律齐文化(00550) - 2025 - 中期财报

Management Discussion and Analysis Business Review The company achieved strategic growth in its core advertising business in Mainland China, while non-core businesses stagnated and an associate investment was sold to boost working capital - Hong Kong's economy is gradually recovering, but global uncertainties, interest rate volatility, and geopolitical tensions lead to moderate growth, with shifting consumption patterns suppressing consumer sectors like retail and F&B[5] - The company expanded advertising services to Mainland China starting in 2024, utilizing local channels like Douyin to offer integrated advertising solutions and partnering with Kingkey Group for mall promotion activities[6][9] 2025 H1 vs 2024 H1 Advertising Business Revenue | Market | 2025 H1 Revenue (HKD) | 2024 H1 Revenue (HKD) | Change | | :--- | :--- | :--- | :--- | | Mainland China | Approximately 12.6 million | - | First contribution | | Hong Kong | Approximately 9.2 million | Approximately 13.8 million | Decreased | - The decline in Hong Kong market revenue was primarily due to market uncertainties and management's strategic reallocation of resources towards Mainland China market growth[7][9] - Other business segments, including healthcare products, e-commerce, and IP development and design services, were largely stagnant in the first half of 2025, recording zero revenue, mainly due to historical issues stemming from the departure of a former executive director[11][14] - The company successfully disposed of an investment in an associate in May 2025, with proceeds enhancing working capital and providing financial flexibility for ongoing operations and growth initiatives[11][14] Prospects The company maintains cautious optimism for the second half of 2025 and beyond, continuing to expand its Mainland China advertising market presence and exploring value-added services in Hong Kong to sustain revenue - The company will continue to expand its Mainland China advertising market, benefiting from national policies like the "14th Five-Year Plan" and digital economy development plans, anticipating sustained growth in the digital advertising industry[16][19] - The company's advertising capabilities on Douyin and its partnership with Kingkey Group for events in high-traffic shopping malls position it to capitalize on rising consumption and experiential marketing trends in Mainland China[16][19] - The company plans to launch workshops in China in July 2025, aiming to improve cost-effectiveness and quality control through vertical integration of event-related material production, while strengthening its project management team[17][19] - The Hong Kong market remains challenging, and the company will leverage brands like Recruit Magazine and Like Magazine to explore value-added services, optimizing content and delivery platforms to adapt to market demands and maintain stable revenue[18][20] - Non-core business segments remain inactive, but the company will selectively consider revitalization opportunities in line with strategic priorities and operational readiness[22][27] Financial Review In the first half of 2025, the Group's total revenue significantly increased by 57.6% to HKD 21.8 million, primarily driven by the expansion of its Mainland China advertising business, yet gross profit margin substantially declined due to competitive pricing strategies in the Chinese market, while administrative expenses decreased after excluding one-off items, but loss before income tax widened due to share of loss from an associate 2025 H1 vs 2024 H1 Revenue Comparison | Indicator | 2025 H1 (HKD) | 2024 H1 (HKD) | YoY Growth Rate | | :--- | :--- | :--- | :--- | | Total Revenue | Approximately 21.8 million | Approximately 13.8 million | Approximately 57.6% | | Advertising Services Revenue | Approximately 21.8 million | Approximately 13.8 million | Approximately 57.6% | | Healthcare Product Sales | Zero | Zero | - | | E-commerce | Zero | Zero | - | | IP Development and Design Services | Zero | Zero | - | - Revenue growth was primarily attributable to the Group's expansion of its advertising business into the Mainland China market[25][28] - The healthcare products, e-commerce, and IP development and design services segments all recorded zero revenue in the first half of 2025, mainly due to documentation issues and business strategy adjustments following the departure of a former executive director[30][31][32][33][34][35] 2025 H1 vs 2024 H1 Gross Profit and Gross Profit Margin Comparison | Indicator | 2025 H1 (HKD) | 2024 H1 (HKD) | Change | | :--- | :--- | :--- | :--- | | Gross Profit | Approximately 6.3 million | Approximately 10.9 million | Decreased by approximately 41.7% | | Gross Profit Margin | Approximately 29.1% | Approximately 78.7% | Decreased by approximately 49.6 percentage points | - The decrease in gross profit and gross profit margin was mainly due to the Group's adoption of a lower-margin competitive pricing strategy during the initial expansion into the Mainland China market, leading to a higher proportion of direct operating costs to revenue[38][39][42][43] 2025 H1 vs 2024 H1 Other Financial Indicators Comparison | Indicator | 2025 H1 (HKD) | 2024 H1 (HKD) | Change | | :--- | :--- | :--- | :--- | | Other Income | Approximately 891,000 | Approximately 645,000 | Increased, mainly due to higher bank interest income | | Selling and Distribution Costs | Approximately 4.4 million | Approximately 5.1 million | Slightly decreased by approximately 12.7% | | Administrative Expenses (excluding one-off items) | Approximately 6.5 million | Approximately 8.8 million | Decreased by 25.7% | | Finance Costs | Approximately 61,000 | Approximately 57,000 | Increased, mainly due to higher lease liabilities | | Loss Before Income Tax | Approximately 10.8 million | Approximately 7.5 million | Loss increased by approximately 45.0% | - Administrative expenses included one-off non-recurring items such as legal fees, forensic investigation, and internal control review fees; excluding these items, actual administrative expenses decreased by 25.7% year-on-year[46][50] Liquidity and Financial Resources As of June 30, 2025, the Group's net current assets and cash and bank balances both increased, and the current ratio improved, though net assets decreased; the Group had no bank loans or other borrowings, maintaining a zero gearing ratio, and adopted centralized financing with conservative foreign exchange and interest rate risk monitoring strategies 2025 H1 vs 2024 H2 Liquidity Indicators Comparison | Indicator | June 30, 2025 (HKD) | December 31, 2024 (HKD) | Change | | :--- | :--- | :--- | :--- | | Net Current Assets | Approximately 34.3 million | Approximately 30.7 million | Increased | | Current Ratio | Approximately 3.8 | Approximately 3.5 | Improved | | Net Assets | Approximately 41.5 million | Approximately 52.3 million | Decreased | | Total Cash and Bank Balances | Approximately 41 million | Approximately 37 million | Increased | - As of June 30, 2025, and December 31, 2024, the Group had no bank loans or other borrowings, resulting in a 0% gearing ratio[55][60] - The Group adopts a centralized financing and treasury policy, monitoring foreign exchange and interest rate risks with a prudent approach, with most transactions conducted in HKD, making currency risk not significant[56][57][60] Capital Structure As of June 30, 2025, the total number of issued shares remained unchanged at 455,534,000 shares, with a par value of HKD 0.2 per share 2025 H1 vs 2024 H2 Issued Shares | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Number of Issued Shares | 455,534,000 shares | 455,534,000 shares | | Par Value per Share | HK$0.2 | HK$0.2 | Capital Commitments and Contingent Liabilities As of June 30, 2025, the Group had no capital commitments or significant contingent liabilities - As of June 30, 2025, the Group had no capital commitments (December 31, 2024: nil)[59][62] - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[59][62] [Material Acquisition and Disposal of Subsidiaries](index