Management Discussion and Analysis Business Review and Future Outlook The Group primarily engaged in financial services and advertising media businesses during the six months ended June 30, 2025, achieving a 3% revenue increase to HKD26.8 million and a narrowed net loss of HKD21.0 million despite Hong Kong market challenges - During the reporting period, the Group's total revenue was approximately HKD26.8 million, a 3% year-on-year increase; net loss was approximately HKD21.0 million, narrowing year-on-year[3]](index=3&type=chunk) Key Financial Data for the Six Months Ended June 30, 2025 | Metric | Six months ended June 30, 2025 (HKD) | Six months ended June 30, 2024 (HKD) | | :--- | :--- | :--- | | Revenue | 26,800,000 | 26,000,000 | | Net loss | (21,000,000) | (25,400,000) | - Despite stable global economic growth, the Hong Kong capital market faced volatility and cautious investor sentiment due to trade protectionism, geopolitical tensions, and a weak retail property sector[4]](index=4&type=chunk) - The Group will explore potential business opportunities, maintain existing operations, and seek new investment opportunities in areas with growth potential to achieve business diversification and sustainable development[4]](index=4&type=chunk) Financial Services Business The financial services business, primarily securities trading and asset management operated by Cornerstone Securities, saw revenue decrease by 6% to HKD4.0 million, with margin financing interest comprising 91% of its revenue amid cautious investor sentiment - Financial services business revenue was approximately HKD4.0 million, a decrease of approximately 6% compared to the same period last year[3]](index=3&type=chunk)[4]](index=4&type=chunk) - Margin financing business is a significant component of the financial services segment, with interest income accounting for approximately 91% of Cornerstone Securities' revenue (2024: 94%)[5]](index=5&type=chunk) Overview of Margin Loan Business | Metric | June 30, 2025 (HKD) | December 31, 2024 (HKD) | Change | | :--- | :--- | :--- | :--- | | Number of margin clients | 11 | 11 | No change | | Total margin loans granted | 82,600,000 | 89,000,000 | decreased by approximately 7.2% | | Proportion of top five borrowing clients | 79% | 80% | slightly decreased | | Annual interest rate on margin loans | 8.5% | 8.5% to 9.125% | tended to stabilize | - The Hong Kong stock market performed strongly in the first half of the year, but external pressures and structural challenges led to market volatility and uncertainty, weakening client investment sentiment[8]](index=8&type=chunk) Advertising and Media Business Advertising and media business revenue increased by 5% to HKD22.8 million, driven by an expanded digital out-of-home network in Hong Kong and Singapore, with programmatic DOOH expected to be a key growth area as performance recovers from pandemic lows - Advertising and media business revenue was approximately HKD22.8 million, an increase of approximately 5% compared to the same period last year[3]](index=3&type=chunk) Number of Selected Locations in Digital Out-of-Home Media Network | Region | Network | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | :--- | | Hong Kong | Office, commercial and residential building networks | 1,132 | 1,111 | | Singapore | Office and commercial building networks | 535 | 515 | | Total selected locations | | 1,667 | 1,626 | - The Group collaborated with Hivestack to enhance the programmatic Digital Out-of-Home (pDOOH) advertising experience in Singapore, with pDOOH expected to be a major growth driver in the coming years[10]](index=10&type=chunk) - The performance of the advertising and media business is gradually recovering from its lowest levels during the pandemic[11]](index=11&type=chunk) Financial Review For the six months ended June 30, 2025, the Group's total revenue grew 3% to HKD26.8 million, with gross profit decreasing 6% to HKD15.1 million due to higher service costs, while administrative expenses decreased 10% and net loss narrowed to HKD21.0 million with a HKD9.29 loss per share Financial Performance for the Six Months Ended June 30, 2025 | Metric | Six months ended June 30, 2025 (HKD) | Six months ended June 30, 2024 (HKD) | Percentage change | | :--- | :--- | :--- | :--- | | Revenue | 26,799,546 | 25,964,172 | 3% | | Gross profit | 15,083,173 | 16,041,075 | -6% | | Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) | (14,888,748) | (19,043,903) | Not applicable (loss narrowed) | | Net loss | (21,004,747) | (25,397,930) | Not applicable (loss narrowed) | - Gross profit decreased by approximately 6% year-on-year to HKD15.1 million, with gross margin declining from 62% to 56%, primarily due to an approximately 18% increase in cost of services[14]](index=14&type=chunk) - Administrative expenses decreased by approximately 10% year-on-year to HKD36.3 million, mainly due to reductions in professional service fees and marketing expenses[14]](index=14&type=chunk) - Loss per share narrowed from HKD10.97 cents in the same period last year to HKD9.29 cents[16]](index=16&type=chunk) Liquidity and Financial Resources As of June 30, 2025, the Group's net current assets decreased to approximately HKD95.0 million, with cash and cash equivalents also declining to HKD48.0 million, primarily funding operations through internal resources Liquidity Overview | Metric | June 30, 2025 (HKD) | December 31, 2024 (HKD) | Change | | :--- | :--- | :--- | :--- | | Net current assets | 95,000,000 | 125,000,000 | decreased 30,000,000 | | Cash and cash equivalents | 48,000,000 | 52,000,000 | decreased 4,000,000 | - The Group funds its daily operations with internally generated resources[17]](index=17&type=chunk) Gearing Ratio As of June 30, 2025, the Group's gearing ratio significantly increased to approximately 22.44% from 11.34% at December 31, 2024 Gearing Ratio | Metric | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing Ratio | 22.44% | 11.34% | increased 11.1 percentage points | Foreign Exchange The Group faces foreign currency risk from its Singapore operations, with transactions, assets, and liabilities primarily denominated in Singapore Dollars, and no hedging activities were undertaken during the period - The Group's operations in Singapore face foreign currency risk as most transactions, assets, and liabilities are denominated in Singapore Dollars[20]](index=20&type=chunk) - During the reporting period, the Group did not engage in any derivative activities or introduce financial instruments to hedge foreign currency risk[20]](index=20&type=chunk) [Capital Structure](index=9&type=section&id=%E8%B3%87%E6%9C%AC%
基石金融(08112) - 2025 - 中期财报