中木国际(01822) - 2025 - 中期业绩

Corporate Information This section provides an overview of the company's governance structure, including board members, committee compositions, and other essential corporate details Directors The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with Mr. Lu Ningjiang serving as Chairman and CEO - Executive Directors: Mr. Lu Ningjiang (Chairman and Chief Executive Officer), Ms. Wu Lixia[11][13] - Non-Executive Director: Mr. Hu Yonggang[11][13] - Independent Non-Executive Directors: Mr. Chan Lik Shan, Mr. So Yin Wai, Mr. Pang Mingli (appointed on June 16, 2025), Mr. Zhao Xianming (resigned on April 1, 2025)[11][13] Committees The company has an Audit Committee, Nomination Committee, and Remuneration Committee, with membership adjustments during the reporting period due to changes in independent non-executive directors - Audit Committee Chairman: Mr. Pang Mingli (appointed on June 16, 2025), Mr. Zhao Xianming (resigned on April 1, 2025)[11][13] - Nomination Committee Chairman: Mr. Lu Ningjiang[12][13] - Remuneration Committee Chairman: Mr. Pang Mingli (appointed on June 16, 2025), Mr. Zhao Xianming (resigned on April 1, 2025)[12][13] Other Key Information This section lists the company's corporate secretary, authorized representatives, share registrar, website, stock code, legal advisors, principal bankers, auditor, registered office, and principal place of business in Hong Kong - Company Secretary: Mr. Li Pak Chung[11][13] - Stock Code: 01822[14][15] - Auditor: Evergreen (Hong Kong) CPA Limited[14][15] Management Discussion and Analysis This section reviews the group's operational performance, financial position, and strategic outlook, highlighting key business developments and financial metrics BUSINESS REVIEW The Group faced challenges in H1 2025 due to a sluggish China property market, leading to a significant decline in timber-related business revenue, while actively expanding into functional food and beverage business with initial success - The China property sector continued to struggle in H1 2025, with new housing starts declining, posing severe challenges to timber consumption and the Group's operating environment[17][22] Timber-Related Business Revenue Changes | Business Type | H1 2025 (HK$) | H1 2024 (HK$) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Timber-Related Business Revenue | 133,000,000 | 170,300,000 | -21.9% | | Processing and Distribution of Furniture Timber | 120,200,000 | 152,500,000 | -21.2% | | Manufacturing and Sales of Antique Wooden Furniture and Other Timber Products | 12,800,000 | 17,800,000 | -28.1% | - The Group established Shenzhen Weijianbao Food Technology Co., Ltd. in Q4 2024 to commence functional food and beverage business, recording revenue of approximately HK$10,800,000 during the reporting period[28][30] - The China functional food market is projected to grow from approximately US$36.77 billion in 2023 to approximately US$67.69 billion in 2030, with a CAGR of approximately 9.1%[27][30] Discontinued Operations The Group disposed of its car rental services business for HK$50,000 in October 2024, which was classified as a discontinued operation in the 2024 annual report - China's car rental services business was one of the Group's core businesses from 2014 to 2024[32][37] - The Group disposed of Hongzhi Limited and its subsidiaries, engaged in car rental business, for HK$50,000 on October 28, 2024[33][37] - The car rental business segment was accounted for as a discontinued operation in the 2024 annual report, with comparative figures reclassified[34][37] FUTURE OUTLOOK Given the positive performance of the food and beverage business, the Group plans to further develop its functional food and beverage business in China and consider acquiring production facilities to support its own-brand products - The Group will further develop its functional food and beverage business in China through cooperation with key industry players and intellectual property development[35][38] - The Group is considering acquiring production facilities for its own-brand food and beverage products, but no decision or final agreement has been made as of the interim report date[36][38] FINANCIAL REVIEW The Group's revenue decreased by 15.6% during the reporting period, primarily due to the timber-related business, leading to a decline in gross profit and gross margin; while selling and distribution expenses increased due to new business growth, administrative expenses decreased due to cost-saving measures, and liquidity significantly improved with a zero gearing ratio Key Financial Metrics Changes | Metric | H1 2025 (HK$ '000) | H1 2024 (HK$ '000, restated) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 143,800 | 170,300 | -15.6% | | Cost of Sales | 131,400 | 155,200 | -15.3% | | Gross Profit | 12,400 | 15,000 | -17.3% | | Gross Margin | 8.6% | 8.8% | -0.2 percentage points | | Selling and Distribution Expenses | 1,600 | 100 | +1500% | | Administrative Expenses | 10,400 | 14,400 | -27.8% | | Finance Costs | 300 | 500 | -40.0% | - The decrease in revenue was primarily due to lower turnover from the timber-related business[39][43] - The increase in selling and distribution expenses was mainly due to marketing efforts for the food and beverage business segment[47][52] - The decrease in administrative expenses was primarily due to the Group's cost-saving measures[48][53] - As of June 30, 2025, cash and cash equivalents were approximately HK$7,300,000 (December 31, 2024: approximately HK$700,000)[51][56] Gearing Ratio | Metric | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Total Bank and Other Borrowings | – | – | | Total Assets | 113,960 | 66,700 | | Gearing Ratio | 0% | 0% | Share Consolidation The company implemented a share consolidation of 10 shares into 1 share on June 18, 2024 - Pursuant to a resolution passed at the Annual General Meeting on June 14, 2024, the company consolidated every 10 shares of HK$0.01 each into 1 consolidated share of HK$0.10 each[59][60] - The share consolidation became effective on June 18, 2024[59][60] Capital structure As of June 30, 2025, the total number of issued ordinary shares was 822,438,680, with a total par value of approximately HK$82.2 million, a significant increase from the end of 2024 - As of June 30, 2025, the total number of ordinary shares of the company was 822,438,680 shares of HK$0.10 each (December 31, 2024: 411,219,340 shares of HK$0.10 each)[64][69] - The total par value was approximately HK$82.2 million (December 31, 2024: approximately HK$41.1 million)[64][69] Charges on the Group assets As of June 30, 2025, the Group had no assets pledged - As of June 30, 2025, the Group had no assets pledged (December 31, 2024: nil)[65][70] Foreign currency exposure The Group's foreign exchange risk primarily arises from transactions denominated in currencies other than RMB, but the risk of exchange rate fluctuations is not considered significant, thus no hedging activities are undertaken - Foreign exchange risk primarily arises from revenue, costs, and borrowings denominated in currencies other than the functional currency of the Group's operating units (RMB)[66][71] - The Group does not expect the risk of exchange rate fluctuations to be significant, and therefore has not undertaken any hedging activities[66][71] DIVIDENDS The Board does not recommend the payment of any dividends for the reporting period - The Board does not recommend the payment of any dividends for the reporting period (H1 2024: nil)[67][72] EMPLOYEES AND REMUNERATION POLICY As of June 30, 2025, the Group employed 32 employees, with total staff costs of approximately HK$4.4 million; the remuneration policy is based on employee performance, qualifications, and market conditions, offering various benefits - As of June 30, 2025, the Group employed a total of 32 employees[68][73] - Total staff costs (including directors' emoluments) for the reporting period were approximately HK$4.4 million[68][73] - Remuneration policy is determined with reference to individual employee's performance, qualifications, and experience, the Group's performance, and market conditions[68][73] - The Group provides employees with discretionary bonuses, medical insurance, provident fund contributions, education allowances, and training[68][73] Other Information This section details shareholding interests, corporate governance practices, and other statutory disclosures, including director and substantial shareholder holdings DIRECTORS' AND CHIEF EXECUTIVE'S INTERESTS AND SHORT POSITIONS IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY OR ITS ASSOCIATED CORPORATIONS As of June 30, 2025, Mr. Lu Ningjiang, Chairman and CEO, held a 54.98% long position in the company's shares through a controlled corporation Directors' Long Positions in the Company's Shares | Director's Name | Capacity/Nature of Interest | Total Number of Shares and Underlying Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Lu Ningjiang | Interest in controlled corporation | 452,169,170 (L) | 54.98% | - Mr. Lu Ningjiang beneficially owns the entire equity interest in Right Momentum Group Limited and is therefore deemed to be interested in the shares held by it[81] SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY As of June 30, 2025, substantial shareholders included Right Momentum Group Limited (controlled by Mr. Lu Ningjiang) and Mr. Zhang Zhengwu, holding 54.98% and 6.59% long positions in the company's shares, respectively Substantial Shareholders' Long Positions in Shares | Name of Substantial Shareholder/Person | Capacity/Nature of Interest | Total Number of Shares and Underlying Shares Held | Approximate Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Right Momentum | Beneficial owner | 452,196,170 (L) | 54.98% | | Zhang Zhengwu | Beneficial owner | 54,221,153 (L) | 6.59% | - The entire issued share capital of Right Momentum is 100% owned by Mr. Lu[84] SHARE OPTION SCHEME The company's existing share option scheme, adopted in 2016, aims to reward eligible participants for their contributions to the Group's success and is valid until June 2026; no share options were granted or outstanding during the reporting period - The share option scheme was adopted on June 3, 2016, and is valid for 10 years, until June 2, 2026[86][90] - Eligible participants include employees, executives, suppliers, customers, consultants, and other individuals or entities who have contributed to the Group's development[87][90] - The total number of shares that may be issued under the share option scheme is 3,240,687 shares, representing 0.39% of the total issued shares as of June 30, 2025[92][95] - No share options were granted or outstanding under the share option scheme during the reporting period[93][96] ARRANGEMENTS TO PURCHASE SHARES OR DEBENTURES During the reporting period, no rights to acquire shares or debentures of the company were granted to or exercised by any director or their associates, nor was the company a party to any such arrangements - During the reporting period, no rights to acquire benefits by way of acquisition of shares or debentures of the company were granted to any director or their respective spouses or minor children, nor were any such rights exercised by them[94][97] - Neither the company nor any of its subsidiaries was a party to any arrangement to enable directors to acquire such rights in any other body corporate[94][97] MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS The company has adopted the Model Code, and all directors confirmed compliance with it during the reporting period - The company has adopted the Model Code as its code for directors' dealings in the company's securities[98][102] - All directors confirmed compliance with the required standards set out in the Model Code throughout the reporting period[98][102] [PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY](index=18&type=section&id=PURCHASE,%20REDEMPTION%20OR%20SALE%20OF%20LISTED%20SECU RITIES%20OF%20THE%20COMPANY) 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, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities[99][103] CORPORATE GOVERNANCE The company generally complied with the Corporate Governance Code during the reporting period, with two deviations: a non-executive director's absence from the AGM and the combined roles of Chairman and CEO - The company has complied with the Corporate Governance Code throughout the reporting period, with the following two exceptions[100][104] - Non-executive Director Mr. Hu Yonggang was unable to attend the Annual General Meeting held on May 23, 2025, deviating from Code Provision C.1.5[100][104] - The roles of Chairman and Chief Executive Officer are both held by Mr. Lu Ningjiang, deviating from Code Provision C.2.1, which the Board believes enhances efficiency in business strategy formulation and execution[101][104] INDEPENDENT NON-EXECUTIVE DIRECTORS Due to the resignation of Independent Non-Executive Director Mr. Zhao Xianming, the company failed to meet Listing Rule requirements regarding the number of INEDs and Audit Committee composition from April 1 to June 15, 2025, but subsequently regained compliance with the appointment of Mr. Pang Mingli - From April 1 to June 15, 2025, the company failed to comply with Listing Rules 3.10(1) (at least three independent non-executive directors) and 3.21 (Audit Committee with at least three non-executive members)[105][107] - This was due to the resignation of Independent Non-Executive Director Mr. Zhao Xianming on April 1, 2025[105][106] - On June 16, 2025, Mr. Pang Mingli was appointed as an Independent Non-Executive Director, and the company subsequently complied with the aforementioned Listing Rules[105][106] AUDIT COMMITTEE REVIEW The Audit Committee has reviewed the accounting principles adopted by the Group and the unaudited condensed consolidated interim financial statements - The Audit Committee comprises three independent non-executive directors: Mr. Pang Mingli (Chairman), Mr. Chan Lik Shan, and Mr. So Yin Wai[108][111] - The Audit Committee has reviewed with management the accounting principles adopted by the Group and the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025[108][111] EVENTS AFTER THE REPORTING PERIOD The Group had no other significant events after the reporting period - The Group had no other significant events after the reporting period[109][112] COMPARATIVE FIGURES Comparative figures in the unaudited condensed consolidated interim financial statements have been reclassified to separately disclose discontinued operations from continuing operations - Comparative figures in the unaudited condensed consolidated interim financial statements have been reclassified to separately disclose discontinued operations from continuing operations[110][113] APPRECIATION The Board expresses its gratitude for the support and efforts of its customers, shareholders, and employees - The Board takes this opportunity to express its appreciation for the long-term support from customers and shareholders and the dedicated efforts of its employees[114] Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group recorded a loss for the period of HK$929 thousand, a significant narrowing from the prior year (HK$2,361 thousand), primarily due to reduced losses from continuing operations and no longer incurring losses from discontinued operations Overview of Profit or Loss and Other Comprehensive Income | Metric | H1 2025 (HK$ '000) | H1 2024 (HK$ '000, restated) | | :--- | :--- | :--- | | Revenue (continuing operations) | 143,776 | 170,268 | | Cost of Sales | (131,416) | (155,244) | | Gross Profit | 12,360 | 15,024 | | Operating Profit | 596 | 552 | | Profit Before Tax | 269 | 44 | | Income Tax Expense | (1,198) | (1,809) | | Loss for the period from continuing operations | (929) | (1,765) | | Loss for the period from discontinued operations | – | (596) | | Loss for the period | (929) | (2,361) | | Total comprehensive loss for the period | (615) | (2,294) | Loss Per Share | Metric | H1 2025 (HK cents) | H1 2024 (HK cents, restated) | | :--- | :--- | :--- | | Basic loss per share (continuing and discontinued operations) | (0.13) | (0.47) | | Basic loss per share (continuing operations) | (0.13) | (0.35) | | Basic loss per share (discontinued operations) | Not applicable | (0.12) | Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets increased to HK$113,960 thousand and net assets increased to HK$83,523 thousand, primarily driven by significant increases in prepayments, deposits, and other receivables, as well as cash and bank balances Overview of Financial Position | Metric | June 30, 2025 (HK$ '000, unaudited) | December 31, 2024 (HK$ '000, audited) | | :--- | :--- | :--- | | Non-current Assets | 11,945 | 8,555 | | Current Assets | 102,015 | 58,145 | | Inventories | 1,267 | 1,173 | | Trade Receivables | 123 | 1,653 | | Prepayments, Deposits and Other Receivables | 93,342 | 54,613 | | Cash and Bank Balances | 7,283 | 706 | | Current Liabilities | 29,073 | 23,443 | | Trade Payables | 2,858 | 2,763 | | Other Payables and Accruals | 19,921 | 14,888 | | Net Current Assets | 72,942 | 34,702 | | Net Assets / Total Equity | 83,523 | 39,235 | Unaudited Condensed Consolidated Statement of Changes in Equity As of June 30, 2025, total equity attributable to owners of the company increased to HK$83,523 thousand, mainly due to a net amount of HK$44,903 thousand from the issuance of new shares after the rights issue Overview of Changes in Equity | Metric | January 1, 2025 (HK$ '000, audited) | June 30, 2025 (HK$ '000, unaudited) | | :--- | :--- | :--- | | Share Capital | 41,122 | 82,244 | | Share Premium | 136,339 | 140,120 | | Exchange Fluctuation Reserve | (3,947) | (3,633) | | Accumulated Losses | (134,279) | (135,208) | | Total Equity | 39,235 | 83,523 | - Net proceeds from the issuance of new shares after the rights issue amounted to HK$44,903 thousand[119] - Loss for the period was HK$929 thousand, and exchange fluctuation reserve increased by HK$314 thousand[119] Unaudited Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, the Group generated net cash outflow from operating activities, but financing activities generated significant net cash inflow due to the rights issue, ultimately leading to a substantial increase in cash and cash equivalents at period-end Overview of Cash Flows | Metric | H1 2025 (HK$ '000, unaudited) | H1 2024 (HK$ '000, unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | (27,915) | (3,759) | | Net cash used in investing activities | (5,989) | – | | Net cash generated from financing activities | 42,217 | 882 | | Net increase in cash and cash equivalents | 8,313 | (2,877) | | Cash and cash equivalents at beginning of period | 706 | 3,522 | | Effect of foreign exchange rate changes | (1,736) | 56 | | Cash and cash equivalents at end of period | 7,283 | 701 | - Net cash generated from financing activities primarily resulted from proceeds of HK$44,903 thousand from the issuance of new shares after the rights issue[122] Notes to the Unaudited Condensed Consolidated Interim Financial Statements This section provides detailed notes to the unaudited condensed consolidated interim financial statements, explaining accounting policies, segment information, and key financial items 1. CORPORATE INFORMATION This note confirms the company's place of incorporation, listing location, and its principal businesses, including timber-related business and functional food and beverage business in China - The company was incorporated in the Cayman Islands, and its shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited[123][124][127] - The Group is principally engaged in (i) timber-related business (including processing and distribution of furniture timber and manufacturing and sales of antique wooden furniture and other timber products); and (ii) food and beverage business in China[125][127] 2. BASIS OF PREPARATION These interim financial statements are prepared in accordance with HKAS 34 and the Listing Rules, consistent with prior year accounting policies; despite liquidity pressure, management has taken steps and secured financial support from the ultimate controlling party to maintain going concern - The unaudited condensed consolidated interim financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Listing Rules of the Stock Exchange[126][128] - The Group recorded a loss of approximately HK$929 thousand and net cash outflow from operating activities of approximately HK$27,915 thousand during the reporting period, with relatively low cash and bank balances (approximately HK$7,283 thousand), significantly lower than current liabilities (approximately HK$29,073 thousand)[131][135] - To mitigate liquidity pressure, management will improve operating cash flow by controlling administrative costs and capital expenditures, and the ultimate controlling party has agreed to provide financial support[132][135] - The Board believes that the Group has sufficient financial resources to meet its debt repayments and financing needs for its operations in the foreseeable future, thus preparing the financial statements on a going concern basis is appropriate[136][138] 3. OPERATING SEGMENT INFORMATION The Group's operating segments include timber-related business, financing services and investments, and food and beverage business; the car rental business was disposed of in October 2024 and classified as a discontinued operation, with China being the Group's primary source of revenue - The Group's reportable operating segments are: (a) timber-related business segment; (b) financing services and investment segment; and (c) food and beverage segment[140] - The car rental business was disposed of on October 28, 2024, and has been accounted for as a discontinued operation in the interim financial statements[141][142][145] Segment Revenue (Sales of Goods) | Segment | H1 2025 (HK$ '000) | H1 2024 (HK$ '000) | | :--- | :--- | :--- | | Timber-related business | 132,984 | 170,268 | | Food and beverage | 10,792 | – | | Total continuing operations | 143,776 | 170,268 | Revenue by Geographical Location (Continuing Operations) | Region | H1 2025 (HK$ '000) | H1 2024 (HK$ '000, restated) | | :--- | :--- | :--- | | China | 130,941 | 152,425 | | Hong Kong | 12,835 | 17,843 | | Total | 143,776 | 170,268 | - During the reporting period, the Group did not record any customers with revenue amounting to 10% or more of the Group's total revenue[152][154] 4. REVENUE The Group's revenue from continuing operations is entirely derived from the sale of goods, recognized at a point in time, primarily from the China market Disaggregation of Revenue from Contracts with Customers by Major Product or Service Line | Product or Service Line | H1 2025 (HK$ '000) | H1 2024 (HK$ '000) | | :--- | :--- | :--- | | Sale of goods | 143,776 | 170,268 | - All revenue is recognized at a point in time, primarily from the China market[159] 5. FINANCE COSTS Finance costs for continuing operations primarily include interest on lease liabilities and bank charges, totaling HK$327 thousand in H1 2025, down from HK$508 thousand in H1 2024 Breakdown of Finance Costs | Item | H1 2025 (HK$ '000) | H1 2024 (HK$ '000, restated) | | :--- | :--- | :--- | | Interest on lease liabilities | 326 | 505 | | Bank charges | 1 | 3 | | Total | 327 | 508 | 6. PROFIT BEFORE TAX The Group's profit before tax from continuing operations is derived after deducting cost of sales, depreciation, research and development costs, and other lease expenses; notably, HK$2,021 thousand in research and development costs were incurred in H1 2025 Items Deducted from Profit Before Tax | Item | H1 2025 (HK$ '000) | H1 2024 (HK$ '000, restated) | | :--- | :--- | :--- | | Cost of sales | 131,446 | 155,244 | | Depreciation of property, plant and equipment | 223 | 33 | | Depreciation of right-of-use assets | 2,389 | 2,637 | | Research and development costs | 2,021 | – | | Other lease expenses | 26 | 70 | - All research and development costs are expensed to profit or loss as incurred[165] 7. INCOME TAX EXPENSE Income tax expense for continuing operations primarily consists of China corporate income tax, provided at a rate of 25%, amounting to HK$1,198 thousand in H1 2025 Breakdown of Income Tax Expense | Item | H1 2025 (HK$ '000) | H1 2024 (HK$ '000) | | :--- | :--- | :--- | | Current - China corporate income tax | 1,198 | 1,809 | - China corporate income tax is provided at a rate of 25%[169][171] - No provision for Hong Kong profits tax or any other taxes has been made in the unaudited condensed consolidated interim financial statements[168][171] 8. DIVIDEND 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 (H1 2024: nil)[170][172] 9. DISCONTINUED OPERATIONS This note details the results and cash flows of the discontinued car rental business for H1 2024, which was disposed of in October 2024 - The Group entered into a sale and purchase agreement on October 28, 2024, to dispose of the disposal group (car rental business) to an independent third party[173] Overview of Discontinued Operations Results (H1 2024) | Item | Amount (HK$ '000) | | :--- | :--- | | Revenue - other sources | 4,822 | | Cost of services provided | (4,327) | | Selling expenses | (1) | | Administrative expenses | (400) | | Finance costs | (690) | | Loss before tax | (596) | | Income tax expense | – | | Loss for the period | (596) | Net Cash Flows from Discontinued Operations (H1 2024) | Item | Amount (HK$ '000) | | :--- | :--- | | Net cash inflow from operating activities | 506 | | Net cash flow from investing activities | – | | Net cash outflow from financing activities | (189) | | Net cash inflow | 317 | 10. LOSS PER SHARE This note details the calculation of basic loss per share, including losses from both continuing and discontinued operations; diluted loss per share is not presented due to the absence of potential dilutive shares Calculation of Basic Loss Per Share (Attributable to Owners of the Company) | Metric | H1 2025 (HK$ '000) | H1 2024 (HK$ '000, restated) | | :--- | :--- | :--- | | Loss for the purpose of calculating basic loss per share | (929) | (2,361) | | Loss for the period from discontinued operations | – | (596) | | Loss for the purpose of calculating basic loss per share from continuing operations | (929) | (1,765) | - The weighted average number of ordinary shares outstanding for the purpose of calculating basic loss per share was 721,801,778 shares (H1 2024: 506,853,249 shares)[181] - Diluted loss per share is not presented as there were no potential dilutive shares outstanding for the six months ended June 30, 2025 and 2024[185][186] 11. TRADE RECEIVABLES As of June 30, 2025, the Group's net trade receivables (after deducting allowance for expected credit losses) amounted to HK$123 thousand, a significant decrease from the end of 2024, with all receivables within 90 days Breakdown of Trade Receivables | Item | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Trade receivables | 5,013 | 6,543 | | Less: Allowance for expected credit losses | (4,890) | (4,890) | | Net amount | 123 | 1,653 | - The Group generally grants credit periods of 0 to 90 days to its customers[189] Ageing Analysis of Trade Receivables (Net) | Ageing | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Within 90 days | 123 | 1,653 | | Over 90 days and within one year | – | – | 12. TRADE PAYABLES As of June 30, 2025, the Group's trade payables amounted to HK$2,858 thousand, with all amounts overdue by more than 365 days Ageing Analysis of Trade Payables | Ageing | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Within 30 days | – | – | | 31 to 60 days | – | – | | 61 to 180 days | – | – | | 181 to 365 days | – | – | | Over 365 days | 2,858 | 2,763 | | Total | 2,858 | 2,763 | - Trade payables are interest-free and generally settled within 30 to 90 days after month-end[196] 13. SHARE CAPITAL The company's issued share capital doubled due to a rights issue on March 27, 2025, issuing 411,219,340 new shares and raising approximately HK$44,903 thousand in net proceeds Changes in Share Capital | Item | Number of Shares | Amount (HK$ '000) | | :--- | :--- | :--- | | Authorised share capital (HK$0.10 per share) | 2,000,000,000 | 200,000 | | Issued and fully paid at December 31, 2024 | 411,219,340 | 41,122 | | Net issuance of new shares after rights issue | 411,219,340 | 41,122 | | Issued and fully paid at June 30, 2025 | 822,438,680 | 82,244 | - On March 27, 2025, the company allotted and issued 411,219,340 shares at a subscription price of HK$0.111 per share by way of a rights issue[199][200] - The net proceeds from the rights issue amounted to approximately HK$44,903 thousand[199][200] 14. RESERVES This note explains the composition of the Group's reserves, including share premium, capital reserve, and exchange fluctuation reserve, and clarifies the reasons for their changes - The share premium account includes premiums on new share issues, amounts transferred from share option exercises, and is partly used for dividend payments, issue expenses, and offsetting accumulated losses[202][209] - Capital reserve refers to the contributed capital surplus of companies comprising the Group, transferred to accumulated losses upon deconsolidation of an excluded company in 2023[203][209] - Exchange fluctuation reserve comprises all exchange differences arising from the translation of financial statements of overseas operations[204][206] 15. CAPITAL COMMITMENTS As of June 30, 2025, the Group's contracted but not yet incurred and provided capital commitments amounted to HK$2,029 thousand, primarily for property, plant, and equipment Breakdown of Capital Commitments | Item | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Property, plant and equipment | 2,029 | – | 16. RELATED PARTY TRANSACTIONS This note discloses the compensation of the Group's key management personnel, including directors' emoluments, which increased to HK$1,271 thousand in H1 2025 Key Management Personnel Compensation | Item | H1 2025 (HK$ '000) | H1 2024 (HK$ '000) | | :--- | :--- | :--- | | Short-term employee benefits | 1,253 | 1,080 | | Post-employment benefits | 18 | 9 | | Total emoluments paid or payable to key management personnel | 1,271 | 1,089 | 17. CONTINGENT LIABILITIES As of June 30, 2025, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities as of June 30, 2025 (December 31, 2024: nil)[213][217] 18. EVENTS AFTER THE REPORTING PERIOD The Group had no other significant events after the reporting period - The Group had no other significant events after the reporting period[214][218] 19. COMPARATIVE FIGURES Comparative figures in the unaudited condensed consolidated interim financial statements have been reclassified to separately disclose discontinued operations from continuing operations - Comparative figures in the unaudited condensed consolidated interim financial statements have been reclassified to separately disclose discontinued operations from continuing operations[215][219] 20. APPROVAL OF THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS These unaudited condensed consolidated interim financial statements were approved and authorized for issue by the Board of Directors on August 29, 2025 - These unaudited condensed consolidated interim financial statements were approved and authorized for issue by the Board of Directors on August 29, 2025[216][220]