港娱国际(08291) - 2025 - 中期业绩

Company Information Company Basic Information Hong Kong Entertainment International Holdings Limited (Stock Code: 8291) is a Cayman Islands-registered investment holding company focused on tinplate manufacturing in China and product repackaging in Hong Kong, with details on governance and operations - Company Name: Hong Kong Entertainment International Holdings Limited (Stock Code: 8291)[2][6] - Registered in the Cayman Islands as an investment holding company[20] - Principal businesses include (i) manufacturing and selling tinplate and tinplate packaging products in China; and (ii) product repackaging and sales in Hong Kong[20][28] - Board of Directors comprises Executive Directors Mr. Wang Yun, Mr. Zou Yonggang; and Independent Non-executive Directors Mr. Wong Shui Chi, Ms. Wan So Ying, Mr. Wu Tsz King[4][11] - Audit Committee Chairman: Mr. Wong Shui Chi; Remuneration Committee Chairman: Ms. Wan So Ying; Nomination Committee Chairman: Mr. Wu Tsz King[11] Financial Highlights Interim Financial Performance Overview For the six months ended June 30, 2025, the Group's revenue decreased by 36.0% year-on-year to RMB24.4 million, but loss attributable to owners of the company significantly narrowed to RMB0.1 million, a substantial improvement from RMB11.1 million in the prior period, with no interim dividend proposed and increased liquidity pressure indicated by a higher asset-liability ratio Key Financial Indicators for the Six Months Ended June 30 | Indicator | June 30, 2025 (RMB million) | June 30, 2024 (RMB million) | Year-on-Year Change (%) | | :--- | :---: | :---: | :---: | | Revenue | 24.4 | 38.1 | -36.0% | | Loss Attributable to Owners of the Company | (0.1) | (11.1) | -99.1% (Loss narrowed) | | Interim Dividend | Nil | Nil | - | | Cash and Bank Balances (End of Period) | 3.6 | 7.1 (December 31, 2024) | -49.3% | | Asset-Liability Ratio (End of Period) | 82.6% | 60.0% (December 31, 2024) | +22.6 pp | Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Profit or Loss and Comprehensive Income Overview For the six months ended June 30, 2025, the Group's revenue decreased to RMB24,396 thousand from RMB38,080 thousand in the prior period, yet the loss for the period significantly narrowed to RMB170 thousand, with loss attributable to owners of the company at RMB147 thousand and basic and diluted loss per share at RMB0.09 cents, primarily due to a net gain from other income and reduced selling, administrative, and finance costs Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Year-on-Year Change (RMB thousand) | Year-on-Year Change (%) | | :--- | :---: | :---: | :---: | :---: | | Revenue | 24,396 | 38,080 | (13,684) | -36.0% | | Cost of Sales | (23,279) | (37,284) | 14,005 | -37.6% | | Gross Profit | 1,117 | 796 | 321 | +40.3% | | Other Income / (Losses) Net | 2,150 | (5,516) | 7,666 | Turned to profit | | Selling Expenses | (93) | (770) | 677 | -87.9% | | Administrative and Other Expenses | (2,477) | (3,984) | 1,507 | -37.8% | | Finance Costs | (867) | (1,659) | 792 | -47.7% | | Loss Before Income Tax | (170) | (11,133) | 10,963 | -98.5% | | Loss for the Period | (170) | (11,133) | 10,963 | -98.5% | | Loss Attributable to Owners of the Company | (147) | (11,133) | 10,986 | -98.7% | | Basic and Diluted Loss Per Share (RMB cents) | (0.09) | (6.96) | 6.87 | -98.7% | Unaudited Condensed Consolidated Statement of Financial Position Financial Position Overview As of June 30, 2025, the Group's non-current assets slightly decreased, and total current assets declined to RMB32,168 thousand from RMB44,614 thousand as of December 31, 2024, primarily due to reductions in inventories, trade receivables, and pledged bank deposits, while total current liabilities also decreased to RMB81,681 thousand from RMB93,723 thousand, mainly driven by lower trade payables and bills payable, with the Group continuing to face challenges from net current liabilities and net liabilities, and an expanding capital deficit Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | Change (RMB thousand) | Change (%) | | :--- | :---: | :---: | :---: | :---: | | Assets | | | | | | Non-current Assets | 1,718 | 2,084 | (366) | -17.6% | | Current Assets | 32,168 | 44,614 | (12,446) | -27.9% | | - Inventories | 5,810 | 8,526 | (2,716) | -31.9% | | - Trade Receivables | 5,587 | 14,640 | (9,053) | -61.8% | | - Financial Assets at Fair Value Through Profit or Loss | 12,716 | 9,541 | 3,175 | +33.3% | | - Cash and Cash Equivalents | 3,565 | 4,099 | (534) | -13.0% | | Liabilities | | | | | | Current Liabilities | 81,681 | 93,723 | (12,042) | -12.8% | | - Trade Payables and Bills Payable | 35,212 | 52,993 | (17,781) | -33.6% | | - Borrowings (Current) | 28,000 | 28,000 | 0 | 0.0% | | Non-current Liabilities (Borrowings) | 46,573 | 46,573 | 0 | 0.0% | | Net | | | | | | Net Current Liabilities | (49,513) | (49,109) | (404) | +0.8% (Liabilities increased) | | Net Liabilities | (94,368) | (93,598) | (770) | +0.8% (Liabilities increased) | | Equity | | | | | | Equity Attributable to Owners of the Company | (94,305) | (93,558) | (747) | +0.8% (Deficit increased) | | Capital Deficit | (94,368) | (93,598) | (770) | +0.8% (Deficit increased) | Unaudited Condensed Consolidated Statement of Changes in Equity Equity Changes Overview For the six months ended June 30, 2025, equity attributable to owners of the company decreased from RMB(93,558) thousand at the beginning of the period to RMB(94,305) thousand at the end, primarily due to a loss for the period of RMB147 thousand and other comprehensive expenses of RMB600 thousand from exchange differences on translating overseas operations, with lapsed share options also reclassified to accumulated losses Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended June 30) | Indicator | June 30, 2025 (RMB thousand) | January 1, 2024 (RMB thousand) | | :--- | :---: | :---: | | Share Capital | 27,909 | 27,909 | | Share Premium | 105,325 | 105,325 | | Statutory Reserve Fund | 3,826 | 3,826 | | Capital Reserve | 7,200 | 7,200 | | Share Option Reserve | 2,463 | 4,208 | | Exchange Reserve | 6,123 | 6,032 | | Other Reserves | (35,783) | (35,783) | | Accumulated Losses | (211,368) | (206,052) | | Subtotal Equity Attributable to Owners of the Company | (94,305) | (87,335) | | Non-controlling Interests | (63) | – | | Total | (94,368) | (87,335) | - Loss for the period: Loss attributable to owners of the company was RMB147 thousand (2024: RMB11,133 thousand)[18] - Other comprehensive expenses: Exchange differences on translating overseas operations resulted in RMB600 thousand expenses (2024: RMB492 thousand income)[18] - Lapsed share options: For the six months ended June 30, 2025, RMB1,266 thousand was deducted from the share option reserve and reclassified to accumulated losses due to lapsed share options[18] Unaudited Condensed Consolidated Statement of Cash Flows Cash Flow Overview For the six months ended June 30, 2025, the Group's net cash used in operating activities significantly decreased to RMB1,345 thousand, with net cash from investing activities at RMB1,741 thousand and net cash used in financing activities at RMB867 thousand, resulting in cash and cash equivalents at the end of the period of RMB3,565 thousand, a decrease of RMB471 thousand from the beginning of the period Condensed Consolidated Statement of Cash Flows (For the Six Months Ended June 30) | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (RMB thousand) | | :--- | :---: | :---: | :---: | | Net Cash Used in Operating Activities | (1,345) | (14,409) | 13,064 | | Net Cash From Investing Activities | 1,741 | 3,455 | (1,714) | | Net Cash Used in Financing Activities | (867) | (1,659) | 792 | | Net Decrease in Cash and Cash Equivalents | (471) | (12,613) | 12,142 | | Cash and Cash Equivalents at End of Period | 3,565 | 7,999 | (4,434) | Notes to the Unaudited Condensed Consolidated Interim Financial Information 1. General Information and Basis of Preparation This section outlines the company's basic information, principal businesses, functional currency, and the basis for preparing financial statements, with the Board affirming the Group's going concern ability despite significant uncertainties like net loss and net current liabilities, supported by unutilized bank facilities, former directors' financial support, and cost control measures - The company is an investment holding company, with principal businesses in tinplate operations in China and product repackaging and sales in Hong Kong[20] - The functional currency is HKD, but RMB is used as the presentation currency for financial reporting[21] - Basis of preparation: Prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the HKICPA and the GEM Listing Rules[21] - Going concern considerations: As of June 30, 2025, the Group incurred a net loss of RMB170 thousand, net current liabilities of RMB49,513 thousand, and net liabilities of RMB94,368 thousand, indicating significant uncertainties[24] - Going concern measures: The Group has unutilized bank facilities of RMB52,000 thousand, former directors have agreed to provide financial support, other financing options can be sought, and cost control measures are being implemented[24][26] 2. Revenue, Other Income / (Losses) Net and Segment Information The Group's total revenue for the six months ended June 30, 2025, was RMB24,396 thousand, a decrease from RMB38,080 thousand in the prior period, mainly due to reduced sales in the China tinplate business; however, net other income turned from a loss of RMB5,516 thousand to a gain of RMB2,150 thousand, primarily driven by fair value gains on financial assets at fair value through profit or loss, with no segment information presented as the chief operating decision maker reviews overall financial performance Revenue and Other Income / (Losses) Net (For the Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :---: | :---: | | Revenue from Sales of Tinplate Packaging Products and Tinplate | 20,403 | 38,080 | | Revenue from Product Repackaging and Sales | 3,993 | – | | Total Revenue | 24,396 | 38,080 | | Realized and Unrealized Fair Value Gains / (Losses) on Financial Assets at FVTPL | 2,146 | (5,571) | | Gain on Disposal of Property, Plant and Equipment | 4 | – | | Gain on Disposal of a Subsidiary | – | 55 | | Other Income / (Losses) Net | 2,150 | (5,516) | - Geographical revenue: China (excluding Hong Kong) revenue was RMB20,403 thousand (2024: RMB38,080 thousand), and Hong Kong, China revenue was RMB3,993 thousand (2024: Nil)[31] Revenue from Major Customers (For the Six Months Ended June 30) | Customer | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :---: | :---: | | Customer A | 4,406 | Not applicable | | Customer B | 3,910 | Not applicable | | Customer C | 2,670 | Not applicable | | Customer D | Not applicable | 14,094 | | Customer E | Not applicable | 5,636 | 3. Finance Costs For the six months ended June 30, 2025, the Group's finance costs, primarily interest expense on borrowings, significantly decreased to RMB867 thousand from RMB1,659 thousand in the prior period, reflecting reduced utilization of bank facilities Finance Costs (For the Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :---: | :---: | | Interest Expense on Borrowings | 867 | 1,659 | 4. Income Tax The Group's subsidiaries in Hong Kong and China did not make any income tax provisions for the six months ended June 30, 2025, and 2024, due to no assessable profits in Hong Kong and tax losses incurred in China - Hong Kong Profits Tax: No assessable profits, no provision made[37] - PRC Enterprise Income Tax: PRC subsidiaries incurred tax losses, no provision made[37] 5. Loss Before Income Tax For the six months ended June 30, 2025, the Group's loss before income tax significantly narrowed to RMB170 thousand from RMB11,133 thousand in the prior period, mainly due to reduced expenses such as cost of inventories and depreciation of property, plant and equipment Loss Before Income Tax Components (For the Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :---: | :---: | | Cost of Inventories Recognized | 23,279 | 37,284 | | Depreciation of Property, Plant and Equipment | 595 | 1,948 | | Depreciation of Right-of-Use Assets | – | 12 | | Expenses Relating to Short-term Leases | 17 | – | 6. Dividends For the six months ended June 30, 2025, the company neither paid nor proposed any dividends - No dividends were paid or proposed for the current period or the prior corresponding period[40] 7. Loss Per Share For the six months ended June 30, 2025, the company's basic and diluted loss per share was RMB0.09 cents, a significant reduction from RMB6.96 cents in the prior period, primarily due to a substantial narrowing of the loss for the period Loss Per Share (For the Six Months Ended June 30) | Indicator | 2025 (RMB cents) | 2024 (RMB cents) | | :--- | :---: | :---: | | Basic and Diluted Loss Per Share | (0.09) | (6.96) | - Basis of calculation: Loss attributable to owners of the company was RMB147 thousand (2024: RMB11,133 thousand), with a weighted average number of 160,000,000 shares in issue[41][15] 8. Property, Plant and Equipment For the six months ended June 30, 2025, the Group acquired property, plant and equipment of RMB249 thousand and disposed of property, plant and equipment with a carrying amount of RMB20 thousand, generating a gain of RMB4 thousand Property, Plant and Equipment Movements (For the Six Months Ended June 30) | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :---: | :---: | | Additions | 249 | 100 | | Proceeds from Disposal | 24 | 0 | | Gain on Disposal | 4 | 0 | 9. Inventories As of June 30, 2025, the Group's total inventories amounted to RMB5,810 thousand, a decrease from RMB8,526 thousand as of December 31, 2024, primarily reflected in reductions across raw materials, work-in-progress, and finished goods categories Inventories Composition (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Raw Materials | 3,110 | 5,319 | | Work-in-progress | 54 | 182 | | Finished Goods | 2,646 | 3,025 | | Total Inventories | 5,810 | 8,526 | 10. Trade Receivables As of June 30, 2025, the Group's net trade receivables significantly decreased to RMB5,587 thousand from RMB14,640 thousand as of December 31, 2024, primarily due to a reduction in trade receivables arising from customer contracts, with a typical credit period of 180 days Trade Receivables (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Trade Receivables Arising from Contracts with Customers | 13,797 | 22,850 | | Less: Provision for Expected Credit Losses | (8,210) | (8,210) | | Net Trade Receivables | 5,587 | 14,640 | Aging Analysis of Trade Receivables (As of June 30, 2025) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Within 1 month | 1,940 | 1,473 | | 1-3 months | 1,679 | 2,578 | | 3-6 months | 1,223 | 3,399 | | 6 months-1 year | 745 | 7,190 | | Total | 5,587 | 14,640 | 11. Financial Assets at Fair Value Through Profit or Loss As of June 30, 2025, the Group's financial assets at fair value through profit or loss primarily consisted of Hong Kong listed equity securities, with a fair value of RMB12,716 thousand, an increase from RMB9,541 thousand as of December 31, 2024 Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Hong Kong Listed Equity Securities | 12,716 | 9,541 | - Fair value measurement: Based on quoted bid prices on the Stock Exchange at each reporting period end[45] 12. Trade Payables and Bills Payable As of June 30, 2025, the Group's total trade payables and bills payable significantly decreased to RMB35,212 thousand from RMB52,993 thousand as of December 31, 2024, primarily due to bills payable reducing to zero and a decrease in trade payables, with a typical supplier credit period of 90 days Trade Payables and Bills Payable (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Trade Payables | 35,212 | 43,009 | | Bills Payable | – | 9,984 | | Total | 35,212 | 52,993 | Aging Analysis of Trade Payables and Bills Payable (As of June 30, 2025) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Within 1 month | 3,412 | 2,762 | | 1-3 months | 8,794 | 12,276 | | 3-6 months | 5,173 | 6,142 | | 6 months-1 year | 9,661 | 14,957 | | Over 1 year | 8,172 | 16,856 | | Total | 35,212 | 52,993 | 13. Borrowings As of June 30, 2025, the Group's total borrowings amounted to RMB74,573 thousand, comprising secured bank borrowings of RMB28,000 thousand and unsecured borrowings from a former director of RMB46,573 thousand, with bank borrowings collateralized by third-party assets and the Group having RMB52,000 thousand in unutilized bank facilities Borrowings Composition (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Current Liabilities - Secured Bank Borrowings | 28,000 | 28,000 | | Non-current Liabilities - Unsecured Borrowings | 46,573 | 46,573 | | Total Borrowings | 74,573 | 74,573 | - Bank borrowing interest rate: 4.4% per annum[48] - Unsecured borrowings: Amounts due to a former director are non-trade in nature, unsecured, interest-free, and repayable by June 30, 2027[48] - Collateral: Bank borrowings are secured by leasehold land and buildings owned by a company wholly-owned by a former director[49] - Unutilized bank facilities: RMB52,000 thousand, valid until September 2, 2027[49] 14. Share Capital As of June 30, 2025, the company's authorized share capital consisted of 500,000 thousand ordinary shares with a par value of HKD0.20 each, and its issued and fully paid share capital comprised 160,000 thousand shares with a par value of HKD32,000 thousand, equivalent to RMB27,909 thousand Share Capital Composition (As of June 30, 2025) | Item | Number of Shares (thousand shares) | Par Value (HKD thousand) | Equivalent (RMB thousand) | | :--- | :---: | :---: | :---: | | Authorized Share Capital (Ordinary shares of HKD0.20 each) | 500,000 | 100,000 | 83,490 | | Issued and Fully Paid Share Capital (Ordinary shares of HKD0.20 each) | 160,000 | 32,000 | 27,909 | 15. Share Option Scheme The company adopted a share option scheme on June 23, 2017, to attract, retain, and motivate participants; as of June 30, 2025, 10,519,352 shares were available for issue under the scheme, with 2,519,352 share options granted but unexercised, and 8,256,000 share options lapsed during the period, resulting in RMB1,266 thousand being reclassified from share option reserve to accumulated losses - Purpose of Share Option Scheme: To attract, retain, and motivate eligible participants, fostering the Group's development[51] - Eligible Participants: Includes directors, employees, consultants, distributors, suppliers, among others[51] - Grant Limit: Not to exceed 10% of the total issued shares[52] - Number of Share Options: As of June 30, 2025, 8,000,000 share options were available for grant; 10,519,352 shares were available for issue (representing 6.57% of issued shares); 2,519,352 share options were granted but unexercised (representing 1.57% of issued shares)[53][54] Share Option Movements Overview (For the Six Months Ended June 30) | Category | January 1, 2024 (options) | Lapsed in 2024 (options) | January 1, 2025 (options) | Lapsed in 2025 (options) | June 30, 2025 (options) | | :--- | :---: | :---: | :---: | :---: | :---: | | Employees | 10,460,440 | (2,064,000) | 8,256,000 | (8,256,000) | 2,204,440 | | Consultants | 314,912 | – | 314,912 | – | 314,912 | | Total | 12,839,352 | (2,064,000) | 10,775,352 | (8,256,000) | 2,519,352 | - Impact of Lapsed Share Options: For the six months ended June 30, 2025, RMB1,266 thousand was deducted from the share option reserve and reclassified to accumulated losses due to the lapse of 8,256,000 share options[57] - No share options were granted during the current period[58] 16. Fair Value Measurement This section describes the Group's method for fair value measurement of financial assets, primarily using Level 1 inputs (unadjusted quoted prices in active markets) for Hong Kong listed equity securities, which amounted to RMB12,716 thousand as of June 30, 2025 - Fair value hierarchy: Level 1 inputs (unadjusted quoted prices in active markets for identical assets or liabilities) are used to measure Hong Kong listed equity securities[62][64] Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :---: | :---: | | Hong Kong Listed Equity Securities | 12,716 | 9,541 | 17. Events After Reporting Period Subsequent to the reporting period, the company's directors proposed a share capital reorganisation, including a share consolidation (3 shares into 1), capital reduction (cancellation of fractional shares and reduction of par value from HKD0.6 to HKD0.006 per share), and subdivision of authorized unissued shares, which remains subject to shareholder and Stock Exchange approval - Proposed Share Capital Reorganisation: Includes share consolidation, capital reduction, and subdivision of authorized unissued shares[66][68] - Share Consolidation: Every 3 issued shares of HKD0.2 par value will be consolidated into 1 consolidated share of HKD0.6 par value[68] - Capital Reduction: Involves cancellation of fractional consolidated shares and reduction of the par value of each consolidated share from HKD0.6 to HKD0.006[68] - Conditions for effectiveness: Subject to shareholder resolutions, approval by the Stock Exchange Listing Committee, and compliance with other regulatory requirements[66] Management Discussion and Analysis Business Activities The Group primarily engages in the manufacturing and sale of tinplate packaging products in China and provides repackaging services in Hong Kong, with no significant changes in business operations since its listing in 2017 - Principal businesses: Manufacturing and sales of tinplate packaging products in China, and repackaging services in Hong Kong[69] - No significant changes in business operations since its listing in 2017[69] Business Review and Outlook For the six months ended June 30, 2025, the Group's revenue decreased by 36.0% due to reduced sales demand from China's economic slowdown; however, loss significantly narrowed to RMB0.2 million, primarily benefiting from fair value gains on financial assets due to a recovering Hong Kong stock market and cost control measures, with future plans to consolidate market share, expand product and service portfolios, broaden sales channels, and improve cash flow through cost control - Revenue decline: For the six months ended June 30, 2025, revenue decreased by 36.0% to RMB24.4 million, mainly due to reduced sales demand from the economic slowdown in China[70] - Loss narrowing: Loss for the period narrowed from RMB11.1 million to RMB0.2 million, primarily attributed to fair value gains on financial assets (RMB2.1 million) from a recovering Hong Kong stock market and cost control measures[70] - Future outlook: Plans to consolidate market share in the tinplate packaging business, expand product and service portfolios, broaden sales channels, enlarge customer base, and improve operational efficiency and cash flow through cost control[71] Debts and Pledges of Assets As of June 30, 2025, the Group had secured borrowings of RMB28.0 million and unsecured borrowings of RMB46.6 million, with bank borrowings collateralized by buildings owned by a subsidiary of a former director, and RMB52 million in unutilized bank facilities Borrowings Composition (As of June 30, 2025) | Item | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :---: | :---: | | Secured Borrowings | 28.0 | 28.0 | | Unsecured Borrowings | 46.6 | 46.6 | - Collateral: Bank borrowings and other bank facilities are secured by buildings owned by a subsidiary of a former director[73] - Unutilized bank facilities: RMB52 million[73] Financial Review This section provides a detailed review of financial indicators for the six months ended June 30, 2025, highlighting a 36.0% revenue decrease due to China's economic slowdown, a corresponding drop in cost of sales, a 40.3% increase in gross profit with a gross margin improvement to 4.6% driven by higher average selling prices, a shift from net other losses to gains, and significant reductions in selling, administrative, and finance costs due to cost control and lower bank financing, ultimately leading to a substantial narrowing of the loss for the period Revenue Revenue decreased by 36.0% year-on-year to RMB24.4 million, primarily due to reduced product sales demand from the economic slowdown in China[74] Cost of Sales Cost of sales decreased by 37.5% year-on-year to RMB23.3 million, consistent with the revenue decline trend[75] Gross Profit and Gross Margin Gross Profit and Gross Margin (For the Six Months Ended June 30) | Indicator | 2025 (RMB million) | 2024 (RMB million) | Change (%) | | :--- | :---: | :---: | :---: | | Gross Profit | 1.1 | 0.8 | +40.3% | | Gross Margin | 4.6% | 2.1% | +2.5 pp | - Gross margin increase was primarily due to an increase in the average selling price of the Group's products[76] Other Income / Losses Net Net other income turned from a loss of RMB5.6 million in 2024 to a gain of RMB2.1 million in 2025, primarily benefiting from fair value gains on financial assets at fair value through profit or loss due to a recovering Hong Kong stock market[77] Selling Expenses Selling expenses decreased by 87.5% year-on-year to RMB0.1 million, mainly due to the Group's implementation of cost control measures[78] Administrative and Other Expenses Administrative and other expenses decreased by 37.5% year-on-year to RMB2.5 million, primarily due to the Group's implementation of cost control measures[79] Finance Costs Finance costs decreased by 47.1% year-on-year to RMB0.9 million, mainly due to reduced utilization of bank facilities[80] Loss for the Period Loss for the period significantly decreased from RMB11.1 million in 2024 to RMB0.2 million in 2025[81] Dividends The Board does not recommend the payment of 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[82] Liquidity and Financial Resources The Group's liquidity primarily stems from cash inflows from operating activities; as of June 30, 2025, total cash and bank balances were RMB3.6 million, and the asset-liability ratio increased to 82.6%, indicating heightened liquidity pressure Liquidity and Financial Resources (As of June 30, 2025) | Indicator | June 30, 2025 (RMB million) | December 31, 2024 (RMB million) | | :--- | :---: | :---: | | Total Cash and Bank Balances | 3.6 | 7.1 | | Asset-Liability Ratio | 82.6% | 60.0% | - Financial policy: The Board adopts a conservative approach and closely monitors liquidity to meet funding requirements[84] Key Performance Indicators The performance analysis of key performance indicators in this interim report has been detailed in the "Financial Review" section - Performance analysis of key performance indicators has been elaborated in the "Financial Review" section[85] Principal Risks, Uncertainties and Risk Management The Group primarily faces credit risk arising from trade receivables, other receivables, and bank cash, and has established credit policies and continuous monitoring, conducting individual credit assessments for customers - Principal risk: Credit risk, arising from trade receivables, other receivables, and bank cash[86] - Risk management: Credit policies are established, credit risk is continuously monitored, and individual credit assessments are conducted for customers[86] Material Acquisitions and Disposals of Subsidiaries For the six months ended June 30, 2025, the Group did not undertake any material acquisitions or disposals of subsidiaries - No material acquisitions or disposals of subsidiaries occurred during the period[87] Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities - No significant contingent liabilities existed during the period[88] Employees and Remuneration Policy As of June 30, 2025, the Group employed 58 employees, a decrease from 75 as of December 31, 2024, with employee costs approximately RMB1.3 million; the Group aims to ensure salary levels align with industry practices and are determined based on qualifications and performance Employees and Remuneration (For the Six Months Ended June 30) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :---: | :---: | | Number of Employees | 58 | 75 | | Employee Costs (RMB million) | 1.3 | 1.8 | - Remuneration policy: Salary levels are consistent with industry practices and market conditions, and remuneration is determined based on employee qualifications and performance[89] Material Investments Held As of June 30, 2025, the Group held 17 Hong Kong listed equity securities with a fair value of approximately RMB12.7 million; to mitigate concentration risk, the Group intends to diversify its investment portfolio and closely monitor performance, with major investments including shares in Harbour Digital, China Investment and Finance, and RexLot Holdings, which represent a significant portion of the Group's total assets, and the Group will continue to adopt a prudent investment approach, maintaining a diversified portfolio across industries - Investment portfolio: Holds 17 Hong Kong listed equity securities, with a fair value of approximately RMB12.7 million[90] - Investment strategy: Intends to diversify its investment portfolio to mitigate concentration and investment risks, closely monitor performance, adopt a prudent investment approach, aiming to enhance capital utilization efficiency and generate additional investment returns[90][93] Major Equity Securities Investments (As of June 30, 2025) | Company Name / Stock Code | Shareholding Percentage | Fair Value (Loss) / Gain for the Six Months Ended June 30, 2025 (RMB thousand) | Fair Value as of June 30, 2025 (RMB thousand) | Percentage of Group's Total Assets | | :--- | :---: | :---: | :---: | :---: | | Harbour Digital Capital Limited (913) | 2.9% | (1,207) | 3,750 | 11.1% | | China Investment and Finance Group Limited (1226) | 0.4% | 1,834 | 2,481 | 7.3% | | RexLot Holdings Limited (1327) | 4.8% | 1,142 | 2,415 | 7.1% | | Other Listed Securities | - | - | 4,070 | 12.0% | | Total | - | - | 12,716 | 37.5% | Foreign Exchange Risk The Group's primary operations are in China, with most transactions settled in RMB, resulting in minimal foreign exchange risk; for the six months ended June 30, 2025, the Group did not hedge any foreign exchange risk - Foreign exchange risk: Minimal, as principal businesses are in China and transactions are settled in RMB[94] - Foreign exchange hedging: No foreign exchange risk was hedged during the period[94] Capital Structure As of June 30, 2025, the company's issued share capital was HKD32,000,000 (approximately RMB27,909,000), with 160,000,000 ordinary shares issued, each with a par value of HKD0.2; there were no other changes to the capital structure apart from those disclosed elsewhere in this interim report - Issued share capital: HKD32,000,000 (approximately RMB27,909,000)[95] - Number of ordinary shares issued: 160,000,000 shares, each with a par value of HKD0.2[95] Future Plans for Material Investments and Capital Assets Apart from what has been disclosed in this interim report, the Group had no other plans for material investments or capital assets as of June 30, 2025 - No other material investment or capital asset plans existed during the period[96] Other Information Disclosure Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company As of June 30, 2025, save as disclosed elsewhere in the report, no directors or chief executive had any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations - Directors and chief executive had no disclosable interests or short positions in shares, underlying shares, or debentures[97] Substantial Shareholders' and Other Persons' Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company As of June 30, 2025, apart from the disclosed directors and chief executive, no other persons held any disclosable interests or short positions in the company's shares or underlying shares, or possessed 10% or more of the voting interests in any other member company of the Group - Apart from directors and chief executive, no other persons held disclosable interests or short positions in shares or underlying shares[98] Share Option Scheme The company adopted a share option scheme on June 23, 2017; as of June 30, 2025, 2,519,352 share options remained granted but unexercised, with each option entitling the holder to subscribe for one share of HKD0.20 par value - The share option scheme was adopted on June 23, 2017[99] - As of June 30, 2025, 2,519,352 share options were granted but unexercised[100][101] - Each share option entitles the holder to subscribe for one share of HKD0.20 par value[100] 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 - During the period, the company and its subsidiaries did not purchase, sell, or redeem any of the company's listed securities[102] Directors' Contractual Interests As of June 30, 2025, no directors had any significant beneficial interests, directly or indirectly, in any contract entered into by the company or any of its subsidiaries that was material to the Group's business - Directors had no material contractual interests[103] Directors' and Controlling Shareholders' Competing Interests As of June 30, 2025, the directors were unaware of any business or interest of the directors, the company's controlling shareholders, or their respective associates that competed or might compete with the Group's business - Directors and controlling shareholders had no competing interests[104] Directors' Securities Transactions The company has adopted written guidelines for directors' securities transactions, and the directors confirm compliance with these guidelines and the required standards of dealing under the GEM Listing Rules as of the report date - The company has adopted written guidelines for directors' securities transactions, and directors confirm compliance with the required dealing standards[105] Compliance with Corporate Governance Code Practices The directors believe that, as of the date of this interim report, the company has adopted the principles and complied with all applicable code provisions of the Corporate Governance Code set out in Appendix 15 to the GEM Listing Rules - The company has adopted and complied with the Corporate Governance Code in Appendix 15 of the GEM Listing Rules[106] Audit Committee The company has established an Audit Committee, comprising three independent non-executive directors, responsible for reviewing and overseeing the financial reporting process and internal control procedures; the Audit Committee has reviewed the condensed consolidated interim financial information in this report - The Audit Committee has been established, comprising Mr. Wong Shui Chi (Chairman), Mr. Wu Tsz King, and Ms. Wan So Ying, all of whom are independent non-executive directors[107] - Principal responsibilities: To review and oversee the Group's financial reporting process and internal control procedures[107] - Review status: The Committee has reviewed the condensed consolidated interim financial information in this report[107]