total trade, bills and other receivables decreased to HKD 147,627 thousand, with most trade receivables aged within sixty days Details of Trade, Bills and Other Receivables | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade receivables | 100,397 | 99,319 | | Bills receivable | 4,821 | 9,369 | | Provision for credit losses | (10,221) | (10,018) | | Prepayments for materials | 45,273 | 41,211 | | Total | 147,627 | 155,368 | Aging Analysis of Trade and Bills Receivables | Aging | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 60 days | 79,343 | 86,174 | | 61 to 90 days | 15,609 | 16,495 | | Over 90 days | 10,266 | 6,019 | | Total | 105,218 | 108,688 | Trade and Other Payables Total trade and other payables decreased to HKD 210,468 thousand, with trade payables having a credit period of 30-150 days and most aged within sixty days Details of Trade and Other Payables | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade payables | 34,460 | 46,137 | | Employee benefit provisions | 86,143 | 90,547 | | Accrued salaries and bonuses | 30,669 | 29,229 | | VAT payables | 26,790 | 22,250 | | Total | 210,468 | 225,029 | Aging Analysis of Trade Payables | Aging | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 60 days | 25,924 | 40,595 | | 61 to 90 days | 6,732 | 3,516 | | Over 90 days | 1,804 | 2,026 | | Total | 34,460 | 46,137 | Share Capital The Company's issued share capital remained unchanged with 631,677,303 ordinary shares at HKD 0.1 par value each - The Company has 631,677,303 ordinary shares in issue with a par value of HKD 0.1 per share[42] Share Option Scheme The 2022 Share Option Scheme incentivizes employees; 4,440,000 options remain unexercised at a weighted average exercise price of HKD 1.387, with HKD 232 thousand expense recognized - The 2022 Share Option Scheme aims to provide incentives to directors and eligible employees and has a ten-year validity period[43] Share Option Movement Details | Grantee Category | January 1, 2025 (units) | June 30, 2025 (units) | Exercise Price Per Share (HKD) | | :--- | :--- | :--- | :--- | | Employees (granted 2023) | 2,310,000 | 2,310,000 | 1.578 | | Employees (granted 2024) | 2,130,000 | 2,130,000 | 1.180 | | Total | 4,440,000 | 4,440,000 | Weighted Average 1.387 | - For the year ended June 30, 2025, the Group recognized a total expense of HKD 232 thousand for share options granted[44] Capital Commitments Contracted but unprovided capital expenditure for property, plant and equipment decreased to HKD 10,116 thousand as of June 30, 2025 Capital Commitments | Item | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Contracted but unprovided capital expenditure for acquisition of property, plant and equipment | 10,116 | 14,468 | Related Party Disclosures The Group engaged in related party transactions with director-controlled entities, and key management personnel compensation totaled HKD 14,800 thousand Related Party Transactions | Nature of Transaction | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Repayment of lease liabilities | 1,291 | 1,291 | | Rental deposits paid | 646 | 646 | | Interest expense on lease liabilities | 104 | 37 | Key Management Personnel Compensation | Item | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Short-term benefits | 13,477 | 13,646 | | Post-employment benefits | 1,323 | 1,323 | | Total | 14,800 | 14,969 | Fair Value Measurement of Financial Instruments Management assesses that the carrying amounts of financial assets and liabilities at amortized cost approximate their fair values, without recurring fair value measurements - Management believes that the carrying amounts of financial assets and financial liabilities recognized at amortized cost in the condensed consolidated financial statements approximate their fair values[50] Management Discussion and Analysis Business Review Despite reduced revenue in a challenging environment, the Group significantly narrowed its net loss through strategic pricing, high-value orders, and cost control, improving overall performance Business Review Key Financial Data | Indicator | Six Months Ended June 30, 2025 (HKD thousands) | Six Months Ended June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 688,654 | 785,212 | | Loss attributable to owners of the Company | 3,553 | 23,915 | | Basic loss per share (HK cents) | 0.56 | 3.79 | - Despite a decrease in total revenue, the Group's product gross margin increased, and net loss significantly decreased by 85.1%, resulting in a slight improvement in overall performance[51][52] - The Group slightly increased product selling prices to mitigate cost pressure and accepted mould orders with high deep-processing content, increasing product revenue[52] Financial Review Revenue decreased by 12.3% due to fewer orders, but cost reductions, higher selling prices, and increased other income led to an 85.1% narrowing of the loss - Revenue decreased by 12.3%, mainly due to a reduction in total market orders caused by a challenging business environment[53] - Costs related to raw materials and consumables used decreased by 22.9%, and their percentage of revenue fell to 35.2% (2024: 40.0%), primarily due to higher selling prices, increased processing services, and falling raw material procurement prices[53] - Other expenses decreased by 16.9%, depreciation of property, plant and equipment decreased by 6.8%, fair value of investment properties decreased by HKD 2,000 thousand, and other income increased by HKD 5,328 thousand (mainly from net exchange gains)[53][54] Liquidity and Financial Resources The Group maintains strong liquidity with HKD 1,600,452 thousand in total equity and HKD 518,076 thousand in cash, with no borrowings Liquidity and Financial Resources Overview | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Total equity | 1,600,452 | 1,673,543 | | Bank balances and cash | 518,076 | 546,648 | | Borrowings | Nil | Nil | - Bank balances and cash are primarily held as short-term deposits with major banks in Hong Kong and China[56] - The Group has ample cash to meet its operating and capital commitments[57] Employees and Remuneration Policy The Group employs approximately 3,000 staff, offering competitive remuneration, performance-based promotions, and share options for incentive - As of June 30, 2025, the Group employed approximately 3,000 employees[58] - The Group implements a competitive remuneration system for employees, with promotions and salary increases based on performance evaluations[58] - The Group grants share options to employees based on their individual performance[58] Outlook Facing global economic headwinds, the Group plans to strengthen marketing, explore new markets, adapt to China's domestic trends, enhance production, and control costs for stable development - Global economic development continues to face significant headwinds, with market prospects difficult to predict and full of uncertainties, which the Group will address cautiously[59] - The Group will strengthen its marketing team and network, prudently adjust marketing strategies, and actively explore emerging trade markets (e.g., ASEAN member states) to diversify market risks[59] - The Group will actively adapt to new development trends in the Chinese market, such as healthy green consumption, new quality productive forces (low-altitude economy, AI products), and trendy collectible toys, to consolidate its industry leadership[60] - The Group will continuously enhance overall processing capabilities and product quality in the plastics and die-casting industries, improve production equipment and processes, utilize intelligent production models, and further monitor and reduce operating costs[60] Other Information Review of Interim Financial Statements The Audit Committee, management, and external auditor reviewed the Group's accounting principles, internal controls, and financial reporting, including the unaudited interim statements - The Audit Committee, in conjunction with management and the external auditor, has reviewed the Group's accounting principles, practices, internal control measures, and financial reporting matters[61] Interim Dividend The Board declared an interim dividend of HKD 8 cents per share for the six months ended June 30, 2025, payable around September 23, 2025 - The Board decided to declare an interim dividend of HKD 8 cents per share (2024: HKD 5 cents per share) for the six months ended June 30, 2025[62] - The total interim dividend amounts to HKD 50,534,000 (2024: HKD 31,584,000)[33] Closure of Register of Members Share transfer registration will be suspended from September 9-10, 2025, requiring documents by September 8, 2025, for interim dividend eligibility - The Company will suspend registration of share transfers from September 9, 2025, to September 10, 2025 (both dates inclusive)[63] - To be eligible for the interim dividend, all duly completed transfer documents together with the relevant share certificates must be lodged with the Company's share registrar in Hong Kong by 4:30 p.m. on September 8, 2025[63] Directors' Interests in Shares As of June 30, 2025, several directors and their associates held significant share interests, including Mr. Shao Tie Lung and Mr. Shao Yu Lung each with 64.49% Directors' Interests in the Company's Shares | Director Name | Total Interest (shares) | Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | | Shao Tie Lung | 407,372,381 | 64.49% | | Shao Yu Lung | 407,372,381 | 64.49% | | Wei Long Shing | 3,843,750 | 0.61% | | Ding Zong Hao | 720,000 | 0.11% | | Shao Xu Tong | 366,290,937 | 57.99% | | Shao Yu Heng | 367,306,937 | 58.15% | | Li Tat Yee | 150,000 | 0.02% | - Mr. Shao Tie Lung and Mr. Shao Yu Lung jointly held 35,851,288 shares and each held 5,310,156 shares. Additionally, Pan Island Investments Limited held 366,210,937 shares, a company wholly owned by a discretionary trust whose beneficiaries include family members of Mr. Shao Tie Lung and Mr. Shao Yu Lung[64][68] Directors' Rights to Acquire Securities No directors, their spouses, or minor children held or exercised any rights to subscribe for the Company's securities during the period - No director, their spouse, or children under 18 years of age held any rights to subscribe for the Company's securities, nor were any such rights exercised during the period[66] Share Option Scheme (Other Information) The 2022 Share Option Scheme aims to incentivize participants; 4,440,000 options remain unexercised, with 58,727,730 available for grant, and no new grants this period - The 2022 Share Option Scheme was adopted with shareholder approval on May 30, 2022, aiming to attract, retain, and incentivize participants, and will expire on May 29, 2032[67] Details of Unexercised Share Options | Grantee Category | January 1, 2025 (units) | June 30, 2025 (units) | Grant Date | Exercise Period | Exercise Price Per Share (HKD) | | :--- | :--- | :--- | :--- | :--- | :--- | | Employees | 2,310,000 | 2,310,000 | September 28, 2023 | September 28, 2024 to September 27, 2027 | 1.578 | | Employees | 2,130,000 | 2,130,000 | September 27, 2024 | September 27, 2025 to September 26, 2028 | 1.180 | | Total | 4,440,000 | 4,440,000 | | | | - At the beginning and end of the reporting period, the number of share options available for grant under the 2022 Scheme was 58,727,730, and no share options were granted under the scheme during this period[70] Major Shareholders Pan Island Investments Limited and HSBC International Trustee Limited are major shareholders, holding 57.97% and 58.02% respectively, with overlapping interests Major Shareholder Holdings | Shareholder Name | Capacity | Number of Shares / Relevant Shares | Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Pan Island Investments Limited | Beneficial owner | 366,210,937 | 57.97% | | HSBC International Trustee Limited | Trustee | 366,514,990 | 58.02% | | David Michael Webb | Beneficial owner and interest in controlled corporation | 37,938,498 | 6.00% | - HSBC International Trustee Limited, as trustee, controls Pan Island Investments Limited, thus its interest overlaps with the share interest held by Pan Island Investments Limited[72] Purchase, Sale or Redemption of Securities Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's securities during the six months ended June 30, 2025 - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares or other securities[74] Corporate Governance and Model Code The Company complied with all code provisions of the HKEX Listing Rules' Corporate Governance Code and adopted the Model Code for directors' securities transactions - The Company complied with all code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules throughout the review period[75] - The Company adopted the Model Code in Appendix C3 of the Listing Rules as the standard for directors' securities transactions, and all directors confirmed compliance with the code[76][77]