零在科技金融(00093) - 2025 - 中期财报

Company Information This section provides an overview of the company's board structure, committee members, registration details, and principal office information Board and Committee Members The company's board comprises executive directors Mr. Li Lap (Chairman), Mr. Li Ming Chun (Vice Chairman and CEO), Mr. Chow Hau Shing, and independent non-executive directors Mr. Shu Wah Tung, Mr. Wu Wai Bun, and Ms. Zhai Hui Ting - Executive Directors include Li Lap (Chairman), Li Ming Chun (Vice Chairman and CEO), Chow Hau Shing[3] - Independent Non-Executive Directors include Shu Wah Tung, Wu Wai Bun, Zhai Hui Ting[3] - Ms. Zhai Hui Ting was appointed as a member of the Nomination Committee on June 19, 2025[3] Registration and Office Information The company is incorporated in Bermuda, with its head office and principal place of business in Cosco Tower, Sheung Wan, Hong Kong - The company is incorporated in Bermuda, with stock code 00093[3] - Head office and principal place of business are located at Units 2107-08, 21st Floor, Cosco Tower, 183 Queen's Road Central, Sheung Wan, Hong Kong[3] - Major banks include The Hongkong and Shanghai Banking Corporation Limited, Hang Seng Bank Limited, Bank of China (Hong Kong) Limited, Dah Sing Bank Limited, DBS Bank (Hong Kong) Limited, and Standard Chartered Bank (Hong Kong) Limited[4] Business Review This section reviews the Group's financial performance, key profit drivers, business segment performance, and credit risk assessment policies Financial Performance Overview For the six months ended June 30, 2025, the Group's revenue reached HK$159,338 thousand, with profit for the period at HK$18,888 thousand, showing growth compared to the prior year 2025 H1 Financial Performance | Indicator | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | YoY Change (Thousand HKD) | | :--- | :--- | :--- | :--- | | Revenue | 159,338 | 116,981 | +42,357 | | Profit for the period | 18,888 | 14,709 | +4,179 | - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025[5] Key Profit Drivers Profit growth for the period was primarily driven by a significant increase in interest income from financial lending business, partially offset by net impairment losses on loans and interest receivables and fair value losses on investment properties Profit Drivers | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | Change (Thousand HKD) | | :--- | :--- | :--- | :--- | | Interest income from financial lending | 155,498 | 116,187 | +39,311 | | Net impairment losses on loans and interest receivables | (67,195) | (43,530) | (23,665) | | Fair value loss on investment properties | (400) | (3,000) | +2,600 | Business Segment Performance The Group primarily operates in property development and investment and financial lending, with the latter showing strong growth in active customer numbers and revenue Property Development and Investment Property sales at Wing Sing Plaza in Zhongshan, Guangdong, were unsatisfactory, with no residential units sold in the first half, and rental income decreased by approximately 5% year-on-year - Property sales at Wing Sing Plaza in Zhongshan were unsatisfactory, with no sales transactions approved and recorded in the government system during the first half[8] - For the six months ended June 30, 2025, rental income from Wing Sing Plaza decreased by approximately 5% compared to the prior year[8] - As of June 30, 2025, 56 residential units remained unsold, of which 3 were leased out[8] Financial Lending The financial lending business performed strongly, primarily offering unsecured revolving and installment loans via the X Wallet app, leading to significant growth in active customer numbers and revenue - Active unsecured loan customer numbers increased from 15,523 as of December 31, 2024, to 16,851 as of June 30, 2025[10] Unsecured Loan Revenue | Indicator | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Unsecured loan revenue | 135,931 | 94,845 | - Unsecured loans have an annual interest rate ranging from 25% to 48%, with a weighted average annual interest rate of approximately 38%, and a maximum limit of HK$1,500,000[9][10] - Mortgage loans have an annual interest rate ranging from 12% to 24%, with a weighted average annual interest rate of approximately 16%, and a maximum limit of HK$100,000,000[11] - As of June 30, 2025, there were 66 mortgage loan customers, with the top 10 customers accounting for 73% of total mortgage loans receivable; there were 16,851 unsecured loan customers, with the top 10 customers accounting for 1% of total unsecured loans receivable[11] Credit Risk Assessment Policy The Group maintains stringent credit risk assessment policies for both secured and unsecured loans, measuring expected credit losses and writing off loans overdue by more than 90 days - Secured loan approval requires reviewing applicant credit history, property type, valuation, loan-to-value ratio, and market conditions[12] - X Wallet unsecured revolving loan approval is automated, based on big data, credit scoring models, and TransUnion credit reports[12] - As of June 30, 2025, impairment provision for loans and interest receivables was HK$107,253 thousand[13] - Loans overdue by more than 90 days are considered defaulted, with a total of approximately HK$47,819 thousand in loans and interest receivables written off[14] Liquidity and Financial Resources The Group maintains ample cash, with working capital primarily sourced from shareholder loans, bank borrowings, capital and reserves, and operating cash flow, facing RMB-related foreign exchange risks without hedging instruments - The Group has ample cash and no significant capital expenditure commitments[16] - Working capital sources include shareholder loans, bank borrowings, capital and reserves, and cash generated from operations[16] - The Group faces foreign exchange risk primarily related to RMB but has not arranged financial instruments for hedging purposes[16] Internal Control Procedures The Group has established comprehensive internal control procedures covering credit approval, loan collection, and recoverability review to ensure robust risk management Credit Approval Procedures The Group implements detailed credit approval processes for secured loans, X Wallet's automated unsecured revolving loans, and credit department-approved unsecured installment loans - Secured loans require credit specialists to collect information, obtain preliminary valuations from independent property valuers, and credit managers to determine loan amounts and interest rates based on internal policies[17] - X Wallet unsecured revolving loan credit approval is automatically processed by the system, retrieving credit reports and performing risk scoring via API[18] - Unsecured installment loans approved by the credit department undergo initial review by credit specialists, with credit managers reviewing and determining loan terms based on applicant information and internal guidelines[18] Loan Collection and Recoverability Review The Group has established a system for identifying and reviewing overdue loan accounts, closely monitored by directors and senior management, with full provisioning for loans overdue by more than 90 days - The Group has a system to identify and review overdue loan accounts, with daily reports reviewed by directors and senior management[19] - The account management department is responsible for loan collection, including calling customers, issuing overdue payment notices, and engaging external collection agencies when necessary[19] - Loan assets overdue for more than 90 days are considered defaulted, and a full provision is made for the related outstanding loans[19] Orders Due to the nature of its business, the Group had no orders as of June 30, 2025, and no plans to launch new products or services - As of June 30, 2025, the Group had no orders[20] - The Group had no new products or services to be launched at the end of the period[20] Employees and Remuneration Policy As of June 30, 2025, the Group employed 124 staff, with a remuneration policy based on performance, qualifications, and capabilities, offering various benefits - As of June 30, 2025, the Group employed a total of 124 staff[21] - Employee benefits include insurance, provident fund schemes, and discretionary bonuses[21] - Directors' remuneration is reviewed by the Remuneration Committee with reference to operating results, individual performance, and market data[21] Prospects The Group's prospects include economic outlook, strategic development of X Wallet into a comprehensive financial services platform, market promotion, product innovation, and prudent risk management Economic Outlook and Group Strategy Hong Kong's economy is expected to remain challenging in the second half of 2025, while the Group aims to develop X Wallet into a comprehensive financial services platform - Hong Kong's economic conditions are expected to remain challenging in the second half of 2025, affected by global economic uncertainties, inflationary pressures, and political instability[22] - Management believes the continued growth of X Wallet will enable the Group to develop into a comprehensive financial services platform, offering a wider range of services[22] Marketing and Product Innovation In July 2025, the Group launched a major brand promotion campaign for X Wallet and introduced AI-driven lending service X Cash.AI and "Buy Now, Pay Later" service X Pay - In July 2025, the Group launched a major brand promotion campaign for X Wallet with the theme "Seize the Opportunity! Outperform 99.9% of People!"[22] - Introduced AI-driven lending service X Cash.AI (5-second instant approval) and innovative payment service X Pay (3-installment interest-free payment)[23] - Developed a media deployment strategy covering MTR stations, outdoor online shopping, TV channels, and online social media to enhance visibility[23] Risk Management and Future Outlook The Group will actively assess its loan portfolio and risk control measures, implement strict loan application standards, and enhance its risk pricing model, while avoiding new property market investments in China - The Group will actively assess its loan portfolio and risk control measures, implementing strict loan application standards to minimize default risk[23] - The Group will adhere to core risk management principles and is committed to enhancing its risk pricing model[23] - Due to the downturn in the China property market, management will not explore new investment opportunities in the property market in the short term[25] Directors' Interests in Shares and Share Options As of June 30, 2025, Directors Mr. Li Lap and Mr. Li Ming Chun held significant interests in the company's shares, primarily through family trusts and controlled corporations, with Mr. Chow Hau Shing holding a smaller personal interest Directors' Long Positions in the Company's Shares (As of June 30, 2025) | Director Name | Total Number of Shares | Percentage of Total Issued Shares | | :--- | :--- | :--- | | Mr. Li Lap | 1,252,752,780 | 46.96% | | Mr. Li Ming Chun | 1,962,752,780 | 73.58% | | Mr. Chow Hau Shing | 7,150,000 | 0.27% | - The interests of Mr. Li Lap and Mr. Li Ming Chun are primarily held by Lee & Leung (B.V.I.) Limited, which is wholly owned by Lee & Leung Family Investment Limited, which in turn is wholly owned by HSBC International Trustee Limited (as trustee of the Lee & Leung Family Trust)[26] - Earth Axis Investment Limited, indirectly controlled by Mr. Li Ming Chun, holds 710,000,000 shares[26] Directors' Long Positions in Shares of Other Associated Corporations (As of June 30, 2025) | Director Name | Subsidiary Name | Total Number of Shares | Percentage of Total Issued Non-Voting Deferred Shares | | :--- | :--- | :--- | :--- | | Mr. Li Lap | Lee's Plastic Manufacturing Company Limited | 500,000 | 100% | | Mr. Li Lap | Timely Electronics Limited | 10,000 | 100% | Substantial Shareholders As of June 30, 2025, the company's substantial shareholders included Lee & Leung (B.V.I.) Limited and its associates, Earth Axis Investment Limited, Cosmo Telecommunication Inc., and East Glory Trading Limited Substantial Shareholders' Shareholdings (As of June 30, 2025) | Shareholder Name | Capacity | Number of Ordinary Shares | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | Lee & Leung (B.V.I.) Limited | Beneficial owner | 1,252,752,780 | 46.96% | | Earth Axis Investment Limited | Beneficial owner | 710,000,000 | 26.62% | | Cosmo Telecommunication Inc. | Beneficial owner | 151,202,960 | 5.67% | | East Glory Trading Limited | Beneficial owner | 103,397,540 | 3.88% | - Lee & Leung (B.V.I.) Limited, Lee & Leung Family Investment Limited, and HSBC International Trustee Limited (as trustee of the Lee & Leung Family Trust) all hold 46.96% shares, with Ms. Leung Lai Ping as the trust beneficiary[28][33] - Earth Axis Investment Limited is wholly owned by Easy Finance Holdings Limited, which is indirectly controlled by Mr. Li Ming Chun[28][33] - Cosmo Telecommunication Inc. is wholly owned by Ms. Jing Xiao Ju[28][33] - East Glory Trading Limited is wholly owned by Master Winner Limited, which is wholly owned by Mr. Yuan Qinghua[28][33] Purchase, Sale or Redemption of the Company's 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 - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[30] Subsequent Events Details of events occurring after the end of the reporting period are set out in Note 24 to the interim condensed consolidated financial information - Details of subsequent events after the end of the reporting period are set out in Note 24 to the interim condensed consolidated financial information[31] Corporate Governance The company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules during the reporting period, with specific provisions for director retirement by rotation - The company has complied with the applicable code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules for the six months ended June 30, 2025[32] - Under the company's Bye-laws, the Chairman and Managing Director are not subject to retirement by rotation but are required to stand for re-election every three years; other directors are required to retire by rotation at least once every three years[34] Changes in Directors' Information There were no other changes in directors' information requiring disclosure under Rules 13.51(2)(a) to (e) and (g) of the Listing Rules - There were no other changes in directors' information requiring disclosure under Rules 13.51(2)(a) to (e) and (g) of the Listing Rules[35] Directors' Securities Transactions The company adopted the Model Code in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions and confirmed all directors complied with it during the reporting period - The company has adopted the Model Code set out in Appendix C3 of the Listing Rules as the code of conduct for directors' securities transactions[36] - All directors complied with the Model Code during the six months ended June 30, 2025[36] - The Board has also established written guidelines for senior management regarding dealings in the company's securities, with terms no less stringent than the Model Code[37] Audit Committee The company's Audit Committee reviewed the Group's adopted accounting principles and practices, and discussed audit, internal control, and financial reporting matters, including the interim report - The Audit Committee has reviewed the accounting principles and practices adopted by the Group[38] - The Audit Committee has discussed audit, internal control, and financial reporting matters, including the review of the interim report for the six months ended June 30, 2025[38] Review Report on Interim Financial Information PricewaterhouseCoopers reviewed the Group's interim financial information for the six months ended June 30, 2025, concluding that nothing came to their attention to suggest the interim financial information was not prepared in all material respects in accordance with HKAS 34 - PricewaterhouseCoopers has reviewed the Group's interim financial information for the six months ended June 30, 2025[40] - A review is substantially less in scope than an audit, and consequently, no audit opinion is expressed[41] - The review concluded that nothing has come to the auditor's attention that causes them to believe the interim financial information is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[43] Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's revenue was HK$159,338 thousand, profit for the period was HK$18,888 thousand, and basic and diluted earnings per share were HK$0.71 cents Summary of Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 159,338 | 116,981 | | Operating profit | 33,555 | 21,505 | | Profit for the period attributable to owners of the company | 18,888 | 14,709 | | Total comprehensive income for the period | 20,235 | 4,201 | | Basic earnings per share (HK cents) | 0.71 | 0.55 | - Net impairment losses on loans and interest receivables were HK$67,195 thousand, an increase from HK$43,530 thousand in the prior year[45] - Finance costs significantly increased to HK$8,934 thousand from HK$1,123 thousand in the prior year[45] Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets were HK$1,465,351 thousand, total equity was HK$1,113,189 thousand, and total liabilities were HK$352,162 thousand, with notable shifts in loans and borrowings Summary of Interim Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Total assets | 1,465,351 | 1,400,616 | | Total equity | 1,113,189 | 1,092,954 | | Total liabilities | 352,162 | 307,662 | | Non-current loans and interest receivables | 687,622 | 600,166 | | Current loans and interest receivables | 237,882 | 309,793 | | Non-current bank borrowings | 215,000 | 112,000 | | Current loan from a shareholder | 97,582 | - | | Non-current loan from a shareholder | - | 160,439 | - Non-current loans and interest receivables increased from HK$600,166 thousand to HK$687,622 thousand[47] - A loan from a shareholder shifted from the non-current portion (HK$160,439 thousand) to current liabilities (HK$97,582 thousand)[48] - Non-current bank borrowings increased from HK$112,000 thousand to HK$215,000 thousand[48] Interim Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, total equity attributable to owners of the company increased to HK$1,113,189 thousand, driven by profit for the period and exchange differences, partially offset by property revaluation loss Summary of Interim Condensed Consolidated Statement of Changes in Equity | Indicator | June 30, 2025 (Thousand HKD) | Jan 1, 2025 (Thousand HKD) | | :--- | :--- | :--- | | Total equity | 1,113,189 | 1,092,954 | | Profit for the period | 18,888 | - | | Exchange differences on translating overseas operations | 2,167 | - | | Revaluation loss on leasehold land and buildings | (820) | - | - Retained earnings increased from HK$84,508 thousand at the beginning of the period to HK$103,396 thousand[49] Interim Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, the Group's cash and cash equivalents increased by HK$35,164 thousand, with operating activities generating cash inflow and financing activities contributing significantly Summary of Interim Condensed Consolidated Statement of Cash Flows | Indicator | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Net cash inflow from operating activities | 9,140 | (88,515) | | Net cash outflow from investing activities | (2,162) | 2,203 | | Net cash inflow from financing activities | 28,186 | 114,150 | | Net increase in cash and cash equivalents | 35,164 | 27,838 | | Cash and cash equivalents at end of period | 157,787 | 129,313 | - Cash flow from operating activities shifted from an outflow in the prior year to an inflow, indicating improved operational performance[50] - In financing activities, shareholder advances were HK$30,000 thousand, repayment of shareholder loans was HK$93,000 thousand, and proceeds from bank borrowings were HK$100,000 thousand[50] Notes to the Interim Condensed Consolidated Financial Information This section provides detailed notes to the interim condensed consolidated financial information, covering general information, accounting policies, risk management, and specific financial statement items 1. General Information The company, incorporated in Bermuda, primarily engages in property investment and development in China and Hong Kong, and financial lending in Hong Kong, with Lee & Leung Family Investment Limited as its ultimate parent company - The company primarily engages in property investment and development in China and Hong Kong, and financial lending in Hong Kong[52] - The company's ultimate parent company is Lee & Leung Family Investment Limited, incorporated in the British Virgin Islands[52] - The interim condensed consolidated financial information is unaudited, presented in Thousand HKD, and was reviewed by the Audit Committee and approved for publication by the Board on August 28, 2025[53] 2. Basis of Preparation The interim condensed consolidated financial information is prepared in accordance with Appendix D2 of the Listing Rules and HKAS 34 "Interim Financial Reporting" and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024 - The interim condensed consolidated financial information is prepared in accordance with Appendix D2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants[54] - It should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024, which have been prepared in accordance with Hong Kong Financial Reporting Standards[54] 3. Accounting Policies The interim condensed consolidated financial statements are prepared on a historical cost basis, with certain assets measured at fair value, and the application of revised standards had no significant impact on financial position or performance - The interim condensed consolidated financial statements are prepared on a historical cost basis, except for leasehold land and buildings, investment properties, and financial assets at fair value through profit or loss, which are stated at fair value at each reporting period end[55] - The application of amendments to HKAS 21 and HKFRS 1 "Lack of Exchangeability" during the period had no impact on the Group's financial position and performance[56] - Several new and revised standards not yet effective are listed, including HKFRS 18 "Presentation and Disclosure in Financial Statements" (effective January 1, 2027)[57] 4. Accounting Estimates and Judgements The significant judgements, estimates, and assumptions made by management in preparing the interim condensed consolidated financial information are consistent with those applied in the annual consolidated financial statements for the year ended December 31, 2024 - The significant judgements, estimates, and assumptions made by management in preparing the interim condensed consolidated financial information are the same as those applied in the annual consolidated financial statements for the year ended December 31, 2024[58] 5. Financial Risk Management The Group faces market risk (foreign exchange risk, interest rate risk), credit risk, and liquidity risk, with risk management policies remaining unchanged since December 31, 2024, and fair value measurements using a three-level hierarchy - The Group's business activities are exposed to market risk (including foreign exchange risk and cash flow and fair value interest rate risk), credit risk, and liquidity risk[60] - There have been no changes in risk management policies since December 31, 2024[61] - The carrying amounts of financial assets and financial liabilities are reasonable approximations of their fair values, and fair value measurements use a three-level hierarchy[63][64] 6. Segment Information The Group's chief operating decision maker reviews the results of two reportable segments: property development and investment, and financial lending, with Hong Kong contributing the vast majority of external customer revenue - The Group has two reportable segments: property development and investment (sale and leasing of properties in China) and financial lending (provision of mortgage and personal loans in Hong Kong)[66][67] Segment Results (For the six months ended June 30, 2025) | Segment | Revenue (Thousand HKD) | Segment Results (Thousand HKD) | | :--- | :--- | :--- | | Property development and investment | 755 | (946) | | Financial lending | 155,498 | 30,006 | | Total | 159,338 | 29,060 | Revenue from External Customers (By geographical area) | Region | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Hong Kong | 155,498 | 116,187 | | China | 3,840 | 794 | | Total | 159,338 | 116,981 | - For the six months ended June 30, 2025, no single customer contributed 10% or more of the Group's revenue[75] 7. Revenue, Other Income and Other Losses, Net For the six months ended June 30, 2025, the Group's revenue primarily came from interest income from financial lending, with other income including handling fees and bank interest, and net other losses mainly from asset impairment recoveries and unrealized exchange losses Revenue Composition (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Interest income from financial lending business | 155,498 | 116,187 | | Rental income from properties held for sale | 755 | 794 | | Information technology service income | 3,085 | - | | Total Revenue | 159,338 | 116,981 | Other Income Composition (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Bank interest income | 99 | 404 | | Handling fee income | 875 | 320 | | Information technology service income | - | 1,727 | | Miscellaneous income | 419 | 22 | | Total Other Income | 1,393 | 2,473 | Other Losses, Net Composition (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Recovery of asset impairment provisions | (533) | (2,273) | | Net unrealized exchange (losses) / gains | (326) | 249 | | Fair value gains on financial assets at fair value through profit or loss | 21 | 3 | | Total Other Losses, Net | (838) | (1,794) | 8. Profit for the Period Profit for the period includes depreciation, amortization, and expenses related to short-term leases, with property, plant and equipment depreciation at HK$3,703 thousand and intangible asset amortization at HK$668 thousand Items Included in "Other Operating Expenses" (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 3,703 | 2,010 | | Amortization of intangible assets | 668 | 672 | | Expenses relating to short-term leases | 185 | 136 | 9. Finance Costs For the six months ended June 30, 2025, the Group's finance costs significantly increased to HK$8,934 thousand, primarily due to increased interest expenses on bank borrowings and amortization of loan arrangement fees Finance Costs Composition (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Interest expense on lease liabilities | 329 | 51 | | Interest expense on loan from a shareholder | 1,240 | 1,072 | | Interest expense on bank borrowings | 5,365 | - | | Amortisation of loan arrangement fees | 2,000 | - | | Total Finance Costs | 8,934 | 1,123 | 10. Net Impairment Losses on Loans and Interest Receivables For the six months ended June 30, 2025, net impairment losses on loans and interest receivables amounted to HK$67,195 thousand, an increase from the prior year, partially offset by recoveries of previously written-off loans and interest Net Impairment Losses on Loans and Interest Receivables (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Net impairment provision | 69,888 | 45,458 | | Recovery of previously written-off loans and interest receivables | (2,693) | (1,928) | | Total Net Impairment Losses | 67,195 | 43,530 | 11. Income Tax Expense For the six months ended June 30, 2025, income tax expense was HK$5,733 thousand, primarily contributed by Hong Kong profits tax, partially offset by deferred income tax Income Tax Expense Composition (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | China corporate income tax | 2 | 55 | | Hong Kong profits tax | 7,828 | 6,311 | | Deferred income tax | (2,097) | (693) | | Total Income Tax Expense | 5,733 | 5,673 | 12. Earnings Per Share For the six months ended June 30, 2025, profit attributable to owners of the company was HK$18,888 thousand, with basic earnings per share of HK$0.71 cents, and diluted earnings per share being the same Earnings Per Share Calculation (For the six months ended June 30, 2025) | Indicator | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Profit attributable to owners of the company (Thousand HKD) | 18,888 | 14,709 | | Weighted average number of ordinary shares in issue (Thousand shares) | 2,667,643 | 2,667,643 | | Basic earnings per share (HK cents) | 0.71 | 0.55 | - For the six months ended June 30, 2025, there were no potential dilutive ordinary shares in issue, thus diluted earnings per share were the same as basic earnings per share[86] 13. Property, Plant and Equipment and Investment Properties As of June 30, 2025, the net book value of property, plant and equipment was HK$203,599 thousand, and investment properties were HK$46,600 thousand, with revaluation and fair value losses recorded during the period Net Book Value of Property, Plant and Equipment and Investment Properties (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Property, plant and equipment | 203,599 | 205,516 | | Investment properties | 46,600 | 47,000 | - Leasehold land and buildings are accounted for using the revaluation model, and investment properties are accounted for using the fair value model[88] - For the six months ended June 30, 2025, there was a revaluation loss of HK$820 thousand on leasehold land and buildings and a fair value loss of HK$400 thousand on investment properties[89][90] - Valuations were performed by Brightway Surveyors & Valuers Limited, an independent professional qualified valuer, using the direct comparison approach[89][91] - As of June 30, 2025, the unit selling price per square foot for leasehold land and buildings was HK$64,900, and for investment properties was HK$19,900[91] 14. Intangible Assets As of June 30, 2025, the net book value of intangible assets was HK$9,951 thousand, primarily comprising brand names and club memberships, with new memberships added and amortization expense recorded during the period Net Book Value of Intangible Assets (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Mobile application | - | - | | Brand names | 7,191 | 7,859 | | Club memberships | 2,760 | - | | Total | 9,951 | 7,859 | - New club memberships of HK$2,760 thousand were added during the period[93] - Amortization expense was HK$668 thousand, recognized in "Other operating expenses" in the interim condensed consolidated statement of profit or loss[93] 15. Loans and Interest Receivables As of June 30, 2025, total loans and interest receivables were HK$1,032,757 thousand, with a net amount of HK$925,504 thousand after deducting impairment provisions, and a significant portion of personal loans being unsecured Loans and Interest Receivables Composition (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Property mortgage loans | 251,530 | 342,227 | | Personal loans | 781,227 | 658,983 | | Total | 1,032,757 | 1,001,210 | | Less: Impairment provision | (107,253) | (91,251) | | Net | 925,504 | 909,959 | - Personal loans and interest receivables of HK$781,227 thousand are unsecured[95] Ageing Analysis of Loans and Interest Receivables (As of June 30, 2025) | Ageing | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Not overdue | 878,440 | 865,309 | | Overdue 1 to 30 days | 57,377 | 39,152 | | Overdue 31 to 60 days | 5,955 | 5,069 | | Overdue 61 to 90 days | 9,538 | 38,249 | | Overdue over 90 days | 81,447 | 53,431 | | Total | 1,032,757 | 1,001,210 | 16. Share Capital As of June 30, 2025, the company's authorized share capital was 2,800,000 thousand shares with a par value of HK$0.08 per share, and issued and fully paid share capital was 2,667,643 thousand shares, remaining unchanged from December 31, 2024 Share Capital Structure (As of June 30, 2025) | Item | Number (Thousand shares) | Par Value (Thousand HKD) | | :--- | :--- | :--- | | Authorized ordinary shares | 2,800,000 | 224,000 | | Issued and fully paid ordinary shares | 2,667,643 | 213,411 | 17. Financial Assets at Fair Value Through Profit or Loss As of June 30, 2025, the Group held equity securities for trading amounting to HK$110 thousand, denominated in HKD and classified as current assets Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Equity securities held for trading | 110 | 89 | - Financial assets are listed instruments denominated in HKD and classified as current assets[99] 18. Other Payables and Accrued Expenses As of June 30, 2025, total other payables and accrued expenses were HK$12,527 thousand, a decrease from December 31, 2024, mainly due to reduced accrued audit fees and employee benefit expenses Other Payables and Accrued Expenses Composition (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Rental deposits | 70 | 77 | | Accrued audit fees | 1,535 | 2,285 | | Accrued employee benefit expenses | 1,951 | 3,662 | | Other payables and accrued expenses | 8,971 | 10,070 | | Total | 12,527 | 16,094 | 19. Loan from a Shareholder The company entered into a loan agreement with shareholder Mr. Li Ming Chun, with approximately HK$97,582 thousand drawn as of June 30, 2025, which is unsecured, bears interest at 3% per annum, and is repayable within two years - The company entered into a loan agreement with shareholder Mr. Li Ming Chun, with a total of approximately HK$97,582 thousand drawn as of June 30, 2025[101] - The loan is unsecured, bears interest at 3% per annum, and is repayable within two years[101] 20. Bank Borrowings As of June 30, 2025, total bank borrowings were HK$215,395 thousand, a significant increase from December 31, 2024, secured by loans and interest receivables, bearing floating interest rates, and complying with financial covenants Bank Borrowings (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Non-current bank borrowings | 215,000 | 112,000 | | Current bank borrowings | 395 | 422 | | Total | 215,395 | 112,422 | - Bank borrowings are secured by the Group's total balance of HK$310,297 thousand in loans and interest receivables[102] - Bank borrowings are denominated in HKD, bear floating interest rates, with a weighted average effective interest rate of 6.5% per annum (December 31, 2024: 8.3% per annum)[102] - The Group has complied with the financial covenants of its bank borrowing facilities[103] 21. Related Party Disclosures The Group has transactions with related parties, including lease liabilities, IT service income, and lease payments, with amounts payable to a related company being unsecured, interest-free, and repayable on demand Balances with Related Parties (As of June 30, 2025) | Item | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Lease liabilities | 5,182 | 6,102 | Transactions with Related Parties (For the six months ended June 30, 2025) | Item | 2025 H1 (Thousand HKD) | 2024 H1 (Thousand HKD) | | :--- | :--- | :--- | | Information technology service income | 3,085 | 1,727 | | Lease payments | 1,147 | 72 | - Amounts payable to a related company are unsecured, interest-free, and repayable on demand[106] - Compensation to key management personnel amounted to HK$3,769 thousand for the six months ended June 30, 2025[105] 22. Operating Lease Commitments - The Group as Lessor The Group leases out certain properties held for sale under short-term operating leases to maintain flexibility in the number of residential units available for sale, with all properties having tenants committed for one year - The Group leases out certain properties held for sale under operating leases to maintain flexibility in the number of residential units available for sale[107] - As of June 30, 2025, all properties had tenants committed for one year[108] Total Future Minimum Lease Payments Receivable (As of June 30, 2025) | Term | June 30, 2025 (Thousand HKD) | Dec 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Less than one year | 2 | 22 | 23. Dividends No dividends were declared for the six months ended June 30, 2025 - No dividends were declared for the six months ended June 30, 2025[110] 24. Subsequent Events On July 7, 2025, X8 Finance Limited, an indirect wholly-owned subsidiary, entered into two loan agreements totaling HK$92,000,000, secured by Hong Kong residential properties at an annual interest rate of 19%, repayable within 12 months - On July 7, 2025, X8 Finance Limited (an indirect wholly-owned subsidiary of the company) entered into two loan agreements with a total principal amount of HK$92,000,000[111] - These loans are secured by residential properties located in Hong Kong, bear an annual interest rate of 19% (plus 3% in case of default), and are repayable upon the expiry of the 12-month term[111]