利亚零售(00831) - 2025 - 中期财报

Company Information Board Members The company's Board of Directors comprises executive, non-executive, and independent non-executive directors, with Dr. Fung Kwok Lun as Chairman, Mr. Tang Tsz Kin as CEO, and Mr. Fung Yue Ming as Vice Chairman - Executive Directors include Fung Yue Ming (Vice Chairman) and Tang Tsz Kin (Chief Executive Officer)[5] - Non-executive Directors include Dr. Fung Kwok Lun (Chairman), Yeung Lap Bun, Fung Wing Yee, and Lee Pui Ming[5] - Independent Non-executive Directors include Lo Kai Yiu, Liao Siu Tung, and Tsang Tiu Lung[5] Company Basic Information The company is registered in the Cayman Islands, with its principal place of business in Hong Kong, PwC as auditor, and stock code 00831 - The company's registered office is in the Cayman Islands, with its head office and principal place of business in Fung Group Centre, Sha Tin, Hong Kong[5] - The auditor is PricewaterhouseCoopers, the principal share registrar is Vistra (Cayman) Limited, and the Hong Kong branch registrar is Tricor Investor Services Limited[6] - Principal bankers are The Hongkong and Shanghai Banking Corporation Limited and Bank of China (Hong Kong) Limited, with stock code 00831[6] Summary Financial Summary For the six months ended June 30, 2025, revenue decreased by 4.6% year-on-year, but core operating profit and profit attributable to company shareholders increased by 17.3% and 18.0% respectively, basic earnings per share grew by 18.8%, while interim dividend per share decreased by 50.0% Financial Summary for the Six Months Ended June 30 | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 688,139 | 721,654 | -4.6% | | Core Operating Profit | 20,425 | 17,419 | +17.3% | | Core Operating Profit (including interest expense on lease liabilities) | 17,365 | 13,598 | +27.7% | | Profit Attributable to Company Shareholders | 15,060 | 12,767 | +18.0% | | Basic Earnings Per Share (HK cents) | 1.9 | 1.6 | +18.8% | | Interim Dividend Per Share (HK cents) | 1.0 | 2.0 | -50.0% | Operational Summary Despite challenging business conditions leading to a revenue decline, the company improved profitability through stringent cost control; the local retail market faces challenges in the second half, but competitor exits offer market share opportunities, and the company maintains a robust financial position with HK$167 million in net cash and no bank borrowings - The business environment remained challenging, with the Group's revenue decreasing by 4.6%[8] - Stringent cost control offset the pressure from declining sales and gross margins, leading to improved profitability[8] - The local retail market continues to face challenges in the second half, but the exit of some competitors provides opportunities for the Group to capture more market share[8] - The Group maintained a sound financial position in the first half of 2025, with net cash of HK$167 million and no bank borrowings[8] Number of Stores As of June 30, 2025, the Group's total number of stores was 155, a slight decrease from 157 as of December 31, 2024, primarily due to fewer Saint Honore Cake Shop branches in Hong Kong and Guangzhou Number of Stores | Store Type | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Saint Honore Cake Shop (Hong Kong) | 110 | 111 | | Saint Honore Cake Shop (Macau) | 14 | 14 | | Saint Honore Cake Shop (Guangzhou) | 3 | 4 | | Mon cher Cake Shop (Hong Kong) | 7 | 7 | | Zoff Optical (Hong Kong) | 16 | 16 | | Zoff Optical (Singapore) | 5 | 5 | | Total Stores under Convenience Retail Asia | 155 | 157 | Chairman's Statement Market Environment and Strategy In the first half of 2025, the retail market was impacted by changes in travel and shopping patterns, macroeconomic uncertainties, and inflation concerns, yet the Group's core businesses outperformed the industry through product innovation, customer service, and digital marketing, while streamlining operations, focusing on high-margin products, and optimizing network and manpower allocation to offset cost pressures - The retail market faced headwinds, but core segments outperformed the industry, benefiting from product innovation, customer service, and digital marketing[11] - The Group adopted a "front-shop, back-factory" model to streamline operations, emphasized developing and selling high-margin products, and optimized its network and manpower allocation to offset rental and labor costs[11] - In response to the weak retail market, the Group made significant strategic adjustments to its fast-growing "business-to-business" (B2B) segment[11] Local Retail Market Performance The Hong Kong retail market remained weak with subdued consumer sentiment and increased cross-border consumption, leading to declines in sales value and volume; despite a significant drop in bread and pastry sales, Saint Honore Cake Shop effectively controlled the decline in same-store sales, while Zoff Optical recorded year-on-year revenue growth, though its Singapore operations faced challenges, prompting the Group to continuously review store performance, adjust its network, and implement measures to reduce staff and supply chain costs - In the first six months of the year, general consumer sentiment was subdued, and increasing cross-border consumption by local residents, along with changing consumption patterns of mainland Chinese visitors, impacted the Hong Kong retail market[12] Changes in Hong Kong Retail Sales Value and Volume | Metric | Change (%) | | :--- | :--- | | Sales Value | -3.3% | | Sales Volume | -4.7% | | Sales Value of Bread, Pastry, Confectionery, and Biscuits | -13.7% | | Sales Volume of Bread, Pastry, Confectionery, and Biscuits | -16.4% | - Saint Honore Cake Shop effectively controlled the decline in same-store sales, maintaining its market share; Zoff Optical recorded year-on-year revenue growth, but its Singapore franchise business experienced a year-on-year decline in comparable same-store sales[12][14] - The Group continues to seek effective operational methods to maintain profitability, reviewing store performance, adjusting its network, and implementing various measures to reduce staff costs and seek supply chain savings[14] Outlook The Group maintains a cautiously optimistic outlook for the second half, anticipating growth from the Mid-Autumn Festival and Christmas peak seasons, while continuing to monitor economic trends, pragmatically expand its network, and seek cost-efficiency optimizations, leveraging its robust balance sheet to pursue organic growth or acquisitions of specialized brands to expand its business - The Group maintains a cautiously optimistic outlook for the second half, anticipating the traditional peak seasons of the Mid-Autumn Festival and Christmas holidays[15] - It will continue to closely monitor local and global economic trends, maintain a pragmatic approach to further network expansion, and review areas for enhancing cost efficiency[15] - A strong balance sheet and potential industry consolidation may present opportunities for the Group, which will seek organic growth or acquisitions of specialized brands that complement its brand portfolio to expand its business[15] CEO's Report Overall Business Review Despite an overall decline in the Hong Kong retail market, the Group successfully maintained its market share in the first half of 2025, with stable weekday business in the bakery segment, growth in new product categories, and continuous ascent in the B2B business, while Zoff Optical outperformed the industry, and the Group focused on excellent customer experience, innovative products, and talent development - In the first half of 2025, despite an overall decline in the Hong Kong retail market, the Group successfully maintained its market share and demonstrated stable performance[18] - The bakery segment's weekday business remained stable, new product categories grew, and the business-to-business (B2B) segment continued to climb[18] - Zoff continued to offer an unparalleled product range and industry-leading service standards, outperforming the optical industry[18] Business Review - Saint Honore Cake Shop As of June 30, 2025, Saint Honore Cake Shop's store count decreased to 127; affected by weak consumption and cross-border spending, total revenue for Hong Kong and Macau cake shops recorded a mid-single-digit decline, but profitability improved year-on-year through stringent cost control and innovative products like European-style sourdough bread and frozen food categories; the B2B business achieved double-digit sales growth, and investment in the Tai Po factory aims to enhance production capacity, while the Group actively participates in social responsibility and sustainability initiatives - As of June 30, 2025, the Group operated 127 Saint Honore Cake Shops in Hong Kong, Macau, and Guangzhou, a decrease from 148 at the end of the first half of 2024[19] - Total revenue for Hong Kong and Macau cake shops recorded a mid-single-digit decline, but profitability increased year-on-year through stringent cost control and the development of innovative products[19] - Successfully launched new products such as European-style sourdough bread, brown sugar whole wheat bread, and walnut Mario bread, and expanded the frozen food category[19] - The "business-to-business" (B2B) segment recorded double-digit sales growth, and a long-term lease agreement was finalized to relocate part of the Hong Kong factory operations to an upgraded facility in Tai Po, aiming to enhance frozen product capacity and efficiency[21] - The Group actively participates in social responsibility and sustainability activities, including "Earth Hour," receiving the "Diamond Award" for the "Outdoor Lighting Charter" campaign, and donating over 150,000 portions of bread and festive food to NGOs[21] Business Review - Mon cher and Merci Moncher Mon cher cake shops maintained stable same-store sales by launching new products and collaborating with local coffee shop NOC; in December last year, the Group introduced a new concept cake shop, "Merci Moncher," blending Japanese and French baking styles, located in the heart of Causeway Bay - Mon cher cake shops launched a series of new products targeting new customers, maintaining stable same-store sales, and collaborated with local coffee shop NOC to enhance brand awareness[22] - In December last year, a new concept cake shop, "Merci Moncher," was launched, blending Japanese and French baking styles, with its flagship store located in Causeway Bay[22] Business Review - Zoff Zoff Hong Kong recorded low single-digit growth in the first half, outperforming the overall shrinking optical market, and continued to operate 16 stores; Zoff expanded customer reach through over 1,400 products, advanced eye examination services, and intraocular pressure measurement services, as well as collaborations with local brands; Zoff's Singapore franchise business faced challenges, with comparable same-store sales recording a mid-single-digit decline, prompting the Group to seek cost savings and team integration to improve efficiency - Zoff Hong Kong recorded low single-digit growth in the first half, outperforming the overall contraction of the Hong Kong optical market, and continued to operate 16 stores[23] - Zoff Hong Kong offers over 1,400 products and conducts marketing campaigns to promote its advanced optometry equipment for eye examination services and intraocular pressure measurement services[23] - Collaborated with local brands such as HSBC, Toys "R" Us, and MTR to expand customer reach and enhance brand awareness[23] - Zoff's Singapore franchise business faced multiple challenges, with comparable same-store sales recording a mid-single-digit decline, operating costs reduced by over 10%, and efforts to integrate Hong Kong and Singapore team operations[24] Outlook The Group maintains a cautiously optimistic outlook for revenue growth in the second half, anticipating opportunities from industry consolidation; the bakery business will expand market share in core categories, develop value-added products, and enhance brand image through digital marketing and platform activities; the B2B business, as a strategic pillar, will heavily invest in talent and production facilities to penetrate the mainland Chinese market; Zoff will expand its retail footprint in Hong Kong, adopt a more cautious strategy in Singapore, and enhance eye examination services while launching more Japanese-made fashion eyewear products - The Group maintains a cautiously optimistic outlook for revenue growth in the second half, anticipating that industry consolidation will provide opportunities[25] - The bakery business is committed to maintaining and expanding market share in core categories, expanding value-added product types, and enhancing brand image through new store models and digital marketing[25] - The "business-to-business" (B2B) segment is a strategic pillar for the Group, which will heavily invest in talent and production facilities to enhance capacity and profitability, and to penetrate the mainland Chinese market[25] - Zoff will continue to seek opportunities to expand its retail footprint in Hong Kong, adopt a more cautious strategy in Singapore, and enhance customer experience and eye examination services[26] Discussion and Analysis Financial Review In the first half of 2025, the Group's turnover decreased by 4.6% to HK$688 million, with the bakery business's turnover decreasing by 5.2% due to store closures and cross-border travel, while Zoff Optical's turnover modestly increased by 0.3%; gross profit margin declined by 2.0 percentage points to 51.7%, mainly influenced by promotional activities and a higher proportion of B2B revenue; operating expenses as a percentage of turnover decreased to 49.2% due to stringent cost control, and both core operating profit and profit attributable to company shareholders recorded significant growth; the Group holds HK$167 million in net cash with no bank borrowings and declared an interim dividend of HK 1 cent per share - In the first six months of 2025, the Group's turnover decreased by 4.6% to HK$688 million, with the bakery business's turnover decreasing by 5.2% to HK$615 million, and Zoff Optical's turnover modestly increasing by 0.3% to HK$73 million[29] - Gross profit margin as a percentage of turnover decreased by 2.0 percentage points to 51.7%, primarily due to promotional activities and an increased proportion of "business-to-business" (B2B) revenue[29] - Operating expenses as a percentage of turnover decreased from 51.7% to 49.2%, attributed to stringent cost control measures, including lease negotiations, adjusted store operating hours, and review of outsourced service contracts[30] Core Operating Profit and Net Profit Changes | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Core Operating Profit before interest expense on lease liabilities | 20,000 | 17,000 | +17.3% | | Core Operating Profit (including interest expense on lease liabilities) | 17,000 | 13,000 | +27.7% | | Net Profit | 15,000 | 13,000 | +18.0% | | Basic Earnings Per Share (HK cents) | 1.9 | 1.6 | +18.8% | - As of June 30, 2025, the Group's net cash balance was HK$167 million, with no bank borrowings and available bank facilities of HK$88 million[31] - The Board of Directors resolved to declare an interim dividend of HK 1 cent per share[32] Employees As of June 30, 2025, the Group had 2,704 employees, with 54% in Hong Kong; total staff costs were HK$245 million, a decrease from the prior year, and the Group offers competitive remuneration, skill enhancement training, and customer service training, recognized as a "Manpower Developer," and through its "Heart-to-Heart" program, aims to improve employee satisfaction and retention while organizing various social activities - As of June 30, 2025, the Group had a total of 2,704 employees, of whom 1,459 (54%) were Hong Kong employees[33] - Total staff costs for the six months ended June 30, 2025, were HK$245 million, a decrease from HK$257 million in the same period last year[33] - The Group provides a competitive remuneration package, including salaries, discretionary bonuses, and share options, along with work-related skill enhancement programs and customer service training[33] - The Group was recognized as a "Manpower Developer" under the Employees Retraining Board's Manpower Developer Award Scheme for 2025 to 2030[33] Sustainability and Corporate Social Responsibility As a member of Fung Group, the company adheres to the UN Global Compact, committed to sustainable operations through the "3R" principles (Reduce, Reuse, Recycle) to protect the environment, conserve resources, and achieve cost savings; Saint Honore and Zoff Hong Kong were awarded the "15 Years Plus Caring Company" and "5 Years Plus Caring Company" logos respectively, demonstrating the Group's commitment to the community - The Group adheres to the UN Global Compact, committed to sustainable operations through the "3R" principles (Reduce, Reuse, and Recycle) to protect the environment, conserve natural resources, and achieve cost savings[34] - Saint Honore was awarded the "15 Years Plus Caring Company" logo by The Hong Kong Council of Social Service, and Zoff Hong Kong was awarded the "5 Years Plus Caring Company" logo[34] Corporate Governance Corporate Governance Principles The Board and management uphold sound corporate governance principles, emphasizing transparency, accountability, and independence, fully complying with the Code Provisions of the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - The Board and management uphold sound corporate governance principles, emphasizing transparency, accountability, and independence[35] - The company has fully complied with all Code Provisions of the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the six months ended June 30, 2025[35] Corporate Culture The Group is committed to developing sustainable businesses through a people-centric culture, fostering the success of its business units and employees; the Board is responsible for establishing the Group's purpose, values, and strategic direction, while management oversees the culture and core values cultivated in daily operations - The Group is committed to developing sustainable businesses through a people-centric culture, fostering the success of its business units and employees[36] - The Board is responsible for establishing the Group's purpose, values, and strategic direction, while management oversees the culture and core values cultivated in daily operations[36] Board of Directors The Board of Directors is responsible for formulating the Group's overall strategy and making decisions on significant operational, financial, and investment matters, with a structure that ensures appropriate skills, experience, knowledge, and diverse perspectives; the roles of Chairman and Chief Executive Officer are separated to enhance independence, accountability, and responsibility - The Board of Directors is responsible for formulating the Group's overall strategy and making decisions on significant operational, financial, and investment matters[37] - The Board's structure ensures it possesses appropriate skills, experience, knowledge, diverse perspectives, and valuable insights[37] - The roles of Chairman and Chief Executive Officer are separated, held by Dr. Fung Kwok Lun and Mr. Tang Tsz Kin respectively, to enhance independence, accountability, and responsibility[37] Board Committees The Board has established an Audit Committee, a Nomination Committee, and a Remuneration Committee, each with clear terms of reference and primarily composed of independent non-executive directors to ensure independent perspectives, and all committees are adequately resourced to fulfill their duties - The Board has established an Audit Committee, a Nomination Committee, and a Remuneration Committee, with each committee having clear terms of reference[38] - All committees are primarily composed of independent non-executive directors to ensure the Board receives independent perspectives and opinions[38] Audit Committee The Audit Committee is primarily responsible for reviewing the Group's financial reporting, risk management, internal controls, and corporate governance matters, and making recommendations to the Board; committee members possess professional qualifications, are authorized to investigate activities within their terms of reference, and have reviewed the unaudited interim financial information for the first half of 2025 - The Audit Committee is primarily responsible for reviewing the Group's financial reporting, risk management, internal controls, and corporate governance matters, and making relevant recommendations to the Board[39] - Committee members possess the appropriate professional qualifications, accounting, or relevant financial management expertise as required by the Listing Rules[39] - The Audit Committee has reviewed the unaudited interim financial information for the six months ended June 30, 2025, with senior management[39] Remuneration Committee The Remuneration Committee, chaired by Liao Siu Tung, is primarily responsible for advising the Board on the remuneration policy, structure, and terms of employment for directors and senior management, and reviewing the Group's remuneration and human resources policies - The Remuneration Committee is chaired by Liao Siu Tung, with members including Dr. Fung Kwok Lun and Tsang Tiu Lung[40] - Responsibilities include advising the Board on the remuneration policy and structure for all directors and senior management of the company, and recommending the remuneration packages for executive directors and senior management[41] - It is also responsible for recommending the remuneration for non-executive directors and reviewing the Group's remuneration and human resources policies[41] Nomination Committee The Nomination Committee, chaired by Dr. Fung Kwok Lun, is primarily responsible for reviewing the Board's structure, size, and composition, assessing the independence of independent non-executive directors, and making recommendations on director appointments, re-appointments, and training and development - The Nomination Committee is chaired by Dr. Fung Kwok Lun, with members including Lo Kai Yiu, Liao Siu Tung, Fung Yue Ming, and Tsang Tiu Lung[45] - Responsibilities include reviewing the Board's structure, size, and composition (including diversity of members), and assessing the independence of independent non-executive directors[45] - It is also responsible for making recommendations to the Board on director appointments or re-appointments, and reviewing and monitoring the training and continuous professional development of directors and senior management[45] Securities Transactions by Directors and Relevant Employees The Group has adopted a code for securities transactions by directors and relevant employees, with terms no less exacting than the Model Code in the Listing Rules; all directors and relevant employees have confirmed compliance, and no breaches were identified during the period - The Group has adopted a code for securities transactions by directors, with terms no less exacting than the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules[43] - The Group has obtained individual confirmations from each director and relevant employee, ensuring their compliance with the relevant requirements for the six months ended June 30, 2025, and no breaches were noted during the period[43] Compliance with Inside Information Requirements The company handles and disseminates inside information in accordance with the Securities and Futures Ordinance and the Listing Rules, ensuring compliance with information disclosure requirements - The company handles and disseminates inside information in accordance with the Securities and Futures Ordinance and the Listing Rules[44] Risk Management and Internal Control The Board is responsible for the Group's risk management and internal control systems, reviewing their effectiveness with the assistance of the Audit Committee; the systems aim to manage rather than eliminate risk, providing reasonable assurance, and the Audit Committee believes that for the six months ended June 30, 2025, the systems continued to be established, adequate, and effectively operated - The Board is responsible for the Group's risk management and internal control systems, and reviews the effectiveness and adequacy of these systems with the assistance of the Audit Committee[46] - The systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, and provide reasonable rather than absolute assurance against material misstatement, loss, or fraud[46] - The Audit Committee believes that for the six months ended June 30, 2025, the Group's risk management and internal control systems continued to be established, adequate, and effectively operated[48] Investor Relations and Communication The Board has adopted a shareholder communication policy to ensure shareholders receive sufficient information to exercise their rights and enhance communication; the company promotes corporate communication and investor relations transparency through meetings, presentations, investor conferences, roadshows, and its corporate website - The Board has adopted a shareholder communication policy aimed at ensuring shareholders receive information about the Group to enable them to exercise their rights in an informed manner and enhance communication with the Group[46] - Regular communication activities include presentations to analysts via meetings and/or email, participation in investor conferences, organizing roadshows, arranging company visits, and specific meetings with institutional shareholders and analysts[46] - The company maintains a corporate website (www.cr-asia.com) as a channel to facilitate effective communication with investors and the public, disseminating company announcements, shareholder information, and other relevant financial and non-financial information in a timely manner[47] Other Information Directors' Interests and Short Positions in Shares, Underlying Shares and Debentures As of June 30, 2025, Dr. Fung Kwok Lun held a 48.77% interest in the company's shares, Ms. Fung Wing Yee held 40.11%, Mr. Yeung Lap Bun held 3.14%, Mr. Tang Tsz Kin held 1.43% (including share options), and Mr. Lo Kai Yiu held 0.29%; these interests include personal interests, trust interests, and equity derivatives (share options) Directors' Long Positions in Shares and Underlying Shares of the Company (as of June 30, 2025) | Director Name | Personal Interests (Number of Shares) | Trust Interests (Number of Shares) | Equity Derivatives (Share Options) (Number of Shares) | Total Interests (Number of Shares) | Percentage of Interest (Approx.) | | :--- | :--- | :--- | :--- | :--- | :--- | | Dr. Fung Kwok Lun | 67,320,000 | 311,792,000 | – | 379,112,000 | 48.77% | | Ms. Fung Wing Yee | – | 311,792,000 | – | 311,792,000 | 40.11% | | Mr. Yeung Lap Bun | 24,396,000 | – | – | 24,396,000 | 3.14% | | Mr. Tang Tsz Kin | – | – | 11,130,000 | 11,130,000 | 1.43% | | Mr. Lo Kai Yiu | 2,276,000 | – | – | 2,276,000 | 0.29% | - Dr. Fung Kwok Lun, through his interest in King Lun Holdings Limited, and Ms. Fung Wing Yee, as a family member of Dr. Victor Fung Kwok King, are both deemed to have an interest in 311,792,000 shares of the company[52] Shareholders' Interests and Short Positions in Shares and Underlying Shares As of June 30, 2025, HSBC Trustee (C.I.) Limited and King Lun Holdings Limited are both deemed to have an interest in 311,792,000 shares of the company, representing 40.11% of the total interest Shareholders' Interests in Shares of the Company (as of June 30, 2025) | Shareholder Name | Number of Shares | Nature of Interest/Capacity | Percentage of Interest (Approx.) | | :--- | :--- | :--- | :--- | | HSBC Trustee (C.I.) Limited | 311,792,000 | Trustee | 40.11% | | King Lun Holdings Limited | 311,792,000 | Interest in controlled corporation | 40.11% | - These shares are held by Fung Retail, which is indirectly wholly-owned by King Lun through its wholly-owned subsidiary, Fung Holdings 1937; HSBC Trustee (C.I.) Limited, King Lun, Fung Holdings 1937, and Fung Retail are all deemed to have an interest in these shares[53] Share Options The company adopted a share option scheme in 2020 to incentivize eligible persons; for the six months ended June 30, 2025, a total of 20,000,000 share options were granted, with Mr. Tang Tsz Kin receiving 7,000,000; during the period, 452,000 share options lapsed due to termination of employment, and no share options were exercised, cancelled, or expired - The company's shareholders approved the adoption of the 2020 Share Option Scheme on April 29, 2020, aiming to provide incentives and/or rewards to eligible persons[55] Details of Changes in 2020 Share Option Scheme (for the six months ended June 30, 2025) | Grantee | As at 1/1/2025 (Number of Options) | Granted (Number of Options) | Lapsed (Number of Options) | As at 30/6/2025 (Number of Options) | Exercise Price (HK$) | Grant Date | Vesting Period | Exercise Period | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Tang Tsz Kin | 4,130,000 | – | – | 4,130,000 | 0.64 | 28/3/2024 | 28/3/2024–31/3/2025 | 1/4/2025–31/3/2028 | | | – | 7,000,000 | – | 7,000,000 | 0.32 | 28/3/2025 | 28/3/2025–31/3/2026 | 1/4/2026–31/3/2029 | | Continuous Contract Employees | 10,166,000 | – | (134,000) | 10,032,000 | 0.764 | 11/11/2021 | 11/11/2021–31/3/2023 | 1/4/2023–31/3/2026 | | | 5,876,000 | – | (318,000) | 5,558,000 | 0.64 | 28/3/2024 | 28/3/2024–31/3/2025 | 1/4/2025–31/3/2028 | | | – | 13,000,000 | – | 13,000,000 | 0.32 | 28/3/2025 | 28/3/2025–31/3/2026 | 1/4/2026–31/3/2029 | | Total | 20,172,000 | 20,000,000 | (452,000) | 39,720,000 | | | | | - During the period, share options to subscribe for a total of 20,000,000 shares were granted, with the closing price of the shares immediately preceding the grant date being HK$0.315[59] - During the period, share options to subscribe for 452,000 shares under the 2020 Share Option Scheme lapsed due to the termination of employment of certain grantees[59] Changes in Directors' Information Since the publication of the 2024 Annual Report, Mr. Fung Yue Ming was re-designated from a Non-executive Director to an Executive Director and appointed as Vice Chairman of the Board, effective June 1, 2025 - Fung Yue Ming was re-designated from a Non-executive Director to an Executive Director and appointed as Vice Chairman of the Board, effective June 1, 2025[60] Purchase, Sale or Redemption of the Company's Listed Securities During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[60] Interim Dividend The Board resolved to declare an interim dividend of HK 1 cent per share for the six months ended June 30, 2025, a 50% decrease from HK 2 cents in 2024 - The Board resolved to declare an interim dividend of HK 1 cent per share for the six months ended June 30, 2025 (2024: HK 2 cents)[61] Closure of Register of Members The company will suspend its share transfer registration from September 1, 2025, to September 2, 2025; shareholders wishing to receive the interim dividend must complete share transfer registration by 4:30 p.m. on August 29, 2025 - The company will suspend its share transfer registration from September 1, 2025, to September 2, 2025 (both dates inclusive)[62] - Shareholders wishing to receive the interim dividend are requested to lodge all transfer documents with the company's share registrar in Hong Kong by 4:30 p.m. on August 29, 2025[62] Condensed Consolidated Statement of Profit or Loss Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the company's revenue was HK$688.1 million, and gross profit was HK$355.4 million; core operating profit was HK$20.425 million, profit attributable to company shareholders was HK$15.06 million, and basic earnings per share was HK 1.9 cents Condensed Consolidated Statement of Profit or Loss (for the six months ended June 30) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Revenue | 688,139 | 721,654 | | Cost of Sales | (332,698) | (334,427) | | Gross Profit | 355,441 | 387,227 | | Other Income | 3,715 | 3,333 | | Selling Expenses | (243,081) | (267,269) | | Distribution Costs | (37,188) | (42,180) | | Administrative Expenses | (58,462) | (63,692) | | Core Operating Profit | 20,425 | 17,419 | | Net Interest Expense | (1,065) | (672) | | Profit Before Income Tax | 19,360 | 16,747 | | Income Tax Expense | (4,300) | (3,980) | | Profit Attributable to Company Shareholders | 15,060 | 12,767 | | Basic Earnings Per Share (HK cents) | 1.9 | 1.6 | Condensed Consolidated Statement of Comprehensive Income Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, profit attributable to company shareholders was HK$15.06 million; other comprehensive income primarily consisted of exchange differences of HK$0.343 million, bringing the total comprehensive income attributable to company shareholders to HK$15.403 million Condensed Consolidated Statement of Comprehensive Income (for the six months ended June 30) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Profit Attributable to Company Shareholders | 15,060 | 12,767 | | Other Comprehensive Income/(Loss): | | | | Exchange Differences | 343 | (101) | | Total Comprehensive Income Attributable to Company Shareholders | 15,403 | 12,666 | Condensed Consolidated Statement of Financial Position Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets were HK$1,153.5 million, a decrease from HK$1,213.6 million as of December 31, 2024; total equity was HK$643.3 million, and total liabilities were HK$510.2 million, with non-current assets primarily comprising intangible assets, property, plant and equipment, and right-of-use assets, while current assets included cash and cash equivalents of HK$149.9 million, and current liabilities included trade payables of HK$61.563 million and gift voucher liabilities of HK$99.373 million Condensed Consolidated Statement of Financial Position (as at June 30, 2025) | Metric | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | | :--- | :--- | :--- | | Assets | | | | Total Non-current Assets | 840,239 | 878,616 | | Total Current Assets | 313,295 | 334,988 | | Total Assets | 1,153,534 | 1,213,604 | | Equity | | | | Total Equity | 643,347 | 635,422 | | Liabilities | | | | Total Non-current Liabilities | 106,387 | 125,866 | | Total Current Liabilities | 403,800 | 452,316 | | Total Equity and Liabilities | 1,153,534 | 1,213,604 | - Among non-current assets, intangible assets were HK$359 million, property, plant and equipment were HK$168 million, and right-of-use assets were HK$194 million[67] - Among current assets, cash and cash equivalents were HK$149 million, and trade receivables were HK$60.458 million[67] - Among current liabilities, trade payables were HK$61.563 million, and gift vouchers were HK$99.373 million[67] Condensed Consolidated Statement of Changes in Equity Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, profit attributable to company shareholders was HK$15.06 million, which, combined with exchange differences of HK$0.343 million, resulted in a total comprehensive income of HK$15.403 million for the period; employee share option benefits increased by HK$0.26 million, and dividends paid amounted to HK$7.774 million, bringing the total equity at period-end to HK$643.3 million Condensed Consolidated Statement of Changes in Equity (for the six months ended June 30) | Metric | Share Capital (HK$ '000) | Share Premium (HK$ '000) | Capital Reserve (HK$ '000) | Share-based Payment Reserve (HK$ '000) | Exchange Reserve (HK$ '000) | Retained Earnings (HK$ '000) | Total Equity (HK$ '000) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | As at January 1, 2025 | 77,742 | 888 | 20,002 | 1,406 | (2,763) | 538,147 | 635,422 | | Profit Attributable to Company Shareholders | – | – | – | – | – | 15,060 | 15,060 | | Exchange Differences | – | – | – | – | 343 | – | 343 | | Total Comprehensive Income for the Period | – | – | – | – | 343 | 15,060 | 15,403 | | Employee Share Option Benefits | – | – | – | 260 | – | 36 | 296 | | Dividends Paid | – | – | – | – | – | (7,774) | (7,774) | | As at June 30, 2025 | 77,742 | 888 | 20,002 | 1,666 | (2,420) | 545,469 | 643,347 | Condensed Consolidated Statement of Cash Flows Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash generated from operating activities was HK$61.527 million; net cash used in investing activities was HK$33.48 million, primarily for purchasing property, plant and equipment and short-term bank deposits; net cash used in financing activities was HK$84.254 million, mainly for lease liability payments and dividends paid; cash and cash equivalents at period-end were HK$149.868 million, a decrease of HK$56.207 million from the beginning of the period Condensed Consolidated Statement of Cash Flows (for the six months ended June 30) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 61,527 | 91,399 | | Net Cash Used in Investing Activities | (33,480) | (16,412) | | Net Cash Used in Financing Activities | (84,254) | (120,624) | | Decrease in Cash and Cash Equivalents | (56,207) | (45,637) | | Cash and Cash Equivalents at January 1 | 206,016 | 220,640 | | Cash and Cash Equivalents at June 30 | 149,868 | 174,437 | - Net cash used in investing activities primarily included HK$20.068 million for the purchase of property, plant and equipment and HK$15.7 million for short-term bank deposits[70] - Net cash used in financing activities primarily included HK$78.788 million for the payment of lease liabilities and HK$7.774 million for dividends paid[70] Notes to the Condensed Consolidated Interim Financial Information General Information Convenience Retail Asia Limited and its subsidiaries primarily operate "Saint Honore" cake shops, "Mon cher" cake shops, "Zoff" optical stores, and wholesale businesses; the company is incorporated in the Cayman Islands, its shares are listed on the Main Board of the Hong Kong Stock Exchange, and this condensed consolidated interim financial information is presented in Hong Kong dollars - The Group's principal activities are the operation of "Saint Honore" cake shops, "Mon cher" cake shops, "Zoff" optical stores, and wholesale businesses[71] - The company is a limited liability company incorporated in the Cayman Islands, and its shares are currently listed on the Main Board of The Stock Exchange of Hong Kong Limited[71][72] - This condensed consolidated interim financial information is presented in Hong Kong dollars and was approved by the Board of Directors on August 14, 2025[72] Basis of Preparation This unaudited condensed consolidated interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Listing Rules on the Main Board of the Stock Exchange; the adoption of new and revised Hong Kong Financial Reporting Standards and Interpretations had no significant impact on this period's financial information - This unaudited condensed consolidated interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the disclosure requirements of the Listing Rules on the Main Board of the Stock Exchange[73] - The accounting policies and methods of computation adopted in the preparation of this condensed consolidated interim financial information are consistent with those applied in the preparation of the 2024 consolidated financial statements[74] - The adoption of new and revised Hong Kong Financial Reporting Standards and Interpretations effective for accounting periods beginning on or after January 1, 2025, and relevant to the operations, had no significant impact on this condensed consolidated interim financial information[74] Financial Risk Management The Group's operations are exposed to various financial risks: foreign exchange risk, credit risk, liquidity risk, and interest rate risk; risk management policies have not changed since the year-end - The Group's operations are exposed to various financial risks: foreign exchange risk, credit risk, liquidity risk, and interest rate risk[74] - Risk management policies have not changed since the year-end[75] Revenue, Other Income and Segment Information For the six months ended June 30, 2025, the Group's revenue was HK$688.1 million, of which HK$614.9 million was from bakery product sales and HK$73.219 million from optical product sales; management categorizes business performance into two operating segments: bakery and optical; the bakery business generated HK$614.9 million in external customer revenue with a core operating profit of HK$22.714 million, while the optical business generated HK$73.219 million in external customer revenue with a core operating loss of HK$2.289 million Revenue Composition (for the six months ended June 30) | Revenue Category | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Bakery Product Sales Revenue | 614,920 | 648,658 | | Optical Product Sales Revenue | 73,219 | 72,996 | | Total Revenue | 688,139 | 721,654 | | Other Income | 3,715 | 3,333 | - Starting from 2025, management primarily considers business performance from a product/service perspective, categorizing it into two operating segments: bakery and optical[77] Segment Information (for the six months ended June 30, 2025) | Metric | Bakery Business (HK$ '000) | Optical Business (HK$ '000) | Group (HK$ '000) | | :--- | :--- | :--- | :--- | | External Customer Revenue | 614,920 | 73,219 | 688,139 | | Core Operating Profit/(Loss) | 22,714 | (2,289) | 20,425 | | Core Operating Profit/(Loss) (including interest expense on lease liabilities) | 20,204 | (2,839) | 17,365 | | Depreciation | (80,748) | (18,261) | (99,009) | - As of June 30, 2025, external customer revenue from Hong Kong was HK$608 million, and from other regions was HK$79.571 million[83] Expenses by Nature For the six months ended June 30, 2025, total cost of sales, selling expenses, distribution costs, and administrative expenses amounted to HK$671.4 million; major expenses included employee benefit expenses of HK$245.2 million, cost of inventories sold of HK$184.3 million, and depreciation of right-of-use assets of HK$75.271 million Expenses by Nature (for the six months ended June 30) | Expense Category | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Cost of Inventories Sold | 184,306 | 190,795 | | Delivery Charges | 18,643 | 21,414 | | Depreciation of Property, Plant and Equipment | 22,148 | 24,372 | | Depreciation of Right-of-Use Assets | 75,271 | 87,483 | | Employee Benefit Expenses | 245,205 | 257,410 | | Short-term and Variable Lease Payments | 8,513 | 7,932 | | Utility Expenses | 21,374 | 22,064 | | Other Expenses | 94,379 | 94,507 | | Total Cost of Sales, Selling Expenses, Distribution Costs and Administrative Expenses | 671,429 | 707,568 | Net Interest Expense For the six months ended June 30, 2025, interest income from bank deposits was HK$1.995 million, and interest expense on lease liabilities was HK$3.06 million, resulting in a net interest expense of HK$1.065 million Net Interest Expense (for the six months ended June 30) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Interest Income from Bank Deposits | 1,995 | 3,149 | | Interest Expense on Lease Liabilities | (3,060) | (3,821) | | Net Interest Expense | (1,065) | (672) | Income Tax Expense For the six months ended June 30, 2025, total income tax expense was HK$4.3 million, comprising Hong Kong profits tax of HK$3.92 million, overseas profits tax of HK$1.692 million, and deferred tax credit of HK$1.312 million - Hong Kong profits tax is provided at a rate of 16.5% based on the estimated assessable profits for 2025 and 2024[87] Income Tax Expense (for the six months ended June 30) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 3,920 | 2,947 | | Overseas Profits Tax | 1,692 | 1,208 | | Deferred Tax Credit | (1,312) | (175) | | Total Income Tax Expense | 4,300 | 3,980 | Earnings Per Share For the six months ended June 30, 2025, profit attributable to company shareholders was HK$15.06 million; basic earnings per share was HK 1.9 cents, and the weighted average number of ordinary shares for diluted earnings per share was 777,553,021 shares - The Group's basic and diluted earnings per share are calculated based on the unaudited profit attributable to company shareholders for the respective periods[89] Earnings Per Share Calculation (for the six months ended June 30) | Metric | 2025 (HK$ '000 / Number of Shares) | 2024 (HK$ '000 / Number of Shares) | | :--- | :--- | :--- | | Profit Attributable to Company Shareholders | 15,060 | 12,767 | | Weighted Average Number of Ordinary Shares Issued | 777,416,974 | 777,416,974 | | Adjustment: Share Options | 136,047 | 170,508 | | Weighted Average Number of Ordinary Shares for Diluted Earnings Per Share | 777,553,021 | 777,587,482 | Dividends The Board declared an interim dividend of HK 1 cent per share for the six months ended June 30, 2025, totaling HK$7.774 million, a decrease from the same period last year Declared Interim Dividend (for the six months ended June 30) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Declared Interim Dividend of HK 1 cent per share (2024: HK 2 cents) | 7,774 | 15,548 | - At the meeting held on August 14, 2025, the directors declared an interim dividend, which has not been recognized as a dividend payable in the condensed consolidated interim financial information[92] Property, Plant and Equipment As of June 30, 2025, the net book value of property, plant and equipment was HK$168 million; additions during the period amounted to HK$20.068 million, and depreciation was HK$22.148 million Property, Plant and Equipment Movements (for the six months ended June 30) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Net Book Value at Beginning of Period | 170,329 | 181,337 | | Additions | 20,068 | 17,082 | | Depreciation | (22,148) | (24,372) | | Net Book Value at End of Period | 168,281 | 174,621 | Right-of-Use Assets As of June 30, 2025, the net book value of right-of-use assets was HK$194 million; additions during the period amounted to HK$46.955 million, and depreciation was HK$75.271 million Right-of-Use Assets Movements (for the six months ended June 30) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Net Book Value at Beginning of Period | 223,541 | 266,323 | | Additions | 46,955 | 64,265 | | Depreciation | (75,271) | (87,483) | | Net Book Value at End of Period | 194,676 | 246,877 | Intangible Assets As of June 30, 2025, the total net book value of intangible assets was HK$359 million, primarily comprising goodwill of HK$247 million and trademarks of HK$110 million Intangible Assets Composition (as of June 30, 2025) | Intangible Asset Category | Cost and Net Book Value (HK$ '000) | | :--- | :--- | | Goodwill | 247,465 | | Trademarks | 110,000 | | Licenses | 1,842 | | Total for the Group | 359,307 | Investment Properties As of June 30, 2025, the net book value of investment properties was HK$5.144 million, with depreciation of HK$0.117 million during the period Investment Property Movements (for the six months ended June 30) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Net Book Value at Beginning of Period | 5,261 | 5,494 | | Depreciation | (117) | (117) | | Net Book Value at End of Period | 5,144 | 5,377 | Trade Receivables As of June 30, 2025, total trade receivables amounted to HK$60.458 million, with 0 to 30 days aging accounting for HK$32.52 million and 31 to 60 days aging for HK$27.151 million - The majority of the Group's revenue is generated in cash, and the credit period for trade receivables from corporate customers is mostly between 30 and 60 days[97] Aging Analysis of Trade Receivables (as of June 30, 2025) | Aging | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | 0 to 30 days | 32,520 | 28,230 | | 31 to 60 days | 27,151 | 7,923 | | 61 to 90 days | 208 | 1,195 | | Over 90 days | 579 | 339 | | Total | 60,458 | 37,687 | Trade Payables As of June 30, 2025, total trade payables amounted to HK$61.563 million, with 0 to 30 days aging accounting for HK$33.928 million and 31 to 60 days aging for HK$23.894 million Aging Analysis of Trade Payables (as of June 30, 2025) | Aging | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | 0 to 30 days | 33,928 | 39,983 | | 31 to 60 days | 23,894 | 27,924 | | 61 to 90 days | 893 | 953 | | Over 90 days | 2,848 | 2,487 | | Total | 61,563 | 71,347 | Lease Liabilities As of June 30, 2025, the net book value of lease liabilities was HK$204 million, comprising current lease liabilities of HK$117 million and non-current lease liabilities of HK$86.871 million; payments for lease liabilities during the period amounted to HK$78.788 million Lease Liabilities Movements (for the six months ended June 30) | Metric | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Net Book Value at Beginning of Period | 233,751 | 274,603 | | Additions | 46,425 | 63,702 | | Payments | (78,788) | (90,883) | | Interest Expense | 3,060 | 3,821 | | Net Book Value at End of Period | 204,023 | 256,471 | | Current Lease Liabilities | 117,152 | 138,346 | | Non-current Lease Liabilities | 86,871 | 118,125 | Share Capital As of June 30, 2025, the company's authorized share capital was 2 billion shares with a par value of HK$0.10 per share, totaling HK$200 million; issued and fully paid share capital was 777,416,974 shares, totaling HK$77.742 million, remaining unchanged from the beginning of the period Share Capital Composition (as of June 30, 2025) | Share Capital Category | Number of Shares | HK$ '000 | | :--- | :--- | :--- | | Authorized Share Capital (par value HK$0.10 per share) | 2,000,000,000 | 200,000 | | Issued and Fully Paid Share Capital (par value HK$0.10 per share) | 777,416,974 | 77,742 | Capital Commitments As of June 30, 2025, the Group's capital commitments contracted but not provided for the purchase of property, plant and equipment amounted to HK$4.813 million - As of June 30, 2025, capital commitments contracted but not provided for amounted to HK$4,813,000 (December 31, 2024: HK$5,709,000)[101] Related Party Transactions During the period, the Group engaged in several related party transactions with its major shareholder, Fung Retail Group Limited, and its associated companies; in terms of revenue, sales of products to subsidiaries of the major shareholder amounted to HK$3 thousand, and service income was HK$0.176 million; in terms of expenses, reimbursement of office and administrative expenses was HK$0.398 million, and rent was HK$0.711 million; these transactions were conducted in the normal course of business and on agreed terms - Fung Retail Group Limited is the company's major shareholder, holding a 40.11% equity interest in the company[102] Significant Related Party Transactions (for the six months ended June 30) | Transaction Category | Related Party | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | :--- | | Revenue | | | | | Sales of Products | Subsidiaries/Fellow Subsidiaries of Major Shareholder | 3 | 19 | | Service Income | Subsidiaries/Fellow Subsidiaries of Major Shareholder | 176 | – | | Expenses | | | | | Reimbursement of Office and Administrative Expenses | Subsidiaries/Fellow Subsidiaries of Major Shareholder | 398 | 12 | | Reimbursement of Office and Administrative Expenses | Associate of Major Shareholder | 3 | – | | Rent | Subsidiaries of Major Shareholder | 711 | 680 | Key Management Personnel Remuneration (for the six months ended June 30) | Remuneration Category | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Fees | 1,300 | 1,300 | | Bonuses | 2,249 | 3,335 | | Salaries and Other Allowances | 4,087 | 4,922 | | Employee Share Option Benefits | 184 | 108 | | Retirement Costs – Defined Contribution Plans | 39 | 45 | | Total | 7,859 | 9,710 | Events After Reporting Period In July 2025, the Group completed two significant transactions: signing a lease agreement for a factory site in Tai Po Industrial Estate, which will recognize approximately HK$9 million in right-of-use assets to expand production capacity; and acquiring a 20% equity interest in a Hong Kong food import, production, and distribution company for HK$3 million, to enhance the Group's food ingredient sourcing network and retail business model - In July 2025, the Group entered into a lease agreement for a factory site in Tai Po Industrial Estate to expand and enhance production capacity and certification standards, which will recognize a right-of-use asset of approximately HK$9,000,000[107] - In July 2025, the Group acquired a 20% equity interest in a Hong Kong food import, production, and distribution company for HK$3,000,000, an investment that will enhance the Group's food ingredient sourcing network and retail business model[107]