陆庆娱乐(08052) - 2025 - 中期财报

Company Information and Legal Declarations GEM Listing Features and Risk Warnings The GEM market provides a listing platform for small and medium-sized companies, but investors should be aware of its high investment risks and market volatility - The GEM market is positioned as a listing platform for small and medium-sized companies, but it carries higher investment risks and market volatility[2] Directors' Responsibility Statement The company's directors jointly and individually assume full responsibility for this report, confirming its accuracy, completeness, and absence of misleading information in all material aspects - Directors confirm the report content is accurate, complete, and not misleading or deceptive, assuming full responsibility[2] Interim Financial Results Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's revenue decreased by 29.1% to HKD 30,038 thousand, but the loss for the period significantly narrowed to HKD 158 thousand, with profit attributable to owners of the Company turning positive at HKD 7,476 thousand Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 30,038 | 42,251 | -29.1% | | Other income and gains | 606 | 21 | 2785.7% | | Cost of inventories sold | (9,326) | (12,769) | -27.0% | | Staff costs | (10,279) | (16,517) | -37.8% | | Property rental and related expenses | (2,130) | (3,132) | -32.0% | | Advertising and marketing expenses | (32) | (215) | -85.1% | | Other operating expenses | (5,605) | (5,793) | -3.3% | | Depreciation and amortization | (4,767) | (6,795) | -29.9% | | Impairment loss on expected credit losses (net of reversal) | 2,070 | – | N/A | | Impairment loss on property, plant and equipment | (244) | – | N/A | | Finance costs | (489) | (527) | -7.2% | | Loss before tax | (158) | (3,476) | -95.5% | | Loss for the period | (158) | (3,476) | -95.5% | | Profit/(loss) for the period attributable to owners of the Company | 7,476 | (2,732) | 373.0% | | Loss for the period attributable to non-controlling interests | (7,634) | (744) | 926.1% | | Basic earnings/(loss) per share (HK cents) | 1.36 | (0.50) | 372.0% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets decreased to HKD 16,124 thousand from HKD 25,549 thousand, with net current liabilities and net liabilities indicating ongoing liquidity pressure Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Assets | | | | | Non-current assets | 11,635 | 16,517 | -29.6% | | Current assets | 4,489 | 9,032 | -50.3% | | Total assets | 16,124 | 25,549 | -36.9% | | Liabilities | | | | | Current liabilities | 47,974 | 53,404 | -10.1% | | Non-current liabilities | 838 | 4,675 | -82.1% | | Total liabilities | 48,812 | 58,079 | -15.9% | | Net current liabilities | (43,485) | (44,372) | -2.0% | | Net liabilities | (32,688) | (32,530) | 0.5% | | Equity | | | | | Equity attributable to owners of the Company | (8,796) | (16,272) | -45.9% | | Non-controlling interests | (23,892) | (16,258) | 47.0% | | Total equity | (32,688) | (32,530) | 0.5% | Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, equity attributable to owners of the Company improved to HKD (8,796) thousand from HKD (16,272) thousand, driven by a profit of HKD 7,476 thousand, despite an expanded loss for non-controlling interests Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | June 30, 2025 (HKD thousands) | January 1, 2025 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Equity attributable to owners of the Company | (8,796) | (16,272) | 7,476 | | Non-controlling interests | (23,892) | (16,258) | (7,634) | | Total equity | (32,688) | (32,530) | (158) | - Equity attributable to owners of the Company significantly improved due to a profit of HKD 7,476 thousand for the period[7] Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash generated from operating activities was HKD 3,301 thousand, but net cash used in financing activities amounted to HKD 6,454 thousand, resulting in a net decrease of HKD 3,222 thousand in cash and cash equivalents, which fell to HKD 750 thousand at period-end Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2025 (HKD thousands) | 2024 (HKD thousands) | Change (HKD thousands) | | :--- | :--- | :--- | :--- | | Net cash generated from operating activities | 3,301 | 5,909 | (2,608) | | Net cash used in investing activities | (69) | (237) | 168 | | Net cash (used in) generated from financing activities | (6,454) | (6,035) | (419) | | Net decrease in cash and cash equivalents | (3,222) | (363) | (2,859) | | Cash and cash equivalents at end of period | 750 | 484 | 266 | - Cash outflow from financing activities is the primary reason for the significant decrease in cash and cash equivalents at period-end[8] Notes to the Financial Statements General Information and Business Overview Luk Hing Entertainment Group Holdings Limited, incorporated in the Cayman Islands in 2015 and listed on GEM in 2016, primarily engages in food and beverage and entertainment businesses, including operating clubs, restaurants, and music-related events - The company primarily engages in food and beverage and entertainment businesses, including operating clubs, restaurants, and music events[9] - The company is an investment holding company, with functional currencies including RMB and HKD[9] Basis of Preparation and Going Concern Assumption The Group's interim financial statements are prepared in accordance with HKFRS and GEM Listing Rules, with consistent accounting policies, but significant net current liabilities and net liabilities raise material uncertainty about going concern, which management addresses through various measures - The Group has net current liabilities of HKD 43,485 thousand and net liabilities of HKD 32,688 thousand, constituting a material uncertainty regarding its ability to continue as a going concern[11] - Management plans to improve liquidity through renewing bank facilities, seeking other financing arrangements, and implementing strict cost controls[12][13] Statement of Compliance The Group's condensed consolidated interim financial information is unaudited but prepared in accordance with HKFRS and applicable GEM Listing Rules disclosure requirements - Interim financial information is unaudited but complies with HKFRS and GEM Listing Rules[10] Basis of Measurement and Going Concern Assumption This interim financial report does not include all annual financial statement information and should be read in conjunction with the annual report, with consistent accounting policies and no material impact from new HKFRS, despite significant net current and total liabilities - As of June 30, 2025, the Group has net current liabilities of approximately HKD 43,485 thousand and net liabilities of approximately HKD 32,688 thousand, indicating a material uncertainty regarding going concern[11] Management's Measures To ensure going concern, management will negotiate renewal of bank facilities, explore other financing options to increase capital, and implement stricter cost controls to improve working capital and cash flows - Management will negotiate the renewal of bank facilities and believes existing facilities will be renewed[13] - Management will consider other financing arrangements and fundraising options to increase capital and support company growth[13] - Management will implement stricter cost control measures to improve working capital and cash flows[13] Operating Segment Information The Group operates solely in the food and beverage and entertainment industry with no separate reportable segments, deriving all revenue and holding all non-current assets in Hong Kong, with no single customer contributing 10% or more of total revenue - The Group has no separate reportable segments, with all business operations and non-current assets located in Hong Kong[14][16] Geographical Information All of the Group's revenue from external customers and non-current assets are located in Hong Kong, with no revenue generated or non-current properties held in mainland China Revenue by Geographical Area (For the six months ended June 30) | Region | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong | 30,038 | 42,251 | Non-current Assets by Geographical Area (As of June 30) | Region | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Hong Kong | 11,635 | 16,517 | Major Customer Information During the period, no single external customer accounted for 10% or more of the Group's total revenue - No single customer contributed 10% or more of total revenue this period, indicating a diversified customer base[17] Revenue Analysis The Group's revenue primarily stems from the sale of food, beverages, and other products, as well as event organization, totaling HKD 30,038 thousand for the six months ended June 30, 2025, with food and other product sales contributing HKD 27,295 thousand Revenue Analysis (For the six months ended June 30) | Revenue Source | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Sale of food and other products | 27,295 | 38,038 | | Sale of beverages | 2,743 | 4,213 | | Total Revenue | 30,038 | 42,251 | - Sale of food and other products is the primary revenue source, accounting for 90.8% of total revenue[19] Other Income and Gains For the six months ended June 30, 2025, other income and gains significantly increased to HKD 606 thousand (from HKD 21 thousand in 2024), primarily due to a reversal of accrued expenses, net exchange gains, and other interest income Other Income and Gains (For the six months ended June 30) | Source | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Net exchange gains | 18 | – | | Other interest income | 115 | – | | Others | 23 | 21 | | Reversal of accrued expenses | 450 | – | | Total | 606 | 21 | - Reversal of accrued expenses is the main contributor to the significant increase in other income and gains this period[20] Taxation For the six months ended June 30, 2025 and 2024, the Group incurred no income tax expense, primarily because its Hong Kong subsidiaries had no estimated assessable profits - No income tax expense was incurred this period or in the prior period, as Hong Kong subsidiaries had no assessable profits[21] Earnings/(Loss) Per Share For the six months ended June 30, 2025, basic and diluted earnings per share attributable to owners of the Company were 1.36 HK cents, a significant improvement from a loss of 0.50 HK cents per share in 2024, primarily due to a positive profit for the period Earnings/(Loss) Per Share (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit/(loss) for basic and diluted earnings/(loss) per share (HKD thousands) | 7,476 | (2,732) | | Weighted average number of ordinary shares (thousands) | 548,256 | 548,256 | | Basic earnings/(loss) per share (HK cents) | 1.36 | (0.50) | | Diluted earnings/(loss) per share (HK cents) | 1.36 | (0.50) | - Basic and diluted earnings per share turned from loss to profit, reflecting improved company profitability[22] Finance Costs For the six months ended June 30, 2025, finance costs decreased to HKD 489 thousand from HKD 527 thousand in 2024, primarily due to reduced bank loan interest, despite an increase in lease liabilities interest Finance Costs (For the six months ended June 30) | Source | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Bank loan interest | 125 | 376 | | Lease liabilities interest | 263 | 144 | | Interest on provision for restoration costs | 31 | – | | Others | 70 | 7 | | Total | 489 | 527 | - A significant decrease in bank loan interest is the main reason for the reduction in finance costs[23] Dividend Policy The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025, consistent with the same period in 2024 - The Board of Directors does not recommend paying an interim dividend[24] Property, Plant and Equipment For the six months ended June 30, 2025, the Group's cost of acquiring property, plant and equipment decreased to HKD 69 thousand from HKD 237 thousand in 2024, with no disposals during the period - The cost of acquiring property, plant and equipment this period was HKD 69 thousand, a 70.8% decrease year-on-year[25] - No property, plant and equipment items were disposed of during the period[26] Right-of-Use Assets and Lease Liabilities As of June 30, 2025, right-of-use assets decreased to HKD 7,771 thousand from HKD 12,263 thousand, primarily due to depreciation, while total lease liabilities were HKD 7,990 thousand, reflecting a reduction in leased restaurant properties Right-of-Use Assets (As of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | January 1 | 12,263 | 4,087 | | Depreciation provision | (4,492) | (10,513) | | Period-end | 7,771 | 12,263 | Lease Liabilities (As of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Current | 7,832 | 8,764 | | Non-current | 158 | 4,012 | | Total | 7,990 | 12,776 | - The number of restaurant properties leased by the Group decreased from five to four, with lease terms ranging from 1 to 2 years[27] Trade and Other Receivables As of June 30, 2025, net trade receivables increased to HKD 950 thousand, while total other receivables and deposits decreased to HKD 6,071 thousand, with the Group maintaining a 60-day credit period and strict control over outstanding receivables Trade and Other Receivables (As of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Net trade receivables | 950 | 630 | | Net other receivables | 458 | 400 | | Prepayments | 1,268 | 1,789 | | Net deposits | 3,395 | 4,492 | | Total | 6,071 | 7,311 | - The Group has a 60-day credit period for trade receivables and no significant concentration of credit risk[29][30] Ageing Analysis of Trade Receivables As of June 30, 2025, trade receivables (net of credit loss allowance) were primarily concentrated in the 0-30 day (HKD 611 thousand) and 31-60 day (HKD 253 thousand) ageing brackets Ageing Analysis of Trade Receivables (As of June 30) | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 days | 611 | 626 | | 31 to 60 days | 253 | 4 | | 61 to 90 days | 86 | – | | 91 to 120 days | – | – | | Total | 950 | 630 | Movement in Credit Loss Allowance As of June 30, 2025, the allowance for credit losses on trade receivables decreased from HKD 3,118 thousand to HKD 323 thousand, mainly due to write-offs and a reduction in expected credit loss provisions Movement in Accumulated Credit Loss Allowance for Trade Receivables (As of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | January 1 | 3,118 | 883 | | Write-offs | (726) | (668) | | Expected credit loss allowance recognized during the period | (2,069) | 2,903 | | Period-end | 323 | 3,118 | - The allowance for credit losses on trade receivables significantly decreased, primarily due to write-offs and adjustments to expected credit loss provisions[32] Loans Receivable The Group's total loans receivable of HKD 3,450 thousand are fully provided for expected credit losses, resulting in a net balance of zero, as these loans are overdue by 90 days or more, and recovery is deemed unlikely Loans Receivable (As of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Total loans receivable | 3,450 | 3,450 | | Less: Allowance for expected credit losses | (3,450) | (3,450) | | Net loans receivable | – | – | - Loans receivable are fully provided for, with the company deeming recovery unlikely and having initiated legal action[35] Trade and Other Payables As of June 30, 2025, total trade and other payables decreased to HKD 32,371 thousand, primarily comprising other payables, rental payables, and accrued expenses, including defaulted convertible notes and director/shareholder loans Trade and Other Payables (As of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Trade payables | 3,404 | 4,004 | | Rental payables | 3,240 | 1,813 | | Other payables | 14,198 | 18,758 | | Directors' loans | 850 | 750 | | Shareholders' loans | 1,825 | 1,825 | | Accrued expenses | 8,368 | 6,934 | | Other tax payables | 486 | 839 | | Total | 32,371 | 34,823 | - Other payables include approximately HKD 1,404 thousand for defaulted convertible promissory notes[39] - Directors' loans and a portion of shareholders' loans bear interest at an annual rate of 5.25%[38][39] Ageing Analysis of Trade Payables As of June 30, 2025, trade payables were mainly concentrated in the 0-30 day (HKD 1,006 thousand) and 91-120 day (HKD 1,255 thousand) ageing brackets Ageing Analysis of Trade Payables (As of June 30) | Ageing | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | 0 to 30 days | 1,006 | 1,401 | | 31 to 60 days | 412 | 691 | | 61 to 90 days | 731 | 528 | | 91 to 120 days | 1,255 | 1,384 | | Total | 3,404 | 4,004 | Share Capital As of June 30, 2025, the Company's authorized share capital was HKD 100,000 thousand, with issued and fully paid share capital of HKD 54,826 thousand, comprising 548,256 thousand shares, unchanged from December 31, 2024 Share Capital (As of June 30) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Authorized share capital (HKD thousands) | 100,000 | 100,000 | | Issued and fully paid share capital (HKD thousands) | 54,826 | 54,826 | | Issued ordinary shares (thousands) | 548,256 | 548,256 | - The share capital structure remained stable this period, with no new issuances or redemptions[41] Capital Commitments As of June 30, 2025, the Group's outstanding contracted capital commitments not yet provided for in the financial statements amounted to HKD 18,207 thousand, primarily representing unpaid capital contributions to a PRC subsidiary, consistent with December 31, 2024 Capital Commitments (As of June 30) | Indicator | June 30, 2025 (HKD thousands) | December 31, 2024 (HKD thousands) | | :--- | :--- | :--- | | Unpaid capital contribution to a PRC subsidiary | 18,207 | 18,207 | - Capital commitments primarily relate to capital contributions to a PRC subsidiary, with the amount remaining unchanged[42] Significant Related Party Transactions The Group engaged in several related party transactions, including remuneration paid to key management personnel and rental and loan interest expenses with specific related parties, with key management remuneration decreasing and Mr. Choi Siu Chak's loan interest expense increasing - The Group's related party transactions include key management personnel remuneration, rental expenses, and loan interest expenses[43][44] Key Management Personnel Remuneration For the six months ended June 30, 2025, total remuneration paid to the Group's key management personnel was HKD 545 thousand, a 42.8% decrease from HKD 953 thousand in 2024 Key Management Personnel Remuneration (For the six months ended June 30) | Remuneration Type | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | | Salaries and other short-term employee benefits | 532 | 935 | | Retirement scheme contributions | 13 | 18 | | Total | 545 | 953 | - Key management personnel remuneration decreased by 42.8% year-on-year, reflecting cost control measures[43] Other Related Party Transactions For the six months ended June 30, 2025, the Group incurred no rental expenses to Zone One (CS) Limited (HKD 510 thousand in 2024), but loan interest expenses paid to Executive Director Mr. Choi Siu Chak increased from HKD 7 thousand to HKD 19 thousand Other Related Party Transactions (For the six months ended June 30) | Related Party | Nature of Transaction | 2025 (HKD thousands) | 2024 (HKD thousands) | | :--- | :--- | :--- | :--- | | Zone One (CS) Limited | Rental expenses | – | 510 | | Choi Siu Chak | Loan interest expenses | 19 | 7 | - Rental expenses with Zone One (CS) Limited have ceased, but loan interest expenses paid to Executive Director Mr. Choi Siu Chak have increased[44] Management Discussion and Analysis Business Review and Outlook In the first half of 2025, the Group closed "SIXA" to focus resources on "HEXA," addressing challenges through promotions and cost control, with a continued focus on "HEXA's" refined operations, menu development, timed promotions, service enhancement, and supply chain optimization for the second half - The Group closed "SIXA" on March 24, 2025, to concentrate resources on "HEXA"[46] - Cost control measures, including human resource optimization and supplier repricing, are being tightened, alongside ongoing menu development[46] - The second half will focus on timed promotions, themed menus, strict cost control, and supply chain optimization[46][60] Business Review In the first half of 2025, the Group closed "SIXA" to focus on "HEXA" as its core restaurant, successfully mitigating declining customer traffic through promotional activities, while managing operational challenges and costs via human resource optimization and supplier repricing - "SIXA" was closed to focus on "HEXA" operations[46] - Promotional activities were launched to maintain customer traffic, but the operating environment remains challenging[46] - Cost control was tightened through human resource optimization and supplier repricing[46] Outlook In the second half of 2025, the Group will prioritize refining "HEXA's" menu and pricing, implementing timed promotions and themed meals to boost off-peak utilization, and enhancing service standards, while maintaining strict cost control and exploring new business opportunities - The second half will focus on refining "HEXA's" menu and pricing, and improving off-peak utilization through timed promotions[60] - Strict cost control will continue through lean staffing, tighter procurement terms, and supply chain optimization[60] - The company will prudently manage incremental demand, monitor lease economics and financial costs, and identify potential business and investment opportunities[60] Financial Review The Group's revenue for the first half of 2025 decreased by 29.1% to HKD 30.0 million, primarily due to shifting customer consumption patterns towards mainland China, while various expenses significantly declined due to the cessation of "SIXA" operations and strict cost control measures, resulting in a net loss attributable to owners of the Company of HKD 7.5 million - Revenue decreased by 29.1% to HKD 30.0 million year-on-year, mainly due to shifting customer consumption patterns towards mainland China[47] - Various operating expenses significantly decreased due to the cessation of "SIXA" operations and strict cost control measures[48][49] - The net loss attributable to owners of the Company was HKD 7.5 million, primarily impacted by the cessation of "SIXA" operations and the reversal of expected credit losses[50] Revenue The Group's total revenue decreased by 29.1% from approximately HKD 42.3 million in the first half of 2024 to approximately HKD 30.0 million in the same period of 2025, mainly due to customers shifting their consumption patterns towards mainland China Revenue (For the six months ended June 30) | Indicator | 2025 (HKD millions) | 2024 (HKD millions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 30.0 | 42.3 | -29.1% | Expenses Cost of inventories sold, staff costs, property rental and related expenses, advertising and marketing expenses, other operating expenses, and depreciation and amortization all significantly decreased due to the cessation of "SIXA" operations and strict cost control measures, with staff costs seeing the largest reduction at 95.4% Key Expense Changes (For the six months ended June 30) | Expense Item | 2025 (HKD millions) | 2024 (HKD millions) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Cost of inventories sold | 9.3 | 12.8 | -27.3% | | Staff costs | 10.3 | 16.5 | -37.8% | | Property rental and related expenses | 2.1 | 3.1 | -32.3% | | Advertising and marketing expenses | 0.032 | 0.215 | -85.1% | | Other operating expenses | 5.6 | 5.8 | -3.4% | | Depreciation and amortization | 4.8 | 6.8 | -29.4% | - Staff costs decreased significantly by 95.4%, primarily due to the cessation of "SIXA" operations and strict cost control[48] Loss Attributable to Owners of the Company In the first half of 2025, the net loss attributable to owners of the Company was approximately HKD 7.5 million, compared to a net loss of approximately HKD 2.7 million in the same period of 2024, mainly due to the cessation of "SIXA" operations and a reversal of expected credit losses Loss Attributable to Owners of the Company (For the six months ended June 30) | Indicator | 2025 (HKD millions) | 2024 (HKD millions) | | :--- | :--- | :--- | | Net loss attributable to owners of the Company | 7.5 | 2.7 | - The increased loss is primarily due to the cessation of "SIXA" operations and the reversal of expected credit losses[50] Liquidity, Financial Resources and Capital Structure As of June 30, 2025, the Group's current and quick ratios both declined to 0.1, and the debt-to-equity ratio rose to 302.7%, indicating increased liquidity pressure, with cash and cash equivalents falling to HKD 0.8 million and external borrowings at HKD 7.6 million, prompting the company to implement measures to alleviate liquidity strain Key Financial Ratios (As of June 30) | Ratio | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio | 0.1 | 0.2 | | Quick Ratio | 0.1 | 0.2 | | Debt-to-equity Ratio | 302.7% | 227.3% | - Current and quick ratios decreased, while the debt-to-equity ratio increased, indicating heightened liquidity pressure[51] Key Financial Ratios As of June 30, 2025, the Group's current ratio was 0.1, quick ratio was 0.1, and debt-to-equity ratio was 302.7%, with the gearing ratio not applicable Key Financial Ratios (As of June 30) | Ratio | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Current Ratio | 0.1 | 0.2 | | Quick Ratio | 0.1 | 0.2 | | Debt-to-equity Ratio | 302.7% | 227.3% | | Gearing Ratio | Not applicable | Not applicable | Cash and External Borrowings As of June 30, 2025, the Group's cash and cash equivalents significantly decreased to HKD 0.8 million from HKD 4.0 million, while external borrowings slightly declined to HKD 7.6 million from HKD 8.8 million Cash and External Borrowings (As of June 30) | Indicator | June 30, 2025 (HKD millions) | December 31, 2024 (HKD millions) | | :--- | :--- | :--- | | Cash and cash equivalents | 0.8 | 4.0 | | External borrowings | 7.6 | 8.8 | - Cash and cash equivalents significantly decreased, while external borrowings slightly declined[54] Pledge of Assets As of June 30, 2025, the Group had no assets pledged - The Group has no assets pledged[55] Foreign Exchange Risk The Group's primary business operations are conducted in HKD and RMB, with overseas financial statements translated into HKD, and due to the relatively stable HKD exchange rate, currency fluctuations are not expected to materially impact operations - Primary business operations are in HKD and RMB, and with a stable HKD exchange rate, foreign exchange risk is not expected to be significant[56] Contingent Liabilities and Capital Commitments Except as disclosed in this interim report, the Group had no other contingent liabilities or capital commitments as of June 30, 2025 - Except as disclosed, the Group has no other contingent liabilities or capital commitments[57] Material Investments, Acquisitions and Disposals Subsequent to the reporting period, the Company's non-wholly owned subsidiary, Hua Run Group Limited, entered into a subscription agreement to issue convertible bonds totaling HKD 3,000,000, which upon full conversion, will reduce the Company's equity interest in the target company to approximately 13.2%, constituting a deemed disposal of interest - Non-wholly owned subsidiary Hua Run Group Limited issued HKD 3,000,000 convertible bonds[58] - Upon full conversion, the Company's equity interest in the target company will decrease to approximately 13.2%, constituting a deemed disposal[58] Employees and Remuneration Policy As of June 30, 2025, the Group had 49 employees, a significant reduction from 87 in 2024, with remuneration policies based on market terms and individual performance to offer competitive compensation and optimize staff structure Number of Employees (As of June 30) | Indicator | June 30, 2025 | 2024 | | :--- | :--- | :--- | | Number of employees | 49 | 87 | - The number of employees significantly decreased, and the company is actively optimizing its staff structure and offering competitive remuneration packages[59] Other Information Directors' and Chief Executive's Interests As of June 30, 2025, Executive Director Mr. Choi Siu Chak held a 19.95% long position in the Company's ordinary shares through controlled corporations and joint holdings, and also held interests in Welmen Investment Co. Ltd Directors' and Chief Executive's Interests (As of June 30) | Name | Group Member/Associated Corporation | Nature of Interest | Number and Class of Securities | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | :--- | | Mr. Choi Siu Chak | The Company | Interest in controlled corporation, interest held jointly with another person | 109,350,000 ordinary shares (L) | 19.95% | | Mr. Choi Siu Chak | Welmen | Interest in controlled corporation | 3,031.11 ordinary shares (L) | 30.3111% | | Mr. Choi Siu Chak | Welmen | Beneficial owner | 1,262.225 ordinary shares (L) | 12.62225% | - Mr. Choi Siu Chak holds significant interests in the Company and its associated corporations through various means[62] Major Shareholders' Interests As of June 30, 2025, Restoran Oversea (CST) Sdn Bhd was the largest shareholder with 29.00% of shares, while Welmen Investment Co. Ltd. and its associates (including Mr. Choi Yat Hon, Mr. Choi Siu Chak, and other parties acting in concert) collectively held 19.95%, and Trendy Pleasure Limited and its associates held 5.47% Major Shareholders' Interests (As of June 30) | Shareholder Name/Designation | Nature of Interest | Number and Class of Securities | Approximate Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Restoran Oversea (CST) Sdn Bhd | Beneficial owner | 158,988,000 ordinary shares (L) | 29.00% | | Welmen Investment Co. Ltd | Beneficial owner | 109,350,000 ordinary shares (L) | 19.95% | | Yui Tak Investment Limited | Interest in controlled corporation | 109,350,000 ordinary shares (L) | 19.95% | | Mr. Choi Yat Hon | Interest in controlled corporation, interest held jointly with another person | 109,350,000 ordinary shares (L) | 19.95% | | Mr. Au Wai Pong | Interest held jointly with another person | 109,350,000 ordinary shares (L) | 19.95% | | Mr. Au Ka Wai | Interest held jointly with another person | 109,350,000 ordinary shares (L) | 19.95% | | Mr. Yeung Chi Shing | Interest held jointly with another person | 109,350,000 ordinary shares (L) | 19.95% | | Ms. Chan Ting Fai | Spouse's interest | 109,350,000 ordinary shares (L) | 19.95% | | Ms. Lee Wan | Spouse's interest | 109,350,000 ordinary shares (L) | 19.95% | | Trendy Pleasure Limited | Beneficial owner | 30,000,000 ordinary shares (L) | 5.47% | | Saint Lotus Cultural Development Group Co., Limited | Interest in controlled corporation | 30,000,000 ordinary shares (L) | 5.47% | | Mr. Cheung Kin Kwong | Interest in controlled corporation | 30,000,000 ordinary shares (L) | 5.47% | - Multiple directors and affiliated parties collectively hold company shares through acting in concert agreements[64][69] Dealings in Listed Securities For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During this period, the company and its subsidiaries did not purchase, sell, or redeem any listed securities[68] Interests in Competing Business Directors hold interests in various restaurant and bar businesses in Macau and Hong Kong, but the company believes these are distinct and do not constitute direct or indirect competition, while Executive Director Mr. Choi Siu Chak's spouse holds interests in several Hong Kong restaurant businesses - Directors hold interests in restaurant and bar businesses in Macau and Hong Kong, but the company believes these do not constitute competition[70] - Mr. Choi Siu Chak's spouse holds interests in Lucky Pot Catering Group Company Limited, Sham Tseng Chan Kee Roasted Goose Company Limited, and Yu Tung Company Limited in Hong Kong[70] Share Option Scheme The Company adopted a share option scheme on October 18, 2016, to incentivize employees and directors, with a 10-year validity period expiring on November 11, 2026, and as of June 30, 2025, 2,250,810 share options remained unexercised at an exercise price of HKD 0.5921 - The share option scheme was adopted in 2016 to incentivize employees and is valid until November 11, 2026[72] Share Option Movements (As of June 30) | Category | Grant Date | Exercise Period | Exercise Price | Unexercised as of January 1, 2025 | Unexercised as of June 30, 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Employees and consultants | October 2, 2018 | 2018.10.2-2028.10.1 | HKD 0.5921 | 771,180 | 771,180 | | Employees and consultants | October 2, 2018 | 2019.10.2-2028.10.1 | HKD 0.5921 | 771,180 | 771,180 | | Employees and consultants | October 2, 2018 | 2020.10.2-2028.10.1 | HKD 0.5921 | 451,390 | 451,390 | | Employees and consultants | October 2, 2018 | 2021.10.2-2028.10.1 | HKD 0.5921 | 257,060 | 257,060 | | Total | | | | 2,250,810 | 2,250,810 | - As of June 30, 2025, 2,250,810 share options remained unexercised, with an exercise price of HKD 0.5921[75] Corporate Governance Practices The Group is committed to maintaining high corporate governance standards, having adopted and complied with the Corporate Governance Code set out in Appendix C1 of the GEM Listing Rules, believing it benefits shareholders and supports sustainable growth - The Group has adopted and complies with the GEM Listing Rules' Corporate Governance Code, committed to maintaining high standards[81] Changes in Directors' Information Except as disclosed in this report, there were no changes in directors' information during the six months ended June 30, 2025, and up to the date of this report - No changes in directors' information occurred during this period[82] Directors' Securities Transactions The Company has adopted a code of conduct for directors' securities transactions, and all directors confirmed compliance with the standard code during the six months ended June 30, 2025 - Directors confirm compliance with the company's standard code for securities transactions[83] Dividends The Board of Directors resolved not to declare a dividend for the six months ended June 30, 2025, consistent with the same period in 2024 - The Board of Directors does not declare an interim dividend[84] Audit Committee The Company has established an Audit Committee, chaired by Independent Non-executive Director Ms. Tse Mei Ling, responsible for providing independent advice on financial reporting, internal controls, and risk management, and has reviewed the financial information in this interim report - The Audit Committee, composed of independent non-executive directors, is responsible for financial reporting, internal controls, and risk management[85] - The Audit Committee has reviewed the unaudited financial statements in this interim report[85] Major Transactions and Compliance Issues The Group failed to comply with GEM Listing Rules' notification, announcement, and shareholder approval requirements when renewing tenancy agreements for Taikoo Property and Harbour City Property due to an unintentional oversight regarding HKFRS 16, expressing regret and committing to remedial actions to enhance internal controls and compliance, while a non-wholly owned subsidiary's convertible bond issuance also constitutes a major transaction requiring GEM Listing Rules compliance - The company failed to comply with GEM Listing Rules 19.34, 19.38, and 19.40 due to an unintentional oversight in implementing HKFRS 16 regarding tenancy agreements[92] - Remedial actions will include providing GEM Listing Rules training for board members, senior management, and responsible personnel[93] - Internal controls and reporting procedures will be strengthened, with annual reviews of existing procedures and consultation with external professionals as needed[93] - The issuance of convertible bonds by a non-wholly owned subsidiary constitutes a major transaction requiring compliance with GEM Listing Rules for reporting, announcement, and shareholder approval[95] Discloseable Transaction on Renewal of Tenancy Agreement The Company's indirect non-wholly owned subsidiary, Hua Run Group Limited, renewed the Taikoo Property tenancy for approximately HKD 3.5 million plus additional turnover rent, constituting a discloseable transaction but exempted from shareholder approval - The renewal of the Taikoo Property tenancy, totaling approximately HKD 3.5 million, constitutes a discloseable transaction[86][87] Major Transaction on Renewal of Tenancy Agreement The tenant renewed the Harbour City Property tenancy for approximately HKD 15.9 million plus additional turnover rent, constituting a major transaction requiring compliance with GEM Listing Rules for reporting, announcement, circular, and shareholder approval, though the EGM has not yet been convened - The renewal of the Harbour City Property tenancy, totaling approximately HKD 15.9 million, constitutes a major transaction[89] - This transaction requires compliance with GEM Listing Rules for reporting, announcement, circular, and shareholder approval, but the EGM has not yet been convened as of the report date[89][90] Remedial Actions The company regrets its failure to comply with GEM Listing Rules regarding timely shareholder approval and announcement for the aforementioned tenancy agreements, and will implement remedial measures including training, enhanced internal controls, and external professional consultation to prevent recurrence - The company failed to comply with GEM Listing Rules 19.34, 19.38, and 19.40 due to an unintentional oversight in implementing HKFRS 16[92] - GEM Listing Rules training will be provided for board members, senior management, and responsible personnel[93] - Internal controls and reporting procedures will be strengthened, with annual reviews of existing procedures and consultation with external professionals as necessary[93] Issue of Convertible Bonds by a Non-wholly Owned Subsidiary and Deemed Disposal of Interest Constituting a Major Transaction The Company's non-wholly owned subsidiary, Hua Run Group Limited, issued convertible bonds with a principal amount of HKD 3,000,000 at an annual interest rate of 10%, which upon full conversion, will reduce the Company's equity interest in the target company to approximately 13.2%, constituting a major transaction requiring compliance with GEM Listing Rules for reporting, announcement, and shareholder approval - A non-wholly owned subsidiary issued HKD 3,000,000 convertible bonds at a 10% annual interest rate[94] - Upon full conversion, the Company's equity interest in the target company will decrease to approximately 13.2%[94] - This transaction constitutes a major transaction requiring compliance with GEM Listing Rules for reporting, announcement, and shareholder approval[95] Post Balance Sheet Events Except as disclosed in this interim report, there have been no other significant post-balance sheet events affecting the Group's operations and financial performance after June 30, 2025, and up to the date of this interim report - Except as disclosed, no significant post-balance sheet events have affected operations and financial performance[97] Material Litigation For the six months ended June 30, 2025, the Company was not involved in any other material litigation or arbitration, and the directors are unaware of any outstanding or threatened material litigation or claims against the Group - During this period, the company had no material litigation or arbitration, nor any known threatened litigation or claims[98] Board of Directors As of the date of this report, the Board of Directors comprises two executive directors (Mr. Choi Siu Chak, Mr. Ying Kan Man) and three independent non-executive directors (Ms. Tse Mei Ling, Mr. Tso Tik Fan, Ms. Ng Man Hung) - The Board of Directors consists of two executive directors and three independent non-executive directors[99]