龙皇集团(08493) - 2025 - 中期业绩

Company Information Board of Directors and Committees The company's Board of Directors and various committee members underwent several changes during the period, including appointments and cessations of executive and non-executive directors, and a change in the Nomination Committee chairman - Mr. Tang Hung Kong, Ms. Leung Lai, and Mr. Wong Oi Chun's executive directorships were revoked effective March 14, 2025, due to continuous absence from board meetings for six months[101] - Mr. Chan Yuen Lung was appointed Executive Director and Chairman of the Board on May 20, 2025[103] - Ms. Shen Tai Ju resigned as Non-executive Director on June 12, 2025, due to other business commitments[103] - Mr. Li Tao was appointed Authorized Representative from March 14, 2025, to May 20, 2025, and was later succeeded by Mr. Chan Yuen Lung[102][8] Company Basic Information The company updated its basic information, including company secretary, auditor, registered office, and principal place of business in Hong Kong, along with share registrar and principal bankers - Mr. Ni Zi Xuan was appointed Company Secretary on July 15, 2025, replacing Mr. Kwan Ka Man who resigned[9] - The company's auditor is BDO Limited, registered office is in the Cayman Islands, and principal place of business in Hong Kong is at Central Plaza, Wan Chai[10] - The company's stock code is 8493, and principal bankers include DBS Bank (Hong Kong) Limited and Hang Seng Bank Limited[10] Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Profit or Loss Overview For the six months ended June 30, 2025, the Group's revenue significantly decreased by 78.2% to HK$9.4 million, leading to a substantial expansion of loss for the period to HK$11.4 million and an increase in basic and diluted loss per share to HK4.65 cents Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 9,428 | 43,161 | -78.2% | | Cost of inventories consumed | (2,500) | (12,086) | -79.3% | | Gross profit | 6,928 | 31,075 | -77.7% | | Other income and gains, net | 3 | 26 | -88.5% | | Staff costs | (6,278) | (18,521) | -66.1% | | Depreciation of property, plant and equipment | (414) | (399) | 3.8% | | Rental and related expenses | (3,466) | (4,541) | -23.7% | | Other operating expenses | (7,550) | (8,027) | -6.0% | | Finance costs | (608) | (1,046) | -41.9% | | Loss before tax | (11,385) | (1,433) | 694.5% | | Income tax expense | – | – | 0.0% | | Loss and total comprehensive expense attributable to owners of the Company for the period | (11,385) | (1,433) | 694.5% | | Loss per share – basic and diluted (HK cents) | (4.65) | (0.62) | 650.0% | - The significant decrease in revenue was primarily due to the closure of two restaurants in the previous period[45] - The increase in loss for the period was mainly due to reduced revenue[55] Unaudited Condensed Consolidated Statement of Financial Position Assets Overview As of June 30, 2025, the Group's total non-current assets slightly decreased, while total current assets significantly declined due to a substantial reduction in cash and cash equivalents Assets Overview (As of June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Non-current assets | | | | | Property, plant and equipment | 25,084 | 25,501 | -1.6% | | Deferred tax assets | 121 | 121 | 0.0% | | Total non-current assets | 25,255 | 25,672 | -1.6% | | Current assets | | | | | Inventories | 2,117 | 2,221 | -4.7% | | Trade receivables | 180 | 220 | -18.2% | | Prepayments, deposits and other receivables | 18,749 | 15,836 | 18.4% | | Cash and cash equivalents | 688 | 6,891 | -90.0% | | Total current assets | 22,010 | 25,444 | -13.5% | - Cash and cash equivalents significantly decreased by 90.0% from approximately HK$6.9 million as of December 31, 2024, to approximately HK$0.7 million as of June 30, 2025[12] Liabilities and Equity Overview The Group's total current liabilities slightly increased, leading to an expanded net current liabilities and a further increase in total equity deficiency to HK$127.4 million, indicating continued financial pressure Liabilities and Equity Overview (As of June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Current liabilities | | | | | Trade payables | 36,048 | 36,113 | -0.2% | | Other payables and accrued charges | 41,895 | 37,770 | 10.9% | | Bank and other borrowings | 93,275 | 93,470 | -0.2% | | Amount due to a director | 2,767 | 3,814 | -27.4% | | Total current liabilities | 174,710 | 172,014 | 1.6% | | Net current liabilities | (152,700) | (146,570) | 4.2% | | Total assets less current liabilities | (127,445) | (120,898) | 5.4% | | Net liabilities | (127,445) | (120,898) | 5.4% | | Capital and reserves | | | | | Share capital | 29,030 | 24,192 | 20.0% | | Reserves | (156,475) | (145,090) | 7.9% | | Total equity deficiency | (127,445) | (120,898) | 5.4% | - The Group's current liabilities exceeded current assets by approximately HK$152.7 million, with net liabilities of approximately HK$127.4 million, indicating uncertainty about going concern[20] - Total bank and other borrowings were approximately HK$93.3 million, of which approximately HK$79.96 million is repayable within one year, while cash and cash equivalents were only approximately HK$0.7 million[20] Unaudited Condensed Consolidated Statement of Changes in Equity Equity Movement Analysis The Group's total equity deficiency expanded from HK$102.4 million as of January 1, 2024, to HK$127.4 million as of June 30, 2025, primarily impacted by loss for the period and new share placements Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Share capital | 29,030 | 24,192 | | Share premium | 95,976 | 95,976 | | Other reserves | (43,224) | (43,224) | | Capital reserve | 42,703 | 42,703 | | Exchange fluctuation reserve | (143) | (143) | | Accumulated losses | (251,787) | (214,796) | | Total equity deficiency | (127,445) | (95,292) | - In the first half of 2025, the company increased its share capital by HK$4,838 thousand through a new share placement, but a loss for the period of HK$11,385 thousand led to a further expansion of accumulated losses[14] - In the first half of 2024, new share placement brought in HK$8,520 thousand, but a loss for the period was HK$1,433 thousand[14] Unaudited Condensed Consolidated Statement of Cash Flows Cash Flow Overview For the six months ended June 30, 2025, the Group recorded a net cash outflow from operating activities of HK$9.7 million and a net cash inflow from financing activities of HK$3.5 million, resulting in a net decrease in cash and cash equivalents of HK$6.2 million Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Net cash (used in) / generated from operating activities | (9,679) | 1,105 | | Net cash generated from investing activities | 2 | 1 | | Net cash generated from financing activities | 3,474 | 5,974 | | Net (decrease) / increase in cash and cash equivalents | (6,203) | 7,080 | | Cash and cash equivalents at beginning of period | 6,891 | 1,014 | | Cash and cash equivalents at end of period | 688 | 8,094 | - Cash flow from operating activities turned from a net inflow of HK$1.1 million in the same period of 2024 to a net outflow of HK$9.7 million in the same period of 2025, reflecting a deterioration in operating conditions[15] - Net cash inflow from financing activities primarily came from new share placement of HK$4.8 million, but was partially offset by repayment of bank borrowings and payment of lease liabilities[15] Notes to the Unaudited Condensed Consolidated Financial Statements General Information The company is an investment holding company primarily engaged in operating and managing restaurants, registered in the Cayman Islands with its principal place of business in Hong Kong - The company was incorporated in the Cayman Islands on August 8, 2016, with its principal place of business at Unit 3902, 39/F, Central Plaza, 18 Harbour Road, Wan Chai, Hong Kong[16] - The Group is principally engaged in the operation and management of Chinese restaurants[17] Basis of Presentation and Principal Accounting Policies These financial statements are prepared on a going concern basis, despite the Group facing challenges with current liabilities exceeding current assets. Management has proposed several measures to address liquidity pressure, including active negotiation for bank loan renewals, considering equity fundraising, and implementing cost-saving initiatives - As of June 30, 2025, the Group's current liabilities exceeded current assets by approximately HK$152.7 million, with net liabilities of approximately HK$127.4 million, and interest-bearing bank and other borrowings totaling approximately HK$93.3 million, while cash and cash equivalents were only approximately HK$0.7 million[20] - Management plans to actively negotiate with banks for loan renewals, consider issuing new shares/convertible bonds or other equity fundraising activities, and implement cost-saving measures to improve liquidity and financial position[21] - The Group will focus on its restaurant operations, accelerate the opening of smaller restaurants offering diverse cuisines, and explore different catering services and peripheral business opportunities to expand revenue streams[21] Estimates The significant management judgments and sources of estimation uncertainty used in preparing the interim financial statements are consistent with those in the previous year's consolidated financial statements, with no material changes - The significant management judgments and key sources of estimation uncertainty in applying the Group's accounting policies for the preparation of the interim condensed consolidated financial statements are the same as those applied in the consolidated financial statements for the year ended December 31, 2024[24] Financial Risk Management and Financial Instruments The Group is exposed to interest rate risk, credit risk, and liquidity risk, but there have been no significant changes in risk management policies and liquidity management practices since the year-end - The Group's activities expose it to interest rate risk, credit risk, and liquidity risk[25] - There have been no significant changes in the risk management policies and practices for liquidity and funding risk since the year-end[26][27] Revenue The Group's revenue is entirely derived from the operation of Chinese restaurants in Hong Kong and is recognized when catering services are provided Revenue Breakdown (For the six months ended June 30) | Category | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Revenue from operation of Chinese restaurants | 9,428 | 43,161 | | Revenue from Hong Kong market | 9,428 | 43,161 | | Revenue recognition timing (at a point in time) | 9,428 | 43,161 | - Performance obligations are satisfied when catering services are provided to customers, with trade terms primarily involving cash and credit card payments, and credit periods typically ranging from a few days to 60 days[30] Other Income and Gains, Net Other income and gains, net, significantly decreased by 88.5% to HK$3 thousand during the period, primarily due to a reduction in miscellaneous income Other Income and Gains, Net (For the six months ended June 30) | Category | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Bank interest income | 2 | 1 | | Exchange gain | – | 1 | | Others | 1 | 24 | | Total | 3 | 26 | - Other income and gains, net, decreased by approximately HK$23 thousand or approximately 88.5%, mainly due to a decrease in miscellaneous income during the period[50] Loss for the Period Loss for the period is stated after deducting auditor's remuneration and employee benefit expenses, with employee benefit expenses significantly reduced due to restaurant closures Loss for the Period Deductions (For the six months ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Auditor's remuneration | 440 | 440 | | Employee benefit expenses (excluding directors' and chief executive's emoluments) | | | | Wages and salaries | 5,515 | 17,157 | | Retirement benefit scheme contributions | 212 | 764 | | Total | 5,727 | 17,921 | - Staff costs decreased by approximately 65.9% from approximately HK$18.5 million in the previous period to approximately HK$6.3 million in the current period, mainly due to the closure of certain restaurants in April and June 2024[51] Income Tax Expense The Group incurred no income tax expense in the current and prior periods, primarily because estimated assessable profits were fully offset by unutilized tax losses carried forward from previous years - No provision for Hong Kong Profits Tax was made as the Group's estimated assessable profits for the relevant periods were fully offset by unutilized tax losses brought forward from prior years[35] - Hong Kong Profits Tax is calculated under a two-tiered profits tax rate regime, with the first HK$2,000,000 of profits taxed at 8.25% and the remainder at 16.5%[35] Dividends The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025 (2024: nil)[37] Loss Per Share For the six months ended June 30, 2025, basic and diluted loss per share attributable to owners of the company was HK4.65 cents, a significant increase from the same period last year Loss Per Share Calculation (For the six months ended June 30) | Indicator | 2025 (HK$'000/thousand shares) | 2024 (HK$'000/thousand shares) | | :--- | :--- | :--- | | Loss attributable to owners of the Company | (11,385) | (1,433) | | Weighted average number of ordinary shares | 244,860 | 232,046 | | Basic and diluted loss per share (HK cents) | (4.65) | (0.62) | - Diluted (loss) earnings per share were not presented for the six months ended June 30, 2025 and 2024, as there were no potential ordinary shares in issue[38] Property, Plant and Equipment For the six months ended June 30, 2025, the Group made no purchases of property, plant and equipment - For the six months ended June 30, 2025, the Group made no purchases of property, plant and equipment (2024: nil)[39] Trade Receivables As of June 30, 2025, total trade receivables amounted to HK$180 thousand, with the majority aged over 180 days Trade Receivables Ageing Analysis (As of June 30) | Ageing | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | 0 to 30 days | 10 | 50 | | Over 180 days | 170 | 170 | | Total | 180 | 220 | - Certain customers are granted credit periods ranging from a few days to 60 days[40] Trade Payables As of June 30, 2025, total trade payables amounted to HK$36,048 thousand, with the vast majority aged over 90 days Trade Payables Ageing Analysis (As of June 30) | Ageing | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | 0 to 30 days | 72 | 171 | | 31 to 60 days | 73 | 20 | | 61 to 90 days | 69 | 64 | | Over 90 days | 35,834 | 35,858 | | Total | 36,048 | 36,113 | Share Capital The company's share capital increased due to a new share placement in June 2025, issuing 48,384,000 placing shares with net proceeds of approximately HK$4.55 million Share Capital Movement (As of June 30) | Share Capital Movement | Number of Shares (shares) | Amount (HK$'000) | | :--- | :--- | :--- | | January 1, 2024 | 207,360,000 | 20,736 | | Placing of new shares on February 22, 2024 | 34,560,000 | 3,456 | | December 31, 2024 and January 1, 2025 | 241,920,000 | 24,192 | | Placing of new shares on June 20, 2025 | 48,384,000 | 4,838 | | June 30, 2025 | 290,304,000 | 29,030 | - On June 2, 2025, the company entered into a placing agreement with a placing agent to place up to 48,384,000 placing shares at HK$0.10 per share to independent investors, with net proceeds of approximately HK$4.55 million[42] Management Discussion and Analysis Business and Operations Review The Group is a Cantonese restaurant group, operating one "Lung Po" brand restaurant in Hong Kong for the six months ended June 30, 2025, and having closed two "Lung King" brand restaurants in the prior period - The Group is a full-service Cantonese restaurant group operating under its own brands[43] - During the period, the Group operated one "Lung Po" brand restaurant in Hong Kong[44] - Due to lease expiry, the Group closed two other "Lung King" brand restaurants in April and June 2024, respectively[44] Financial Review The Group's financial performance significantly deteriorated, with revenue sharply declining by 78.2%, gross profit decreasing by 77.5%, and loss for the period expanding by nearly 7 times, primarily due to restaurant closures and a weak market Revenue Total revenue for the period was approximately HK$9.4 million, a 78.2% decrease from HK$43.2 million in the prior period, mainly due to the closure of two restaurants in the prior period Revenue Details (For the six months ended June 30) | Brand | 2025 (HK$'000) | % of Total Revenue | 2024 (HK$'000) | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Lung King* | – | – | 27,930 | 64.7 | | Lung Po | 9,428 | 100.0 | 15,231 | 35.3 | | Total Revenue | 9,428 | 100.0 | 43,161 | 100.0 | - Revenue from the "Lung Po" brand decreased by approximately 38.1% to HK$9.4 million, mainly due to a challenging business environment and weak market sentiment[47] Gross Profit and Gross Margin Gross profit for the period was HK$7.0 million, a 77.5% decrease from the prior period, but the overall gross margin slightly increased by 1.5%, mainly due to reduced customer spending - Gross profit decreased by approximately HK$24.1 million or approximately 77.5%[48] - The overall gross margin slightly increased by 1.5% compared to the prior period, mainly due to less customer spending during the period[48] Other Income and Gains, Net Other income and gains, net, significantly decreased by 88.5% to HK$3 thousand during the period, primarily due to a reduction in miscellaneous income - Other income and gains, net, decreased by approximately HK$23 thousand or approximately 88.5% from approximately HK$26 thousand in the prior period to approximately HK$3 thousand in the current period[50] Staff Costs Staff costs amounted to HK$6.3 million, a 65.9% decrease from the prior period, primarily due to the closure of certain restaurants in April and June 2024 - Staff costs decreased by approximately HK$12.2 million or approximately 65.9%[51] Rental and Related Expenses Rental and related expenses decreased by 22.2% to HK$3.5 million, mainly due to a reduction in the number of restaurants operated by the Group - Rental and related expenses decreased by approximately HK$1.0 million or approximately 22.2%[53] Other Operating Expenses Other operating expenses decreased by 5.0% to HK$7.6 million, primarily due to the closure of certain restaurants - Other operating expenses decreased by approximately HK$0.4 million or approximately 5.0%[54] Loss Attributable to Owners of the Company Loss attributable to owners of the company was HK$11.4 million, a significant increase from HK$1.4 million in the prior period, mainly due to reduced revenue - Loss attributable to owners of the company increased by approximately HK$10.0 million, mainly due to reduced revenue resulting from the closure of two restaurants[55] Prospects The Hong Kong catering industry faces multiple challenges, including changing consumption patterns, rising costs, and weak market sentiment. The Group will comprehensively review operations, diversify its restaurant portfolio, maintain cost control, and enhance operational efficiency to address challenges and promote sustainable development - The Hong Kong catering industry faces multiple challenges, including changing customer consumption patterns, rising food and labor costs, weak consumer sentiment, and the rise of takeaway and delivery services[56] - The Group will conduct a comprehensive review and integration of its operations, seize opportunities to diversify its existing restaurant portfolio, and expand its presence in the catering market[56] - The Group will continue to implement cost control and enhance operational efficiency, closely monitor market dynamics, adopt flexible operating strategies, and focus on its core business to strengthen its competitive advantages[56] Capital Structure The company completed a placing of 48,384,000 new shares in June 2025, with net proceeds of approximately HK$4.55 million, primarily used for general working capital, business development, and repayment of outstanding liabilities - On June 20, 2025, the company successfully placed 48,384,000 placing shares to Mr. Lee Cheong Sun at a placing price of HK$0.10 per share[58] - The net proceeds from the placing were approximately HK$4.55 million, of which approximately 37.4% was used for general working capital, approximately 44.0% for business development, and approximately 18.6% for repayment of outstanding liabilities[58] - As of June 30, 2025, the company's issued share capital was HK$29,030,400 (i.e., 290,304,000 shares)[59] Liquidity and Financial Resources The Group is primarily funded by cash generated from operations and bank borrowings, but as of June 30, 2025, cash and cash equivalents significantly decreased to HK$0.7 million, while bank and other borrowings remained at approximately HK$93.3 million - As of June 30, 2025, the Group's bank and other borrowings were approximately HK$93.3 million (December 31, 2024: approximately HK$93.5 million)[60] - As of June 30, 2025, the Group's cash and cash equivalents were approximately HK$0.7 million (December 31, 2024: approximately HK$6.9 million), a significant decrease[60] Gearing Ratio As of June 30, 2025, the Group's gearing ratio was approximately 376.0%, largely consistent with December 31, 2024, indicating a high leverage level - As of June 30, 2025, the Group's gearing ratio was approximately 376.0% (December 31, 2024: approximately 375.9%)[61] - The gearing ratio is calculated as net debt divided by capital and net debt, where net debt is total liabilities (excluding tax payables) less cash and cash equivalents[61] Pledge of the Group's Assets As of June 30, 2025, the Group pledged buildings valued at approximately HK$25.1 million to secure certain bank facilities - As of June 30, 2025, the Group pledged buildings with a value of approximately HK$25.1 million (December 31, 2024: approximately HK$25.5 million) to secure certain bank facilities granted to it[62] Discloseable Transaction The company entered into a business introduction agreement with Garville Consultants Limited, paying a refundable amount of HK$3 million to identify potential restaurant business sellers, and will pay a 5% success fee upon successful acquisition, aiming to expand its business footprint - The company entered into a business introduction agreement with Garville Consultants Limited to identify and introduce potential sellers of restaurant businesses[65] - The Group has paid a refundable amount of HK$3 million to obtain due diligence information and will pay a success fee of 5% of the total transaction amount upon successful acquisition[65][66] - The Group is actively seeking to acquire quality restaurant businesses offering Asian Pacific cuisines to expand its business footprint and increase overall revenue[67] Foreign Exchange Risk The Group's majority of income and expenses are denominated in HKD and RMB, with no significant foreign exchange risk expected from RMB transactions and balances, and no hedging activities undertaken - The majority of the Group's income and expenses are denominated in Hong Kong Dollars and Renminbi, with no significant risk expected from Renminbi transactions and balances[69] - The Group does not have any significant foreign exchange risk and did not use any financial instruments for hedging purposes during the period[70] Treasury Policy The Board will continue to adopt a prudent policy in managing cash balances to maintain a strong and sound liquidity position, seizing future growth opportunities - The Directors will continue to adopt a prudent policy in managing the Group's cash balances and maintaining a strong and sound liquidity position to ensure the Group is ready to seize future growth opportunities[71] Contingent Liabilities and Commitments As of June 30, 2025, the Group had no significant contingent liabilities or commitments - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[72] - As of June 30, 2025, the Group had no commitments (December 31, 2024: nil)[73] Employees and Remuneration Policy As of June 30, 2025, the Group had 38 employees, with total staff costs of approximately HK$6.3 million. The remuneration policy combines fixed and variable components, offering training and a share option scheme to incentivize staff - As of June 30, 2025, the Group had approximately 38 employees (June 30, 2024: 48 employees) based in Hong Kong[75] - Total staff costs (including directors' emoluments and mandatory provident fund contributions) for the period were approximately HK$6.3 million (prior period: approximately HK$18.5 million)[75] - The remuneration policy primarily comprises a fixed component (basic salary) and a variable component (discretionary bonus and other performance-based remuneration), and a share option scheme has been adopted to acknowledge and reward contributions[75] Share Option Scheme The company has a share option scheme, valid for ten years, aimed at incentivizing and retaining talent. As of the period, the total number of share options available for grant under the scheme was 14,400,000, but no options were granted, exercised, cancelled, or lapsed during the period - The share option scheme was adopted on December 15, 2017, with a ten-year validity, aiming to grant share options to directors, employees, and other stakeholders as incentives or rewards[77][80] - The subscription price for share options is the highest of the closing price on the grant date, the average closing price for the preceding five business days, or the nominal value of the shares[77] - As of January 1, 2025, and June 30, 2025, the total number of share options available for grant under the scheme was 14,400,000, but no share options were granted, exercised, cancelled, or lapsed during the period[80][82] Events After the Reporting Period On August 28, 2025, Dragon International Group Limited, a direct wholly-owned subsidiary of the company, entered into a non-legally binding memorandum of understanding with 1957 & Co. (Hospitality) Limited regarding the possible disposal of 70% of the issued share capital of MANGO TREE (KOWLOON) LIMITED - On August 28, 2025, Dragon International Group Limited, a direct wholly-owned subsidiary of the company, entered into a non-legally binding memorandum of understanding with 1957 & Co. (Hospitality) Limited regarding the possible disposal of 70% of the issued share capital of MANGO TREE (KOWLOON) LIMITED[83] Material Litigation The Group faces several material litigations, including a judgment to pay HK$2 million for dishonored checks, a winding-up order for a subsidiary due to unpaid debts, and a settlement reached in a dispute over renovation project contract payments - Oriental E-Commerce Limited, a wholly-owned subsidiary, was ordered to pay HK$2 million plus interest and legal costs to Chan Chun Kau & Co. for dishonored checks[84] - Fu Ju Limited, a wholly-owned subsidiary, was ordered to be wound up on February 12, 2025, for refusing to settle a debt of approximately HK$17 thousand[85] - Yun Li Limited, a wholly-owned subsidiary, reached a settlement with Well-Built Engineering Limited regarding a dispute over renovation project contract payments by the end of April 2023[86][87] Other Information Directors' and Chief Executive's Interests As of June 30, 2025, no directors or chief executive of the company held any disclosable interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations - As of June 30, 2025, no directors or chief executive of the company had any interests or short positions in the shares, underlying shares, and debentures of the company or any of its associated corporations that were required to be notified to the company and the Stock Exchange under Part XV of the Securities and Futures Ordinance[89] Substantial Shareholders' and Other Persons' Interests As of June 30, 2025, Mr. Lee Cheong Sun was a substantial shareholder of the company, holding 48,384,000 shares, representing approximately 16.67% of the equity Substantial Shareholders' Shareholding (As of June 30) | Name of Substantial Shareholder | Capacity/Nature of Interest | Number of Shares Held/Interested | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Lee Cheong Sun | Beneficial owner | 48,384,000 | 16.67% | - The approximate percentage of shareholding in this table is calculated based on the company's issued share capital of 290,304,000 shares as of June 30, 2025[91] Purchase, Sale or Redemption of Listed Securities During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities, nor did it hold any treasury shares - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[92] - As of June 30, 2025, the company did not hold any treasury shares[93] Directors' Securities Transactions All directors confirmed full compliance with the required standards of dealing as set out in the GEM Listing Rules during the period, with no instances of non-compliance - All Directors confirmed that they had fully complied with the required standards of dealing and that there were no instances of non-compliance during the period[94] Corporate Governance Practices The company complied with the Corporate Governance Code during the period, but there were several deviations, including insufficient gender diversity on the Board, no director's legal liability insurance, no established internal audit function, and the Audit Committee chairman's absence from the AGM - The company's Board of Directors consists of directors of a single gender, deviating from the Corporate Governance Code's requirement for the Nomination Committee to appoint at least one director of a different gender[95] - The company did not arrange for directors' legal liability insurance during the period, as the Board believed the risk of significant legal claims was minimal[95] - The Group has not yet established its internal audit function, and the Audit Committee and the Board will continue to review the need for an internal audit function annually[96] - Mr. Tsang Ching Fung, the chairman of the Audit Committee, was unable to attend the company's Annual General Meeting due to other work commitments[96] Use of Proceeds from Placing of New Shares The company completed a placing of 48,384,000 shares in June 2025, and the net proceeds of approximately HK$4.55 million have been fully utilized as planned for general working capital, business development, and repayment of outstanding liabilities Use of Net Proceeds from Placing of New Shares (As of June 30) | Use of Net Proceeds | Net Proceeds (HK$'000) | Net Proceeds Utilized (HK$'000) | Net Proceeds Unutilized (HK$'000) | | :--- | :--- | :--- | :--- | | General working capital | 1,700 | 1,700 | – | | Business development | 2,000 | 2,000 | – | | Repayment of outstanding liabilities | 850 | 850 | – | | Total | 4,550 | 4,550 | – | - All shares issued under the placing were allotted to Mr. Lee Cheong Sun, an independent third party of the company[99] Changes in Directors Several changes occurred in the Board of Directors during the period, including the revocation of three executive directors' positions due to absence from meetings, Ms. Shen's resignation as a non-executive director, and Mr. Chan Yuen Lung's appointment as executive director and chairman of the Board - Mr. Tang Hung Kong, Ms. Leung Lai, and Mr. Wong Oi Chun's executive directorships were revoked effective March 14, 2025, due to continuous absence from board meetings for six months[101] - Ms. Shen Tai Ju resigned as Non-executive Director on June 12, 2025, due to other business commitments[103] - Mr. Chan Yuen Lung was appointed Executive Director and Chairman of the Board on May 20, 2025, and was re-elected at the Annual General Meeting[103] - Mr. Lo Shing Shan was appointed Chairman of the Nomination Committee, and Mr. Li Tao and Mr. Chan Yuen Lung were successively appointed Authorized Representatives[102][103] Audit Committee The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing financial information, internal control, and risk management systems. The committee has reviewed the unaudited condensed consolidated financial statements for the period and found them to comply with applicable accounting standards and disclosure requirements - The Audit Committee comprises three independent non-executive directors: Mr. Tsang Ching Fung (Chairman), Mr. Lo Shing Shan, and Mr. Chow Yick[106] - The Audit Committee reviews financial information and reporting processes, internal control procedures and risk management systems, audit plans, and relationships with external auditors[106] - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the period and is of the opinion that they comply with applicable accounting standards, the GEM Listing Rules, and that adequate disclosures have been made[106]