华禧控股(01689) - 2025 - 中期业绩

Disclaimer HKEX and SEHK disclaim responsibility for the announcement's content, accuracy, completeness, and any resulting losses Disclaimer Statement HKEX and SEHK disclaim responsibility for the announcement's content, accuracy, completeness, and any resulting losses - HKEX and SEHK are not responsible for the content of this announcement, do not guarantee its accuracy or completeness, and are not liable for losses incurred from reliance on its content[1] Interim Results Announcement This section provides an overview of Huaxi Holdings Company Limited's interim results for the six months ended June 30, 2025 Company Information Huaxi Holdings Company Limited (Stock Code: 1689) released its interim results for the six months ended June 30, 2025 - Huaxi Holdings Company Limited (Stock Code: 1689) announced its interim results for the six months ended June 30, 2025[2] Financial Summary Revenue increased by 4.9% to 65.7 million HKD, gross profit surged by 120.3%, and loss per share significantly reduced to 0.33 HK cents Key Financial Indicators for H1 FY2025 | Indicator | 2025 H1 (thousand HKD) | YoY Change (%) | | :--- | :--- | :--- | | Revenue | 65,700 | +4.9% | | Gross Profit | 19,890 | +120.3% | | Operating Loss | (1,570) | -92.6% | | Loss Attributable to Owners | (2,300) | -89.0% | | Basic Loss Per Share (HK cents) | (0.33) | -89.0% | - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[3] Condensed Consolidated Financial Statements This section presents the condensed consolidated financial statements, including the statement of comprehensive income and financial position Condensed Consolidated Statement of Comprehensive Income Revenue increased to 65.7 million HKD, gross profit rose to 19.89 million HKD, and loss per share was 0.33 HK cents Summary of Condensed Consolidated Statement of Comprehensive Income (Six Months Ended June 30) | Indicator | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 65,702 | 62,615 | 3,087 | +4.9% | | Cost of Sales | (45,816) | (53,590) | 7,774 | -14.5% | | Gross Profit | 19,886 | 9,025 | 10,861 | +120.3% | | Operating Loss | (1,566) | (21,241) | 19,675 | -92.6% | | Loss for the Period | (2,323) | (21,046) | 18,723 | -89.0% | | Loss Attributable to Owners of the Company | (2,295) | (20,987) | 18,692 | -89.1% | | Basic Loss Per Share (HK cents) | (0.33) | (2.99) | 2.66 | -89.0% | - In other comprehensive income, currency translation differences shifted from a loss of 2,643 thousand HKD in 2024 to a gain of 4,112 thousand HKD in 2025[6] Condensed Consolidated Statement of Financial Position Total assets decreased to 330.92 million HKD, cash and cash equivalents fell to 15.14 million HKD, and total liabilities reduced to 131.53 million HKD Summary of Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Assets | | | | | | Non-current Assets | 79,345 | 82,719 | (3,374) | -4.1% | | Current Assets | 251,576 | 268,159 | (16,583) | -6.2% | | Total Assets | 330,921 | 350,878 | (19,957) | -5.7% | | Equity | | | | | | Total Equity | 199,395 | 197,606 | 1,789 | +0.9% | | Liabilities | | | | | | Non-current Liabilities | 5,054 | 5,520 | (466) | -8.4% | | Current Liabilities | 126,472 | 147,752 | (21,280) | -14.4% | | Total Liabilities | 131,526 | 153,272 | (21,746) | -14.2% | | Cash and Cash Equivalents | 15,139 | 25,826 | (10,687) | -41.4% | | Borrowings | - | 10,260 | (10,260) | -100.0% | - Net trade receivables slightly increased from 143.60 million HKD at the end of 2024 to 144.50 million HKD as of June 30, 2025[7] - Trade payables and bills decreased from 109.27 million HKD at the end of 2024 to 101.77 million HKD as of June 30, 2025[8] Notes to the Condensed Consolidated Financial Statements This section provides detailed notes on the condensed consolidated financial statements, covering general information, basis of preparation, segment information, revenue, expenses, tax, loss per share, dividends, and trade receivables/payables General Information The company is incorporated in the Cayman Islands, with its main businesses in China being cigarette packaging and environmental restoration - The Company is incorporated in the Cayman Islands, with its ultimate parent company, SXD Limited, registered in the British Virgin Islands[9] - The Group's principal businesses are the manufacturing and sale of cigarette packaging materials and environmental and ecological restoration in China[9] - The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong since December 6, 2013[9] Basis of Preparation Interim financial information is prepared under HKAS 34 and Listing Rules, with no significant impact from newly adopted HKFRS amendments - The interim financial information is prepared in accordance with the Listing Rules of the Stock Exchange and Hong Kong Accounting Standard 34 'Interim Financial Reporting'[11] - The Group first applied HKAS 21 (Amendment) 'Lack of Exchangeability' on January 1, 2025, with no significant impact on financial position or performance[12] Segment Information The Group operates cigarette packaging and environmental governance segments, with environmental governance turning profitable and significantly improving segment results - The Group primarily operates cigarette packaging and environmental governance businesses, both identified as reportable segments[13] Summary of Segment Results (Six Months Ended June 30) | Indicator | Cigarette Packaging Business (thousand HKD) | Environmental Governance Business (thousand HKD) | Total Group (thousand HKD) | | :--- | :--- | :--- | :--- | | 2025 | | | | | Revenue | 60,298 | 5,404 | 65,702 | | Segment Result | 2,380 | 217 | 2,597 | | 2024 | | | | | Revenue | 58,445 | 4,069 | 62,615 | | Segment Result | 4,077 | (14,572) | (10,394) | - The environmental governance business achieved a turnaround in segment results in H1 2025, shifting from a loss of 14.57 million HKD in the same period of 2024 to a profit of 0.22 million HKD[15][16] Summary of Segment Assets and Liabilities (As of June 30) | Indicator | Cigarette Packaging Business (thousand HKD) | Environmental Governance Business (thousand HKD) | Total Group (thousand HKD) | | :--- | :--- | :--- | :--- | | June 30, 2025 | | | | | Segment Assets | 363,000 | 135,178 | 293,199 | | Segment Liabilities | 62,567 | 267,164 | 124,696 | | Capital Expenditure | 55 | - | 55 | | December 31, 2024 | | | | | Segment Assets | 367,351 | 141,926 | 313,118 | | Segment Liabilities | 74,648 | 267,422 | 145,834 | | Capital Expenditure | 4,220 | 1,595 | 5,815 | Revenue Total revenue increased by 4.9% to 65.70 million HKD, primarily from cigarette packaging and environmental restoration, with two major clients contributing 91.4% of total revenue Revenue Breakdown (Six Months Ended June 30) | Revenue Source | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Sale of cigarette packaging products | 60,298 | 58,445 | 1,853 | +3.2% | | Agency services | - | 101 | (101) | -100.0% | | Construction services | 2,376 | 2,625 | (249) | -9.5% | | Maintenance and other services | 3,028 | 1,444 | 1,584 | +109.7% | | Total Revenue | 65,702 | 62,615 | 3,087 | +4.9% | Revenue Contribution by Major Clients (Six Months Ended June 30) | Client | 2025 (%) | 2024 (%) | | :--- | :--- | :--- | | Client A | 48.2% | 45.2% | | Client B | 43.2% | 44.6% | - The majority of the Group's revenue is derived from customers in China[18] Contract Assets and Liabilities with Customers (As of June 30) | Indicator | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Total Contract Assets | 17,286 | 19,184 | | Contract Liabilities – Construction Services | 258 | 2,427 | Expenses by Nature Total cost of sales, distribution, and administrative expenses decreased by 13.9% to 62.01 million HKD, with reductions in staff, raw material, and subcontracting costs Key Expense Breakdown (Six Months Ended June 30) | Expense Item | 2025 (thousand HKD) | 2024 (thousand HKD) | Change (thousand HKD) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Cost of inventories sold | 34,350 | 35,078 | (728) | -2.1% | | Staff costs | 15,367 | 15,680 | (313) | -2.0% | | Raw materials used and subcontracting costs for construction contracts | 2,847 | 8,666 | (5,819) | -67.2% | | Total depreciation and amortisation | 4,102 | 4,965 | (863) | -17.4% | | Total cost of sales, distribution costs and administrative expenses | 62,011 | 72,064 | (10,053) | -13.9% | Other Gains/(Losses) – Net (Six Months Ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Foreign exchange (loss)/gain | (1,091) | 478 | | Dividend income from financial assets at fair value through profit or loss | 88 | 143 | | Loss on disposal of property, plant and equipment | (3) | (1,423) | | Net fair value gains/(losses) on financial assets at fair value through profit or loss | 1,340 | (10,973) | | Total | 334 | (11,775) | Income Tax Expense/Credit Income tax expense was 980 thousand HKD, with tax exemptions for certain entities, varying rates for Hong Kong subsidiaries, and preferential rates for high-tech enterprises in China - The Company's entities in the Cayman Islands and British Virgin Islands are exempt from income tax[23] - Hong Kong operating subsidiaries are subject to an income tax rate of 16.5%, with eligible subsidiaries taxed at 8.25% for the first 2 million HKD of assessable profits[24] - Shantou Xinda, as a high-tech enterprise, enjoys a preferential corporate income tax rate of 15%[25] - A 5% withholding income tax rate applies to dividends declared by Chinese subsidiaries to eligible Hong Kong intermediate holding companies[26] Income Tax Expense/Credit (Six Months Ended June 30) | Item | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Current income tax | (416) | - | | Deferred income tax | (564) | 313 | | Total | (980) | 313 | Loss Per Share Basic loss per share attributable to owners significantly decreased to 0.33 HK cents, with diluted loss per share being identical Loss Per Share Calculation (Six Months Ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the Company (thousand HKD) | (2,295) | (20,987) | | Weighted average number of ordinary shares in issue | 701,430,000 | 701,430,000 | | Basic loss per share (HK cents) | (0.33) | (2.99) | - Diluted loss per share was the same as basic loss per share due to no potential dilutive shares outstanding during the period[30] Dividends The Board does not recommend an interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[31] Trade Receivables Net trade receivables slightly increased to 144.50 million HKD, with the largest portion being over 365 days, all denominated in RMB Ageing Analysis of Trade Receivables (As of June 30) | Ageing | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Within 90 days | 28,203 | 25,872 | | 91 to 180 days | 1,998 | 9,073 | | 181 to 365 days | 9,642 | 6,114 | | Over 365 days | 167,880 | 161,426 | | Total | 207,723 | 202,485 | | Less: Impairment allowance | (63,226) | (58,884) | | Net | 144,497 | 143,601 | - The Group's trade receivables are all denominated in RMB[32] Trade Payables and Bills Total trade payables and bills decreased to 101.77 million HKD, with the majority due within 90 days, all denominated in RMB Ageing Analysis of Trade Payables and Bills (As of June 30) | Ageing | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Trade Payables | | | | Within 90 days | 60,961 | 69,652 | | 91 to 180 days | 1,563 | 164 | | Over 180 days | 4,205 | 3,548 | | Subtotal | 66,729 | 73,364 | | Bills Payable – Bank Acceptance Bills | 35,045 | 35,901 | | Total | 101,774 | 109,265 | - The Group's trade payables and bills are all denominated in RMB[33] Management Discussion and Analysis This section provides a review of the Group's business operations, financial performance, capital structure, and future outlook Business and Operations Review Revenue grew by 4.9% to 65.7 million HKD, loss attributable to owners decreased by 89.0%, driven by growth in both cigarette packaging and environmental governance businesses - The Group's revenue for the reporting period was approximately 65.7 million HKD, representing a year-on-year increase of 4.9%[34] - Loss attributable to owners of the Company was approximately 2.3 million HKD, a year-on-year decrease of 89.0%[34] Cigarette Packaging Business Revenue Breakdown (Six Months Ended June 30) | Product Category | 2025 (thousand HKD) | 2025 (%) | 2024 (thousand HKD) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Inner Liner Paper | 32,754 | 54.3 | 36,948 | 63.2 | | Tipping Paper | 17,088 | 28.4 | 14,996 | 25.7 | | Frame Paper | 7,072 | 11.7 | 3,924 | 6.7 | | Seal Paper | 3,381 | 5.6 | 2,577 | 4.4 | | Others | 3 | 0.0 | - | - | | Total | 60,298 | 100.0 | 58,445 | 100.0 | - Environmental governance business revenue was approximately 5.4 million HKD, a year-on-year increase of 32.7%, primarily due to the completion and settlement of existing construction projects and river ecological management contributions[36] Financial Performance Review Gross profit surged by 120.3% to 19.89 million HKD, gross margin increased to 30.3%, driven by environmental governance turnaround, while impairment losses increased and tax shifted to an expense - The Group's gross profit was approximately 19.89 million HKD, representing a year-on-year increase of 120.3%[37] - The Group's gross profit margin increased from 14.4% in the same period of 2024 to 30.3% in the same period of 2025, an increase of 15.9 percentage points[37] - The gross profit margin of the environmental governance business turned profitable, from -183.8% in the same period of 2024 to 26.7% in the same period of 2025[38] - Administrative expenses decreased by 13.6% to 15.72 million HKD[40] - Net impairment losses on financial and contract assets increased to 5.58 million HKD, primarily due to long-term overdue balances related to the environmental governance business[41] - Other net gains were 0.33 million HKD, compared to a loss of 11.78 million HKD in the same period last year, mainly due to stable securities markets in Hong Kong and China, and net fair value gains on financial assets of 1.34 million HKD[42] - Net finance income was 0.22 million HKD, compared to net finance costs of 0.12 million HKD in the same period last year[43] - Income tax expense was 0.98 million HKD, compared to an income tax credit of 0.31 million HKD in the same period last year[44] - Loss attributable to owners of the Company decreased by 89.0% to 2.3 million HKD[45] Financial Assets at Fair Value Through Profit or Loss The Group recorded net gains of 1.43 million HKD on listed securities, including 1.34 million HKD from fair value changes, holding 13.68 million HKD in financial assets at fair value through profit or loss - The Group recorded total net gains on listed securities of approximately 1.43 million HKD during the reporting period, primarily due to stable securities markets in Hong Kong and China[47] - Fair value gains from changes were approximately 1.34 million HKD, compared to a loss of 10.97 million HKD in the same period last year[47] Financial Assets at Fair Value Through Profit or Loss (As of June 30) | Security Category | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Equity securities listed in Hong Kong | 701 | 1,236 | | Equity securities listed in China (Luen Thai Environmental) | 6,082 | 5,447 | | Equity securities listed in China (Tianji Shares) | 3,857 | 3,315 | | Other China-listed equity securities | 3,042 | 3,163 | | Total | 13,682 | 13,161 | Capital Structure, Liquidity and Financial Resources Net assets were 199.40 million HKD, with a working capital surplus of 125.10 million HKD, all borrowings repaid, and exposure to exchange rate risk without hedging - As of June 30, 2025, the Group's net assets were 199.40 million HKD, with a working capital surplus of 125.10 million HKD[49] Cash and Cash Equivalents (As of June 30) | Item | June 30, 2025 (thousand HKD) | December 31, 2024 (thousand HKD) | | :--- | :--- | :--- | | Restricted bank cash | 37,730 | 37,550 | | Cash and cash equivalents | 15,140 | 25,830 | | Total | 52,870 | 63,370 | Summary of Cash Flows (Six Months Ended June 30) | Cash Flow Category | 2025 (thousand HKD) | 2024 (thousand HKD) | | :--- | :--- | :--- | | Net cash used in operating activities | (1,446) | (1,865) | | Net cash from investing activities | 1,062 | 7,510 | | Net cash used in financing activities | (11,111) | (6,651) | | Net decrease in cash and cash equivalents | (11,495) | (1,006) | | Cash and cash equivalents at end of period | 15,139 | 10,911 | - The Group has fully repaid all borrowings and had no borrowings as of June 30, 2025, thus no gearing ratio is presented[53] - The Group primarily faces exchange rate fluctuation risk and currently has no hedging policy in place[54] Capital Expenditure and Commitments Total capital expenditure was 60 thousand HKD for property, plant, and equipment, with no capital commitments as of June 30, 2025 - During the reporting period, the Group's total capital expenditure was approximately 60 thousand HKD, primarily for the acquisition of property, plant, and equipment[55] - As of June 30, 2025, the Group had no capital commitments[55] Pledged Assets The Group pledged cash deposits of 37.73 million HKD for bills payable and performance bonds, all denominated in RMB - The Group pledged cash deposits of approximately 37.73 million HKD, with 35.05 million HKD for bills payable and 1.61 million HKD as performance bond deposits[56] - All pledged cash deposits are denominated in RMB[56] Contingent Liabilities The Group had no contingent liabilities as of June 30, 2025, and December 31, 2024 - The Group had no contingent liabilities at the end of the reporting period[57] Significant Acquisitions and Disposals The Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period - The Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the reporting period[58] Major Investment Activities The Group had no major investment activities during the reporting period - The Group had no major investment activities during the reporting period[59] Future Outlook and Prospects Despite slight improvements, the 2025 outlook remains challenging, prompting the Group to strengthen existing businesses and pursue concentric diversification for new revenue streams - While cigarette packaging and environmental governance businesses showed slight improvement, the outlook for 2025 remains challenging[60] - The cigarette packaging business will continue to strengthen existing customer relationships and seek new clients to expand market share[60] - The environmental governance business faces challenges, with limited opportunities for new ecological restoration projects, requiring close monitoring and timely strategy adjustments[60] - The Group will pursue a concentric diversification strategy, actively seeking new business opportunities to broaden revenue streams[61] Other Information This section covers human resources, corporate governance compliance, securities transactions, interim results review, and publication details Human Resources The Group employed 250 full-time staff with total remuneration of 15.37 million HKD, offering competitive compensation and benefits reviewed periodically - As of June 30, 2025, the Group employed 250 full-time employees in China and Hong Kong (December 31, 2024: 258 employees)[62] - Total staff costs for the reporting period were 15.37 million HKD (same period in 2024: 15.68 million HKD)[62] - The Group offers competitive remuneration packages, determined by employee performance, qualifications, and experience, along with benefits such as social insurance, provident funds, and discretionary bonuses[62] Compliance with Corporate Governance Practices The company adheres to the Corporate Governance Code, with explanations provided for deviations such as combined Chairman/CEO roles and fewer board meetings - The Company has adopted and applied the Corporate Governance Code set out in Appendix C1 Part 2 of the Listing Rules[63] - Mr. Zheng Yisheng serves concurrently as the Chairman of the Board and Chief Executive Officer of the Group, an arrangement the Board believes does not lead to an imbalance of power[64] - The Board held only one regular meeting during the reporting period, falling short of the minimum of four meetings per year required by Code Provision C.2.1, but deemed quarterly meetings unnecessary[65] - Management did not submit monthly reports to all Board members as required by Code Provision D.1.2, but provides regular updates and information on significant changes[66] Purchase, Sale and Redemption of Company Securities Neither the Company nor its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during the reporting period - Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities during the reporting period[67] Review of Interim Results The Company's audit committee has reviewed the Group's interim results for the reporting period - The Company's audit committee has reviewed the Group's interim results for the reporting period[68] Publication of Interim Results and Interim Report This interim results announcement is published on the company and Stock Exchange websites, with the full interim report to be dispatched to shareholders - This interim results announcement has been published on the Company's website (www.huaxihds.com.hk) and the Stock Exchange's website (www.hkexnews.hk)[69](index=69&type=chunk) - The Company's interim report, containing all information required by the Listing Rules, will be dispatched to shareholders in due course and made available on the aforementioned websites[69]