丽年国际(09918) - 2025 - 中期业绩

Company Overview and Financial Summary Company Information Wise Ally International Holdings Limited is an investment holding company registered in the Cayman Islands, primarily engaged in electronic product manufacturing and sales, listed on the main board of the Hong Kong Stock Exchange on January 10, 2020 - The company is an investment holding company registered in the Cayman Islands, primarily engaged in electronic product manufacturing and sales[6] - The company's shares were listed on the main board of the Hong Kong Stock Exchange on January 10, 2020[7] Financial Summary For the six months ended June 30, 2025, revenue decreased by 16.6% to HK$469,858 thousand, gross profit decreased by 27.4% to HK$78,727 thousand, and gross margin declined by 240 bps to 16.8%, with profit attributable to equity holders decreasing by 8.7% to HK$14,338 thousand and basic and diluted earnings per share at 14.34 HK cents Key Financial Metrics (HK$ thousand) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | Change (bps) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 469,858 | 563,536 | (16.6%) | - | | Gross Profit | 78,727 | 108,445 | (27.4%) | - | | Gross Margin | 16.8% | 19.2% | - | (240) | | Operating Profit | 18,169 | 28,406 | (36.0%) | - | | EBITDA | 36,778 | 47,262 | (22.2%) | - | | Profit Attributable to Equity Holders | 14,338 | 15,701 | (8.7%) | - | | Basic and Diluted Earnings Per Share (HK cents) | 14.34 | 15.70 | (8.7%) | - | Condensed Consolidated Financial Statements Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, the company reported revenue of HK$469,858 thousand and gross profit of HK$78,727 thousand, with other net income significantly increasing to HK$29,649 thousand due to fair value gains on financial assets, and net finance costs substantially decreasing to HK$2,312 thousand, resulting in a profit for the period of HK$14,338 thousand Condensed Consolidated Statement of Comprehensive Income (HK$ thousand) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Revenue | 469,858 | 563,536 | | Cost of Sales | (391,131) | (455,091) | | Gross Profit | 78,727 | 108,445 | | Other Net Income | 29,649 | 3,194 | | Other Income | 244 | 1,550 | | Selling and Distribution Expenses | (28,853) | (27,159) | | Administrative Expenses | (60,865) | (57,624) | | Provision for Impairment Loss on Financial Assets | (733) | – | | Operating Profit | 18,169 | 28,406 | | Net Finance Costs | (2,312) | (8,011) | | Profit Before Income Tax | 15,857 | 20,395 | | Income Tax Expense | (1,519) | (4,694) | | Profit Attributable to Equity Holders | 14,338 | 15,701 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets decreased to HK$806,541 thousand from HK$933,499 thousand on December 31, 2024, driven by significant reductions in trade receivables and inventories within current assets, while cash and cash equivalents increased, total liabilities decreased to HK$571,737 thousand, and total equity increased to HK$234,804 thousand Condensed Consolidated Statement of Financial Position (HK$ thousand) | Indicator | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 112,233 | 128,245 | | Current Assets | 694,308 | 805,254 | | Total Assets | 806,541 | 933,499 | | Equity | | | | Share Capital | 20,000 | 20,000 | | Reserves | 214,804 | 201,139 | | Total Equity | 234,804 | 221,139 | | Liabilities | | | | Non-current Liabilities | 38,435 | 50,997 | | Current Liabilities | 533,302 | 661,363 | | Total Liabilities | 571,737 | 712,360 | | Total Equity and Liabilities | 806,541 | 933,499 | Notes to the Financial Statements Basis of Preparation and Accounting Policies The condensed consolidated financial statements are prepared in accordance with HKAS 34 "Interim Financial Reporting" and Appendix D2 of the Listing Rules, adopting the same accounting policies as the 2024 financial statements - The financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules[9] - The same accounting policies as the 2024 financial statements are adopted[9] Adoption of New and Revised Standards The Group adopted HKAS 21 and HKFRS 1 (Amendments) "Lack of Exchangeability" from January 1, 2025, with no significant impact, and management anticipates no material impact from new and revised standards issued but not yet adopted, such as HKFRS 18 "Presentation and Disclosure in Financial Statements" - HKAS 21 and HKFRS 1 (Amendments) "Lack of Exchangeability" have been adopted with no significant impact[10] - New and revised standards issued but not yet adopted, including HKFRS 18, are not expected to have a material impact on financial position and operating results[12] Revenue and Segment Information The Group primarily engages in electronic product manufacturing and sales, with the CEO assessing operating segment performance based on revenue and gross profit, and all revenue for H1 2025 derived from contracts with customers and recognized at a point in time - The Group primarily engages in electronic product manufacturing and sales, with one reportable operating segment[13] - The CEO assesses operating segment performance based on revenue and gross profit[14] Operating Segments The CEO, as the chief operating decision maker, assesses performance and allocates resources based on internal reports, identifying only one reportable operating segment: electronic product manufacturing and sales - The CEO is the chief operating decision maker, assessing performance and allocating resources based on internal reports[13] - The Group has only one reportable operating segment: electronic product manufacturing and sales[13] Revenue by Geographical Location of Customers For H1 2025, the Group's products were shipped to over 25 countries and regions, with the US becoming the largest market, contributing HK$174,410 thousand or 37.1% of total revenue, an increase from the prior year, while revenue from the Philippines and Mainland China decreased Revenue by Geographical Location (HK$ thousand) | Geographical Location | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | United States | 174,410 | 137,435 | | Philippines | 111,255 | 180,454 | | Mainland China | 71,068 | 111,493 | | Ireland | 33,477 | 40,826 | | Switzerland | 14,998 | 9,025 | | Malaysia | 12,449 | 18,063 | | Germany | 11,079 | 9,707 | | Hong Kong | 8,856 | 7,241 | | United Kingdom | 6,271 | 21,756 | | Belgium | 4,797 | 48 | | Singapore | 3,926 | 2,453 | | Mexico | 3,074 | 11,364 | | India | 2,916 | 4,978 | | Estonia | 2,474 | 1,847 | | Netherlands | 1,796 | 1,176 | | Norway | 1,717 | 1,189 | | Others | 5,295 | 4,481 | | Total | 469,858 | 563,536 | - The US became the largest market, contributing 37.1% of total revenue, an increase from 24.4% in the prior year[16][39] Revenue from Major Customers For H1 2025, Customer A contributed HK$77,196 thousand and Customer D contributed HK$72,131 thousand, while Customers B and C did not meet the 10% revenue threshold, unlike H1 2024 when Customers A, B, and C were all major customers Revenue from Major Customers (HK$ thousand) | Customer | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Customer A | 77,196 | 116,537 | | Customer B | Not applicable* | 72,695 | | Customer C | Not applicable* | 64,068 | | Customer D | 72,131 | Not applicable* | - In H1 2025, Customer A and Customer D were major customers, whereas in H1 2024, Customers A, B, and C were major customers[17] Contract Liabilities and Unsatisfied Performance Obligations As of June 30, 2025, contract liabilities increased to HK$17,285 thousand from HK$12,818 thousand on December 31, 2024, with all unsatisfied performance obligations arising from contracts with an original expected duration of less than one year, thus transaction prices are not disclosed Contract Liabilities (HK$ thousand) | Indicator | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Contract Liabilities | 17,285 | 12,818 | - Unsatisfied performance obligations are from contracts with an expected duration of less than one year, thus transaction prices are not disclosed[19] Non-current Assets by Geographical Location As of June 30, 2025, the Group's total non-current assets (excluding financial instruments and deferred tax assets) primarily located in Mainland China (HK$91,827 thousand) and Hong Kong (HK$9,268 thousand), totaling HK$101,095 thousand, a decrease from December 31, 2024 Non-current Assets by Geographical Location (HK$ thousand) | Geographical Location | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Hong Kong | 9,268 | 11,953 | | Mainland China | 91,827 | 104,955 | | Total | 101,095 | 116,908 | Other Net Income and Other Income For H1 2025, other net income significantly increased to HK$29,649 thousand (H1 2024: HK$3,194 thousand), primarily due to a fair value gain of HK$23,228 thousand on financial assets at fair value through profit or loss, while other income decreased from HK$1,550 thousand to HK$244 thousand Other Net Income and Other Income (HK$ thousand) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Other Net Income | | | | Loss on disposal of property, plant and equipment | (142) | (21) | | Gain on disposal of a joint venture | 730 | – | | Exchange gain | 5,833 | 3,215 | | Fair value gain on financial assets | 23,228 | – | | Total Other Net Income | 29,649 | 3,194 | | Other Income | | | | Government grants | 202 | 200 | | Others | 42 | 1,350 | | Total Other Income | 244 | 1,550 | - Other net income significantly increased by HK$26.4 million, primarily due to a one-off gain of HK$23.2 million from fair value changes in financial assets[21][40] Net Finance Costs For H1 2025, net finance costs significantly decreased by 71.3% to HK$2,312 thousand (H1 2024: HK$8,011 thousand), mainly due to a strategic reduction in bank borrowings and increased interest income from bank deposits and convertible bonds Net Finance Costs (HK$ thousand) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Interest income from bank deposits and convertible bonds | (3,127) | (1,988) | | Interest expense on bank borrowings | 3,677 | 7,787 | | Interest expense on lease liabilities | 1,762 | 2,212 | | Net Finance Costs | 2,312 | 8,011 | - Net finance costs decreased by 71.3% year-on-year, primarily due to reduced bank borrowings and increased interest income[23][42] Income Tax Expense For H1 2025, income tax expense was HK$1,519 thousand, a significant decrease from HK$4,694 thousand in H1 2024, with Hong Kong subsidiaries subject to a two-tiered profits tax rate (8.25% and 16.5%) and PRC subsidiaries subject to a 25% corporate income tax rate Income Tax Expense (HK$ thousand) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current income tax expense | 1,632 | 4,849 | | Deferred income tax credit | (113) | (155) | | Income Tax Expense | 1,519 | 4,694 | - Hong Kong applies a two-tiered profits tax rate (8.25% and 16.5%), while China applies a 25% corporate income tax rate[24] Dividends The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025, and 2024 - The Board does not recommend the payment of an interim dividend for H1 2025 and H1 2024[26][52] Earnings Per Share For H1 2025, basic and diluted earnings per share were 14.34 HK cents, a decrease from 15.70 HK cents in H1 2024, with no difference between basic and diluted earnings due to the absence of potential dilutive ordinary shares in both periods Earnings Per Share (HK$ thousand/thousand shares/HK cents) | Indicator | 2025 (HK$ thousand/thousand shares/HK cents) | 2024 (HK$ thousand/thousand shares/HK cents) | | :--- | :--- | :--- | | Profit attributable to equity holders | 14,338 | 15,701 | | Weighted average number of ordinary shares issued | 100,000 | 100,000 | | Basic and Diluted Earnings Per Share | 14.34 | 15.70 | - Basic and diluted earnings per share decreased, with no difference between basic and diluted earnings due to the absence of potential dilutive ordinary shares[28] Trade Receivables As of June 30, 2025, trade receivables (net of impairment) significantly decreased to HK$178,362 thousand from HK$270,925 thousand on December 31, 2024, with a credit period ranging from 15 to 120 days, and the highest proportion of receivables due within one month Trade Receivables (HK$ thousand) | Indicator | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Trade Receivables | 186,454 | 278,284 | | Less: Impairment provision | (8,092) | (7,359) | | Net Trade Receivables | 178,362 | 270,925 | Aging Analysis of Trade Receivables (HK$ thousand) | Aging (by invoice date) | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Within 1 month | 91,844 | 125,320 | | 1 to 2 months | 46,507 | 96,967 | | 2 to 3 months | 31,370 | 40,186 | | Over 3 months | 8,641 | 8,452 | | Total | 178,362 | 270,925 | - Trade receivables significantly decreased by HK$92.5 million, primarily due to more proactive debt collection measures[40] Trade Payables As of June 30, 2025, trade payables were HK$217,571 thousand, a decrease from HK$285,421 thousand on December 31, 2024, with the highest proportion of payables due within one month Aging Analysis of Trade Payables (HK$ thousand) | Aging (by invoice date) | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Within 1 month | 101,222 | 175,149 | | 1 to 2 months | 41,646 | 36,281 | | 2 to 3 months | 36,827 | 28,639 | | Over 3 months | 37,876 | 45,352 | | Total | 217,571 | 285,421 | Bank Borrowings As of June 30, 2025, bank borrowings significantly decreased to HK$123,774 thousand from HK$188,279 thousand on December 31, 2024, with some borrowings and financing pledged by undertakings from controlling shareholders Mr. Chu Wai Hang and Mr. Chu Wai Cheung Bank Borrowings (HK$ thousand) | Indicator | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Bank Borrowings - Repayable on demand | 123,774 | 188,279 | - Bank borrowings decreased by HK$64.5 million, or approximately 34.3%, to reduce borrowing costs[33][40] - Bank borrowings are pledged by undertakings from controlling shareholders Mr. Chu Wai Hang and Mr. Chu Wai Cheung to jointly hold at least 51% equity[33] Investment in a Joint Venture Wise Ally Holdings Limited, an indirect wholly-owned subsidiary, completed the disposal of 10% of the issued shares of Talentone Technology Limited (TTL) on February 13, 2025, for a consideration of HK$730,000, and no longer holds any equity interest in TTL thereafter - Wise Ally Holdings completed the disposal of 10% of TTL shares on February 13, 2025, and no longer holds any equity interest[34] - The disposal of the joint venture generated a gain of HK$730 thousand[21][34] Financial Assets at Fair Value Through Profit or Loss The Group previously held two tranches of convertible bonds issued by TTL with a total principal of HK$44,000,000, which were fully recovered on February 10, 2025, including outstanding principal and interest, through an undertaking deed by Mr. Chu Wai Hang, resulting in a fair value gain of HK$23,228 thousand - The Group previously held convertible bonds issued by TTL with a total principal of HK$44,000,000[37] - The convertible bonds were fully recovered on February 10, 2025, including outstanding principal and interest, through an undertaking deed by Mr. Chu Wai Hang[38] - A fair value gain of HK$23,228 thousand was recognized from the convertible bond investment[21][40] Management Discussion and Analysis Business and Financial Review H1 2025 saw a 16.6% revenue decrease and 27.4% gross profit decrease due to major customer new product development cycle transitions, reduced order volumes, product mix changes, and US tariff policy uncertainties, which the company addressed by reducing bank borrowings, actively collecting trade receivables, and prudent procurement, while other net income significantly increased due to fair value changes in financial assets - Revenue and gross profit decline primarily attributed to major customer new product development cycle transitions, reduced order volumes, product mix changes, and US tariff policy uncertainties[39] - Measures taken include reducing bank borrowings (down 34.3%), actively collecting trade receivables (down 34.1%), and prudent procurement (inventory reduction)[40] - Other net income increased by HK$26.4 million, mainly from a one-off gain of HK$23.2 million from fair value changes in financial assets[40] - Selling, distribution, and administrative expenses increased by HK$4.9 million, mainly due to higher sales commissions (related to increased sales to US customers) and increased employee benefit costs[41] - Net finance costs decreased by 71.3%, primarily due to a strategic reduction in bank borrowings and increased interest income[42] - Exchange gains increased by 81.3% to HK$5.8 million, mainly due to the appreciation of the US dollar[42] Outlook For H2 2025, the Group will continue to navigate global challenges by strengthening business resilience through cost management, debt reduction, and advancing its "China Plus One" manufacturing strategy, anticipating ongoing challenges from US-China tariff uncertainties, global economic volatility, and geopolitical tensions that may impact orders, profits, and supply chains, while enhanced capacity at the Batam production base positively impacts US customer business growth, aligning with the "China Plus One" strategy - The Group will strengthen business resilience through prudent cost management, effective debt reduction, and advancing its "China Plus One" manufacturing strategy[43] - Ongoing challenges are expected from US-China tariff uncertainties, global economic volatility, and geopolitical tensions[43] - Enhanced capacity at the Batam production base positively impacts US customer business growth, aligning with the "China Plus One" strategy and enhancing service capabilities amidst tariff uncertainties[44] - Prudent procurement and inventory management, strict control over trade receivables, and diversification of customer base and production layout will be maintained[45] Liquidity and Financial Resources As of June 30, 2025, the Group's bank borrowings were HK$123.8 million, with cash and cash equivalents and time deposits totaling HK$320.0 million, resulting in a net cash position of HK$196.2 million (December 31, 2024: HK$95.6 million), indicating ample liquidity Liquidity Position (HK$ thousand) | Indicator | 2025 June 30 (HK$ thousand) | 2024 Dec 31 (HK$ thousand) | | :--- | :--- | :--- | | Bank Borrowings | 123,774 | 188,279 | | Cash and Cash Equivalents | 299,792 | 235,333 | | Time Deposits with Original Maturity Over Three Months | 20,162 | 48,576 | | Total Net Cash | 196,180 | 95,630 | - The Group is in a net cash position with ample liquidity, thus no gearing ratio is presented[46][47] Capital Expenditure and Commitments For H1 2025, the Group incurred total capital expenditure of HK$4.5 million, primarily for additions to property, plant and equipment and intangible assets, and as of June 30, 2025, had contracted but unprovided capital commitments for plant and machinery of HK$2.7 million - Total capital expenditure for H1 2025 was HK$4.5 million, used for property, plant and equipment and intangible assets[48] - As of June 30, 2025, contracted but unprovided capital commitments for plant and machinery amounted to HK$2.7 million[48] Contingent Liabilities and Pledge of Assets As of June 30, 2025, the Group had no significant contingent liabilities or pending/threatened legal proceedings that could have a material adverse effect, and its assets were not pledged - As of June 30, 2025, the Group had no significant contingent liabilities or pending legal proceedings[49] - As of June 30, 2025, the Group's assets were not pledged[50] Foreign Exchange and Risk Management The Group faces foreign exchange risk primarily related to the US dollar and Renminbi, with most sales denominated in US dollars and some purchases and operating expenses in Renminbi, and will closely monitor and take proactive, prudent measures to mitigate these risks - The Group faces US dollar and Renminbi foreign exchange risk, with most sales denominated in US dollars and some expenses in Renminbi[51] - The Group will closely monitor foreign exchange risk and take proactive, prudent measures to minimize it[51] Capital Structure As of June 30, 2025, the company had 100,000,000 issued shares of HK$0.2 par value each, with the capital structure comprising bank borrowings and equity attributable to equity holders, showing no significant changes during the reporting period - As of June 30, 2025, total issued shares were 100,000,000 with a par value of HK$0.2 per share[53] - The capital structure includes bank borrowings and equity attributable to equity holders, with no significant changes during the reporting period[53] Significant Events After Reporting Period Except for matters disclosed in this announcement, no significant events materially affecting the Group's business occurred after June 30, 2025 - No significant events occurred after the reporting period[54] Material Investments, Acquisitions and Disposals Aside from the disposal of 10% of TTL's issued shares, the Group had no other material investments, acquisitions, or disposals during the reporting period, and as of June 30, 2025, held no material investments representing 5% or more of total asset value - No other material investments, acquisitions, or disposals occurred during the reporting period, except for the disposal of 10% of TTL shares[55] - As of June 30, 2025, no material investments representing 5% or more of total asset value were held[55] Other Information Employee Information As of June 30, 2025, the Group employed approximately 1,500 employees in Hong Kong and China, a decrease from 1,900 on December 31, 2024, with total staff costs of HK$120.4 million for H1 2025, and compensation policies based on job nature, qualifications, and experience, including year-end bonuses, insurance benefits, and discretionary bonuses - As of June 30, 2025, the number of employees was approximately 1,500, a decrease from 1,900 on December 31, 2024[56] - Total staff costs for H1 2025 were HK$120.4 million[56] - Compensation policy is based on job nature, qualifications, and experience, offering year-end bonuses, insurance benefits, and discretionary bonuses[56] - As of June 30, 2025, no outstanding share options were granted under the share option scheme[56] Purchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, nor did they hold any treasury shares - During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities, nor held any treasury shares[57] Corporate Governance The company complied with the Corporate Governance Code during the reporting period, except for a deviation from code provision C.2.1 regarding the separation of Chairman and Chief Executive roles, as Mr. Chu Wai Hang holds both positions, which the Board believes provides strong and consistent leadership, with three independent non-executive directors ensuring a balance of power - The company complied with the Corporate Governance Code, except for a deviation from code provision C.2.1 regarding the separation of Chairman and Chief Executive roles[58] - Mr. Chu Wai Hang serves as both Chairman and Chief Executive, an arrangement the Board believes provides strong and consistent leadership[58] - The Board includes three independent non-executive directors to ensure a balance of power[59] Standard of Conduct for Securities Transactions by Directors The company has adopted the Model Code set out in Appendix C3 of the Listing Rules, and all directors confirmed compliance with the code during the reporting period after inquiry - The company adopted the Model Code in Appendix C3 of the Listing Rules, and all directors confirmed compliance during the reporting period[60] Audit Committee The Audit Committee, composed of three independent non-executive directors, reviewed the Group's accounting principles, risk management, internal controls, and financial reporting matters, including the unaudited condensed consolidated financial statements and interim results for the six months ended June 30, 2025 - The Audit Committee, comprising three independent non-executive directors, reviewed the Group's accounting principles, risk management, internal controls, and interim results[61] Publication of Interim Results and Interim Report This announcement has been published on the company's and the Stock Exchange's websites, and the 2025 interim report will be distributed to shareholders and published on these websites in due course - This announcement has been published on the company's website and the Stock Exchange's website[62] - The 2025 interim report will be distributed to shareholders and published on the websites in due course[62]