凯富善集团控股(08512) - 2025 - 中期财报

Corporate Information The company's corporate governance structure includes its Board of Directors, various committees, and key operational and advisory entities - The Board of Directors comprises Executive Directors (Mr Wong Wai Chit, Mr Wong Man Chit, and Ms Wong Wan Ian) and Independent Non-executive Directors (Mr Chan Cheong Tat, Mr Ho Chi Wai, and Mr Chu Kin Wang)[6] - The company has established an Audit Committee, Remuneration Committee, and Nomination Committee, and discloses key information such as its registered office, principal place of business, and auditors[6]7[9] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The company's profit attributable to owners declined significantly due to lower revenue and gross profit Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30, 2025) | Metric | 2025 (HK$ thousands) | 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 369,837 | 406,237 | (36,400) | -9.0% | | Cost of sales | (256,125) | (238,441) | (17,684) | 7.4% | | Gross profit | 113,712 | 167,796 | (54,084) | -32.2% | | Other income | 7,068 | 6,743 | 325 | 4.8% | | Other gains and losses, net | 3,991 | 28,972 | (24,981) | -86.2% | | Selling and distribution expenses | (16,684) | (18,726) | 2,042 | -10.9% | | Administrative expenses | (48,557) | (72,712) | 24,155 | -33.2% | | Finance costs | (4,404) | (5,015) | 611 | -12.2% | | Profit before income tax expense | 55,126 | 107,058 | (51,932) | -48.5% | | Income tax expense | (9,976) | (12,506) | 2,530 | -20.2% | | Profit for the period attributable to owners of the Company | 45,150 | 94,552 | (49,402) | -52.2% | | Basic and diluted earnings per share (HK cents) | 4.91 | 9.15 | (4.24) | -46.3% | Condensed Consolidated Statement of Financial Position The company's total assets and net assets grew, supported by increases in both non-current and current assets Condensed Consolidated Statement of Financial Position (As at June 30, 2025) | Metric | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Assets | | | | | | Total non-current assets | 250,965 | 220,048 | 30,917 | 14.1% | | Total current assets | 607,315 | 576,739 | 30,576 | 5.3% | | Total assets | 858,280 | 796,787 | 61,493 | 7.7% | | Liabilities | | | | | | Total current liabilities | 157,990 | 139,882 | 18,108 | 12.9% | | Total non-current liabilities | 8,163 | 9,933 | (1,770) | -17.8% | | Total liabilities | 166,153 | 149,815 | 16,338 | 10.9% | | Equity | | | | | | Net assets / Total equity | 692,127 | 646,972 | 45,155 | 7.0% | Condensed Consolidated Statement of Changes in Equity Total equity increased, driven by profit for the period despite a significant decrease compared to the prior year Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30, 2025) | Metric | June 30, 2025 (HK$ thousands) | June 30, 2024 (HK$ thousands) | | :--- | :--- | :--- | | Total equity at the beginning of the period | 646,972 | 505,570 | | Profit for the period | 45,150 | 94,552 | | Other comprehensive income | 5 | (34) | | Repurchase and cancellation of shares | – | (30,000) | | Total equity at the end of the period | 692,127 | 570,088 | Condensed Consolidated Statement of Cash Flows The company's cash position improved significantly due to a strong turnaround in net cash from operating and financing activities Condensed Consolidated Statement of Cash Flows (For the six months ended June 30, 2025) | Metric | 2025 (HK$ thousands) | 2024 (HK$ thousands) | Change (HK$ thousands) | | :--- | :--- | :--- | :--- | | Net cash generated from/(used in) operating activities | 31,969 | (21,265) | 53,234 | | Net cash used in investing activities | (33,198) | (44,053) | 10,855 | | Net cash generated from/(used in) financing activities | 14,947 | (36,838) | 51,785 | | Net increase/(decrease) in cash and cash equivalents | 13,718 | (102,156) | 115,874 | | Cash and cash equivalents at end of period | 338,232 | 234,616 | 103,616 | Notes to the Condensed Consolidated Financial Statements 1. General Information and Basis of Preparation The Group, primarily engaged in manufacturing and selling candle products, is listed on the Hong Kong Stock Exchange and prepares its financial statements in Hong Kong dollars - The company is an investment holding company whose subsidiaries are principally engaged in the manufacturing and sale of candle products, with headquarters in Hong Kong and operations in Vietnam[17] - The company's shares have been listed on the GEM of The Stock Exchange of Hong Kong Limited since July 19, 2018[17] - The financial statements are presented in Hong Kong dollars, while the functional currency of the company and its subsidiaries is the US dollar[18] 2. Changes in Accounting Policies The adoption of new amendments to Hong Kong Financial Reporting Standards did not materially impact the Group's financial position or performance - The Group has adopted amendments to HKAS 21 and HKFRS 1, "Lack of Exchangeability," for the first time[19] - The adoption of these amendments did not have a significant impact on the Group's results and financial position for the current or prior years[19] 3. Revenue and Segment Information The Group's revenue is primarily derived from the sale of candle products, with scented candles being the main contributor, and is recognized upon transfer of control to customers (i) Disaggregation of Revenue from Contracts with Customers Total revenue for the six months ended June 30, 2025, was HK$369,837 thousand, primarily from scented candle sales, though overall revenue decreased by 9.0% year-over-year Revenue by Product Type (For the six months ended June 30, 2025) | Product Type | 2025 (HK$ thousands) | 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Daily candles | 48,356 | 54,734 | (6,378) | -11.6% | | Scented candles | 268,851 | 274,948 | (6,097) | -2.2% | | Decorative candles | 11,946 | 8,585 | 3,361 | 39.1% | | Others (including aroma diffusers) | 40,684 | 67,970 | (27,286) | -40.1% | | Total | 369,837 | 406,237 | (36,399) | -9.0% | - The Group's markets are mainly department stores and sourcing agents headquartered in the United States and the United Kingdom[20] (ii) Performance Obligations Revenue from the sale of candle products is recognized when control of the products is transferred to the customer, which occurs upon delivery to the specified location - Revenue is recognized when control of the products has been transferred to the customer, which is when the products are delivered to the external customer's specified location[22] (iii) Transaction Price Allocated to the Remaining Performance Obligations The transaction price for unfulfilled contracts is not disclosed as all performance obligations for candle sales are completed within one year or less - All performance obligations for the sale of candle products are for periods of one year or less, hence the transaction price allocated to these unsatisfied contracts is not disclosed[24] Geographical Information The Group operates mainly in Hong Kong and Vietnam, with the majority of external customer revenue from the United States and non-current assets located primarily in Vietnam Revenue from External Customers by Location (For the six months ended June 30, 2025) | Region | 2025 (HK$ thousands) | 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | United States | 341,950 | 393,050 | (51,100) | -13.0% | | United Kingdom | 27,356 | 9,352 | 18,004 | 192.5% | | Others | 531 | 3,835 | (3,304) | -86.1% | | Total | 369,837 | 406,237 | (36,399) | -9.0% | Non-current Assets by Location (As at June 30, 2025) | Region | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong | 6,243 | 4,377 | 1,866 | 42.6% | | Vietnam | 220,357 | 191,665 | 28,692 | 15.0% | | Total | 226,600 | 196,042 | 30,558 | 15.6% | 4. Other Income Other income, mainly from bank interest and miscellaneous sources, totaled HK$7,068 thousand for the six months ended June 30, 2025, showing a slight year-over-year increase Other Income (For the six months ended June 30, 2025) | Item | 2025 (HK$ thousands) | 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Bank interest income | 4,243 | 3,151 | 1,092 | 34.6% | | Interest income from debt instruments | 29 | 29 | 0 | 0.0% | | Miscellaneous income | 1,152 | 948 | 204 | 21.5% | | Others | 1,644 | 2,615 | (971) | -37.1% | | Total | 7,068 | 6,743 | 325 | 4.8% | 5. Other Gains and Losses, Net Net other gains and losses decreased sharply to HK$3,991 thousand for the six months ended June 30, 2025, primarily due to a large provision reversal in the prior year period Other Gains and Losses, Net (For the six months ended June 30, 2025) | Item | 2025 (HK$ thousands) | 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net foreign exchange gains | 2,232 | 345 | 1,887 | 546.9% | | Reversal of/(provision for) impairment loss on trade receivables | 1,450 | (975) | 2,425 | -248.7% | | Gain on reversal of provision | – | 29,714 | (29,714) | -100.0% | | Total | 3,991 | 28,972 | (24,981) | -86.2% | 6. Finance Costs Finance costs for the six months ended June 30, 2025, were HK$4,404 thousand, a year-over-year decrease of 12.2%, mainly from interest on bank borrowings Finance Costs (For the six months ended June 30, 2025) | Item | 2025 (HK$ thousands) | 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest on bank borrowings | 4,239 | 4,919 | (680) | -13.8% | | Interest on lease liabilities | 165 | 96 | 69 | 71.9% | | Total | 4,404 | 5,015 | (611) | -12.2% | 7. Income Tax Expense Income tax expense for the six months ended June 30, 2025, was HK$9,976 thousand, a 20.2% decrease year-over-year, primarily comprising Hong Kong Profits Tax and Vietnam Corporate Income Tax Income Tax Expense (For the six months ended June 30, 2025) | Item | 2025 (HK$ thousands) | 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Hong Kong Profits Tax | 6,274 | 9,788 | (3,514) | -35.9% | | Vietnam Corporate Income Tax | 3,652 | 2,345 | 1,307 | 55.7% | | Singapore Corporate Income Tax | – | 79 | (79) | -100.0% | | Over-provision in prior years | (247) | – | (247) | -100.0% | | Subtotal for current tax | 9,679 | 12,212 | (2,533) | -20.7% | | Deferred tax | 297 | 294 | 3 | 1.0% | | Total | 9,976 | 12,506 | (2,530) | -20.2% | - Hong Kong Profits Tax is calculated using a two-tiered rate system, with the first HK$2 million taxed at 8.25% and the remainder at 16.5%[38] - The statutory corporate tax rates are 20% in Vietnam and 17% in Singapore[39] 8. Profit Before Income Tax Expense Profit before income tax expense has been arrived at after charging or crediting various items, including cost of inventories, depreciation, and employee benefit expenses Items Charged/(Credited) to Profit Before Income Tax Expense (For the six months ended June 30, 2025) | Item | 2025 (HK$ thousands) | 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cost of inventories recognised as an expense | 255,757 | 238,441 | 17,316 | 7.3% | | Provision for/(reversal of) inventories | 368 | (1,143) | 1,511 | -132.2% | | Depreciation of right-of-use assets (net) | 1,575 | 1,406 | 169 | 12.0% | | Depreciation of property, plant and equipment (net) | 1,386 | 995 | 391 | 39.3% | | Total staff costs (net) | 13,424 | 13,747 | (323) | -2.3% | 9. Directors' Remuneration Total directors' remuneration for the six months ended June 30, 2025, was HK$25,959 thousand, a significant decrease from the prior year period mainly due to reduced discretionary bonuses Directors' Remuneration (For the six months ended June 30, 2025) | Item | 2025 (HK$ thousands) | 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Fees | 270 | 270 | 0 | 0.0% | | Salaries and other allowances | 4,128 | 3,600 | 528 | 14.7% | | Retirement benefit scheme contributions | 27 | 18 | 9 | 50.0% | | Other benefits | 1,006 | 829 | 177 | 21.3% | | Discretionary bonuses | 20,528 | 40,000 | (19,472) | -48.7% | | Total | 25,959 | 44,717 | (18,758) | -41.9% | 10. Dividends No dividends were paid, declared, or proposed for the six months ended June 30, 2025, and June 30, 2024 - No dividends were paid, declared, or proposed for the six months ended June 30, 2025 and 2024[41] 11. Earnings Per Share Basic earnings per share for the six months ended June 30, 2025, was 4.91 HK cents, a sharp decline from 9.15 HK cents in the prior year period, with no diluted earnings as there were no potential ordinary shares Earnings Per Share (For the six months ended June 30, 2025) | Metric | 2025 | 2024 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Profit for the period attributable to owners of the Company (HK$ thousands) | 45,150 | 94,552 | (49,402) | -52.2% | | Weighted average number of ordinary shares | 918,500,000 | 1,033,184,066 | (114,684,066) | -11.1% | | Basic and diluted earnings per share (HK cents) | 4.91 | 9.15 | (4.24) | -46.3% | - No diluted earnings per share is presented as there were no potential ordinary shares in issue during these periods[42] 12. Property, Plant and Equipment During the interim period, the Group acquired property, plant, and equipment amounting to HK$36,283 thousand for its operations - During the interim period, the Group acquired property, plant and equipment amounting to HK$36,283 thousand (six months ended June 30, 2024: HK$45,786 thousand)[43] Net Book Value of Property, Plant and Equipment (As at June 30, 2025) | Item | June 30, 2025 (HK$ thousands) | January 1, 2025 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Buildings | 102,189 | 85,291 | 16,898 | 19.8% | | Plant and machinery | 49,411 | 40,608 | 8,803 | 21.7% | | Motor vehicles | 7,473 | 7,426 | 47 | 0.6% | | Furniture and fixtures | 6,021 | 5,677 | 344 | 6.1% | | Office equipment | 2,978 | 2,091 | 887 | 42.4% | | Computer equipment | 852 | 1,000 | (148) | -14.8% | | Total | 168,924 | 142,093 | 26,831 | 18.9% | 13. Inventories As of June 30, 2025, total inventories amounted to HK$129,667 thousand, an increase from December 31, 2024, primarily consisting of raw materials and finished goods Inventories (As at June 30, 2025) | Item | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Raw materials | 72,260 | 72,068 | 192 | 0.3% | | Work in progress | 4,913 | 3,951 | 962 | 24.3% | | Finished goods | 35,560 | 27,443 | 8,117 | 29.6% | | Goods in transit | 22,859 | 7,571 | 15,288 | 201.9% | | Less: Provision for inventories | (5,925) | (5,557) | (368) | 6.6% | | Total | 129,667 | 105,476 | 24,191 | 22.9% | 14. Trade and Other Receivables As of June 30, 2025, total trade and other receivables were HK$139,416 thousand, a slight decrease from December 31, 2024, with the company maintaining strict control over outstanding receivables Trade and Other Receivables (As at June 30, 2025) | Item | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade receivables, net | 128,082 | 130,966 | (2,884) | -2.2% | | Deposits and prepayments | 11,334 | 14,072 | (2,738) | -19.5% | | Total | 139,416 | 145,038 | (5,622) | -3.9% | - The credit period for trade receivables ranges from 30 to 180 days, and the company maintains strict control over its outstanding receivables[47] 15. Pledged Bank Deposits / Restricted Bank Deposits / Bank Balances and Cash Pledged bank deposits secure bank borrowings, restricted bank deposits were released by June 30, 2025, and bank balances include short-term deposits - Pledged bank deposits are pledged to banks to secure bank borrowings[48] - The restricted deposit of approximately HK$1,711 thousand as at December 31, 2024, was released as at June 30, 2025[48] - Bank balances and cash comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less[48] 16. Trade and Other Payables As of June 30, 2025, total trade and other payables were HK$120,356 thousand, an increase from December 31, 2024, mainly comprising trade payables and accrued expenses Trade and Other Payables (As at June 30, 2025) | Item | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade payables | 71,660 | 45,299 | 26,361 | 58.2% | | Other payables | 6,279 | 14,026 | (7,747) | -55.2% | | Accrued expenses | 42,417 | 57,311 | (14,894) | -26.0% | | Total | 120,356 | 116,636 | 3,720 | 3.2% | - The credit period for purchases of goods ranges from 0 to 60 days[49] 17. Contract Liabilities Contract liabilities represent trade deposits from customers, which will be recognized as revenue upon the transfer of control of goods to the customer - Contract liabilities represent trade deposits from customers, which will be recognised as revenue for the Group when control of the goods is transferred to the customer[50] 18. Provisions As of June 30, 2025, provisions have been fully paid, and the reversal of a HK$29,714 thousand provision recognized in the prior year has been completed - For the six months ended June 30, 2025, the compensation amount of HK$3,880 thousand was fully paid, resulting in a zero provision balance[51] - For the year ended December 31, 2024, the Group reached a settlement with a customer and recognised a reversal of provision of HK$29,714 thousand[51] 19. Bank Borrowings During the interim period, the Group obtained new bank loans of HK$30,084 thousand for daily operations, with interest at floating market rates of 3.75% to 8.02% per annum - During the interim period, the Group obtained new bank loans of HK$30,084 thousand (December 31, 2024: HK$5,522 thousand)[52] - The bank loans carry interest at floating market rates ranging from 3.75% to 8.02% per annum, and the proceeds are used for the Group's daily operations[52] 20. Share Capital As of June 30, 2025, the company's authorized share capital was HK$50,000 thousand, with issued and fully paid capital of HK$9,185 thousand, representing 918,500,000 shares Share Capital (As at June 30, 2025) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Authorised share capital (HK$ thousands) | 50,000 | 50,000 | | Issued and fully paid share capital (HK$ thousands) | 9,185 | 9,185 | | Number of ordinary shares issued | 918,500,000 | 918,500,000 | 21. Related Party Transactions Compensation for key management personnel includes salaries, allowances, bonuses, and contributions to retirement benefit schemes Key Management Personnel Compensation For the six months ended June 30, 2025, total remuneration for key management personnel was HK$25,959 thousand, a significant decrease from the prior year period Key Management Personnel Compensation (For the six months ended June 30, 2025) | Item | 2025 (HK$ thousands) | 2024 (HK$ thousands) | Change (HK$ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Salaries, allowances and bonuses | 25,932 | 44,699 | (18,767) | -42.0% | | Retirement benefit scheme contributions | 27 | 18 | 9 | 50.0% | | Total | 25,959 | 44,717 | (18,758) | -41.9% | 22. Fair Value of the Group's Financial Assets Measured at Fair Value on a Recurring Basis Certain financial assets of the Group are measured at fair value, including debt instruments at FVOCI and financial assets at FVTPL, both classified under Level 3 fair value measurement Fair Value of Financial Assets Measured at Fair Value (As at June 30, 2025) | Item | June 30, 2025 (HK$ thousands) | December 31, 2024 (HK$ thousands) | Fair Value Hierarchy | | :--- | :--- | :--- | :--- | | Debt instruments at fair value through other comprehensive income | 895 | 889 | Level 3 | | Financial assets at fair value through profit or loss | 3,295 | 3,251 | Level 3 | - The fair value of debt instruments is determined using discounted cash flows at a discount rate that reflects the issuer's credit risk[58] - The fair value of financial assets is based on the cash surrender value of key-man insurance contracts[58] Management Discussion and Analysis Business Review The Group manufactures and sells candle products, focusing on the mid-to-high-end scented candle market with major clients in the US and UK, but faces margin pressure from US tariffs on Vietnamese imports - The Group is principally engaged in the manufacturing and sale of candle products, with major customers being department store operators and sourcing agents in the United States and the United Kingdom[59] - Market preference for candle products with fragrance and color additives has driven the growth in demand for scented candles[59] - The successful completion of two new factories in Vietnam in 2022 and 2024 has significantly increased the production capacity of candle products[60] - The recent imposition of a 20% tariff by the US government on general imports from Vietnam is expected to lead to a substantial increase in export costs and pressure on profit margins[61] - The Group is actively exploring market diversification opportunities in Europe and other regions, while planning to enhance production efficiency to reduce costs[62] Financial Review For the six months ended June 30, 2025, the Group's revenue and gross profit declined, leading to a significant drop in profit for the period, while its liquidity remained sound Revenue For the six months ended June 30, 2025, revenue was approximately HK$369.8 million, a year-over-year decrease of 9.0%, mainly due to lower sales of daily, scented, and other candle products Revenue (For the six months ended June 30, 2025) | Metric | 2025 (HK$ millions) | 2024 (HK$ millions) | Change (HK$ millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 369.8 | 406.2 | (36.4) | -9.0% | - The decrease in revenue was mainly due to a reduction in sales volume of daily candles, scented candles, and other candle products[63] Gross Profit and Gross Profit Margin For the six months ended June 30, 2025, gross profit was approximately HK$113.7 million, a 32.2% decrease year-over-year, with the gross profit margin falling to 30.7% due to higher raw material unit prices Gross Profit and Gross Profit Margin (For the six months ended June 30, 2025) | Metric | 2025 (HK$ millions) | 2024 (HK$ millions) | Change (HK$ millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross Profit | 113.7 | 167.8 | (54.1) | -32.2% | | Gross Profit Margin | 30.7% | 41.3% | (10.6%) | -25.7% | - The decrease in gross profit margin was primarily due to an increase in the unit price of raw materials[64] Other Income For the six months ended June 30, 2025, other income was approximately HK$7.1 million, a 6.0% increase year-over-year, mainly due to higher sales of scrap materials Other Income (For the six months ended June 30, 2025) | Metric | 2025 (HK$ millions) | 2024 (HK$ millions) | Change (HK$ millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other Income | 7.1 | 6.7 | 0.4 | 6.0% | - The increase in other income was mainly due to an increase in sales of scrap materials of approximately HK$507 thousand[65] Other Gains and Losses, Net For the six months ended June 30, 2025, net other gains were approximately HK$4.0 million, a sharp 86.2% decrease year-over-year, mainly due to the absence of a large claim provision reversal recorded in the prior period Other Gains and Losses, Net (For the six months ended June 30, 2025) | Metric | 2025 (HK$ millions) | 2024 (HK$ millions) | Change (HK$ millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other Gains and Losses, Net | 4.0 | 29.0 | (25.0) | -86.2% | - The decrease was mainly due to the absence of a reversal of provision for claims of approximately HK$29.7 million as recorded in the same period in 2024[66] Selling and Distribution Expenses For the six months ended June 30, 2025, selling and distribution expenses were approximately HK$16.7 million, a 10.7% decrease year-over-year, mainly due to reduced marketing and promotion expenses Selling and Distribution Expenses (For the six months ended June 30, 2025) | Metric | 2025 (HK$ millions) | 2024 (HK$ millions) | Change (HK$ millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 16.7 | 18.7 | (2.0) | -10.7% | - The decrease was mainly due to a reduction in marketing and promotion expenses of approximately HK$4.3 million[68] Administrative Expenses For the six months ended June 30, 2025, administrative expenses were approximately HK$48.6 million, a 33.1% decrease year-over-year, mainly due to lower salaries, legal fees, and office expenses Administrative Expenses (For the six months ended June 30, 2025) | Metric | 2025 (HK$ millions) | 2024 (HK$ millions) | Change (HK$ millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Administrative Expenses | 48.6 | 72.7 | (24.1) | -33.1% | - The decrease in administrative expenses was mainly due to a reduction in salaries and allowances of approximately HK$19.4 million, legal and professional fees of approximately HK$2.6 million, and office expenses of approximately HK$2.0 million[69] Finance Costs For the six months ended June 30, 2025, finance costs were approximately HK$4.4 million, a 12.0% decrease year-over-year, mainly due to lower interest rates on bank borrowings Finance Costs (For the six months ended June 30, 2025) | Metric | 2025 (HK$ millions) | 2024 (HK$ millions) | Change (HK$ millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Finance Costs | 4.4 | 5.0 | (0.6) | -12.0% | - The decrease was mainly due to a reduction in the interest rate on bank borrowings related to business operations[71] Profit for the Period For the six months ended June 30, 2025, net profit was approximately HK$45.2 million, a sharp 52.2% decrease year-over-year, reflecting the combined impact of lower gross profit and other income, partially offset by reduced administrative expenses Profit for the Period (For the six months ended June 30, 2025) | Metric | 2025 (HK$ millions) | 2024 (HK$ millions) | Change (HK$ millions) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Profit for the Period | 45.2 | 94.6 | (49.4) | -52.2% | - The change in profit was due to the combined effect of a decrease in gross profit of approximately HK$54.1 million and a decrease in other income of approximately HK$25.0 million, offset by a decrease in administrative expenses of approximately HK$24.1 million[72] Liquidity and Financial Resources As of June 30, 2025, the Group's total assets were approximately HK$858.3 million, with a current ratio of 3.8 times and a gearing ratio that increased from 2.5% to 5.7% due to higher bank borrowings Liquidity and Financial Resources (As at June 30, 2025) | Metric | June 30, 2025 (HK$ millions) | December 31, 2024 (HK$ millions) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 858.3 | 796.8 | 7.7% | | Total liabilities | 166.2 | 149.8 | 10.9% | | Shareholders' equity | 692.1 | 647.0 | 7.0% | | Total interest-bearing borrowings | 34.3 | 12.7 | 169.3% | | Current ratio | 3.8 times | 4.1 times | -7.3% | | Gearing ratio | 5.7% | 2.5% | 128.0% | - The increase in the gearing ratio was mainly due to an increase in bank borrowings[73] - As at June 30, 2025, the Group had unutilised banking facilities of approximately HK$86.7 million[74] Treasury Policies The Group adopts a prudent financial management strategy, maintaining a sound liquidity position and controlling costs through continuous credit assessment and centralized treasury activities - The Group adopts a prudent financial management strategy to maintain a sound liquidity position[76] - Treasury activities are centrally managed, with cash generally placed in licensed banks in Hong Kong and denominated in Hong Kong dollars[76] Capital Structure The Group's capital structure remained stable with no significant changes during the reporting period, and the issued share capital and number of ordinary shares were unchanged - There were no significant changes in the Group's capital structure during the reporting period[77] - As at June 30, 2025, the issued share capital was HK$9,185 thousand, and the number of issued ordinary shares was 918,500,000[77] Future Plans for Material Investments and Capital Assets As of June 30, 2025, the Group had no future plans for material investments or capital assets other than those disclosed in the prospectus and this report - Other than as disclosed, the Group did not have any plans for material investments or capital assets as at June 30, 2025[78] Pledge of Assets As of June 30, 2025, the Group had assets with a carrying amount of approximately HK$107.0 million pledged as security for bank loans Pledge of Assets (As at June 30, 2025) | Metric | June 30, 2025 (HK$ millions) | December 31, 2024 (HK$ millions) | Change (%) | | :--- | :--- | :--- | :--- | | Carrying amount of pledged assets | 107.0 | 109.4 | -2.2% | - Pledged assets include property, plant and equipment, right-of-use assets, debt instruments at fair value through other comprehensive income, and pledged bank deposits[79] Foreign Currency Risk The Group is primarily exposed to foreign exchange risk from transactions denominated in Hong Kong dollars and Vietnamese dong, with no current hedging arrangements in place - The Group is primarily exposed to foreign exchange risk arising from transactions denominated in Hong Kong dollars and Vietnamese dong[80] - For the six months ended June 30, 2025, the Group did not have any hedging arrangements and currently has no foreign currency hedging policy[80] Capital Commitments As of June 30, 2025, the Group had capital commitments of approximately HK$1.9 million for property, plant, and equipment Capital Commitments (As at June 30, 2025) | Item | June 30, 2025 (HK$ millions) | June 30, 2024 (HK$ millions) | Change (%) | | :--- | :--- | :--- | :--- | | Capital commitments for property, plant and equipment | 1.9 | 1.8 | 5.6% | Contingent Liabilities As of June 30, 2025, the Group had no contingent liabilities - As at June 30, 2025, the Group did not have any contingent liabilities[82] Employees and Remuneration Policies As of June 30, 2025, the Group employed approximately 1,640 staff with total employee remuneration of about HK$63.7 million, and it has adopted a share option scheme to reward employees Employees and Remuneration (For the six months ended June 30, 2025) | Metric | 2025 | 2024 | Change | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Number of employees | 1,640 | 2,110 | (470) | -22.3% | | Total employee remuneration (HK$ millions) | 63.7 | 82.3 | (18.6) | -22.6% | - The Company adopted a share option scheme on June 7, 2024, to provide incentives and rewards to its employees[83] Material Investments, Significant Acquisitions and Disposals of Subsidiaries, and Capital Assets For the six months ended June 30, 2025, the Group had no material investments, significant acquisitions or disposals of subsidiaries, or capital assets - During the six months ended June 30, 2025, the Group did not have any material investments, significant acquisitions or disposals of subsidiaries, or capital assets[84] Events After the Reporting Period There were no significant events affecting the Group after the reporting period and up to the date of this report - There were no significant events affecting the Group after the reporting period and up to the date of this report[85] Dividend The Board of Directors has not declared an interim dividend for the six months ended June 30, 2025 - The Board of Directors has not declared an interim dividend for the six months ended June 30, 2025[86] Use of Proceeds The net proceeds of approximately HK$44.5 million from the Group's listing were fully utilized by June 30, 2025, for upgrading production facilities, acquiring new equipment, and repaying bank loans Comparison of Business Objectives with Actual Business Progress The net proceeds of approximately HK$44.5 million from the listing have been fully utilized as of June 30, 2025, in line with the business objectives stated in the prospectus Use of Proceeds (As at June 30, 2025) | Use | Approximate Amount of Net Proceeds (HK$ millions) | Approximate Amount of Actual Utilisation (HK$ millions) | | :--- | :--- | :--- | | Upgrading existing production facilities | 6.2 | 6.2 | | Acquiring new production facilities | 18.1 | 18.1 | | Purchase of new machinery | 9.2 | 9.2 | | Installation of Enterprise Resource Planning system | 2.0 | 2.0 | | Repayment of a portion of bank loans | 6.9 | 6.9 | | General working capital | 2.1 | 2.1 | | Total | 44.5 | 44.5 | - As at June 30, 2025, the Group had utilised HK$44.5 million of the net proceeds from the Listing, with no remaining unutilised net proceeds[96] Upgrading Existing Production Facilities Construction work for renovating existing production facilities was completed by June 30, 2025, with approximately HK$6.2 million of the net proceeds from the listing having been paid - The construction work for renovating the existing production facilities commenced in October 2024 and was completed by June 30, 2025[91] - A portion of the contract price was settled with the net proceeds from the Listing amounting to approximately HK$6.2 million[91] Acquiring New Production Facilities The Group completed the acquisition of new land in 2019 and the construction of new production facilities in 2021, fully utilizing the allocated HK$18.1 million of net proceeds - The Group completed the acquisition of new land in 2019 and the construction of the building for the new production facilities in 2021[93] - The net proceeds of approximately HK$18.1 million allocated to the new production facilities have been fully utilised[93] Purchase of New Machinery The Group has paid approximately HK$9.2 million for the purchase of new machinery to accommodate more customer purchase orders - The Group has paid approximately HK$9.2 million for the purchase of machinery to cope with more purchase orders from customers[94] Installation of Enterprise Resource Planning ("ERP") System The Group has paid approximately HK$2.0 million for the installation of an ERP system to improve production, warehouse management, and customer relationship management - The Group has paid approximately HK$2.0 million as expenses related to the installation of an ERP system for production and warehouse management, as well as customer relationship management[95] Repayment of a Portion of Bank Loans The Group has repaid approximately HK$2.9 million of its bank loan balance and approximately HK$4.0 million of its overdraft - The Group has repaid bank loan balances of approximately HK$2.9 million in Hong Kong and Vietnam, and has also repaid an overdraft of approximately HK$4.0 million in Hong Kong[96] Corporate Governance and Other Information Directors' and Chief Executive's Interests in Shares, Underlying Shares and Debentures As of June 30, 2025, Executive Directors Mr Wong Wai Chit and Mr Wong Man Chit, along with their spouses, beneficially owned 70.1% of the Company's shares through AVW International Limited - Mr Wong Wai Chit and Mr Wong Man Chit are each deemed to be interested in the 643,500,000 shares held by AVW International Limited, representing 70.1% of the total issued shares[98] - Ms Yung Man Lai, spouse of Mr Wong Wai Chit, and Ms Tse Sheung, spouse of Mr Wong Man Chit, are also deemed to be interested in the same number of shares[98] Rights to Acquire Shares or Debentures During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries was a party to any arrangement that would enable the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate - During the six months ended June 30, 2025, neither the Company nor any of its subsidiaries was a party to any arrangement that would enable the Directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate[100] Directors' Interests in Contracts During the six months ended June 30, 2025, no Director or their respective close associates had a material beneficial interest, directly or indirectly, in any contract of significance to the Group's business to which the Company or any of its subsidiaries was a party - During the six months ended June 30, 2025, no Director or their respective close associates had a material beneficial interest, directly or indirectly, in any contract of significance to the Group's business to which the Company or any of its subsidiaries was a party[101] Substantial Shareholders of Shares As of June 30, 2025, AVW International Limited and its related parties were the substantial shareholders of the Company, holding 70.1% of the issued shares Interests of Substantial Shareholders of Shares (As at June 30, 2025) | Name of Shareholder | Nature of Interest | Number of Shares Held | Approximate % of Total Issued Shares | | :--- | :--- | :--- | :--- | | AVW International Limited | Beneficial owner | 643,500,000 | 70.1% | | Ms Yung Man Lai | Interest of spouse | 643,500,000 | 70.1% | | Ms Tse Sheung | Interest of spouse | 643,500,000 | 70.1% | - AVW is beneficially owned as to 50% by each of the executive Directors, Mr Wong Wai Chit and Mr Wong Man Chit[106] Share Option Scheme The Company adopted a share option scheme on June 7, 2024, to incentivize eligible participants, with a scheme mandate limit of 10% of issued shares and a maximum exercise period of 10 years - The Share Option Scheme was adopted on June 7, 2024, to provide an opportunity for employees, participants of affiliated entities, and service providers to acquire an ownership interest in the Company[105] - The scheme mandate limit is 10% of the Company's issued shares as of the date of shareholder approval, with a service provider sub-limit of 10% of the scheme mandate limit[107] - The exercise period for an option shall not be more than 10 years from the date of grant, and the vesting period shall not be less than 12 months[109] - As of the date of this report, no options or awards have been granted under the Share Option Scheme[109] Competing Interests During the six months ended June 30, 2025, no Director, substantial shareholder, or controlling shareholder of the Company, nor any of their respective associates, had any interest in a business that competes or is likely to compete, either directly or indirectly, with the business of the Group - During the six months ended June 30, 2025, no Director, substantial shareholder, or controlling shareholder of the Company, nor any of their respective associates, had any interest in a business that competes or is likely to compete, either directly or indirectly, with the business of the Group[110] Directors' Securities Transactions The Company has adopted the required standard of dealings set out in the GEM Listing Rules as its code of conduct for securities transactions by Directors and confirms that all Directors have complied during the reporting period - The Company has adopted the required standard of dealings set out in Rules 5.48 to 5.67 of the GEM Listing Rules as its code of conduct for securities transactions by Directors[112] - For the six months ended June 30, 2025, all Directors have confirmed compliance with the required standard of dealings, and no incidents of non-compliance have been identified[112] Purchase, Sale or Redemption of Shares As of June 30, 2025, the Company held no treasury shares, and neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the reporting period - As at June 30, 2025, the Company did not hold any treasury shares[113] - During the reporting period and up to the date of this report, neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the Company's listed securities[113] Compliance with the Corporate Governance Code The Company is committed to high standards of corporate governance and has complied with the Corporate Governance Code in Appendix C1 of the GEM Listing Rules for the six months ended June 30, 2025 - The Company is committed to achieving high standards of corporate governance and has complied with the Corporate Governance Code in Appendix C1 of the GEM Listing Rules for the six months ended June 30, 2025[114] Disclosure of Directors' Information under GEM Listing Rule 17.50A(1) Ms Wong Wan Ian was appointed as a member of the Company's Nomination Committee effective June 20, 2025, with no other material changes to the information of other Directors - Ms Wong Wan Ian was appointed as a member of the Company's Nomination Committee with effect from June 20, 2025[115] Audit Committee The Audit Committee, comprising three independent non-executive directors, is responsible for reviewing financial reporting, internal controls, and monitoring connected transactions, and has reviewed the unaudited results in this report - The Audit Committee comprises three independent non-executive Directors, with Mr Chan Cheong Tat serving as the chairman[116] - Its primary duties are to review and supervise the Company's financial reporting process, the Group's internal control system, and to monitor continuing connected transactions[116] - The Audit Committee has reviewed the Group's unaudited consolidated results for the six months ended June 30, 2025[116] Review of this Report This report for the six months ended June 30, 2025, is unaudited but has been reviewed by the Audit Committee - This report for the six months ended June 30, 2025 is unaudited, but has been reviewed by the Audit Committee[117] Directors As of the date of this report, the Board of Directors includes Executive Directors Mr Wong Wai Chit (Chairman), Mr Wong Man Chit (CEO), and Ms Wong Wan Ian, and Independent Non-executive Directors Mr Chan Cheong Tat, Mr Ho Chi Wai, and Mr Chu Kin Wang - The Executive Directors are Mr Wong Wai Chit (Chairman), Mr Wong Man Chit (Chief Executive Officer), and Ms Wong Wan Ian[118] - The Independent Non-executive Directors are Mr Chan Cheong Tat, Mr Ho Chi Wai, and Mr Chu Kin Wang[118]