中国网成(01920) - 2025 - 中期业绩

Interim Results Announcement Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The company achieved revenue of HKD 65,056 thousand, a significant increase from HKD 38,368 thousand in the prior period, successfully turning a net loss of HKD 25,467 thousand into a net profit of HKD 124 thousand Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HKD '000) | 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 65,056 | 38,368 | 26,688 | 69.56% | | Cost of services | (56,790) | (52,067) | (4,723) | 9.07% | | Gross profit/(loss) | 8,266 | (13,699) | 21,965 | 160.34% | | Other income | 19 | 93 | (74) | -79.57% | | Administrative expenses | (8,069) | (3,767) | (4,302) | 114.22% | | Finance costs | (182) | (255) | 73 | -28.63% | | Profit/(loss) before tax | 124 | (25,467) | 25,591 | 100.49% | | Profit/(loss) for the period | 124 | (25,467) | 25,591 | 100.49% | | Basic earnings/(loss) per share (HK cents) | 0.04 | (8.16) | 8.20 | 100.49% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the company's total assets increased to HKD 55,226 thousand, with significant improvement in net current assets and total equity, reflecting a robust enhancement in financial position Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Assets | | | | | | Non-current assets | 13,818 | 5,792 | 8,026 | 138.57% | | Current assets | 42,658 | 36,468 | 6,190 | 16.97% | | Total assets | 55,226 | 42,260 | 12,966 | 30.68% | | Liabilities | | | | | | Current liabilities | 32,326 | 32,430 | (104) | -0.32% | | Net current assets | 10,332 | 4,038 | 6,294 | 155.87% | | Total equity | 24,150 | 9,830 | 14,320 | 145.68% | Notes to the Condensed Consolidated Financial Statements 1. General Information and Basis of Preparation China Netcom Group Company Limited, incorporated in the Cayman Islands and listed on the Main Board of the Stock Exchange, primarily engages in construction services, construction IT services, and beauty and health services, with financial statements presented in HKD under HKAS 34 - The Company was incorporated in the Cayman Islands on January 30, 2019, and listed on the Main Board of the Stock Exchange on August 16, 2019[5] - The Group primarily engages in construction services, construction IT services, and beauty and health services[6] - The condensed consolidated financial statements are presented in HKD and prepared in accordance with HKAS 34 Interim Financial Reporting issued by the HKICPA and the applicable disclosure requirements of Appendix D2 to the Listing Rules of the Stock Exchange[7] 2. Application of New and Revised Hong Kong Financial Reporting Standards The application of the revised HKFRS accounting standards (Amendments to HKFRS 21: Lack of Exchangeability) during this period had no material impact on the Group's financial position and performance - The application of the revised HKFRS accounting standards (Amendments to HKFRS 21: Lack of Exchangeability) during this period had no material impact on the Group's financial position and performance[9] 3A. Revenue from Contracts with Customers The Group's revenue from contracts with customers for the six months ended June 30, 2025, totaling HKD 65,056 thousand, was entirely derived from construction services, showing significant growth, with public sector projects contributing the majority Classification of Revenue from Contracts with Customers (For the six months ended June 30) | Service Type | 2025 (HKD '000) | 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Construction services | 65,056 | 38,368 | 26,688 | 69.56% | | Construction IT services | – | – | – | – | | Beauty and health services | – | – | – | – | | Total | 65,056 | 38,368 | 26,688 | 69.56% | | Customer Type | 2025 (HKD '000) | 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Private sector projects – Construction services | 7,321 | 5,353 | 1,968 | 36.76% | | Public sector projects – Construction services | 57,735 | 33,015 | 24,720 | 74.88% | | Total | 65,056 | 38,368 | 26,688 | 69.56% | - The Group's revenue from wet trade and related ancillary works is recognized over time, with contract periods ranging from 1 to 17 months[12] 3B. Segment Information The Group's reportable segments include construction services, construction IT services, and the newly added beauty and health services, with construction services being the sole revenue source for the period, contributing a positive segment result of HKD 1,974 thousand, a turnaround from a loss in the prior year - The Group's reportable segments are construction services, construction IT services, and the newly added beauty and health services for the current period[13][14] Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (HKD '000) | 2025 Results (HKD '000) | 2024 Revenue (HKD '000) | 2024 Results (HKD '000) | | :--- | :--- | :--- | :--- | :--- | | Beauty and health services | – | – | – | – | | Construction services | 65,056 | 1,974 | 38,368 | (24,078) | | Construction IT services | – | – | – | – | | Consolidated | 65,056 | 124 (Profit before tax) | 38,368 | (25,467) (Loss before tax) | - The Group's revenue and non-current assets are primarily derived from a single geographical region, Hong Kong, thus no geographical segment information is presented[20] 4. Other Income Other income for the period was HKD 19 thousand, a decrease of approximately 80% from HKD 93 thousand in the prior period, mainly due to reduced bank interest income and the absence of government grants Other Income (For the six months ended June 30) | Item | 2025 (HKD '000) | 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest income | 19 | 13 | 6 | 46.15% | | Government grants | – | 80 | (80) | -100.00% | | Total | 19 | 93 | (74) | -79.57% | - Government grants primarily originated from the Construction Industry Council's scheme to subsidize employers for apprentice training, compensating for expenses incurred[22] 5. Finance Costs Finance costs for the period were HKD 182 thousand, a decrease of approximately 28.6% from HKD 255 thousand in the prior period, primarily due to reduced interest on bank borrowings Finance Costs (For the six months ended June 30) | Item | 2025 (HKD '000) | 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Interest on bank borrowings | 99 | 255 | (156) | -61.18% | | Interest on lease liabilities | 83 | – | 83 | N/A | | Total | 182 | 255 | (73) | -28.63% | 6. Profit/(Loss) Before Tax Profit before tax for the period was HKD 124 thousand, a significant turnaround from a loss of HKD 25,467 thousand in the prior period, primarily driven by improved gross profit, partially offset by increased administrative expenses Components of Profit/(Loss) Before Tax (For the six months ended June 30) | Item | 2025 (HKD '000) | 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 1,493 | 933 | 560 | 60.02% | | Rental expenses for short-term leases of warehouses, office premises and machinery | 493 | 119 | 374 | 314.29% | | Total staff costs | 2,476 | 2,535 | (59) | -2.33% | 7. Income Tax Expense No provision for Hong Kong profits tax was made as the Group did not generate any assessable profits in Hong Kong during the current and prior periods - No provision for Hong Kong profits tax was made as the Group did not generate any assessable profits in Hong Kong during the current and prior periods[24] 8. Dividends The Board of Directors resolved not to declare any dividends for the review period, consistent with the prior period - The Board of Directors resolved not to declare any dividends for the review period[25] 9. Earnings/(Loss) Per Share Basic earnings per share for the period was HKD 0.04 cents, a significant improvement from a basic loss per share of HKD 8.16 cents in the prior period, with no diluted loss per share presented due to the absence of potential dilutive shares Calculation of Earnings/(Loss) Per Share (For the six months ended June 30) | Indicator | 2025 (HKD '000/shares '000) | 2024 (HKD '000/shares '000) | | :--- | :--- | :--- | | Profit/(loss) for the period | 124 | (25,467) | | Weighted average number of ordinary shares | 314,413 | 312,000 | | Basic earnings/(loss) per share (HK cents) | 0.04 | (8.16) | - No diluted loss per share is presented due to the absence of potential dilutive ordinary shares[28] 10. Impairment Losses under Expected Credit Loss ("ECL") Model (net of reversal) Impairment loss reversal of approximately HKD 3 thousand was recorded for the period, a significant reduction from an impairment loss of HKD 7,839 thousand in the prior period, primarily due to the reversal of impairment losses on trade receivables offsetting impairment losses on contract assets Recognized Impairment Losses (net of reversal) (For the six months ended June 30) | Item | 2025 (HKD '000) | 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Contract assets | 1,247 | 7,839 | (6,592) | -84.09% | | Trade receivables | (1,250) | – | (1,250) | N/A | | Total | (3) | 7,839 | (7,842) | -100.04% | - Impairment losses primarily comprised an impairment loss of approximately HKD 1,100 thousand for a Sha Tau Kok construction project and a reversal of impairment loss of approximately HKD 1,300 thousand for trade receivables from a Tai Wai construction project[56] 11. Changes in Property, Plant and Equipment The Group recognized right-of-use assets of approximately HKD 9,432 thousand during the period, primarily for a three-year office lease in Hong Kong, with no such recognition in the prior period - The Group recognized right-of-use assets of approximately HKD 9,432 thousand during the period, primarily for a three-year office lease in Hong Kong[30] 12. Financial Assets at Fair Value Through Profit or Loss The Group's financial assets at fair value through profit or loss primarily consist of life insurance policies for key management personnel, totaling HKD 2,882 thousand as of June 30, 2025, a slight increase from HKD 2,795 thousand as of December 31, 2024 Financial Assets at Fair Value Through Profit or Loss | Item | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Life insurance policies for key management personnel | 2,882 | 2,795 | 87 | 3.11% | - The life insurance policy covers the death and permanent disability of an executive director, with Ma Yau Engineering Company Limited as the beneficiary and policyholder[31] 13. Trade Receivables As of June 30, 2025, trade receivables (net of impairment loss provision) significantly decreased to HKD 3,036 thousand from HKD 21,776 thousand as of December 31, 2024, primarily due to the collection of receivables and reduced impairment provisions Trade Receivables (As of June 30, 2025) | Item | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade receivables | 3,150 | 23,140 | (19,990) | -86.39% | | Less: Provision for impairment losses | (114) | (1,364) | 1,250 | -91.64% | | Total | 3,036 | 21,776 | (18,740) | -86.06% | Ageing Analysis of Trade Receivables (As of June 30, 2025) | Ageing | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Within 30 days | 3,036 | 4,111 | | 31 to 60 days | – | 9,339 | | 61 to 90 days | – | 8,326 | | Total | 3,036 | 21,776 | 14. Other Receivables, Deposits and Prepayments As of June 30, 2025, total other receivables, deposits, and prepayments amounted to HKD 5,517 thousand, compared to zero as of December 31, 2024, primarily comprising new other receivables and deposits of HKD 1,505 thousand and prepayments of HKD 4,012 thousand Other Receivables, Deposits and Prepayments (As of June 30, 2025) | Item | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Other receivables and deposits | 1,505 | – | | Prepayments | 4,012 | – | | Total | 5,517 | – | 15. Contract Assets As of June 30, 2025, net contract assets significantly increased to HKD 10,975 thousand from HKD 4,153 thousand as of December 31, 2024, mainly due to an increase in unbilled revenue and retention receivables Contract Assets (As of June 30, 2025) | Item | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Contract assets | 33,979 | 25,910 | 8,069 | 31.14% | | Less: Provision for impairment losses | (23,004) | (21,757) | (1,247) | 5.73% | | Net | 10,975 | 4,153 | 6,822 | 164.26% | - Contract assets represent the Group's right to consideration from customers for construction services provided, including unbilled revenue and retention receivables[34] Analysis of Construction Services Contract Assets (Current) | Item | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Unbilled revenue | 9,881 | 3,161 | 6,720 | 212.59% | | Retention receivables | 1,094 | 992 | 102 | 10.28% | | Total | 10,975 | 4,153 | 6,822 | 164.26% | 16. Trade and Other Payables As of June 30, 2025, total trade and other payables decreased by approximately 34% to HKD 17,880 thousand from HKD 27,124 thousand as of December 31, 2024, primarily due to a reduction in trade payables Trade and Other Payables (As of June 30, 2025) | Item | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Trade payables | 15,744 | 25,406 | (9,662) | -38.03% | | Wages and MPF payables | 392 | 416 | (24) | -5.77% | | Accrued expenses | 1,744 | 1,302 | 442 | 33.95% | | Total | 17,880 | 27,124 | (9,244) | -34.08% | Ageing Analysis of Trade Payables (As of June 30, 2025) | Ageing | June 30, 2025 (HKD '000) | December 31, 2024 (HKD '000) | | :--- | :--- | :--- | | Within 30 days | 5,344 | 6,562 | | 31 to 60 days | 10,400 | 9,962 | | 61 to 90 days | – | 8,882 | | Total | 15,744 | 25,406 | 17. Bank Borrowings The Group did not draw new bank borrowings during the period and repaid approximately HKD 375 thousand, with existing bank borrowings bearing interest at HKD Prime minus 2.5% and HIBOR plus 1.85%, and bank overdrafts at HIBOR plus 2% as of June 30, 2025 - The Group did not draw new bank borrowings during the period and repaid approximately HKD 375 thousand in bank borrowings[38] - Bank borrowings bear interest at HKD Prime minus 2.5% and HIBOR plus 1.85%, while bank overdrafts bear interest at HIBOR plus 2%[38] - Bank borrowings are repayable in installments by May 2028[38] 18. Share Capital As of June 30, 2025, the Company's issued share capital increased to HKD 37,440 thousand, primarily due to the placement of 62,400,000 new ordinary shares, raising net proceeds of approximately HKD 14.1 million Details of Share Capital Movement (As of June 30, 2025) | Item | Number of Shares ('000) | Amount (HKD '000) | | :--- | :--- | :--- | | As at December 31, 2024 | 312,000,000 | 31,200 | | Shares issued under placing | 62,400,000 | 6,240 | | As at June 30, 2025 | 374,400,000 | 37,440 | - On June 24, 2025, the Company allotted and issued 62,400,000 ordinary shares by way of placing at a placing price of HKD 0.241 per share, raising gross proceeds of HKD 15,038 thousand[39] 19. Significant Related Party Transactions Total key management personnel compensation for the period was HKD 915 thousand, a significant increase from HKD 399 thousand in the prior period, primarily due to growth in short-term benefits Key Management Personnel Compensation (For the six months ended June 30) | Item | 2025 (HKD '000) | 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Short-term benefits | 906 | 390 | 516 | 132.31% | | Post-employment benefits | 9 | 9 | 0 | 0.00% | | Total | 915 | 399 | 516 | 129.32% | 20. Fair Value Measurement of Financial Instruments The Group's financial assets at fair value through profit or loss, primarily life insurance policies for key management personnel, are classified under Level 2 fair value measurements, with their fair value determined by reference to the cash value provided by the insurance company, and no transfers between levels occurred during the period Fair Value Hierarchy of Financial Assets at Fair Value Through Profit or Loss | Item | Level 1 (HKD '000) | Level 2 (HKD '000) | Level 3 (HKD '000) | Total (HKD '000) | | :--- | :--- | :--- | :--- | :--- | | June 30, 2025 - Life insurance policies for key management personnel | – | 2,882 | – | 2,882 | | December 31, 2024 - Life insurance policies for key management personnel | – | 2,795 | – | 2,795 | - The fair value of life insurance policies for key management personnel is determined by reference to the cash value provided by the insurance company[43] - No transfers between Level 1 and Level 2, or into or out of Level 3, occurred during the period[42] Management Discussion and Analysis Business Review and Outlook The Group continues to focus on wet trade engineering while actively expanding into new businesses, including construction IT services and beauty and health services, to achieve business diversification and consolidate revenue streams, striving to enhance market competitiveness and seek new opportunities despite challenges in the construction industry Provision of Wet Trade and Related Ancillary Works The Group, through Ma Yau Engineering Company Limited, provides wet trade engineering services and faces challenges in the Hong Kong construction industry, including financial constraints and increased competition, but remains committed to monitoring the market and expanding its client base - The Group provides wet trade engineering services through Ma Yau Engineering Company Limited, which is registered with the Construction Industry Council[45] Overview of Wet Trade Engineering Projects (As of June 30, 2025) | Project Status | Contract Amount (HKD million) | | :--- | :--- | | Ongoing projects (commenced but not completed, and awarded but not commenced) | 139.6 | | Projects currently bidding or awaiting tender results | 131.9 | - The Hong Kong construction industry faces challenges such as financial tightness, slower new project tendering, pressure on tender prices and profit margins due to mainland construction companies' participation, and increased credit risk[46] - The Group will continue to monitor the market, provide high-quality engineering, expand its client base and market share to enhance competitiveness[47] Provision of Construction IT Services The Group has established an online platform to provide users with specifications for wet trade engineering service projects and assist clients in reviewing contractors' monthly payment requests - The Group has established an online platform to provide users with specifications for wet trade engineering service projects and assist clients in reviewing contractors' monthly payment requests[48] Provision of Beauty and Health Services (New Business) The Group launched new beauty and health services during the review period to diversify its business and revenue streams, focusing on cosmetics, skincare, nutritional health products, and health management through joint ventures and physical stores in major Chinese cities, collaborating with global manufacturers - The Group commenced new beauty and health services during the review period to achieve business and revenue stream diversification[49] - The new business will focus on cosmetics, beauty and skincare products, nutritional health foods, lifestyle beauty, medical aesthetics, and health management, primarily through establishing joint ventures and physical stores with local partners in first-tier and second-tier cities in China[50] - The Group has opened physical stores in central cities in mainland China, including Shenzhen, Beijing, Shanghai, Wuhan, Fuzhou, Chongqing, and Shenyang, Xi'an[51] - The Group has established deep cooperation with globally renowned cosmetics manufacturers such as Cosmax (China) Cosmetics Co., Ltd. and Xianle Health Technology (Anhui) Co., Ltd[52] - The Group is actively expanding into the medical aesthetics and health consumption sectors and exploring market opportunities outside Hong Kong[52] Financial Review The period saw significant improvement in financial performance, with substantial revenue growth, a turnaround from gross loss to profit, and net profit achieved, primarily driven by successful large-scale project tenders and improved cost control, though administrative expenses increased due to professional fees and staff costs Revenue Revenue for the period increased significantly, primarily due to the larger scale of successfully tendered projects Revenue Change | Indicator | 2025 (HKD million) | 2024 (HKD million) | Change (HKD million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | 65.1 | 38.4 | 26.7 | 69.6% | - The increase in revenue was primarily due to the relatively larger scale of successfully tendered projects[53] Gross Profit/(Loss) and Gross Profit/(Loss) Margin Gross profit for the period improved significantly, turning a loss into a profit, primarily due to better cost control Gross Profit/(Loss) and Gross Profit/(Loss) Margin Change | Indicator | 2025 (HKD million) | 2024 (HKD million) | Change (HKD million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Gross profit/(loss) | 8.3 | (13.7) | 22.0 | 160.6% | | Gross profit/(loss) margin | 12.7% | (35.7%) | 48.4% | N/A | - The improvement in gross profit was primarily due to improved cost control[54] Other Income Other income decreased for the period, mainly due to reduced bank interest income resulting from lower average bank balances Other Income Change | Indicator | 2025 (HKD '000) | 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Other income | 19 | 93 | (74) | -79.6% | - The decrease was primarily due to reduced bank interest income resulting from lower average bank balances[55] Impairment Losses under Expected Credit Loss ("ECL") Model (net of reversal) Impairment loss reversal was recorded for the period, primarily influenced by an impairment loss on a construction project and a reversal of impairment loss on trade receivables from another project Expected Credit Loss Impairment Loss Change | Indicator | 2025 (HKD '000) | 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | ECL reversal | (3) | 7,800 | (7,803) | -100.04% | - Impairment losses primarily comprised an impairment loss of approximately HKD 1,100 thousand for a Sha Tau Kok construction project and a reversal of impairment loss of approximately HKD 1,300 thousand for trade receivables from a Tai Wai construction project[56] Administrative Expenses Administrative expenses increased for the period, mainly due to higher professional fees related to a cash offer and increased staff costs Administrative Expenses Change | Indicator | 2025 (HKD million) | 2024 (HKD million) | Change (HKD million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Administrative expenses | 8.1 | 3.8 | 4.3 | 113.2% | - The increase was primarily due to higher professional fees related to a cash offer and increased staff costs[57] Finance Costs Finance costs decreased for the period, primarily due to reduced interest on bank borrowings resulting from lower interest rates Finance Costs Change | Indicator | 2025 (HKD '000) | 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Finance costs | 182 | 255 | (73) | -28.6% | - The decrease was primarily due to reduced interest on bank borrowings resulting from lower interest rates[58] Net Profit/(Loss) Net profit for the period significantly improved, turning a loss into a profit Net Profit/(Loss) Change | Indicator | 2025 (HKD '000) | 2024 (HKD '000) | Change (HKD '000) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net profit/(loss) | 124 | (25,500) | 25,624 | 100.49% | Interim Dividend The Board of Directors does not recommend the payment of an interim dividend for the review period - The Board of Directors does not recommend the payment of an interim dividend for the review period[60] Liquidity, Financial Resources and Capital Structure The Company completed a placing of 62,400,000 new shares during the period, significantly strengthening its capital structure, with total bank balances and cash increasing and total borrowings slightly decreasing as of June 30, 2025, indicating improved liquidity - The Company completed the placing of 62,400,000 new shares at a placing price of HKD 0.241 per share on June 24, 2025[61] Liquidity and Borrowings Overview | Indicator | June 30, 2025 (HKD million) | December 31, 2024 (HKD million) | Change (HKD million) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Issued share capital | 37.44 | 31.20 | 6.24 | 20.0% | | Total bank balances and cash | 23.1 | 10.5 | 12.6 | 120.0% | | Total borrowings (including bank borrowings) | 4.9 | 5.3 | (0.4) | -7.5% | - All bank balances and borrowings are denominated in HKD, with interest charged at fixed and floating rates, and the Group has not implemented any interest rate hedging policy[62] Fundraising and Use of Proceeds The Company raised net proceeds of approximately HKD 14.1 million from a new share placement, with 57.4% earmarked for new beauty salon businesses, 21.3% for new office renovation, and the remaining 21.3% for working capital, all of which remained unutilized as of June 30, 2025, and are planned for use in the second half of 2025 - Net proceeds from the placing amounted to approximately HKD 14.1 million[63] Intended Use of Net Proceeds | Use | Amount (HKD million) | Proportion of Net Proceeds | | :--- | :--- | :--- | | New business (establishing approximately 8 physical beauty salons in first-tier cities in China) | 8.1 | 57.4% | | Renovation of new office | 3.0 | 21.3% | | Working capital | 3.0 | 21.3% | - As of June 30, 2025, the net proceeds remained unutilized and are planned to be used for their intended purposes in the second half of 2025[63] Treasury Policy The Group adopts a prudent financial management approach, with the Board of Directors closely monitoring liquidity to ensure the liquidity structure of assets, liabilities, and other commitments meets funding requirements - The Group adopts a prudent financial management approach, with the Board of Directors closely monitoring liquidity to ensure funding requirements are met[64] Pledged Assets As of June 30, 2025, the Group had pledged approximately HKD 2.9 million of financial assets at fair value through profit or loss to secure bank facilities - As of June 30, 2025, the Group had pledged approximately HKD 2.9 million of financial assets at fair value through profit or loss to secure bank facilities[65] Foreign Exchange Risk The Group primarily operates in Hong Kong, with most transactions and assets denominated in HKD, and foreign currency transactions are not significant; no derivative instruments were involved, nor was foreign exchange risk hedged during the period - The Group primarily operates in Hong Kong, with most transactions and assets denominated in HKD, and foreign currency transactions are not significant[66] - No derivative instruments were involved, nor was foreign exchange risk hedged during the period[66] Gearing Ratio As of June 30, 2025, the gearing ratio was approximately 20.4%, a significant decrease from 54.0% as of December 31, 2024, with the higher ratio in 2024 primarily due to a reduction in total equity from accumulated losses Gearing Ratio Change | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Gearing ratio | 20.4% | 54.0% | -33.6% | - The decrease in gearing ratio was primarily due to a reduction in total equity as of June 30, 2024, resulting from increased accumulated losses[67] Material Investments Held, Material Acquisitions or Disposals of Subsidiaries, Associates and Joint Ventures The Group held no material investments and made no material acquisitions or disposals of subsidiaries, associates, or joint ventures during the period - The Group held no material investments and made no material acquisitions or disposals of subsidiaries, associates, or joint ventures during the period[68] Future Plans for Material Investments or Capital Assets As of the date of this announcement, the Group has no other plans for material investments or capital assets - As of the date of this announcement, the Group has no other plans for material investments or capital assets[69] Employees As of June 30, 2025, the Group's employee count increased to 38, with total staff costs of approximately HKD 2.5 million, and the Group regularly reviews its remuneration policy, offering competitive benefits and training, adjusting compensation and discretionary bonuses based on individual performance and market conditions Employee Count and Costs | Indicator | June 30, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Number of employees | 38 | 13 | 25 | | Total staff costs (HKD million) | 2.5 | 2.5 | 0 | - The Group regularly reviews its remuneration policy, offering competitive salary benefits and job training, and adjusts compensation and discretionary bonuses based on individual performance and market conditions[70] Capital Commitments and Contingent Liabilities As of June 30, 2025, the Group had no material capital commitments or contingent liabilities - As of June 30, 2025, the Group had no material capital commitments or contingent liabilities[71] Other Information Compliance with Corporate Governance Code The Company has adopted and complied with the principles and provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules - The Company has adopted and complied with the principles and provisions of the Corporate Governance Code set out in Appendix C1 to the Listing Rules[72] Compliance with the Standard Code for Securities Transactions The Company has adopted the Standard Code as the code of conduct for directors' securities transactions, and all directors confirmed compliance with its provisions during the review period after specific inquiry - The Company has adopted the Standard Code as the code of conduct for directors' securities transactions, and all directors confirmed compliance with its provisions[73] Purchase, Sale and Redemption of the Company's Listed Securities During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the review period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[74] Audit Committee The Company's Audit Committee, established on July 22, 2019, comprises three members with Ms. Ding Xin as Chairperson, and its primary responsibilities include recommending external auditors, reviewing financial information, and monitoring financial reporting and internal control systems - The Audit Committee was established on July 22, 2019, comprising Ms. Ding Xin, Mr. Zhu Qi, and Ms. Zhang Lingke, with Ms. Ding Xin as Chairperson[75] - Its primary responsibilities include recommending the appointment and removal of external auditors, reviewing financial information, and monitoring the financial reporting system and internal control procedures[75] Review of Interim Financial Results The Group's interim financial results, though unaudited, have been reviewed and approved by the Audit Committee, which deemed them prepared in compliance with applicable accounting standards, requirements, and Listing Rules, with adequate disclosures - The Group's interim financial results, though unaudited, have been reviewed and approved by the Audit Committee[76] - The Audit Committee deemed the results prepared in compliance with applicable accounting standards, requirements, and Listing Rules, with adequate disclosures[76] Information on Board Members As of the date of this announcement, the Board of Directors includes executive directors Mr. Zhou Zhenlin, Ms. Peng Yunying, and Mr. Guo Xianjiao, as well as independent non-executive directors Ms. Ding Xin, Mr. Zhu Qi, Ms. Zhang Lingke, and Professor Lin Chengguang - As of the date of this announcement, the Board of Directors includes executive directors Mr. Zhou Zhenlin, Ms. Peng Yunying, and Mr. Guo Xianjiao, as well as independent non-executive directors Ms. Ding Xin, Mr. Zhu Qi, Ms. Zhang Lingke, and Professor Lin Chengguang[77]