中国长远(00110) - 2025 - 中期业绩

Interim Results Announcement Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the Group's revenue increased by 17.4% to HKD 40,548 thousand, while loss for the period narrowed to HKD 7,455 thousand from HKD 8,771 thousand in the prior year, with basic loss per share improving to HKD 2.61 cents from HKD 3.13 cents Key Financial Data from Condensed Consolidated Statement of Profit or Loss | Indicator | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 40,548 | 34,506 | 17.5% | | Cost of Sales | (39,474) | (34,411) | 14.7% | | Gross Profit | 1,074 | 95 | 1030.5% | | Other Income | 488 | 142 | 243.7% | | Net Other Gains and Losses | 35 | (273) | N/A | | Selling and Distribution Costs | (20) | (13) | 53.8% | | Administrative Expenses | (7,966) | (8,673) | -8.2% | | Finance Costs | (999) | (49) | 1938.8% | | Loss Before Income Tax | (7,388) | (8,771) | -15.8% | | Income Tax Expense | (67) | – | N/A | | Loss for the Period | (7,455) | (8,771) | -15.0% | | Loss for the Period Attributable to Owners of the Company | (6,560) | (6,753) | -2.8% | | Loss for the Period Attributable to Non-controlling Interests | (895) | (2,018) | -55.6% | | Basic and Diluted Loss Per Share (HK cents) | (2.61) | (3.13) | -16.7% | Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, the Group's total comprehensive expense for the period decreased to HKD 6,827 thousand from HKD 8,932 thousand in the prior year, primarily due to exchange differences turning from loss to gain Key Data from Condensed Consolidated Statement of Comprehensive Income | Indicator | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Loss for the Period | (7,455) | (8,771) | -15.0% | | Exchange Differences Arising from Translation of Functional Currency to Presentation Currency | 628 | (161) | N/A | | Total Comprehensive Expense for the Period | (6,827) | (8,932) | -23.6% | | Total Comprehensive Expense for the Period Attributable to Owners of the Company | (5,882) | (7,975) | -26.3% | | Total Comprehensive Expense for the Period Attributable to Non-controlling Interests | (945) | (957) | -1.3% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's net current liabilities expanded to HKD 18,910 thousand, with total assets less current liabilities at negative HKD 16,501 thousand, indicating increased liquidity pressure, and equity attributable to owners of the Company was negative HKD 13,464 thousand Key Data from Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Non-current Assets | 2,409 | 1,789 | 620 | | Current Assets | 59,255 | 59,188 | 67 | | Current Liabilities | 78,165 | 74,733 | 3,432 | | Net Current Liabilities | (18,910) | (15,545) | (3,365) | | Total Assets Less Current Liabilities | (16,501) | (13,756) | (2,745) | | Equity Attributable to Owners of the Company | (13,464) | (11,721) | (1,743) | | Non-controlling Interests | (3,072) | (2,135) | (937) | | Total Equity and Liabilities | (16,501) | (13,756) | (2,745) | Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, the Group's net cash from operating activities turned to an inflow of HKD 1,614 thousand from an outflow of HKD 7,759 thousand in the prior year, with a net increase in cash and cash equivalents of HKD 587 thousand, bringing the period-end balance to HKD 7,891 thousand Key Data from Condensed Consolidated Statement of Cash Flows | Indicator | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Net Cash From (Used In) Operating Activities | 1,614 | (7,759) | 9,373 | | Net Cash Used In Investing Activities | (766) | (611) | (155) | | Net Cash (Used In) From Financing Activities | (261) | 4,251 | (4,512) | | Net Increase (Decrease) in Cash and Cash Equivalents | 587 | (4,119) | 4,706 | | Cash and Cash Equivalents at End of Period | 7,891 | 7,475 | 416 | Notes General Information China Fortune Holdings Limited is an investment holding company incorporated in Bermuda, primarily engaged in the distribution and trading of mobile phones and electronic products, with its shares listed on the Hong Kong Stock Exchange; the company's functional currency is RMB, but financial statements are presented in HKD for shareholder convenience - The company's principal business is the distribution and trading of mobile phones and electronic products[12] - The company's functional currency is RMB, with financial statements presented in HKD[12] Basis of Preparation The condensed consolidated financial statements are prepared in accordance with the Listing Rules and HKAS 34 on a going concern basis; however, the company faces significant uncertainties due to continuous losses and net current liabilities, with management implementing measures to ensure going concern for the next 12 months Going Concern Assessment Despite a loss of HKD 6,560 thousand and net current liabilities of HKD 18,910 thousand for the six months ended June 30, 2025, creating significant uncertainty, the Board has reviewed cash flow forecasts and implemented measures including new share subscriptions, controlling shareholder funding commitments, alternative financing, and strict cost control, believing the Group has sufficient resources for going concern in the next 12 months Key Financial Data for Going Concern Assessment | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company | 6,560 | 6,753 | | Net Current Liabilities | 18,910 | 15,545 | - The Group has adopted several measures to ensure going concern, including: (i) completion of new share subscriptions totaling approximately HKD 4,160 thousand; (ii) obtaining a commitment from the controlling shareholder for sufficient funding; (iii) seeking alternative financing and bank borrowings; and (iv) closely monitoring general administrative and operating costs[15][16] - The Group's ability to continue as a going concern depends on generating sufficient financing and operating cash flows, and securing ongoing financial support from the controlling shareholder, which presents significant uncertainty[17] Significant Accounting Policies and Changes in Accounting Policies The financial statements are prepared on a historical cost basis, with certain financial instruments measured at fair value; newly adopted/amended HKFRS (e.g., HKAS 21 and HKFRS 1 amendments) had no significant impact on the Group's performance or financial position, and standards issued but not yet effective are not expected to have a material future impact Adoption of New or Revised Hong Kong Financial Reporting Standards — Effective January 1, 2025 HKAS 21 and HKFRS 1 (Amendments) 'Lack of Exchangeability' were first applied this period, with no significant impact on the Group's performance or financial position - HKAS 21 and HKFRS 1 (Amendments) 'Lack of Exchangeability' were first applied this period[18] - The adoption of these new standards and amendments had no significant impact on the Group's performance or financial position[18] New or Revised Hong Kong Financial Reporting Standards Issued But Not Yet Effective Standards issued but not yet effective include various annual improvements and amendments to HKFRS, which directors do not expect to have a significant impact on the Group's consolidated financial performance and position - Standards issued but not yet effective include annual improvements to HKAS 7, HKFRS 1, 7, 9, and 10, as well as amendments concerning contracts dependent on natural power, classification and measurement of financial instruments, sale or contribution of assets between an investor and its associate or joint venture, presentation and disclosure in financial statements, disclosure for non-publicly accountable subsidiaries, and classification of term loans with a repayment on demand clause[19] - The Directors do not expect the application of these new HKFRS and amendments to have a significant impact on the Group's consolidated financial performance and position and/or the disclosures in the Group's consolidated financial statements[19] Use of Judgements and Estimates The significant judgements made by management and key sources of estimation uncertainty in preparing the condensed consolidated financial statements are consistent with those applied in the consolidated financial statements for the year ended December 31, 2024 - Significant judgements and estimates used by management in preparing the financial statements are consistent with the prior year[21] Segment Information and Revenue For the six months ended June 30, 2025, the Group operated only one segment, the continuing mobile phone and electronic products business, with mining operations terminated in 2024; revenue primarily originated from Hong Kong and China, with a significant increase from the Chinese market, reflecting the effectiveness of supply chain diversification strategies Reconciliation of Reportable Segments and Reportable Segment Revenue, Profit or Loss, Assets and Liabilities For the six months ended June 30, 2025, the Group operated solely in the mobile phone and electronic products segment, with mining operations terminated in 2024; in the prior period of 2024, the mobile phone and electronic products business contributed all revenue, while mining operations had ceased - For the six months ended June 30, 2025, the Group had only one operating segment: mobile phone and electronic products business (continuing operations)[24] - The mining business (discontinued operations) was terminated after the disposal of 100% equity interest in China Huangshi Group for the year ended December 31, 2024[23] Segment Results as of June 30, 2024 (HKD thousands) | Indicator | Mobile Phone and Electronic Products Business | Mining Business | Total | | :--- | :--- | :--- | :--- | | Segment Revenue | 34,506 | – | 34,506 | | Reportable Segment Loss | (1,145) | (413) | (1,558) | Geographical Information The Group's customer revenue primarily originates from Hong Kong and China, with a significant increase in revenue contribution from the Chinese market; non-current assets are mainly located in China, and non-current assets in China have grown Revenue by Customer Geographical Location (HKD thousands) | Region | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Hong Kong | 30,125 | 33,425 | | China | 10,423 | 1,081 | | Total | 40,548 | 34,506 | Non-current Assets by Asset Location (HKD thousands) | Region | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Hong Kong | 725 | 923 | | China | 1,578 | 764 | | Total | 2,303 | 1,687 | Revenue The Group's revenue is entirely derived from the trading of mobile phones and electronic products, recognized at a point in time; revenue is segmented by geographical market, with Hong Kong and China being the primary contributors Disaggregation of Revenue from Contracts with Customers (HKD thousands) | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Geographical Markets | | | | Hong Kong | 30,125 | 33,425 | | China | 10,423 | 1,081 | | Total | 40,548 | 34,506 | | Timing of Revenue Recognition | | | | At a point in time | 40,548 | 34,506 | Finance Costs For the six months ended June 30, 2025, finance costs significantly increased to HKD 999 thousand from HKD 49 thousand in the prior year, primarily due to a substantial rise in interest on short-term borrowings Breakdown of Finance Costs (HKD thousands) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Interest on Lease Liabilities | 9 | 47 | | Interest on Short-term Borrowings | 988 | – | | Other Interest Expenses | 2 | 2 | | Total | 999 | 49 | - The increase in finance costs is primarily attributable to interest on short-term borrowings during the reporting period[56] Income Tax Expense For the six months ended June 30, 2025, the Group recorded an income tax expense of HKD 67 thousand, compared to zero in the prior year, primarily due to its Chinese subsidiaries' business being subject to a 25% corporate income tax rate - Income tax expense for the six months ended June 30, 2025, was HKD 67 thousand (2024: nil)[37][57] - The Group conducts certain businesses through its subsidiaries established in China, which are subject to a corporate income tax rate of 25%[37] Loss for the Period For the six months ended June 30, 2025, loss before income tax was arrived at after deducting (crediting) staff costs, auditor's remuneration, cost of inventories recognized as expense, depreciation of plant and equipment, depreciation of right-of-use assets, and crediting interest income Items Deducted (Credited) in Loss Before Income Tax (HKD thousands) | Item | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Staff Costs | 4,321 | 4,174 | | Auditor's Remuneration | 572 | 545 | | Cost of Inventories Recognized as Expense | 39,474 | 34,411 | | Depreciation of Plant and Equipment | 7 | 5 | | Depreciation of Right-of-use Assets | 259 | 493 | | Interest Income | (4) | (43) | Loss Per Share For the six months ended June 30, 2025, basic and diluted loss attributable to owners of the Company was HKD 6,560 thousand, with basic loss per share improving to HKD 2.61 cents from HKD 3.13 cents in the prior year, primarily due to an increase in the weighted average number of ordinary shares from new share subscriptions - Loss for the period attributable to owners of the Company: HKD 6,560 thousand (2024: HKD 6,753 thousand)[40] - Basic and diluted loss per share: 2.61 HK cents (2024: 3.13 HK cents)[40] - Weighted average number of ordinary shares: 251,699,534 shares (2024: 215,555,888 shares), adjusted for new share subscriptions by the Company[40] Trade and Other Receivables As of June 30, 2025, total trade and other receivables (net of credit loss allowance) amounted to HKD 47,560 thousand, a decrease from HKD 50,844 thousand as of December 31, 2024, primarily due to customer settlement of trade receivables Breakdown of Trade and Other Receivables (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Receivables (Net of Allowance) | 37,658 | 39,310 | | Prepayments to Suppliers | 28,922 | 30,031 | | Other Receivables and Deposits (Net of Allowance) | 9,902 | 11,534 | | Total (Net of Allowance) | 47,560 | 50,844 | Ageing Analysis of Trade Receivables (HKD thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 30 days | 22,617 | 7,072 | | 31 to 90 days | 4,950 | – | | 91 to 365 days | 10,091 | 32,238 | | Total | 37,658 | 39,310 | - The Group generally grants credit terms of 30 to 90 days to its trade customers[42] Trade and Other Payables As of June 30, 2025, total trade and other payables increased to HKD 59,988 thousand from HKD 50,512 thousand as of December 31, 2024, primarily due to increased trade payables from delayed payments to suppliers Breakdown of Trade and Other Payables (HKD thousands) | Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade Payables | 41,138 | 32,820 | | VAT Payables | 103 | 243 | | Customer Prepayments | 3,274 | 943 | | Other Payables and Accrued Expenses | 14,373 | 15,446 | | Amounts Due to an Associate | 1,100 | 1,060 | | Total | 59,988 | 50,512 | Ageing Analysis of Trade Payables (HKD thousands) | Ageing | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 0 to 90 days | 22,546 | 43 | | Over 90 days | 18,592 | 32,777 | | Total | 41,138 | 32,820 | Share Capital As of June 30, 2025, the Company's issued share capital increased to HKD 2,536 thousand, primarily due to the subscription of 16,000,000 new shares under general mandate, with cash consideration of approximately HKD 4,160 thousand Changes in Share Capital (HKD thousands) | Item | Number of Shares | Amount | | :--- | :--- | :--- | | As of December 31, 2024 | 237,555,888 | 2,376 | | Subscription of New Shares | 16,000,000 | 160 | | As of June 30, 2025 | 253,555,888 | 2,536 | - The 2025 new share subscription involved the allotment and issue of a total of 16,000,000 subscription shares at a subscription price of HKD 0.26 per share, with a cash consideration of approximately HKD 4,160 thousand[44] Amounts Due to Related Parties As of June 30, 2025, total amounts due to related parties significantly increased to HKD 10,657 thousand from HKD 2,516 thousand as of December 31, 2024, primarily due to amounts payable to Mr. Liu Xiaoying; these amounts are unsecured, interest-free, and repayable on demand Breakdown of Amounts Due to Related Parties (HKD thousands) | Related Party | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Mr. Liu Xiaoying | 10,574 | 2,313 | | Ms. Liu Zixian | 83 | 203 | | Total | 10,657 | 2,516 | - The balances are unsecured, interest-free, and repayable on demand[46] Dividends The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, and 2024 - The Board did not declare any interim dividend for the six months ended June 30, 2025, and 2024[47] Management Discussion and Analysis Revenue For the six months ended June 30, 2025, the Group's total revenue reached HKD 40,500 thousand, a 17.4% year-on-year increase, primarily driven by growth in mobile phone and electronic product trading in China and Hong Kong; China's market contribution significantly rose from 3.2% to 25.7%, reflecting successful supply chain diversification strategies - Total revenue: HKD 40,500 thousand (2024: HKD 34,500 thousand), a year-on-year increase of 17.4%[48] - Revenue growth primarily stemmed from the mobile phone and electronic product trading business in China and Hong Kong[48] - China market revenue contribution increased from 3.2% to 25.7%, while Hong Kong market contribution decreased from 96.8% to 74.3%[49] - The increase in revenue was due to a moderate market recovery and the Group's adoption of a supply chain diversification strategy, expanding its trading and distribution network, and commencing router product trading and distribution in China from the second half of 2024[49] Gross Profit and Gross Profit Margin For the six months ended June 30, 2025, the Group's gross profit increased to HKD 1,100 thousand, with gross profit margin rising to 2.7%, compared to HKD 95 thousand and 0.3% in the prior year; this significant increase is primarily attributed to the commencement of router and related electronic product trading and distribution business in China in the second half of 2024 - Gross profit: HKD 1,100 thousand (2024: HKD 95 thousand)[50] - Gross profit margin: 2.7% (2024: 0.3%)[50] - The increase in gross profit and gross profit margin was primarily due to the Group's commencement of router and related electronic product trading and distribution in China in the second half of 2024[50] Other Income For the six months ended June 30, 2025, other income increased to approximately HKD 500 thousand from approximately HKD 100 thousand in the prior year, primarily comprising information technology system integration services - Other income: approximately HKD 500 thousand (2024: approximately HKD 100 thousand)[51] - The Group's other income primarily comprised information technology system integration services during both reporting periods[51] Net Other Gains and Losses For the six months ended June 30, 2025, the Group recorded net other gains of HKD 35 thousand, compared to net losses of HKD 300 thousand in the prior year, primarily benefiting from gains on reversal of other payables and reduced fair value losses on financial assets at fair value through profit or loss - Net other gains: HKD 35 thousand (2024: net losses of HKD 300 thousand)[52] - Primarily included: gains on reversal of other payables of HKD 35 thousand, exchange gains of HKD 9 thousand, and fair value losses on financial assets at fair value through profit or loss of HKD 24 thousand[52] Selling and Distribution Costs For the six months ended June 30, 2025, selling and distribution costs slightly increased to approximately HKD 20 thousand, primarily comprising logistics and transportation expenses, rental expenses, and travel expenses - Selling and distribution costs: approximately HKD 20 thousand (2024: HKD 13 thousand)[53] - The Group's selling and distribution costs primarily include logistics and transportation expenses, rental expenses, and travel expenses[53] Administrative Expenses For the six months ended June 30, 2025, administrative expenses decreased by 8.0% to approximately HKD 8,000 thousand, primarily due to reduced salaries and allowances, and legal and professional fees, reflecting strict expense policies - Administrative expenses: approximately HKD 8,000 thousand (2024: approximately HKD 8,700 thousand), a decrease of 8.0%[54] - The decrease in administrative expenses was primarily attributable to reduced salaries and allowances, and legal and professional fees, resulting from the implementation of strict expense policies[55] Finance Costs For the six months ended June 30, 2025, finance costs significantly increased to approximately HKD 1,000 thousand from HKD 49 thousand in the prior year, primarily due to increased interest on short-term borrowings - Finance costs: approximately HKD 1,000 thousand (2024: HKD 49 thousand)[56] - The Group's finance costs primarily comprise interest on lease liabilities and interest on short-term borrowings; the increase in finance costs was mainly due to interest on short-term borrowings during the reporting period[56] Income Tax Expense For the six months ended June 30, 2025, the Group recorded an income tax expense of HKD 67 thousand, compared to zero in the prior year - Income tax expense: HKD 67 thousand (2024: nil)[57] Loss Attributable to Owners of the Company for the Period For the six months ended June 30, 2025, loss attributable to owners of the Company was HKD 6,600 thousand, narrowing from HKD 6,800 thousand in the prior year - Loss attributable to owners of the Company: HKD 6,600 thousand (2024: HKD 6,800 thousand)[58] Loss Per Share For the six months ended June 30, 2025, basic loss per share was HKD 2.61 cents, an improvement from HKD 3.13 cents in the prior year - Basic loss per share: 2.61 HK cents (2024: 3.13 HK cents)[59] Financial Assets at Fair Value Through Profit or Loss As of June 30, 2025, the Group held unlisted equity investments of HKD 100 thousand (focused on a China-based AI foundational data service provider) and listed equity investments of HKD 500 thousand (primarily ordinary shares of entities listed on the Shanghai/Shenzhen Stock Exchanges) - Unlisted equity investments: HKD 100 thousand (December 31, 2024: HKD 100 thousand), representing a 4.8% investment in a China-based AI foundational data service provider[60][61] - Listed equity investments: HKD 500 thousand (December 31, 2024: HKD 500 thousand), primarily referring to ordinary shares of entities listed on the Shanghai/Shenzhen Stock Exchanges[60][61] Inventories As of June 30, 2025, inventories increased to HKD 3,300 thousand from HKD 600 thousand as of December 31, 2024, primarily due to mobile phones and electronic products not yet delivered and recognized as inventory - Inventories: HKD 3,300 thousand (December 31, 2024: HKD 600 thousand)[62] - The increase in inventories was primarily due to mobile phones and electronic products not yet delivered and recognized during the six months ended June 30, 2025[62] Trade and Other Receivables As of June 30, 2025, trade and other receivables decreased by HKD 3,200 thousand to approximately HKD 47,600 thousand, primarily due to customer settlement of trade receivables - Trade and other receivables: approximately HKD 47,600 thousand (December 31, 2024: approximately HKD 50,800 thousand), a decrease of HKD 3,200 thousand[63] - This decrease was primarily due to a HKD 1,700 thousand reduction in trade receivables as of June 30, 2025, resulting from subsequent settlement of trade receivables as of December 31, 2024 by customers[63] Cash and Cash Equivalents As of June 30, 2025, total cash and cash equivalents increased to approximately HKD 7,900 thousand, primarily benefiting from the new share subscription completed in January 2025, amounting to approximately HKD 4,100 thousand - Cash and cash equivalents: approximately HKD 7,900 thousand (December 31, 2024: approximately HKD 7,200 thousand)[64] - The increase in cash and cash equivalents was primarily due to the new share subscription completed in January 2025 under general mandate, amounting to approximately HKD 4,100 thousand[64] Financial and Treasury Policies The Group adopts a prudent financial management approach, closely monitoring its liquidity position to meet funding needs; there were no significant changes in financial and treasury policies during the period, and with most revenue and expenses denominated in HKD and RMB, there is no significant potential currency risk, thus no foreign currency hedging policy is currently in place - The Group adopts a prudent financial management approach regarding its financial and treasury policies, with the Board closely monitoring the Group's liquidity position[65] - There were no significant changes in the Group's financing and treasury policies during the period; the Group has no significant potential currency risk and currently has no foreign currency hedging policy in place[65] Trade and Other Payables As of June 30, 2025, trade and other payables increased by approximately HKD 9,500 thousand to approximately HKD 60,000 thousand, primarily due to increased trade payables from delayed payments to suppliers; other payables and accrued expenses decreased mainly due to the settlement of various operating expenses - Trade and other payables: approximately HKD 60,000 thousand (December 31, 2024: approximately HKD 50,500 thousand), an increase of approximately HKD 9,500 thousand[66] - The increase was primarily due to an HKD 8,300 thousand increase in trade payables, mainly attributable to delayed payments to suppliers[66] - The decrease in other payables and accrued expenses was mainly due to the settlement of various operating expenses and payables during the period since the commencement of router and electronic product trading and distribution in China in 2024[68] Short-term Borrowings As of June 30, 2025, the Group's outstanding short-term borrowings increased to approximately HKD 15,500 thousand, all unsecured and bearing fixed annual interest rates ranging from 3.84% to 18.00% - Outstanding short-term borrowings: approximately HKD 15,500 thousand (December 31, 2024: HKD 10,500 thousand)[69] - These amounts are unsecured and bear fixed annual interest rates ranging from 3.84% to 18.00%[69] Liquidity and Gearing Ratio As of June 30, 2025, net liabilities attributable to owners of the Company and net current liabilities both increased, the current ratio decreased to 0.76 times, and the gearing ratio deteriorated to (94.8%), indicating continued liquidity pressure - Net liabilities attributable to owners of the Group: HKD 13,500 thousand (December 31, 2024: HKD 11,700 thousand)[70] - Net current liabilities: approximately HKD 18,900 thousand (December 31, 2024: HKD 15,500 thousand)[70] - Current ratio: 0.76 times (December 31, 2024: 0.79 times)[70] - Gearing ratio: (94.8%) (December 31, 2024: (78.9%))[70] Capital Commitments As of June 30, 2025, the Group had no capital expenditures contracted but not provided for in the unaudited condensed consolidated financial statements related to leasehold improvements - The Group had no capital commitments[71] Contingent Liabilities As of June 30, 2025, the Group had no contingent liabilities or guarantees - The Group had no contingent liabilities or guarantees[72] Significant Acquisitions and Disposals of Subsidiaries or Associates For the six months ended June 30, 2025, the Group had no significant acquisitions or disposals of subsidiaries or associates - For the six months ended June 30, 2025, the Group had no significant acquisitions or disposals of subsidiaries or associates[73] Employees and Remuneration Policy As of June 30, 2025, the Group employed 32 staff, with remuneration determined by job nature and market trends, offering staff benefits and pension contributions; there were no changes in remuneration policy, bonus schemes, or share option schemes during the period - As of June 30, 2025, the Group employed a total of 32 staff (December 31, 2024: 31 staff)[74] - There were no changes in remuneration policy, bonus schemes, or share option schemes during the period[74] Material Investments Held by the Group As of June 30, 2025, the Group held no material investments - As of June 30, 2025, the Group held no material investments[75] Subscription of New Shares Under General Mandate The Group completed a new share subscription in January 2025, allotting and issuing 16,000,000 shares at HKD 0.26 per share, with a cash consideration of approximately HKD 4,160 thousand, and net proceeds of approximately HKD 4,120 thousand to be used for general working capital - The 2025 new share subscription: allotment and issue of a total of 16,000,000 shares at a subscription price of HKD 0.26 per share, with a cash consideration of approximately HKD 4,160 thousand[76] - The net proceeds (after deducting all related expenses) of approximately HKD 4,120 thousand will be used as general working capital for the Group[76] Charge on Assets As of June 30, 2025, the Group had no assets charged - As of June 30, 2025, the Group had no assets charged[77] Dividends The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025[78] Operations Review Market Overview China has approximately 1.8 billion mobile phone service subscribers, with intense market competition driving manufacturers to streamline distribution; 5G technology is rapidly expanding nationwide, with an estimated 4.2 million 5G base stations and over 950 million 5G users by end-2024; despite a 2025 decline in the Chinese mobile phone market due to trade tensions and economic instability, continuous advancements in 5G and 6G network technologies are expected to drive gradual market recovery - China has approximately 1.8 billion mobile phone service subscribers[79] - By the end of 2024, telecommunication operators are expected to deploy approximately 4.2 million 5G base stations, with over 950 million mobile phone users anticipated to adopt 5G services[81] - China plans to install an additional approximately 700,000 5G base stations in 2025 and is actively preparing for 6G wireless technology research and development[82] - The Chinese mobile phone market experienced a decline in 2025, but continuous advancements in 5G and 6G network technologies are likely to offset these adverse factors, with the market expected to gradually recover in the coming years[83] Business Review Mobile phone and electronic product trading remains the Group's principal business, having secured exclusive distribution rights for 'Philips' brand routers and related electronic products in China, Hong Kong, and Macau in 2024, with this business expected to grow steadily and become a future core; mining operations were terminated on December 23, 2024, through the disposal of 100% equity interest in China Huangshi Group Mobile Phone and Electronic Products Business Mobile phone and electronic product trading and distribution is the Group's principal business for the period; the Group secured exclusive distribution rights for 'Philips' brand routers and related electronic products in China, Hong Kong, and Macau in 2024, with this business expected to grow steadily, aiming to become a leader in AI edge cloud computing technology - Mobile phone and electronic product trading and distribution remained the Group's principal business during the period[84] - In 2024, the Group obtained the exclusive distribution rights for 'Philips' brand routers and related electronic products in China, Hong Kong, and Macau for a period of five years[84][85] - The Group focuses on providing efficient network services through user-centric platforms, aiming to optimize resources, drive value creation, and become a leader in AI edge cloud computing technology[86] - The gross profit margin for the 'Philips' router trading and distribution business is expected to be approximately 10%, with future sales growth potentially further enhancing the gross profit margin[87] Mining Business The Group terminated its mining business on December 23, 2024, through the disposal of 100% equity interest in China Huangshi Investment Limited and its subsidiaries - The Group terminated its mining business on December 23, 2024, through the disposal of 100% equity interest in China Huangshi Investment Limited and its subsidiaries[88][89][90] Prospects and Outlook Despite uncertainties from the US-China trade war and economic slowdown, China's vast domestic market and advancements in 5G/6G technology provide continuous growth momentum for the Group; the Group will continue to focus on technological progress and market diversification to enhance competitive advantages, while closely monitoring trade opportunities in Hong Kong and ASEAN markets - The Chinese economy continues to show signs of slowing down, with the consumer and retail sectors remaining affected by the US-China trade conflict, leading to an uncertain outlook[91] - China, as the world's largest mobile phone market with approximately 1.8 billion users, has seen significant increases in 5G users and network users, presenting vast business opportunities in mobile applications and mobile commerce markets[91] - The Group will continue to focus on technological advancements and market diversification to strengthen its competitive advantages, while closely monitoring changes and exploring opportunities in the Hong Kong and ASEAN trade markets[92][93] Use of Proceeds 2024 Subscription The 2024 new share subscription involved the issue of 26,000,000 shares with a cash consideration of approximately HKD 6,760 thousand, and net proceeds of approximately HKD 6,720 thousand, all of which have been utilized for the Group's general working capital - The 2024 subscription involved the issue of 26,000,000 shares at a subscription price of HKD 0.26 per share, with a cash consideration of approximately HKD 6,760 thousand[94] - Net proceeds of approximately HKD 6,720 thousand have been fully utilized for the Group's general working capital[95][96] Net Proceeds and Actual Use of 2024 Subscription (HKD thousands) | Item | Disclosed Allocation of Net Proceeds | Unutilized Amount as of December 31, 2024 | Utilized Amount for the Six Months Ended June 30, 2025 | Unutilized Amount as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | | General Working Capital | 6,720 | 1,262 | 1,262 | – | 2025 Subscription The 2025 new share subscription involved the issue of 16,000,000 shares with a cash consideration of approximately HKD 4,160 thousand, and net proceeds of approximately HKD 4,120 thousand; as of June 30, 2025, HKD 3,968 thousand has been utilized for general working capital, with the remaining HKD 152 thousand expected to be used by December 31, 2026 - The 2025 subscription involved the issue of 16,000,000 subscription shares at a subscription price of HKD 0.26 per share, with a cash consideration of approximately HKD 4,160 thousand[98][99] - The net proceeds (after deducting all related expenses) of approximately HKD 4,120 thousand will be used as general working capital for the Group[100] Net Proceeds and Actual Use of 2025 Subscription (HKD thousands) | Item | Disclosed Allocation of Net Proceeds | Utilized Amount for the Six Months Ended June 30, 2025 | Unutilized Amount as of June 30, 2025 | Expected Timeline for Use of Unutilized Proceeds | | :--- | :--- | :--- | :--- | :--- | | General Working Capital | 4,120 | 3,968 | 152 | By December 31, 2026 | Other Information Purchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, and up to the date of this announcement, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities, nor did they hold any treasury shares - For the six months ended June 30, 2025, and up to the date of this announcement, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[101] - As of June 30, 2025, the Company held no treasury shares[101] Material Events After Reporting Period Except as disclosed in this announcement, there have been no material events after the reporting period up to the date of this announcement - Except as disclosed in this announcement and up to the date of this announcement, there have been no material events after the reporting period[102] Corporate Governance The Company complied with the Corporate Governance Code during the reporting period, with deviations regarding the Chairman and CEO being the same person and the Chairman not being subject to rotation; the Board believes this arrangement facilitates business strategy execution at the current stage and has duly considered shareholders' interests under the supervision of independent non-executive directors Compliance with Corporate Governance Code The Company complies with the Corporate Governance Code, except for Mr. Liu Xiaoying holding both Chairman and CEO roles and not being subject to rotation; the Board believes this arrangement facilitates the Group's business strategy execution at its current development stage, with shareholders' interests fully considered - The Company has consistently complied with the Corporate Governance Code, except that the roles of Chairman and Chief Executive Officer are combined and held by Mr. Liu Xiaoying, and Mr. Liu, as Chairman of the Board, is not subject to retirement by rotation[103] - The Board believes that this arrangement, at the Group's current stage of development, facilitates the execution of the Group's business strategies and maximizes business effectiveness, with shareholders' interests having been fully and fairly considered[104] Audit Committee The Audit Committee comprises three independent non-executive directors, with primary responsibilities including reviewing financial and other information, assessing internal control systems, risk management, and audit processes, and has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, and this announcement - The Audit Committee members include three independent non-executive directors: Mr. Leung Wai Hung (Chairman), Dr. Law Chun Kwong, and Dr. Lo Wai Shun[105] - The Audit Committee's primary responsibilities include reviewing financial and other information presented to shareholders, and reviewing the effectiveness and objectivity of internal control systems, risk management, and audit processes[105] - The Audit Committee has discussed and reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, and this announcement with the Group's management[105] Compliance with the Model Code for Securities Transactions The Company has adopted a code for securities transactions no less exacting than the Model Code set out in Appendix C3 of the Listing Rules, and all Directors have confirmed compliance with this code throughout the reporting period - The Company has adopted a code for securities transactions by Directors and employees that is no less exacting than the Model Code set out in Appendix C3 of the Listing Rules[106] - Following specific enquiries with all Directors, they have confirmed compliance with the Model Code and the code for securities transactions throughout the period from January 1, 2025, up to the date of this announcement[106] Publication of Interim Results Announcement and Interim Report This announcement has been published on the HKEX website and the Company's website; the interim report, containing all required information, is expected to be published in September 2025 and dispatched to shareholders no later than September 30, 2025 - This announcement is published on the HKEX website (http://www.hkexnews.hk) and the Company's website (http://www.chinafortune.com)[107](index=107&type=chunk) - The Company's interim report for the six months ended June 30, 2025, containing all information required by Appendix D2 of the Listing Rules, is expected to be published on the same websites in September 2025 and dispatched to the Company's shareholders no later than September 30, 2025[107] By Order of the Board This announcement was issued by Mr. Liu Xiaoying, Chairman and Chief Executive Officer of the Board, on August 29, 2025; the Board comprises three executive directors and three independent non-executive directors - This announcement was issued by Mr. Liu Xiaoying, Chairman and Chief Executive Officer of the Board, on August 29, 2025[108] - The Board comprises three executive directors (Mr. Liu Xiaoying, Ms. Liu Zixian, and Mr. Li Jianwu) and three independent non-executive directors (Dr. Law Chun Kwong, Dr. Lo Wai Shun, and Mr. Leung Wai Hung)[108]