Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The statement details the company's financial performance, showing a significant decline in revenue and profit for the period, alongside increased finance costs Profit or Loss Overview Revenue decreased by 22.2% to HKD 256,127 thousand, with profit for the period down 62.1% to HKD 3,569 thousand, primarily due to lower revenue and gross profit, alongside increased finance costs Profit or Loss Summary (HKD thousands) | Indicator | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 256,127 | 329,077 | -22.2% | | Cost of sales | (242,661) | (307,814) | -21.2% | | Gross profit | 13,466 | 21,263 | -36.7% | | Profit from operations | 9,648 | 17,119 | -43.7% | | Finance costs | (5,964) | (4,221) | +41.3% | | Profit before tax | 3,684 | 12,898 | -71.4% | | Income tax expense | (115) | (3,388) | -96.6% | | Profit for the period | 3,569 | 9,510 | -62.5% | | Profit for the period attributable to owners of the company | 3,590 | 9,488 | -62.2% | | Basic and diluted earnings per share (HK cents) | 0.37 | 0.97 | -61.9% | - Total comprehensive income for the period was HKD 5,838 thousand, a 26.6% decrease from HKD 7,957 thousand in the prior year period5 Condensed Consolidated Statement of Financial Position This statement presents the company's assets, liabilities, and equity, indicating slight growth in total assets and equity, but also an increase in liabilities Financial Position Overview As of June 30, 2025, total assets, net current assets, and total equity increased, while current and total liabilities also saw a rise Financial Position Summary (HKD thousands) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | 6,385 | 6,746 | -5.3% | | Current assets | 407,849 | 378,680 | +7.7% | | Current liabilities | 326,209 | 302,983 | +7.7% | | Net current assets | 81,640 | 75,697 | +7.9% | | Total assets less current liabilities | 88,025 | 82,443 | +6.8% | | Non-current liabilities | 210 | 466 | -54.9% | | Net assets | 87,815 | 81,977 | +7.1% | | Total equity | 87,815 | 81,977 | +7.1% | - Bank balances and cash significantly increased by 167% from HKD 3,572 thousand on December 31, 2024, to HKD 9,537 thousand on June 30, 20256 - Trade and other receivables increased by 4.1% to HKD 322,538 thousand, while trade and other payables decreased by 7.8% to HKD 87,889 thousand6 Condensed Consolidated Statement of Changes in Equity This statement outlines the changes in the company's total equity, primarily driven by profit and total comprehensive income for the period Equity Changes Overview Total equity increased from HKD 81,977 thousand on January 1, 2025, to HKD 87,815 thousand by June 30, 2025, driven by profit and total comprehensive income for the period Equity Changes Summary (HKD thousands) | Indicator | June 30, 2025 (HKD thousands) | January 1, 2025 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Share capital | 4,910 | 4,910 | 0 | | Share premium | 190,049 | 190,049 | 0 | | Exchange fluctuation reserve | (14,042) | (16,256) | +2,214 | | Accumulated losses | (95,032) | (98,622) | +3,590 | | Total reserves | 80,975 | 75,171 | +5,804 | | Non-controlling interests | 1,930 | 1,896 | +34 | | Total equity | 87,815 | 81,977 | +5,838 | - Profit and total comprehensive income for the period amounted to HKD 5,838 thousand, with HKD 5,804 thousand attributable to owners of the company7 Condensed Consolidated Statement of Cash Flows This statement summarizes cash inflows and outflows from operating, investing, and financing activities, highlighting a net increase in cash and cash equivalents Cash Flow Overview Net cash used in operating activities significantly increased, but a substantial improvement in net cash from financing activities led to a net increase in cash and cash equivalents for the six months ended June 30, 2025 Cash Flow Summary (HKD thousands) | Indicator | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (21,473) | (9,943) | -11,530 | | Net cash from investing activities | 1 | 5 | -4 | | Net cash from/(used in) financing activities | 25,230 | (2,238) | +27,468 | | Net increase/(decrease) in cash and cash equivalents | 3,758 | (12,176) | +15,934 | | Effect of exchange rate changes | 2,207 | 65 | +2,142 | | Bank balances and cash at June 30 | 9,537 | 12,224 | -2,687 | - Cash flow from financing activities shifted from a net outflow in the prior year to a net inflow in the current period, primarily driving the increase in cash and cash equivalents9 Notes to the Condensed Consolidated Interim Financial Statements These notes provide detailed explanations of the accounting policies, financial instrument fair values, segment information, and other significant financial disclosures 1. General Information and Basis of Preparation The company, registered in Bermuda and listed in Hong Kong, focuses on cross-border business and finance lease services, with the latter now only managing existing matters; financial statements are presented in HKD under HKAS 34 - The company's principal businesses are cross-border trade and the provision of finance lease and consulting services, with new finance lease business discontinued, only involving the winding up and compliance handling of existing matters11 - The company's functional currency is RMB, but the consolidated financial statements are presented in HKD11 - The financial statements are prepared in accordance with Appendix 16 of the Listing Rules of the Stock Exchange and HKAS 3411 2. Significant Accounting Policies The condensed consolidated interim financial statements are prepared on a historical cost basis, with no significant impact from new or revised HKFRSs adopted this period - The financial statements are prepared on a historical cost basis, except for certain financial instruments13 - New and revised HKFRSs adopted in the current period have no significant impact on the Group's financial statements13 3. Fair Value Measurement Fair value measurement employs a three-level hierarchy, with all the Group's financial assets (listed equity securities) categorized as Level 1, based on unadjusted quoted prices in active markets Financial Instruments Fair Value (HKD thousands) | Financial Instrument | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Fair Value Hierarchy | | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss — Listed equity securities | 56 | 66 | Level 1 | - Level 1 inputs refer to unadjusted quoted prices in active markets for identical assets or liabilities17 4. Revenue Revenue for the period primarily stemmed from cross-border business, with a significant reduction in finance lease and consulting service revenue, indicating business restructuring Revenue Sources (HKD thousands) | Revenue Source | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Cross-border business | 256,127 | 328,950 | -72,823 | | Interest income from finance lease and consulting services | – | 15 | -15 | | Other consulting service income | – | 112 | -112 | | Total Revenue | 256,127 | 329,077 | -72,950 | - In the first half of 2025, finance lease and consulting services generated no operating income, indicating that new business in this segment has largely ceased18 5. Segment Information The Group's two reportable segments are cross-border business and finance lease/consulting services; cross-border business is the main revenue and profit driver, with finance lease contributions significantly reduced - The Group's reportable and operating segments include: (i) cross-border business; and (ii) provision of finance lease and consulting services21 Segment Revenue and Results Cross-border business was the sole revenue source, with segment profit down 36% year-on-year, while the finance lease and consulting services segment continued to incur losses Segment Revenue and Results (HKD thousands) | Segment | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Revenue | | | | | Cross-border business | 256,127 | 328,950 | -72,823 | | Finance lease and consulting services | – | 15 | -15 | | Other | – | 112 | -112 | | Total Revenue | 256,127 | 329,077 | -72,950 | | Segment Profit/(Loss) | | | | | Cross-border business | 12,987 | 20,308 | -7,321 | | Finance lease and consulting services | (262) | (261) | -1 | | Other | (91) | (112) | +21 | | Total Segment Profit | 12,634 | 19,935 | -7,301 | - Segment profit is not allocated for fair value changes of financial assets at fair value through profit or loss, certain selling and distribution expenses, central administrative costs, directors' remuneration, certain other expenses, and finance costs25 Segment Assets and Liabilities Cross-border business segment assets and liabilities both increased, whereas the finance lease business segment maintained a smaller scale of assets and liabilities Segment Assets and Liabilities (HKD thousands) | Segment | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Segment Assets | | | | | Cross-border trade of nutritional food and health products | 382,312 | 366,390 | +15,922 | | Finance lease business | 10,909 | 3,764 | +7,145 | | Other | 4,638 | 5,653 | -1,015 | | Total Segment Assets | 397,859 | 375,807 | +22,052 | | Segment Liabilities | | | | | Cross-border trade of nutritional food and health products | 89,225 | 89,302 | -77 | | Finance lease business | 181 | 139 | +42 | | Other | 4,388 | 10,151 | -5,763 | | Total Segment Liabilities | 93,794 | 99,592 | -5,798 | - Unallocated corporate assets and liabilities significantly increased, reflecting centralized management of company-level assets and liabilities26 Geographical Information The Group operates in Hong Kong and China, with Hong Kong as the main revenue source and non-current assets primarily located in China Geographical Information (HKD thousands) | Region | External Customer Revenue June 30, 2025 (HKD thousands) | External Customer Revenue June 30, 2024 (HKD thousands) | Non-current Assets June 30, 2025 (HKD thousands) | Non-current Assets December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | :--- | :--- | | China | – | 127 | 5,634 | 5,694 | | Hong Kong | 256,127 | 328,950 | 751 | 1,052 | | Total | 256,127 | 329,077 | 6,385 | 6,746 | - Revenue from external customers in China was zero for the period, with Hong Kong contributing all external customer revenue27 6. Finance Costs Finance costs surged by 41.3%, mainly driven by increased interest on bank and other borrowings, corporate bonds, and acceptance bills Finance Costs Sources (HKD thousands) | Finance Cost Source | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Interest on bank and other borrowings | 1,942 | 11 | +1,931 | | Interest on shareholder loans | 2,375 | 2,375 | 0 | | Interest on lease liabilities | 26 | 10 | +16 | | Interest on corporate bonds | 316 | 1,262 | -946 | | Interest on acceptance bills | 1,305 | 563 | +742 | | Total Finance Costs | 5,964 | 4,221 | +1,743 | - Interest on bank and other borrowings surged from HKD 11 thousand last year to HKD 1,942 thousand this period, a primary driver of increased finance costs28 7. Income Tax Expense Income tax expense significantly decreased by 96.6% to HKD 115 thousand, primarily due to a reduction in Hong Kong profits tax Income Tax Expense (HKD thousands) | Tax Type | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Hong Kong profits tax | 115 | 3,388 | -3,273 | | Total Income Tax Expense | 115 | 3,388 | -3,273 | - Hong Kong subsidiaries are subject to a tax rate of 16.5%, with the first HKD 2 million of assessable profits taxed at 8.25% for some companies; Chinese subsidiaries are taxed at 25%29 8. Profit for the Period Profit for the period is reported after deducting depreciation of property, plant and equipment, right-of-use assets, and unrealized losses on financial assets at fair value through profit or loss Deductions from Profit for the Period (HKD thousands) | Deduction Item | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 196 | 202 | | Depreciation of right-of-use assets | 301 | 332 | | Unrealized losses on financial assets at fair value through profit or loss | 10 | 11 | 9. Dividends For the reporting period ended June 30, 2025, no dividends were paid, declared, or proposed by the company - No dividends were paid, declared, or proposed during or since the end of the reporting period32 10. Earnings Per Share Basic and diluted earnings per share were HKD 0.37 cents, a 61.9% decrease from the prior year, with no diluted adjustment due to the anti-dilutive effect of outstanding convertible bonds3435 Earnings Per Share (HKD thousands, except per share data) | Indicator | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Profit attributable to owners of the company | 3,590 | 9,488 | | Weighted average number of ordinary shares (thousands) | 982,000 | 982,000 | | Basic and diluted earnings per share (HK cents) | 0.37 | 0.97 | - Outstanding convertible bonds had an anti-dilutive effect, thus no diluted adjustment was made to the basic earnings per share amount35 11. Property, Plant and Equipment The Group incurred no acquisition costs for property, plant and equipment and made no disposals of related assets during the period - For the six months ended June 30, 2025, the Group incurred approximately zero HKD in costs for the acquisition of property, plant and equipment36 - The net book value of property, plant and equipment disposed of during the period was approximately zero HKD36 12. Interests in a Joint Venture The Group holds a 49% interest in Hebao (Shenzhen) Information Technology Co., Ltd., which has suspended operations, with no capital injected during the period Joint Venture Interests | Entity Name | Entity Form | Place of Incorporation | Registered Capital | Group's Interest (June 30, 2025) | Principal Business | | :--- | :--- | :--- | :--- | :--- | :--- | | Hebao (Shenzhen) Information Technology Co., Ltd. | Incorporated | China | RMB 20,000,000 | 49% | Suspended operations | - As of June 30, 2025, and up to the date of this announcement, the Group has not injected any capital into the joint venture37 13. Trade and Other Receivables Total trade and other receivables increased, with a slight rise in impairment provisions, and trade receivables over 60 days constituting the largest portion Trade and Other Receivables (HKD thousands) | Receivable Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Trade receivables | 339,971 | 334,723 | +5,248 | | Less: Provision for impairment losses | (35,293) | (34,860) | -433 | | Net Trade Receivables | 304,678 | 299,863 | +4,815 | | Other receivables | 28,519 | 20,576 | +7,943 | | Less: Provision for impairment losses | (12,020) | (12,020) | 0 | | Net Other Receivables | 16,499 | 8,556 | +7,943 | | Deposits and prepayments | 1,361 | 1,361 | 0 | | Total | 322,538 | 309,780 | +12,758 | Ageing Analysis of Trade Receivables (HKD thousands) | Trade Receivables Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 days | 28,621 | 28,337 | | 31 to 60 days | 38,853 | 57,755 | | Over 60 days | 237,204 | 213,771 | | Total | 304,678 | 299,863 | - The Group does not charge interest or hold any collateral for these balances38 14. Financial Assets at Fair Value Through Profit or Loss The Group's financial assets at fair value through profit or loss are mainly Hong Kong listed equity securities, which experienced a slight value decrease Financial Assets at Fair Value Through Profit or Loss (HKD thousands) | Financial Asset Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong listed equity securities | 56 | 66 | 15. Trade and Other Payables Total trade and other payables decreased, primarily driven by reductions in trade payables and accrued interest Trade and Other Payables (HKD thousands) | Payable Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Trade payables | 57,768 | 61,963 | -4,195 | | Other payables | 18,078 | 22,488 | -4,410 | | Accrued interest | 11,875 | 10,733 | +1,142 | | VAT payable | 168 | 171 | -3 | | Total | 87,889 | 95,355 | -7,466 | Ageing Analysis of Trade Payables (HKD thousands) | Trade Payables Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 days | 33,609 | 32,346 | | 31 to 60 days | 24,159 | 564 | | Over 60 days | – | 29,053 | | Total | 57,768 | 61,963 | 16. Loan from Ultimate Holding Company The loan from the ultimate holding company remained at HKD 50,000 thousand, bearing a fixed annual interest rate of 9.5%, and is exposed to foreign currency risk Loan from Ultimate Holding Company (HKD thousands) | Loan Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Other borrowings repayable on demand | 50,000 | 50,000 | - The loan from the ultimate holding company bears a fixed annual interest rate of 9.5%42 - The loan is denominated in HKD, which is not the functional currency of the relevant Group entities, thus exposing it to foreign currency risk42 17. Lease Liabilities Total lease liabilities decreased, reflecting reductions in both current and non-current lease obligations Lease Liabilities (HKD thousands) | Lease Liability Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Current liabilities | 557 | 593 | | Non-current liabilities | 210 | 466 | | Total | 767 | 1,059 | 18. Bank and Other Borrowings Total bank and other borrowings significantly decreased due to the full repayment of other loans; remaining bank borrowings are RMB-denominated with a fixed 9% annual interest rate Bank and Other Borrowings (HKD thousands) | Borrowing Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Bank loans | 1,576 | 1,597 | -21 | | Other loans | – | 4,992 | -4,992 | | Total | 1,576 | 6,589 | -5,013 | - As of June 30, 2025, bank borrowings are denominated in RMB, repayable within one year, and bear a fixed annual interest rate of 9%43 - As of June 30, 2025, other loans have been fully repaid44 19. Acceptance Bills Total acceptance bills significantly increased, bearing annual interest rates from 3% to 7%; post-period, some matured with preliminary settlement agreements reached Acceptance Bills Movement (HKD thousands) | Acceptance Bills Movement | Amount (HKD thousands) | | :--- | :--- | | As at January 1, 2024 | 33,755 | | New acceptance bills issued | 56,250 | | Estimated interest deducted | 1,551 | | As at December 31, 2024 and January 1, 2025 | 91,556 | | New acceptance bills issued | 34,000 | | Estimated interest deducted | 1,305 | | As at June 30, 2025 | 126,861 | - Acceptance bills bear annual interest rates ranging from 3% to 7% and mature 12 to 24 months after their issue dates45 - Subsequent to June 30, 2025, approximately HKD 39,968 thousand of acceptance bills matured, and preliminary settlement agreements were reached with holders on July 5, 202546 - Acceptance bills are unsecured, denominated in HKD, and exposed to foreign currency risk47 20. Corporate Bonds Issued unlisted corporate bonds totaled HKD 45,000 thousand at 5% to 7% annual interest; most defaulted by period-end, with preliminary settlement agreements reached post-period - As of June 30, 2025, the total principal amount of issued unlisted corporate bonds was approximately HKD 45,000 thousand, bearing annual interest rates ranging from 5% to 7%48 - As of June 30, 2025, approximately HKD 51,831 thousand of corporate bonds were in default, leading to demands for immediate repayment48 - On July 5, 2025, the Group reached preliminary settlement agreements with corporate bondholders to repay the defaulted corporate bonds48 - Corporate bonds are unsecured, denominated in HKD, and exposed to foreign currency risk48 21. Share Capital The company's issued share capital remained unchanged as of June 30, 2025 Share Capital (HKD thousands, except share numbers) | Share Capital Type | Number of Shares (thousands) | Share Capital (HKD thousands) | | :--- | :--- | :--- | | Authorised share capital (ordinary shares of HKD 0.005 each) | 20,000,000 | 100,000 | | Issued and fully paid share capital (ordinary shares of HKD 0.005 each) | 982,000 | 4,910 | - There was no change in the company's issued share capital from December 31, 2024, to June 30, 202549 22. Capital Commitments Capital expenditure commitments for contributions to a joint venture slightly increased Capital Commitments (HKD thousands) | Capital Commitment Type | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Contracted capital expenditure commitments for capital contributions to a joint venture | 10,738 | 10,431 | 23. Related Party Transactions Key management personnel remuneration decreased during the period, with no other significant related party transactions requiring disclosure Key Management Personnel Remuneration (HKD thousands) | Remuneration Type | June 30, 2025 (HKD thousands) | June 30, 2024 (HKD thousands) | | :--- | :--- | :--- | | Short-term employee benefits | 237 | 409 | - For the six months ended June 30, 2025, no other related party transactions required disclosure as defined under Chapter 14A of the Listing Rules52 24. Events After the Reporting Period Post-period, the company entered settlement agreements with creditors for debt restructuring via convertible bonds, pending regulatory and shareholder approval - On July 5, 2025, the company entered into settlement agreements with certain creditors involving the issuance of convertible bonds to creditors for debt restructuring53 - The debt restructuring requires regulatory and shareholder approval, which has not been obtained as of the date of this announcement53 Management Discussion and Analysis This section reviews the Group's business operations, financial performance, future prospects, liquidity, and capital structure, including ongoing debt restructuring efforts Business Review The Group focuses on cross-border business via S2B2C and B2C models, while its finance lease and consulting services have contracted and ceased new operations due to market and regulatory pressures - The Group primarily engages in cross-border business and the provision of finance lease and consulting services55 Cross-border Business Initiated in 2017, cross-border business utilizes S2B2C for supply chain services and B2C for direct consumer sales, diversifying revenue streams - The Group has been engaged in cross-border business since 2017, expanding through S2B2C and B2C models56 - The S2B2C model provides services such as overseas direct procurement, import and export supply chain management, bonded warehousing, customs declaration, storage, and logistics assistance56 - The B2C model enables the Group to directly promote and sell products to end consumers, diversifying revenue sources56 Provision of Finance Lease and Consulting Services Once a core business, finance lease operations have declined due to market and regulatory pressures; new business has ceased, with focus now on existing matters' compliance and accounting - Finance lease business, once a core operation of the Group, has faced operational pressure in recent years, with its scale and profitability gradually declining57 - The Group has gradually scaled back and streamlined its finance lease business, ceasing new related operations, and this business segment generated no operating income during the period58 - Subsequent work only involves performance oversight of existing matters and compliant accounting treatment of historical financial data58 Financial Performance For the six months ended June 30, 2025, revenue decreased by 22.2% to HKD 256.1 million, and profit for the period fell by 62.1% to HKD 3.6 million, mainly due to reduced cross-border sales and lower gross profit - For the six months ended June 30, 2025, the Group recorded revenue of approximately HKD 256.1 million, a decrease of approximately HKD 73.0 million or 22.2% from the prior year period, primarily due to reduced sales in cross-border business59 - Profit for the period was approximately HKD 3.6 million, a decrease of approximately HKD 5.9 million or 62.1% from the prior year period, primarily due to reduced revenue and gross profit59 Prospects The global cross-border e-commerce market, particularly for nutrition and health products, is expected to grow, with Hong Kong leveraging digital strategies and smart port systems to become a global health product service platform, creating opportunities for omnichannel businesses - The global cross-border e-commerce market is projected to exceed HKD 18 trillion by 2025, with China's market share continuously expanding to approximately 62%60 - Cross-border transaction volume for nutrition and health products maintains a high compound annual growth rate of 28%, with explosive growth in demand for mid-to-high-end functional nutritional supplements60 - Driven by the "Digital Silk Road" strategy and "Smart Port 3.0" system, Hong Kong has enhanced customs clearance efficiency and cold chain logistics capabilities, solidifying its position as an Asia-Pacific health product trade hub61 - The deep integration of social e-commerce and content marketing, mature blockchain traceability and AI personalized recommendation technologies, and tariff benefits from the RCEP agreement provide strategic value for Hong Kong enterprises to integrate global health resources62 Liquidity, Financial Resources and Capital Structure The Group has HKD 414.2 million in total assets and a 1.25x current ratio, with working capital from operations and borrowings; it faces debt defaults and statutory demands, actively pursuing debt restructuring via convertible bonds, pending approvals - As of June 30, 2025, the Group's total assets were approximately HKD 414.2 million, with a current ratio of 1.25 times63 - Working capital primarily originates from funds generated by operating activities and borrowings, with borrowings mainly denominated in HKD and RMB, and cash and cash equivalents in HKD, RMB, and USD63 Convertible Bonds The company issued HKD 39 million convertible bonds in 2019 at 5% annual interest, extended to June 24, 2025; a post-period statutory demand was received and later withdrawn - The company issued convertible bonds with a total principal amount of HKD 39,000,000 in 2019, bearing an annual interest rate of 5%, extended to June 24, 202564 - A statutory demand was received on March 3, 2025, requesting payment of HKD 50,881,644, but was subsequently withdrawn65 Statutory Demands and Debt Restructuring Efforts The company faced multiple demand letters and statutory demands for acceptance bills and corporate bonds, resulting in defaults; preliminary settlement agreements were reached on July 5, 2025, to issue HKD 178,615,220 convertible bonds for debt restructuring, pending regulatory and shareholder approval - On September 16, 2024, the company received a demand letter from an acceptance bill holder concerning HKD 20 million in acceptance bills68 - On October 10, 2024, a statutory demand was received, requesting payment of HKD 20,316,438, failing which a winding-up petition might be presented70 - The company previously entered into a settlement agreement with creditors to capitalize HKD 91,534,164 in debt, but it was terminated due to inability to meet Listing Rules conditions7475 - On July 5, 2025, the company entered into settlement agreements with certain creditors, proposing to issue convertible bonds with a total principal amount of HKD 178,615,220 for debt restructuring78 - The debt restructuring requires a whitewash waiver and consent from the Securities and Futures Commission, as well as approval from independent shareholders78 Contingent Liabilities The Group had no other significant contingent liabilities at the end of the reporting period, apart from those already disclosed - Except as disclosed in this announcement, the Group had no other significant contingent liabilities as of June 30, 2025, and December 31, 202481 Gearing Ratio As of June 30, 2025, the Group's gearing ratio increased to 55.7% from 52.1% at the end of 2024 - The gearing ratio as of June 30, 2025, was 55.7% (December 31, 2024: 52.1%)82 - The gearing ratio is calculated as total external financing debt divided by total assets at the end of the respective period82 Foreign Exchange Risk and Interest Rate Risk The Group faces HKD/USD/RMB currency risk, particularly in cross-border business, with negligible risk in finance lease operations; no hedging policy exists, but significant risks are monitored for potential hedging - Cross-border business primarily faces currency risk related to HKD/USD/RMB, especially the volatility risk of RMB against HKD/USD and HKD against RMB83 - Revenue, expenditures, and operating expenses for finance lease business are all transacted in RMB, resulting in negligible currency risk83 - The Group currently has no foreign currency hedging policy but will closely monitor foreign exchange risk conditions83 Credit Policy The Group manages finance lease receivables credit risk by assessing lessee credit quality, setting limits, requiring collateral, and monitoring repayment records - The Group assesses the credit quality of potential lessees and defines limits for each lessee before accepting new finance leases84 - Finance lease borrowers are required to pledge other collateral when necessary, and repayment records are monitored to determine recoverability84 - The fair value of pledged assets is continuously assessed and reviewed to ensure collateral value is sufficient to cover finance lease amounts84 Capital Expenditure & Commitments The Group made no additions to property, plant and equipment during the period, but capital commitments for joint venture contributions increased - For the six months ended June 30, 2025, the Group incurred no additions to property, plant and equipment85 - As of June 30, 2025, the Group had contractual capital contribution commitments to an investee of approximately HKD 10.7 million86 Pledge of Assets As of June 30, 2025, assets with a net book value of HKD 138 thousand, held under finance lease arrangements, were pledged by the Group - As of June 30, 2025, assets with a net book value of approximately HKD 138,000 (held under finance lease arrangements) were pledged by the Group87 Employees and Remuneration Policy As of June 30, 2025, the Group had 13 employees, a decrease from 2024-end; remuneration policy is annually reviewed, offering discretionary bonuses, medical insurance, and training programs - As of June 30, 2025, the Group employed a total of 13 staff in Hong Kong and China (December 31, 2024: 16 staff)88 - Salaries and wages are reviewed annually with reference to remuneration policy and market conditions, offering discretionary bonuses, medical insurance, training programs, social insurance, and provident funds88 - The company has adopted a share option scheme, but no share options have been granted since its adoption88 Significant Investments & Acquisitions/Disposals Aside from the joint venture investment, the Group held no other significant equity investments, nor did it undertake any major acquisitions or disposals of subsidiaries or associates during the period - Except as disclosed in the business review and investments in subsidiaries, the Group held no other significant equity investments in any company89 - The Group undertook no significant acquisitions or disposals of subsidiaries and associates90 Future Plans for Material Investments and Capital Assets The Group will explore improving financial performance and diversifying revenue, potentially investing in capital assets or other businesses, and may execute debt/equity restructuring to meet financing needs - The Group will continue to explore ways to improve financial performance and diversify revenue streams91 - The possibility of investing in capital assets or expanding into other businesses is not ruled out91 - The possibility of executing debt and/or equity fundraising plans to meet financing needs and improve financial position is not ruled out91 Interim Dividend The Board has resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board has resolved not to declare any interim dividend for the six months ended June 30, 202592 Suspension and Resumption of Trading The company's shares experienced multiple suspensions and resumptions of trading due to debt restructuring, statutory demands, and delayed annual results publication - Trading in shares was suspended from October 21, 2024, pending the release of inside information such as debt restructuring, and resumed on January 9, 202593 - Trading in shares was suspended from March 10, 2025, pending the release of inside information regarding a statutory demand, and resumed on March 11, 202593 - Trading in shares was suspended from April 1, 2025, due to the delayed publication of the 2024 annual results announcement, and resumed on August 5, 202594 Events After 30 June 2025 Post-reporting period events, including debt restructuring progress and share trading suspensions/resumptions, are detailed in the "Liquidity, Financial Resources and Capital Structure" and "Suspension and Resumption of Trading" sections - Details of the proposed debt restructuring, whitewash waiver, and special transactions are provided in the "Liquidity, Financial Resources and Capital Structure" section on page 22 of this announcement95 - Details of the suspension and resumption of trading in shares are provided in the "Suspension and Resumption of Trading" section on page 30 of this announcement95 Purchase, Sale or Redemption of the Company’s Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the review period - During the review period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities96 Corporate Governance and Compliance The company complied with corporate governance codes and director securities transaction standards; the Audit Committee reviewed interim financial statements, internal controls, risk management, and financial reporting - The company has complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules97 - All Directors have confirmed their compliance with the required standards set out in the Model Code and the Code of Conduct for the six months ended June 30, 202598 - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, and discussed internal control, risk management, and financial reporting matters99 Appointment of Authorised Representative Executive Director Mr. Zhu Jianhong was appointed as the company's authorized representative under Listing Rule 3.05, effective February 7, 2025 - Mr. Zhu Jianhong, an executive director, was appointed as the company's authorized representative under Listing Rule 3.05, effective February 7, 2025100 By Order of the Board This announcement is issued by Executive Director Mr. Zhu Jianhong on behalf of the Board, which comprises one executive director and three independent non-executive directors as of the announcement date - This announcement is issued by Mr. Zhu Jianhong, an executive director, on behalf of the Board101 - As of the date of this announcement, the Board comprises Mr. Zhu Jianhong, an executive director, and three independent non-executive directors, Mr. Xian Jiamin, Ms. Liang Lina, and Mr. Chen Yifan102
正乾金融控股(01152) - 2025 - 中期业绩