中建富通(00138) - 2025 - 中期业绩

Chairman's Report This section provides an overview of the group's financial performance, including net loss and property impairment, and outlines the interim dividend policy Performance Overview The Group recorded a net loss attributable to owners of the parent of approximately HKD 210 million for H1 2025, a 26.5% increase, primarily due to property impairment losses of approximately HKD 99.4 million - Global economic slowdown, geopolitical tensions, and tariff disputes continue to impact Hong Kong's economic recovery[4] Net Loss Attributable to Owners of the Parent | Indicator | H1 2025 (HKD) | H1 2024 (HKD) | Change (%) | | :--- | :--- | :--- | :--- | | Net Loss | 210,000,000 | 166,000,000 | 26.5% (Increase) | | Property Impairment Loss | 99,400,000 | - | - | Interim Dividend Policy The Board decided not to declare an interim dividend for the period to preserve cash reserves in the challenging operating environment - The Board does not recommend paying an interim dividend for H1 2025 (H1 2024: nil), aiming to preserve cash reserves for future difficulties and challenges[5] Business Review A detailed look at the performance of the Group's diverse business segments, including property, securities, luxury automotive, collectibles, logistics, and cultural entertainment Hong Kong Property Business The Hong Kong property market remains sluggish, with the Group's property values facing revaluation pressure due to US economic and interest rate uncertainties - Hong Kong's property market continues to be sluggish, with the Group's property values facing revaluation pressure due to US economic and interest rate uncertainties[7] Securities Business The company did not trade listed stocks or securities in H1 2025 to preserve cash and reduce risk, with primary income from interest on bills receivable - In H1 2025, the company did not trade listed stocks or securities to preserve cash and reduce risk[8] - Securities business revenue primarily derived from stable interest income on bills receivable[8] Blackbird Group Blackbird Group operates Ferrari and Maserati dealerships in Hong Kong and Macau, valuable collectibles trading, and automotive logistics, showing satisfactory development despite challenges - Blackbird Group's main businesses include Ferrari and Maserati dealerships, valuable collectibles trading and investment, and automotive logistics[9] - Management is satisfied with the positive momentum of Blackbird Group's multifaceted automotive business, despite a challenging operating environment[9] Ferrari Business Blackbird Concessionaires, the exclusive Ferrari importer for HK/Macau, saw increased delivery speed in H1 2025, with strong demand for new models and excellent certified pre-owned performance - Blackbird Concessionaires, as the exclusive Ferrari importer for Hong Kong and Macau, increased delivery speed in H1 2025, with full-year production expected to grow by 10%[10] - Deliveries of the Ferrari Purosangue and limited-edition Daytona SP3 continue, indicating sustained demand for top-tier Ferrari products[11] - Personalization levels for new Ferrari orders are ahead of commercial targets, showing a slight increase of 5% year-to-date[11] - The 296 Speciale, launched in April 2025, saw nearly 90% of its 3-year lifecycle allocation for the Hong Kong market sold out before its local launch[12] - The official Ferrari Certified Pre-Owned program achieved strong consignment and sales results, meeting its 100% Ferrari Certified penetration target[12] - Over 80% of Ferrari Certified Pre-Owned buyers are first-time purchasers, making the program a key channel for new car promotion and sales[12] - The Ferrari Official Technical Service, Aftersales, and Spare Parts department in Kwai Chung implemented new strategies to recover lost vehicles and maintain growth[14] - Blackbird Concessionaires' business maintains good momentum for the remainder of 2025, with plans to launch two new Ferrari models[14] Maserati Business Blackbird Tridente, the exclusive Maserati importer for HK/Macau, achieved stable sales driven by Grecale SUV demand, with the electric Grecale Folgore now delivering and new GranTurismo arriving - Blackbird Tridente recorded stable sales performance, primarily driven by sustained demand for the high-end SUV Grecale[15] - Maserati's first all-electric SUV, the Grecale Folgore, has begun deliveries, marking a significant milestone in the brand's electrification journey[15] - The new GranTurismo sports car is set to enter the Hong Kong and Macau markets, expected to solidify the brand's position in the luxury sports car segment[15] Valuable Collectibles Trading and Investment Business The classic and investment-grade car market is affected by global weakness, but management remains cautiously optimistic for long-term growth, while the vintage watch division thrives - The classic and investment-grade car market is affected by global market weakness, but management remains cautiously optimistic about long-term development[16] - The vintage watch division enjoys a strong reputation for its magazine and online platform, engaging in editorial collaborations and consulting services with several important brands[17] Blackbird Works Supply (Logistics Business) Blackbird Works Supply encompasses Hong Kong, cross-border, pre-delivery inspection, and call center logistics, with Hong Kong logistics as the main revenue driver and growth in cross-border and call center services - Blackbird Works Supply comprises Hong Kong logistics, cross-border logistics (Mainland China and Macau), pre-delivery inspection and roll-on/roll-off vessel handling, and call center services[18] - Hong Kong logistics remains the primary revenue source, with cross-border logistics services to Mainland China continuing to grow[18] - Call center business continues to grow as various brands cut costs and switch to its services[18] - Blackbird Works Supply is updating its internal systems and exploring new business models and market opportunities, with an optimistic growth outlook[18] Culture and Entertainment Business To streamline operations, the Group disposed of its interest in an associate engaged in stage audio, lighting, and engineering business in February 2025, making film business its sole activity - The Group disposed of its interest in an associate engaged in stage audio, lighting, and stage engineering business on February 28, 2025[19] - Following the disposal, the film business became the sole activity of the cultural and entertainment segment[19] Outlook Facing global economic slowdown, geopolitical tensions, and tariff disputes, the Group anticipates a slow and uneven recovery, focusing on developing the Blackbird automotive group and prudent financial management - The global and local economic outlook faces challenges, with recovery likely to be slow and uneven[20] - The Group will continue to focus on building and developing the Blackbird automotive group, aiming to become one of the global leaders in the automotive industry[20] - The Group will implement prudent financial management and cost-saving measures, striving to turn challenges into opportunities for long-term sustainable growth and enhanced shareholder value[20] Acknowledgements The Board extends sincere gratitude to directors, management, employees, shareholders, investors, banks, customers, suppliers, and landlords for their unwavering commitment and support during challenging times - The Board extends its sincere gratitude to the directors, management, employees, shareholders, investors, banks, customers, suppliers, and landlords[21] Financial Performance Review An overview of the Group's financial results for H1 2025, including revenue, loss, and segment-specific performance, highlighting key drivers of change Summary of Financial Results for H1 2025 The Group's revenue decreased by 19.4% to approximately HKD 258 million in H1 2025, with loss expanding to HKD 210 million, primarily due to property impairment losses Summary of Financial Results for H1 2025 | Indicator | 2025 (HKD million) | 2024 (HKD million) | Increase/(Decrease) Percentage | | :--- | :--- | :--- | :--- | | Revenue | 258 | 320 | (19.4%) | | Finance Costs | 57 | 57 | –% | | Loss Before Tax | (210) | (165) | 27.3% | | Income Tax Expense | – | (1) | (100.0%) | | Loss for the Period | (210) | (166) | 26.5% | | Loss Attributable to Owners of the Parent | (210) | (166) | 26.5% | | Basic Loss Per Share | (HKD 0.132) | (HKD 0.104) | 26.9% | | Diluted Loss Per Share | (HKD 0.132) | (HKD 0.104) | 26.9% | | Dividend Per Share | Nil | Nil | Not Applicable | - Revenue decrease primarily due to the disposal of unprofitable multimedia business in June 2024 and continued weakness in the global valuable collectibles market[24] - Loss expansion mainly due to property impairment losses of approximately HKD 99.4 million (H1 2024: approximately HKD 43 million) recognized on assets classified as a disposal group held for sale[25] Analysis by Business Segment The Group's business segments showed mixed performance, with Ferrari business revenue growing 7.4% while property, Maserati, collectibles, logistics, and cultural entertainment segments experienced declines or increased losses Revenue for the Six Months Ended June 30 (by Business Segment) | Business Segment | 2025 Amount (HKD million) | 2025 Relative Percentage | 2024 Amount (HKD million) | 2024 Relative Percentage | Increase/(Decrease) Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | | Property Investment and Holding | 1 | 0.4% | 4 | 1.2% | (75.0%) | | Ferrari Business | 204 | 79.0% | 190 | 59.4% | 7.4% | | Maserati Business | 22 | 8.5% | 39 | 12.2% | (43.6%) | | Valuable Collectibles and Logistics Business | 20 | 7.8% | 57 | 17.8% | (64.9%) | | Other Businesses | 11 | 4.3% | 30 | 9.4% | (63.3%) | | Total | 258 | 100.0% | 320 | 100.0% | (19.4%) | Operating Profit/(Loss) for the Six Months Ended June 30 (by Business Segment) | Business Segment | 2025 (HKD million) | 2024 (HKD million) | Increase/(Decrease) Percentage | | :--- | :--- | :--- | :--- | | Property Investment and Holding | (102) | (41) | 148.8% | | Securities Business | 4 | 4 | –% | | Ferrari Business | 5 | 3 | 66.7% | | Maserati Business | (4) | (7) | (42.9%) | | Valuable Collectibles and Logistics Business | (12) | (22) | (45.5%) | | Culture and Entertainment Business | –* | –* | –% | | Other Businesses | (10) | (22) | (54.5%) | | Total | (119) | (85) | 40.0% | Operating loss less than HKD 1 million - Hong Kong property business rental income decreased by 75% to HKD 1 million, with operating loss expanding to HKD 102 million, primarily due to property impairment losses[29] - Ferrari business revenue increased by 7.4% to HKD 204 million, and operating profit increased by HKD 2 million to HKD 5 million, benefiting from accelerated car deliveries and stable service center performance[31] - Maserati business revenue decreased by 43.6% to HKD 22 million, but operating loss narrowed to HKD 4 million[32] - Valuable collectibles and logistics business revenue and operating loss decreased by 64.9% and 45.5% respectively, mainly due to global market weakness[33] - Following the disposal of the stage audio, lighting, and stage engineering business, the film business became the sole activity of the cultural and entertainment segment, with no revenue and an operating loss of less than HKD 1 million for the period[34] - Other businesses saw revenue decrease by 63.3% and operating loss narrow by 54.5%, primarily due to the disposal of the unprofitable multimedia business in June 2024[35] Analysis by Geographical Region The majority of the Group's revenue, approximately HKD 258 million, originated from Hong Kong, Macau, and Mainland China, a 11.3% decrease from H1 2024, mainly due to the disposal of Hong Kong multimedia business Revenue for the Six Months Ended June 30 (by Geographical Region) | Region | 2025 Amount (HKD million) | 2025 Relative Percentage | 2024 Amount (HKD million) | 2024 Relative Percentage | Increase/(Decrease) Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | | Hong Kong, Macau and Mainland China | 258 | 100.0% | 291 | 90.9% | (11.3%) | | Rest of the World | – | –% | 29 | 9.1% | (100.0%) | | Total | 258 | 100.0% | 320 | 100.0% | (19.4%) | Less than HKD 1 million - Revenue decrease primarily due to the disposal of the unprofitable Hong Kong multimedia business in June 2024[38] - Revenue from the Rest of the World, mainly from global sales of valuable collectibles, recorded no sales for the period due to market weakness[38] Capital Structure and Liquidity An analysis of the Group's capital structure, gearing ratio, liquidity, and financial resources, including details on borrowings, capital commitments, and treasury management Capital Structure and Gearing Ratio As of June 30, 2025, shareholders' equity decreased to HKD 462 million due to the period's loss, increasing the gearing ratio to 78.2% from 70.5%, with total outstanding borrowings of HKD 1,662 million, 99.2% short-term Capital Structure | Indicator | June 30, 2025 (HKD million) | June 30, 2025 Relative Percentage | December 31, 2024 (HKD million) | December 31, 2024 Relative Percentage | | :--- | :--- | :--- | :--- | :--- | | Bank Borrowings | 1,157 | 54.4% | 1,172 | 51.5% | | Other Borrowings | 350 | 16.5% | 261 | 11.5% | | Lease Liabilities | 26 | 1.2% | 43 | 1.9% | | Convertible Bonds | 98 | 4.6% | 96 | 4.2% | | Bank Borrowings Directly Related to Assets Classified as Held for Sale | 31 | 1.5% | 33 | 1.4% | | Total Borrowings | 1,662 | 78.2% | 1,605 | 70.5% | | Shareholders' Equity Attributable to Owners of the Parent | 462 | 21.8% | 672 | 29.5% | | Total Capital Employed | 2,124 | 100.0% | 2,277 | 100.0% | - Shareholders' equity attributable to owners of the parent decreased by approximately HKD 210 million, primarily due to the net loss for the period[39] - The gearing ratio increased from 70.5% as of December 31, 2024, to 78.2% as of June 30, 2025, mainly due to the decrease in equity[40] - Total outstanding borrowings amounted to approximately HKD 1,662 million, of which approximately 99.2% were short-term in nature[40] Liquidity and Financial Resources The Group's net current liabilities increased to HKD 1,328 million, primarily due to working capital usage and property impairment, with all bank borrowings reclassified as current liabilities due to covenant non-compliance Net Current Liabilities | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Current Assets | 832 | 950 | | Current Liabilities | (2,160) | (2,100) | | Net Current Liabilities | (1,328) | (1,150) | - Net current liabilities increased by approximately HKD 178 million, primarily due to working capital usage and property impairment losses[42] - The Group's failure to comply with bank financial covenants (requiring shareholders' equity of not less than HKD 100 million) resulted in the reclassification of all bank borrowings, approximately HKD 1,140 million, as current liabilities[43] - The Board expects to rely on net cash from operating activities, additional borrowings and fundraising activities, and disposal of non-core assets to meet working capital requirements[44] - Subsequent to the reporting period, the Group obtained additional capital of HKD 82 million and HKD 5.58 million through property and subsidiary disposals, and streamlined business operations[45] Capital Commitments As of June 30, 2025, the Group's capital commitments were approximately HKD 3 million, a decrease from HKD 5 million at the end of 2024, planned to be funded by internal resources Capital Commitments | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Capital Commitments | 3 | 5 | - The Group intends to fund capital commitments through internal resources[46] Treasury Management The Group adopts a conservative approach to cash management and risk control, centralizing treasury activities for better risk control and efficient fund management, with no significant foreign exchange risk or interest rate hedging currently - The Group adopts a conservative approach to cash management and risk control, centralizing treasury activities for better risk control and efficient fund management[47] - Currently, foreign exchange risk is not significant, and no financial instruments are used to hedge interest rate risk, but this will be considered if needed[47] Disposal of Significant Subsidiaries and Associates The Group entered into an agreement on December 27, 2024, to dispose of its associate in the cultural entertainment business engaged in stage audio, lighting, and engineering for HKD 8.1 million, completed on February 28, 2025 - The Group entered into an agreement on December 27, 2024, to dispose of its associate in the cultural entertainment business engaged in stage audio, lighting, and stage engineering for HKD 8.1 million[48] - Following the completion of the disposal on February 28, 2025, the Group no longer operates the stage audio, lighting, and stage engineering business[48] Other Significant Matters Key information regarding the Group's assets, liabilities, human resources, share option scheme, corporate governance, and convertible bonds Pledge of Assets As of June 30, 2025, approximately HKD 1,983 million of the Group's assets and HKD 17 million in fixed deposits were pledged as collateral for bank and other borrowings Pledged Assets | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Net Book Value of Pledged Assets | 1,983 | 2,103 | | Pledged Fixed Deposits | 17 | 20 | Contingent Liabilities A subsidiary of the Group faces a legal claim related to property sales, but the Board, based on legal advice, believes a successful defense is probable, thus no provision has been made - A subsidiary of the Group faces a legal claim related to property sales[50] - The Board believes a successful defense is probable and has made no provision for the claim in this legal proceeding[50] Employees and Remuneration Policy As of June 30, 2025, the Group had 175 employees, a decrease of 12 from end-2024, with a remuneration policy based on fairness, performance, and market competitiveness, including provident funds and bonuses Number of Employees | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Employees | 175 | 187 | - The remuneration policy is based on fairness, providing incentive-driven, performance-based, and market-competitive remuneration packages[51] Share Option Scheme The Company adopted a 10-year share option scheme in 2021, limiting shares issued upon exercise to 10% of issued shares and total outstanding options to 30% of issued shares, with no options granted or exercised to date - The Company adopted the 2021 Share Option Scheme on June 23, 2021, with a 10-year validity period[52] - Under the scheme, the total number of shares that may be issued upon exercise of options shall not exceed 10% of the shares in issue on the date of the 2021 AGM (i.e., 87,311,145 shares)[53] - The total number of shares that may be issued upon exercise of all outstanding share options shall not exceed 30% of the total number of shares in issue from time to time[53] - As of June 30, 2025, and the date of this announcement, no share options have been granted, exercised, lapsed, or cancelled[54] Purchase, Sale or Redemption of the Company's Listed Securities or Treasury Shares Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities or treasury shares during the six months ended June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any listed securities or treasury shares during the period[55] - As of June 30, 2025, the Company held no treasury shares[56] Corporate Governance The Company is committed to high corporate governance standards, ensuring shareholder and stakeholder interests, with the Board confirming compliance with the Corporate Governance Code, except for the combined Chairman and CEO roles - The Company is committed to maintaining high standards of corporate governance to safeguard the interests of shareholders and key stakeholders[57] - The Board believes that all applicable provisions of the Corporate Governance Code were complied with during the period, except for Code Provision C.2.1 (separation of Chairman and Chief Executive Officer roles)[58] - The Board believes that Mr. Mak's dual role as Chairman and Chief Executive Officer, given his extensive experience, enhances communication between the Board and management and ensures effective strategy execution[59] Standard Code for Securities Transactions by Directors and Relevant Employees The Company has adopted a code of conduct for securities transactions by directors and employees with inside information, which is no less exacting than the Standard Code, and all directors confirmed compliance - The Company has adopted a code of conduct whose terms are no less exacting than the required standards of the Standard Code[60] - All Directors have confirmed their compliance with the Standard Code throughout the period[60] Convertible Bonds The Group holds 2025 and 2024 convertible bonds; the 2025 bonds had an initial principal of HKD 220 million, partially converted or offset by asset sales, while the 2024 bonds were partially redeemed, with the remainder extended to August 18, 2025, at 9.0% interest - The 2025 Convertible Bonds had an initial principal amount of HKD 220 million, maturing on December 31, 2025, with an annual interest rate of 4.5%[61] - A portion of the 2025 Convertible Bonds was converted into 731,250,000 shares on May 17, 2023[61] - A portion of the principal of the 2025 Convertible Bonds has been offset through the disposal of multimedia business and landscape design services subsidiaries[62][63] Outstanding Principal of 2025 Convertible Bonds | Date | Outstanding Principal (HKD million) | | :--- | :--- | | June 30, 2025 | 93.5 | | Date of this Announcement | 87.92 | - The 2024 Convertible Bonds had an initial principal amount of HKD 30,011,500, with portions redeemed on February 18, 2024, and at the initial maturity date[64] - The maturity date for the remaining outstanding principal of HKD 6,755,000 of the 2024 Convertible Bonds was extended to August 18, 2025, with the conversion price changed to HKD 0.15 per share and the annual interest rate increased to 9.0%[65][66] Events After Reporting Period Subsequent to the reporting period, the Group disposed of a property for HKD 82 million on August 25, 2025, and a group of subsidiaries engaged in landscape design, retail, and F&B for HKD 5.58 million on July 30, 2025 - On August 25, 2025, the Company disposed of House No. 7, Rosecliff, 20 Tai Tam Road, Hong Kong, for HKD 82 million[109] - On July 30, 2025, the Company disposed of a group of subsidiaries engaged in landscape design services, floral and plant retail, and catering business for HKD 5.58 million[109] Review and Publication of Interim Results The Company's Audit Committee reviewed the unaudited condensed consolidated interim results, which have been published on the company and HKEX websites, with the interim report to be dispatched to shareholders - The Company's Audit Committee has reviewed the Group's unaudited condensed consolidated interim results for the period[68] - The interim results announcement has been published on the Company's website and the HKEX website[69] - The 2025 Interim Report will be dispatched to shareholders in due course and published on the Company's and HKEX websites[69] Board Composition As of the announcement date, the Board comprises two executive directors (Mr. Mak Siu Tong and Ms. Cheng Yuk Ching) and three independent non-executive directors (Mr. Chan Lik, Mr. Chau Siu Yue, and Mr. Lau Ho Kit) - The Board comprises two executive directors (Mr. Mak Siu Tong and Ms. Cheng Yuk Ching) and three independent non-executive directors (Mr. Chan Lik, Mr. Chau Siu Yue, and Mr. Lau Ho Kit)[70] Financial Statements Presents the Group's condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position, for the reporting period Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the Group reported revenue of HKD 258 million, gross profit of HKD 53 million, a loss for the period of HKD 210 million, and basic and diluted loss per share of HKD 0.132 Condensed Consolidated Statement of Profit or Loss Summary | Indicator | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Revenue | 258 | 320 | | Cost of Sales | (205) | (247) | | Gross Profit | 53 | 73 | | Other Income and Gains | 10 | 9 | | Selling and Distribution Expenses | (9) | (14) | | Administrative Expenses | (108) | (133) | | Other Expenses and Losses | (99) | (45) | | Finance Costs | (57) | (57) | | Share of Profits of Associates | – | 2 | | Loss Before Tax | (210) | (165) | | Income Tax Expense | – | (1) | | Loss for the Period | (210) | (166) | | Loss Attributable to Owners of the Parent | (210) | (166) | | Basic Loss Per Share | (HKD 0.132) | (HKD 0.104) | | Diluted Loss Per Share | (HKD 0.132) | (HKD 0.104) | Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, the Group recorded a loss for the period of HKD 210 million, with zero other comprehensive income, resulting in a total comprehensive loss of HKD 210 million for the period Condensed Consolidated Statement of Comprehensive Income Summary | Indicator | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Loss for the Period | (210) | (166) | | Other Comprehensive Income (that may be reclassified to profit or loss in subsequent periods) | – | – | | Other Comprehensive Income (that will not be reclassified to profit or loss in subsequent periods) | – | 325 | | Other Comprehensive Income for the Period | – | 325 | | Total Comprehensive (Loss)/Income for the Period | (210) | 159 | | Total Comprehensive (Loss)/Income Attributable to Owners of the Parent | (210) | 159 | Less than HKD 1 million Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets were HKD 2,635 million, total liabilities HKD 2,173 million, and total shareholders' equity HKD 462 million, with net current liabilities of HKD 1,328 million Condensed Consolidated Statement of Financial Position Summary | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Assets | | | | Total Non-Current Assets | 1,803 | 1,836 | | Total Current Assets | 832 | 950 | | Total Assets | 2,635 | 2,786 | | Equity and Liabilities | | | | Total Shareholders' Equity | 462 | 672 | | Total Non-Current Liabilities | 13 | 14 | | Total Current Liabilities | 2,160 | 2,100 | | Total Liabilities | 2,173 | 2,114 | | Total Equity and Liabilities | 2,635 | 2,786 | | Net Current Liabilities | (1,328) | (1,150) | | Total Assets Less Current Liabilities | 475 | 686 | Notes to the Condensed Consolidated Financial Information Detailed explanations and disclosures supporting the condensed consolidated financial statements, covering basis of presentation, accounting policies, revenue, segment information, and other financial items 1. Basis of Presentation The Group recorded a net loss of HKD 210 million and net current liabilities of HKD 1,328 million as of June 30, 2025, facing significant going concern uncertainties, with the Board implementing plans to ensure sufficient working capital - As of June 30, 2025, the Group recorded a net loss of approximately HKD 210 million and net current liabilities of approximately HKD 1,328 million[75] - The Group failed to comply with bank financial covenants, resulting in the reclassification of all bank borrowings, approximately HKD 1,140 million, as current liabilities[77] - The Board has formulated various plans and measures, including active discussions for asset disposals, renewal and extension of borrowings, potential capital transactions, driving sales and collection of receivables, controlling administrative costs, and managing capital expenditures[76] - The Group's ability to continue as a going concern depends on the successful and timely disposal of assets, renewal of bank facilities, completion of capital transactions, and effective implementation of plans to improve operating cash flows[78] 2. Basis of Preparation The unaudited interim condensed consolidated financial information is prepared in accordance with Appendix D2 of the Listing Rules and HKAS 34, and should be read in conjunction with the 2024 audited annual consolidated financial statements - The unaudited interim condensed consolidated financial information is prepared in accordance with Appendix D2 of the Listing Rules and Hong Kong Accounting Standard 34 issued by the HKICPA[81] - It should be read in conjunction with the Group's audited annual consolidated financial statements for the year ended December 31, 2024[81] 3. Principal Accounting Policies The accounting policies used in preparing these financial statements are consistent with the 2024 annual consolidated financial statements, except for new HKFRS amendments which had no significant impact - The accounting policies adopted in preparing these financial statements are consistent with those applied in the 2024 annual consolidated financial statements[82] - HKAS 21 (Amendment) "Lack of Exchangeability" had no impact on the unaudited interim condensed consolidated financial information[83] 4. Revenue The Group's total revenue for H1 2025 was HKD 258 million, primarily from Ferrari business (HKD 204 million), with revenue recognition occurring at a point in time for goods or over time for services Revenue Analysis | Revenue Source | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Ferrari Business | 204 | 190 | | Maserati Business | 22 | 39 | | Valuable Collectibles and Logistics Business | 20 | 57 | | Other Businesses | 11 | 30 | | Rental Income from Investment Properties | 1 | 4 | | Total Revenue | 258 | 320 | Disaggregation of Revenue from Contracts with Customers (by Timing of Revenue Recognition) | Timing of Revenue Recognition | Goods Transferred at a Point in Time (HKD million) | Services Transferred Over Time (HKD million) | Total (HKD million) | | :--- | :--- | :--- | :--- | | H1 2025 | | | | | Ferrari Business | 163 | 41 | 204 | | Maserati Business | 12 | 10 | 22 | | Valuable Collectibles and Logistics Business | – | 20 | 20 | | Other Businesses | 11 | – | 11 | | Total | 186 | 71 | 257 | | H1 2024 | | | | | Ferrari Business | 148 | 42 | 190 | | Maserati Business | 28 | 11 | 39 | | Valuable Collectibles and Logistics Business | 29 | 28 | 57 | | Other Businesses | 9 | 21 | 30 | | Total | 214 | 102 | 316 | - Performance obligations for sales of Ferrari and Maserati cars are satisfied upon delivery, with customers generally required to make advance payments[86][87] - Performance obligations for providing automotive logistics and after-sales services are satisfied as services are rendered, with payments generally due within 30 to 90 days after service completion[89] 5. Operating Segment Information The Group is segmented into seven operating divisions: Hong Kong Property, Securities, Ferrari, Maserati, Valuable Collectibles & Logistics, Culture & Entertainment, and Other Businesses, with Ferrari being the main revenue source - The Group is divided into seven operating segments: Hong Kong Property Investment and Holding, Securities Business, Ferrari Business, Maserati Business, Valuable Collectibles and Logistics Business, Culture and Entertainment Business, and Other Businesses[93] H1 2025 Operating Segment Revenue and Operating (Loss)/Profit | Segment | External Customer Sales (HKD million) | Other Income (HKD million) | Operating (Loss)/Profit (HKD million) | | :--- | :--- | :--- | :--- | | Property Investment and Holding | 1 | – | (102) | | Securities Business | – | 4 | 4 | | Ferrari Business | 204 | 5 | 5 | | Maserati Business | 22 | 1 | (4) | | Valuable Collectibles and Logistics Business | 20 | – | (12) | | Culture and Entertainment Business | – | – | – | | Other Businesses | 11 | – | (10) | | Total | 258 | 10 | (119) | Operating loss less than HKD 1 million Segment Assets and Liabilities as of June 30, 2025 | Segment | Segment Assets (HKD million) | Segment Liabilities (HKD million) | | :--- | :--- | :--- | | Property Investment and Holding | 911 | 855 | | Securities Business | 152 | 85 | | Ferrari Business | 297 | 421 | | Maserati Business | 29 | 44 | | Valuable Collectibles and Logistics Business | 272 | 61 | | Culture and Entertainment Business | 84 | 1 | | Other Businesses | 179 | 82 | | Total | 1,924 | 1,549 | Non-Current Assets (by Location of Assets) | Region | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Hong Kong, Macau and Mainland China | 1,747 | 1,780 | | Rest of the World | 55 | 55 | | Total | 1,802 | 1,835 | - For the six months ended June 30, 2025, no single customer's sales revenue accounted for 10% or more of the Group's total revenue[98] 6. Loss Before Tax The Group's loss before tax is presented after deducting various costs, including those related to Ferrari, Maserati, automotive services, other businesses, and depreciation and amortization expenses Items Deducted from Loss Before Tax | Item | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Cost of Valuable Collectibles Sold | – | 29 | | Ferrari Business Costs | 171 | 158 | | Maserati Business Costs | 18 | 32 | | Cost of Automotive Services Provided | 13 | 17 | | Other Business Costs | 3 | 11 | | Depreciation and Amortization | 44 | 53 | 7. Income Tax Expense For H1 2025, the Group made no provision for Hong Kong profits tax or overseas taxation due to the absence of assessable profits, unlike H1 2024 which had a provision at 16.5% - In H1 2025, the Group made no provision for Hong Kong profits tax and overseas taxation due to the absence of assessable profits[101] - In H1 2024, Hong Kong profits tax was provided at a rate of 16.5% on estimated assessable profits[101] 8. Dividends The Board declared no interim dividend for the six months ended June 30, 2025 (H1 2024: nil) - The Board declared no interim dividend for the six months ended June 30, 2025[102] 9. Loss Per Share Attributable to Owners of the Parent Basic and diluted loss per share for the six months ended June 30, 2025, was HKD 0.132, with convertible bonds not considered for diluted loss per share due to their anti-dilutive effect Calculation of Basic and Diluted Loss Per Share | Indicator | 2025 (HKD million) | 2024 (HKD million) | | :--- | :--- | :--- | | Loss Attributable to Owners of the Parent (for basic loss per share) | (210) | (166) | | Interest on Convertible Bonds | 5 | 6 | | Loss Attributable to Owners of the Parent Before Interest on Convertible Bonds | (205) | (160) | | | Number of Shares | Number of Shares | | | June 30, 2025 | June 30, 2024 | | Weighted Average Number of Ordinary Shares in Issue During the Period (for basic loss per share) | 1,599,675,452 | 1,604,361,452 | | Dilutive Effect – Weighted Average Number of Ordinary Shares from Convertible Bonds | 629,408,333 | 757,471,474 | | Weighted Average Number of Ordinary Shares (for diluted loss per share) | 2,229,083,785 | 2,361,832,926 | - For the six months ended June 30, 2025, convertible bonds had an anti-dilutive effect on basic loss per share and were therefore not considered in the calculation of diluted loss per share[103] 10. Property, Plant and Equipment For the six months ended June 30, 2025, the Group added approximately HKD 12 million in property, plant, and equipment, including HKD 4 million in right-of-use assets Additions to Property, Plant and Equipment | Item | H1 2025 (HKD million) | H1 2024 (HKD million) | | :--- | :--- | :--- | | Additions to Property, Plant and Equipment | 12 | 12 | | Of which: Right-of-Use Assets | 4 | 11 | 11. Trade Receivables As of June 30, 2025, the Group's total trade receivables were HKD 31 million, with 77% due within 180 days, and most businesses having a typical credit period of one month Ageing Analysis of Trade Receivables | Ageing | June 30, 2025 Balance (HKD million) | June 30, 2025 Percentage | December 31, 2024 Balance (HKD million) | December 31, 2024 Percentage | | :--- | :--- | :--- | :--- | :--- | | Within 180 days | 24 | 77% | 23 | 85% | | 181 to 365 days | 4 | 13% | 1 | 4% | | 1 to 2 years | 2 | 7% | 1 | 4% | | Over 2 years | 1 | 3% | 2 | 7% | | Total | 31 | 100% | 27 | 100% | - The credit period for most of the Group's businesses is typically one month[105] 12. Financial Assets at Fair Value Through Profit or Loss As of June 30, 2025, and December 31, 2024, the Group's financial assets at fair value through profit or loss remained at HKD 5 million Financial Assets at Fair Value Through Profit or Loss | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | | :--- | :--- | :--- | | Financial Assets | 5 | 5 | 13. Trade Payables As of June 30, 2025, the Group's total trade payables were HKD 24 million, with 83% overdue by more than 90 days; trade payables are interest-free, unsecured, and generally settled within 60 days Ageing Analysis of Trade Payables | Ageing | June 30, 2025 Balance (HKD million) | June 30, 2025 Percentage | December 31, 2024 Balance (HKD million) | December 31, 2024 Percentage | | :--- | :--- | :--- | :--- | :--- | | Current to 30 days | 3 | 13% | 16 | 38% | | 31 to 60 days | 1 | 4% | – | –* | | 61 to 90 days | – | – | –* | –* | | Over 90 days | 20 | 83% | 26 | 62% | | Total | 24 | 100% | 42 | 100% | *Less than HKD 1 million - Trade payables are interest-free, unsecured, and generally settled within a 60-day period[107] 14. Comparative Amounts Certain comparative amounts have been reclassified to conform with the current period's presentation - Certain comparative amounts have been reclassified to conform with the current period's presentation[108] 15. Events After Reporting Period Subsequent to the reporting period, the Group disposed of a property for HKD 82 million on August 25, 2025, and a group of subsidiaries engaged in landscape design, retail, and F&B for HKD 5.58 million on July 30, 2025 - On August 25, 2025, the Company disposed of House No. 7, Rosecliff, 20 Tai Tam Road, Hong Kong, for HKD 82 million[109] - On July 30, 2025, the Company disposed of a group of subsidiaries engaged in landscape design services, floral and plant retail, and catering business for HKD 5.58 million[109] Glossary of Terms This section provides definitions for specialized terms used throughout the report, including company, business, financial, and geographical terms, to ensure clear understanding