WKK INTL (HOLD)(00532) - 2025 - 中期业绩

Interim Condensed Consolidated Income Statement The Group's unaudited interim condensed consolidated income statement for the six months ended June 30, 2025, shows an 8.6% year-on-year revenue increase, a significant improvement from operating loss to profit, and a substantial reduction in loss for the period | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,817,904 | 1,673,274 | 8.6% | | Other income, net | 8,242 | 4,655 | 77.0% | | Operating profit / (loss) | 12,783 | (64,162) | Significant improvement | | Finance costs, net | (11,850) | (15,304) | -22.6% | | Profit / (loss) before income tax | 12,728 | (70,861) | Significant improvement | | Income tax expense | (16,139) | (10,774) | 49.8% | | Loss for the period | (3,411) | (81,635) | -95.8% | | Loss attributable to equity holders of the Company | (11,042) | (84,090) | -86.9% | | Basic loss per share (HK cents) | (1.51) | (11.52) | Significant improvement | | Diluted loss per share (HK cents) | (1.51) | (11.52) | Significant improvement | Interim Condensed Consolidated Statement of Comprehensive Income The Group's total comprehensive loss for the six months ended June 30, 2025, significantly narrowed, primarily due to a positive shift from foreign currency exchange loss to gain, despite equity investments' fair value moving from gain to loss | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Loss for the period | (3,411) | (81,635) | -95.8% | | Fair value (loss) / gain on equity investments at fair value through other comprehensive income, net of tax | (34,522) | 22,524 | Shift from gain to loss | | Currency translation differences | 34,646 | (19,359) | Shift from loss to gain | | Total comprehensive loss for the period | (3,287) | (78,470) | -95.8% | | Attributable to equity holders of the Company | (19,068) | (76,601) | -75.1% | | Non-controlling interests | 15,781 | (1,869) | Shift from loss to gain | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets increased from December 31, 2024, driven by higher current assets including trade and other receivables, inventories, short-term bank deposits, and cash equivalents, while total liabilities also rose and total equity slightly decreased | Indicator | June 30, 2025 (HKD thousands) | Dec 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 3,141,784 | 2,905,646 | 8.1% | | Total non-current assets | 613,566 | 648,330 | -5.4% | | Total current assets | 2,528,218 | 2,257,316 | 12.0% | | Inventories | 668,033 | 624,358 | 7.0% | | Trade and other receivables | 1,175,177 | 1,058,228 | 11.0% | | Short-term bank deposits | 95,737 | 59,075 | 62.1% | | Cash and cash equivalents | 534,877 | 467,438 | 14.4% | | Total liabilities | 1,669,957 | 1,418,563 | 17.7% | | Total current liabilities | 1,611,754 | 1,354,392 | 19.0% | | Trade and other payables | 772,201 | 670,464 | 15.2% | | Bank borrowings | 681,103 | 567,920 | 19.9% | | Total equity | 1,471,827 | 1,487,083 | -1.0% | Notes to the Financial Statements This section details the basis of preparation for interim financial information, changes in significant accounting policies, segment operating performance, finance costs, income tax expense, earnings per share calculation, dividend policy, and aging analysis of trade receivables and payables, along with share capital structure Basis of Preparation - The unaudited interim condensed consolidated financial information is prepared in accordance with Appendix D2 of the Listing Rules of the Stock Exchange of Hong Kong and HKAS 34 'Interim Financial Reporting', and should be read in conjunction with the 2024 annual financial statements[11] Significant Accounting Policies - The Group adopted amendments to HKAS 21 and HKFRS 1 'Lack of Exchangeability' from January 1, 2025, with no impact on amounts recognized in prior or current periods[13] - New and revised standards and interpretations issued but not yet adopted include 'Annual Improvements to HKFRS Standards – Volume 11' and 'Amendments to Classification and Measurement of Financial Instruments', with the Group currently assessing their potential impact[14][15] Segment Information - The Group operates in two segments: Trading and Distribution (trading and distribution of chemicals, materials, and equipment used in manufacturing printed circuit boards and electronic products) and Original Product Manufacturing (manufacturing of electrical and electronic products)[16] 2025 H1 Segment Results | Segment | Revenue (HKD thousands) | Segment Results (HKD thousands) | Segment Operating Profit / (Loss) (HKD thousands) | | :--- | :--- | :--- | :--- | | Trading and Distribution | 1,063,693 | 68,009 | 69,063 | | Original Product Manufacturing | 877,533 | (46,138) | (58,466) | | Consolidated | 1,817,904 | 12,783 | 933 | 2024 H1 Segment Results | Segment | Revenue (HKD thousands) | Segment Results (HKD thousands) | Segment Operating Profit / (Loss) (HKD thousands) | | :--- | :--- | :--- | :--- | | Trading and Distribution | 846,430 | 13,093 | 14,457 | | Original Product Manufacturing | 915,884 | (67,967) | (84,694) | | Consolidated | 1,673,274 | (64,162) | (79,466) | Segment Assets and Liabilities (June 30, 2025) | Segment | Segment Assets (HKD thousands) | Segment Liabilities (HKD thousands) | | :--- | :--- | :--- | | Trading and Distribution | 1,462,869 | 491,198 | | Original Product Manufacturing | 1,523,915 | 1,122,423 | | Others | 155,000 | 56,336 | | Consolidated | 3,141,784 | 1,669,957 | Segment Assets and Liabilities (December 31, 2024) | Segment | Segment Assets (HKD thousands) | Segment Liabilities (HKD thousands) | | :--- | :--- | :--- | | Trading and Distribution | 1,314,982 | 417,762 | | Original Product Manufacturing | 1,370,951 | 920,966 | | Others | 219,713 | 79,835 | | Consolidated | 2,905,646 | 1,418,563 | Net Finance Costs | Indicator | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | YoY Change | | :--- | :--- | :--- | :--- | | Interest income | 2,821 | 3,604 | -21.7% | | Interest expense | (14,671) | (18,908) | -22.4% | | Finance costs, net | (11,850) | (15,304) | -22.6% | Income Tax Expense - No provision for Hong Kong profits tax has been made as carried forward tax losses are sufficient to offset estimated assessable profits[20] - Chinese subsidiaries are subject to enterprise income tax at a rate of 25%, while Taiwanese subsidiaries are subject to enterprise income tax at a rate of 20%[20] | Tax Category | H1 2025 (HKD thousands) | H1 2024 (HKD thousands) | | :--- | :--- | :--- | | China enterprise income tax | 5,208 | 3,429 | | Taiwan enterprise income tax | 7,082 | 2,242 | | Other jurisdictions | 780 | 3,582 | | Withholding tax on dividends declared by subsidiaries | 3,072 | 1,521 | | Total income tax expense | 16,139 | 10,774 | Loss Per Share Basic Loss Per Share | Indicator | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss attributable to equity holders of the Company (HKD thousands) | (11,042) | (84,090) | | Weighted average number of ordinary shares in issue (thousands) | 729,898 | 729,898 | | Basic loss per share (HK cents per share) | (1.51) | (11.52) | - Diluted loss per share for the six months ended June 30, 2025, and 2024, is equivalent to basic loss per share due to the anti-dilutive effect of share options[24] Dividends - The Board resolved not to recommend the payment of any interim dividend for the six months ended June 30, 2025 (2024: HKD zero)[25] Trade and Other Receivables - As of June 30, 2025, total trade and other receivables amounted to HKD 1,095,931 thousand, an increase from December 31, 2024[26][27] - The Group grants trade customers credit periods ranging from 30 to 180 days, with longer terms for some long-standing customers[26] Aging Analysis of Trade and Bills Receivables | Aging | June 30, 2025 (HKD thousands) | Dec 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 days | 684,433 | 344,246 | | 31 to 60 days | 91,184 | 196,811 | | 61 to 90 days | 97,271 | 183,742 | | Over 90 days | 223,043 | 307,063 | | Total | 1,095,931 | 1,031,862 | Trade and Other Payables - As of June 30, 2025, total trade and other payables amounted to HKD 604,598 thousand, an increase from December 31, 2024[28][29] Aging Analysis of Trade and Bills Payables | Aging | June 30, 2025 (HKD thousands) | Dec 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 days | 279,350 | 230,549 | | 31 to 60 days | 146,486 | 121,362 | | 61 to 90 days | 75,187 | 81,808 | | Over 90 days | 103,575 | 91,190 | | Total | 604,598 | 524,909 | Share Capital Issued and Fully Paid Share Capital | Date | Number of Ordinary Shares | Share Capital (HKD thousands) | | :--- | :--- | :--- | | Dec 31, 2024, Jan 1, 2025, and June 30, 2025 | 729,897,964 | 72,990 | Business Review and Outlook The Group's revenue grew by 8.6% in the first half of 2025, with a significant reduction in net loss, primarily driven by strong performance in the Trading and Distribution segment and improved operational efficiency in Original Product Manufacturing; the Group plans to continue optimizing cost structures, enhancing efficiency, and actively addressing market challenges Business Review - Revenue for the first half of 2025 was HKD 1.8 billion, an increase of approximately 8.6% compared to the same period last year[31] - Net loss attributable to equity holders of the Company was HKD 11 million, a significant improvement from HKD 84.1 million in the prior year period[31] - Positive performance was primarily driven by strong results in the Trading and Distribution segment, strategic responses to geopolitical pressures and global economic volatility in Original Product Manufacturing, and a decrease in net finance costs[31] - The Trading and Distribution segment's revenue was HKD 0.9 billion, a year-on-year increase of approximately 25.7%, mainly due to increased demand for distributed products from Taiwanese and mainland Chinese subsidiaries, as well as customer inventory expansion and capital expenditure increases[31] - The Trading and Distribution segment recorded an operating profit of HKD 69.1 million, compared to HKD 14.5 million in the prior year period[31] - The Original Product Manufacturing segment's revenue was HKD 0.88 billion, a slight year-on-year decrease of approximately 4.2%, impacted by geopolitical pressures and global economic volatility[32] - The Original Product Manufacturing segment recorded an operating loss of HKD 58.5 million, a reduction from HKD 84.7 million in the prior year period, primarily due to effective implementation of operational cost reduction plans and enhanced operational efficiency[32] Financial Position - As of June 30, 2025, the Group had secured total bank and other financing of HKD 2.58 billion, with HKD 0.775 billion utilized[33] - Consolidated net debt was HKD 0.116 billion, total equity was HKD 1.472 billion, and the net gearing ratio was 7.9%[33] - The majority of the Group's sales are conducted in the same currency as the corresponding purchase transactions, and foreign exchange contracts have been entered into to hedge against exchange rate fluctuations[33] Capital Structure - The Group's capital structure comprises bank borrowings, cash and cash equivalents, short-term bank deposits, and equity attributable to equity holders of the Company (including issued share capital and reserves)[34] Human Resources - As of June 30, 2025, the Group had a total of 3,428 employees, with 175 based in Hong Kong, 2,446 in mainland China, and 807 overseas[35] - Employee remuneration is primarily determined by job performance, experience, and industry practice, with benefits including provident fund schemes, medical allowances, training programs, discretionary bonuses, and share options[35] Outlook - The Trading and Distribution segment anticipates demand to remain largely stable in the second half of 2025, driven by current business inquiries and orders from customers expanding production capacity[36] - The Original Product Manufacturing segment expects moderate revenue growth in the second half of 2025, primarily benefiting from the continuous expansion of production scale and improved operational efficiency at its Mexican manufacturing facility[36] - The Group will continue to implement its long-term sustainable development strategy by streamlining underperforming business units and optimizing internal resource allocation to reduce overall operating costs and enhance efficiency[36] - Management will closely monitor market dynamics and make timely, data-driven strategic adjustments to address macroeconomic challenges and maintain a competitive advantage[36] Corporate Governance and Others The Group did not purchase, sell, or redeem any listed securities during the reporting period, complied with the Corporate Governance Code with a deviation in directors' rotation, adopted a standard code for directors' securities transactions, and the Audit Committee reviewed financial reporting and internal controls Purchase, Sale or Redemption of the Company's Listed Securities - During 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[37] Corporate Governance - The Company complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025, with the exception of Code Provision B.2.2[38] - The deviation relates to the Company's Articles of Association requiring all directors (except the Executive Chairman) to retire by rotation and be eligible for re-election at annual general meetings, whereas the Code requires each director to retire by rotation at least once every three years; the Board believes the current arrangement is in the best interest of the Company and its shareholders as a whole[38] - The Company has adopted a code of conduct for directors' securities transactions, the terms of which are no less exacting than the Model Code set out in Appendix C3 of the Listing Rules, and all directors have confirmed compliance[39] Audit Committee - The Audit Committee, in conjunction with management, reviewed the accounting principles and practices adopted by the Group and discussed matters related to auditing, risk management, internal control systems, and financial reporting, including the unaudited interim condensed consolidated financial information for the six months ended June 30, 2025[40] Publication of Results and Interim Report - This results announcement is published on the Company's website www.wkkintl.com/i_announcement_t.aspx and the Stock Exchange's website www.hkexnews.hk[41](index=41&type=chunk) - The 2025 Interim Report will be published on the aforementioned websites in due course[41] Acknowledgements and Board Composition - The Board extends its sincere gratitude to all employees, partners, and shareholders for their loyalty, support, and trust[41] - As of the date of this announcement, the Company's Executive Directors are Mr. Wong Chung Tong, Ms. Wong Ngai Kiu, Ms. Wong Yin Tak, and Mr. Cheung Shui Sun; the Independent Non-executive Directors are Mr. Tse Hung Chung, Dr. Leung Kam Fong, Dr. Ip Wai Kwong, and Mr. Lam Yiu Wing[43]