合丰集团(02320) - 2025 - 中期财报

CORPORATE INFORMATION Board of Directors This section lists the Board of Directors of Hop Fung Group Holdings Limited, including executive and independent non-executive directors, and the composition of various committees - Executive Directors include Mr. Hui Sum Ping (Chairman), Mr. Hui Sum Tai (Chief Executive Officer), and Ms. Hui Yuk Ling[3] - Independent Non-Executive Directors are Mr. Cho Sze Wai, Mr. Wong Chu Leung, and Mr. Chow Suk Ming[3] - Mr. Cho Sze Wai chairs the Audit, Remuneration, and Nomination Committees[3] Other Corporate Details This section provides essential company information, including authorized representatives, company secretary, auditor, and stock code - Authorized representatives are Mr. Hui Sum Tai and Mr. Chan Wai Man, with Mr. Chan also serving as Company Secretary[4] - The company's auditor is ZHONGHUI ANDA CPA Limited[4] - The company's stock code is 2320, and its official website is www.hopfunggroup.com[7](index=7&type=chunk) CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Financial Performance Overview For the six months ended June 30, 2025, group revenue significantly decreased by 35.9% to HK$69,134 thousand, resulting in lower gross profit and a period loss of HK$38,406 thousand, narrower than the prior year Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Revenue | 69,134 | 107,821 | | Cost of sales | (64,094) | (98,586) | | Gross profit | 5,040 | 9,235 | | Other income | 1,079 | 1,120 | | Other gains and losses | 1,782 | 175 | | Selling and distribution costs | (4,449) | (5,867) | | Administrative expenses | (16,112) | (17,983) | | Other expenses | (27,489) | (29,546) | | Finance costs | (1,662) | (1,831) | | Loss before tax | (41,811) | (44,697) | | Income tax credit | 3,405 | 1,020 | | Loss for the period | (38,406) | (43,677) | | Exchange differences | 19,849 | (22,724) | | Total comprehensive expense for the period | (18,557) | (66,401) | | Basic loss per share (HK cents) | (4.70) | (5.34) | - Revenue decreased by 35.9% year-on-year, primarily due to reduced customer orders and intense market competition[11][133] - Gross profit margin declined from 8.6% in H1 2024 to 7.3% in H1 2025, as revenue decreased more than cost of sales[133] - Other gains and losses increased from a net gain of HK$175 thousand in H1 2024 to a net gain of HK$1,782 thousand in H1 2025, mainly due to write-off of accrued expenses and other payables[11][134] - Administrative expenses decreased by 10.5% to HK$16,112 thousand, reflecting the Group's proactive review and streamlining of its cost structure[11][135] - Loss for the period narrowed to HK$38,406 thousand from HK$43,677 thousand in the prior year[11][140] CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION Financial Position Overview As of June 30, 2025, total assets slightly decreased, non-current assets remained stable, while current assets significantly declined due to reduced inventories, trade and other receivables, and bank balances and cash, leading to a lower current ratio Condensed Consolidated Statement of Financial Position (As at June 30) | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Non-current assets | | | | Property, plant and equipment | 659,510 | 665,812 | | Right-of-use assets | 17,449 | 17,493 | | Deposits and prepayments | 125,252 | 131,821 | | Current assets | | | | Inventories | 12,058 | 13,098 | | Trade and other receivables | 30,787 | 39,549 | | Bank balances and cash | 20,125 | 33,558 | | Current liabilities | | | | Trade and other payables | 61,812 | 77,581 | | Bank borrowings (due within one year) | 4,317 | 4,239 | | Non-current liabilities | | | | Bank borrowings (due after one year) | 87,595 | 88,128 | | Deferred tax | 5,347 | 8,969 | | Equity | | | | Share capital | 81,764 | 81,764 | | Reserves | 627,642 | 646,199 | | Total equity | 709,406 | 727,963 | - Net current assets significantly decreased from HK$9,934 thousand as at December 31, 2024, to HK$137 thousand as at June 30, 2025[15][141] - The current ratio decreased from 1.12 as at December 31, 2024, to 1.0 as at June 30, 2025[141] - Total bank balances and cash decreased from HK$33,558 thousand to HK$20,125 thousand, with the majority denominated in RMB[15][141] CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY Equity Changes Overview For the six months ended June 30, 2025, total equity decreased from HK$727,963 thousand to HK$709,406 thousand, primarily due to a period loss of HK$38,406 thousand, partially offset by an increase in exchange reserve Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Total at January 1 | 727,963 | 842,892 | | Loss for the period | (38,406) | (43,677) | | Other comprehensive income/(expense) for the period | 19,849 | (22,724) | | Total comprehensive income/(expense) for the period | (18,557) | (66,401) | | Total at June 30 | 709,406 | 776,491 | - Exchange reserve recorded a positive change of HK$19,849 thousand in H1 2025, compared to a negative HK$22,724 thousand in H1 2024[19][21] - Retained profits decreased due to the loss for the period, from HK$286,647 thousand as at January 1, 2025, to HK$248,241 thousand[19] CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS Cash Flow Overview For the six months ended June 30, 2025, the Group experienced net cash outflows from operating, investing, and financing activities, resulting in a net decrease of HK$13,838 thousand in cash and cash equivalents Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Net cash used in operating activities | (9,770) | (9,124) | | Net cash used in investing activities | (172) | (1,104) | | Net cash (used in)/generated from financing activities | (3,896) | 15,275 | | Net (decrease)/increase in cash and cash equivalents | (13,838) | 5,047 | | Cash and cash equivalents at January 1 | 33,558 | 47,272 | | Effect of foreign exchange rate changes | 405 | (1,425) | | Cash and cash equivalents at June 30 | 20,125 | 50,894 | - Net cash used in operating activities was slightly higher than the prior period, mainly impacted by changes in working capital[24] - Financing activities shifted from a net cash inflow in the prior period to a net cash outflow, primarily due to reduced new bank loans and bank loan repayments[26] - Total cash and cash equivalents as at June 30, 2025, amounted to HK$20,125 thousand, a significant decrease from HK$33,558 thousand as at January 1, 2024[26] NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. GENERAL This note states that the company is an exempted limited company incorporated in the Cayman Islands, with its shares listed on The Stock Exchange of Hong Kong - The company is incorporated in the Cayman Islands, and its shares are listed on The Stock Exchange of Hong Kong[27][30] 2. BASIS OF PREPARATION This note outlines the basis of financial statement preparation, discussing the going concern assumption and the Group's plans to mitigate liquidity pressure despite significant uncertainties - The financial statements are prepared in accordance with Hong Kong Accounting Standard 34 Interim Financial Reporting and Appendix D2 of the Listing Rules[28][31] - The Group incurred losses in both H1 2025 and H1 2024 and faces significant contingent liabilities from the PRC tax authority, which may cast significant doubt on its ability to continue as a going concern[29][32] - The Board has prepared cash flow forecasts and obtained a letter of intent for loan facilities of approximately RMB300 million from its principal bankers to support its going concern[33][35] 3. PRINCIPAL ACCOUNTING POLICIES This note states that the financial statements are prepared on a historical cost basis, confirming the Group's adoption of all new and revised HKFRSs, but not yet applying unissued standards - The financial statements are prepared on a historical cost basis, and the accounting policies adopted are consistent with those in the 2024 annual financial statements[36][37][40] - The adoption of new and revised HKFRSs did not result in significant changes to accounting policies, financial statement presentation, or reported amounts[38][41] 4. REVENUE AND SEGMENT INFORMATION This note discloses the Group's revenue and segment results, categorizing business into containerboard and corrugated packaging, with revenue primarily from corrugated packaging as of June 30, 2025 - The Group's manufacturing operations are located in the PRC, with operating segments including containerboard (corrugating medium and kraftliner) and corrugated packaging (corrugated paperboards and cartons)[42][44][45] Segment Revenue and Results (For the six months ended June 30) | Segment | 2025 Revenue (HK$'000) | 2025 Segment Loss (HK$'000) | 2024 Revenue (HK$'000) | 2024 Segment Loss (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | Containerboard | – | (30,058) | – | (31,336) | | Corrugated packaging | 69,134 | (4,424) | 107,821 | (3,341) | | Consolidated total | 69,134 | (34,482) | 107,821 | (34,677) | - The containerboard business has generated no external revenue since 2022, primarily due to the temporary suspension of upstream operations[47][129] 5. OTHER EXPENSES This note details the Group's other expenses, primarily comprising depreciation, other PRC taxes, and legal and professional fees Other Expenses (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Other PRC taxes | 1,693 | 1,771 | | Depreciation | 24,329 | 24,864 | | Legal and professional fees | 958 | 2,210 | | Others | 509 | 701 | | Total | 27,489 | 29,546 | - Total other expenses decreased from HK$29,546 thousand in 2024 to HK$27,489 thousand in 2025, mainly due to reduced legal and professional fees[50][136] 6. FINANCE COSTS This note discloses the Group's finance costs, primarily consisting of interest on bank borrowings, which decreased due to bank loan repayments Finance Costs (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Interest on bank borrowings | 1,660 | 1,826 | | Interest on lease liabilities | 2 | 5 | | Total | 1,662 | 1,831 | - Finance costs decreased from HK$1,831 thousand in 2024 to HK$1,662 thousand in 2025, primarily due to bank loan repayments[52][139] 7. INCOME TAX CREDIT This note details the Group's income tax credit, including Hong Kong profits tax, PRC corporate income tax, and deferred tax credit, also mentioning preferential tax rates for high-tech PRC subsidiaries Income Tax Credit (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Current tax: | | | | Hong Kong profits tax | 331 | 390 | | PRC corporate income tax | 3 | – | | Subtotal | 334 | 390 | | Deferred tax credit | (3,739) | (1,410) | | Total | (3,405) | (1,020) | - Hong Kong profits tax applies a two-tiered tax rate, with the first HK$2 million of assessable profits taxed at 8.25% and the remainder at 16.5%[54][55] - PRC subsidiaries are subject to a 25% tax rate, with one high-tech enterprise enjoying a preferential rate of 15%[57][60] 8. LOSS FOR THE PERIOD This note lists the key items included in or deducted from the loss for the period, such as depreciation, staff costs, and cost of inventories recognized as expense Items (credited)/charged to loss for the period (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 25,105 | 25,652 | | Depreciation of right-of-use assets | 340 | 342 | | Staff costs (including directors' emoluments) | 17,394 | 19,574 | | Cost of inventories recognised as expense | 64,094 | 98,586 | | Exchange gains, net | (29) | (81) | - Staff costs (including directors' emoluments) decreased from HK$19,574 thousand in 2024 to HK$17,394 thousand in 2025[62] - Cost of inventories recognized as expense decreased from HK$98,586 thousand in 2024 to HK$64,094 thousand in 2025[62] 9. LOSS PER SHARE This note provides the calculation for basic and diluted loss per share, indicating a narrowing of the loss per share Loss Per Share (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Loss for the purpose of calculating basic and diluted loss per share | (38,406) | (43,677) | | Weighted average number of ordinary shares | 817,644,000 | 817,644,000 | | Basic and diluted loss per share (HK cents) | (4.70) | (5.34) | - No assumption of share option exercise was made for diluted loss per share calculation, as the exercise price was higher than the average market price of shares[64][66] 10. DIVIDENDS This note states that no dividends were declared or proposed by the Board for the six months ended June 30, 2025 - No dividends were declared or proposed for the six months ended June 30, 2025, and 2024[65][67] 11. PROPERTY, PLANT AND EQUIPMENT This note discloses the Group's capital expenditure on property, plant, and equipment - For the six months ended June 30, 2025, the Group acquired property, plant and equipment of approximately HK$0.2 million, a significant decrease from HK$1.06 million in the same period of 2024[68][69][142] 12. RIGHT-OF-USE ASSETS This note provides the carrying amount and depreciation expense of right-of-use assets, also mentioning the early termination of a Macau office lease agreement Right-of-Use Assets Carrying Amount and Depreciation Expense | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Carrying amount | 17,449 | 17,493 | | Depreciation expense (For the six months ended June 30) | 340 | 342 | - The Group early terminated a Macau office lease agreement, derecognizing the related right-of-use assets and lease liabilities, and recognizing a gain on lease termination[72] 13. INVENTORIES This note details the composition of the Group's inventories, primarily consisting of raw materials and finished goods Inventories Composition (As at June 30) | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Raw materials | 11,834 | 12,965 | | Finished goods | 224 | 133 | | Total | 12,058 | 13,098 | - Total inventories decreased from HK$13,098 thousand as at December 31, 2024, to HK$12,058 thousand as at June 30, 2025[74] 14. TRADE AND OTHER RECEIVABLES This note provides a detailed analysis of trade and other receivables, including aging distribution and advances to Batangas Paper Corporation Trade and Other Receivables (As at June 30) | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Trade receivables (net of allowance) | 21,548 | 30,422 | | Other receivables | 9,239 | 9,127 | | Total | 30,787 | 39,549 | Aging Analysis of Trade Receivables (As at June 30) | Aging | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Within 30 days | 14,169 | 20,504 | | 31-60 days | 6,474 | 9,488 | | 61-90 days | 413 | 341 | | Over 90 days | 492 | 89 | - Total trade and other receivables as at June 30, 2025, amounted to HK$30,787 thousand, a decrease from HK$39,549 thousand as at December 31, 2024[76] - Other receivables include advances of approximately HK$7,695 thousand to independent third party Batangas Paper Corporation, which are unsecured, interest-free, and repayable on demand[77] - Trade receivables overdue for 90 days or more increased from HK$243 thousand as at December 31, 2024, to HK$506 thousand as at June 30, 2025[80][81] 15. TRADE AND OTHER PAYABLES This note presents the composition and aging analysis of the Group's trade and other payables, indicating a decrease in total payables Trade and Other Payables (As at June 30) | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Trade payables | 16,236 | 22,703 | | Payables for acquisition of property, plant and equipment | 3,200 | 2,492 | | Other PRC taxes payable | 13,010 | 11,794 | | Accrued expenses | 25,692 | 37,811 | | Other payables | 3,674 | 2,781 | | Total | 61,812 | 77,581 | - Total trade and other payables decreased from HK$77,581 thousand as at December 31, 2024, to HK$61,812 thousand as at June 30, 2025[84] - Accrued expenses, including accrued salaries and wages, were a major component of payables, decreasing from HK$37,811 thousand to HK$25,692 thousand[84][85] 16. LEASE LIABILITIES This note discloses the Group's lease liabilities, primarily consisting of amounts repayable within one year Lease Liabilities (As at June 30) | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Lease liabilities repayable within one year | 64 | 141 | | Total | 64 | 141 | - Total lease liabilities decreased from HK$141 thousand as at December 31, 2024, to HK$64 thousand as at June 30, 2025[88] 17. BANK BORROWINGS This note provides detailed information on the Group's bank borrowings, including their composition and repayment term distribution Bank Borrowings (As at June 30) | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Total bank loans | 91,912 | 92,367 | | Repayable within one year | 4,317 | 4,239 | | Repayable after one year but within two years | 87,595 | 42,335 | | Repayable after two years but within five years | – | 45,793 | | Amount shown under non-current liabilities | 87,595 | 88,128 | - Total bank borrowings slightly decreased from HK$92,367 thousand as at December 31, 2024, to HK$91,912 thousand as at June 30, 2025[90][145] - Bank borrowings repayable after one year but within two years significantly increased, while those repayable after two years but within five years were eliminated[90] 18. SHARE CAPITAL This note discloses the Group's authorized and issued and fully paid share capital, indicating a stable capital structure Share Capital (As at June 30) | Indicator | Number of shares | Amount (HK$'000) | | :--- | :--- | :--- | | Authorised share capital (HK$0.10 par value per share) | 1,000,000,000 | 100,000 | | Issued and fully paid share capital (HK$0.10 par value per share) | 817,644,000 | 81,764 | - As at June 30, 2025, issued and fully paid share capital was HK$81,764 thousand, consistent with December 31, 2024[94] 19. CAPITAL COMMITMENTS This note discloses the Group's capital commitments for the acquisition of plant and equipment Capital Commitments (As at June 30) | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Capital expenditure for acquisition of plant and equipment – contracted but not provided for | 45,089 | 44,682 | - As at June 30, 2025, capital expenditure for acquisition of plant and equipment contracted but not provided for was HK$45,089 thousand, slightly higher than December 31, 2024[97] 20. LITIGATION AND CONTINGENT LIABILITIES This note details significant tax issues and related litigation faced by the Group's PRC subsidiary, involving VAT invoice irregularities and substantial tax arrears and administrative penalties - The Group's indirect wholly-owned subsidiary, Senye Paper, received tax assessment and administrative penalty decisions from Qingyuan Tax Bureau, demanding approximately RMB109 million in unpaid taxes and RMB44.07 million in administrative penalties[98][99][100][102] - Senye Paper's application for review of the tax assessment decision was rejected by the Guangdong High People's Court, and it has now applied for administrative supervision from the Qingyuan People's Procuratorate of Guangdong Province[105][106][108][109][113] - Senye Paper filed an administrative reconsideration and then an administrative lawsuit against the tax penalty decision, with the Guangzhou Railway Transportation Intermediate Court's second-instance judgment revoking the first-instance administrative judgment and dismissing Senye Paper's claims[111][115][117][119][120][123] - The Board believes no provision for the related tax amounts is required as at June 30, 2025, as the Group is still seeking PRC legal advice[121][124] 21. RELATED PARTY TRANSACTIONS This note discloses the Group's related party transactions, primarily involving directors' emoluments and a warehouse lease agreement with an independent non-executive director Directors' Emoluments (For the six months ended June 30) | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Short-term benefits | 4,493 | 5,663 | | Pension scheme contributions | 31 | 82 | | Total | 4,524 | 5,745 | - The Group entered into a warehouse lease agreement with independent non-executive director Mr. Wong Chu Leung, with rental expenses of HK$78 thousand for the six months ended June 30, 2025, conducted on an arm's length basis[126][127] MANAGEMENT DISCUSSION AND ANALYSIS BUSINESS REVIEW In H1 2025, Group revenue declined by 35.9% due to reduced customer orders and increased market competition; the upstream containerboard business remains suspended, awaiting boiler conversion to resume production, while the Group focuses on cost control and operational efficiency - In H1 2025, Group revenue decreased by 35.9%, primarily due to reduced customer orders, global economic downturn, and intense market competition[128][131] - The upstream containerboard business has been suspended since October 2021, with ongoing coordination with local government for a coal-to-gas boiler conversion project, expected to resume production upon completion[129][131] - The Group addresses challenges of soaring manufacturing costs and weak market demand by strengthening cost control management and enhancing operational efficiency[130][132] FINANCIAL REVIEW This section reviews the Group's H1 2025 financial performance, covering revenue, gross profit, expenses, EBITDA, period loss, liquidity, and capital resources - Revenue decreased by 35.9% from HK$107.8 million in H1 2024 to HK$69.1 million in H1 2025[133][137] - Gross profit decreased from HK$9.2 million to HK$5.0 million, with gross profit margin declining from 8.6% to 7.3%[133][137] - Other gains and losses increased from a net gain of HK$0.1 million in H1 2024 to a net gain of HK$1.8 million in H1 2025, primarily due to the write-off of accrued expenses and other payables[134][138] - Administrative expenses decreased to HK$16.1 million, reflecting the Group's proactive streamlining of its cost structure[135][138] - EBITDA decreased by HK$2.2 million from -HK$16.9 million to -HK$14.7 million[140][143] - Loss for the period narrowed to HK$38.4 million from HK$43.7 million in H1 2024[140][143] - As at June 30, 2025, total cash and cash equivalents were HK$20.1 million, net current assets were HK$0.1 million, and the current ratio was 1.0[141][144] - The gearing ratio increased from 12.7% as at December 31, 2024, to 13.0% as at June 30, 2025; the net gearing ratio increased from 8.0% to 10.0%[145][147] OUTLOOK The Group anticipates continued challenges in the corrugated packaging industry but sees opportunities from stricter plastic packaging regulations and e-commerce growth in China, focusing on strategic initiatives and the resumption of upstream operations for vertical integration advantages - The operating environment for the corrugated packaging industry is expected to remain challenging, impacted by soaring manufacturing costs and weak market demand[146][148] - Stricter PRC government controls on plastic packaging and the growth of the e-commerce market are expected to stimulate demand for paper packaging, benefiting the Group's business[149][151] - The Group will focus on key strategies including pricing power, increasing sales volume, enhancing production efficiency, and reducing energy consumption and raw material waste[150][151] - The resumption of upstream operations, following coordination for the coal-to-gas boiler conversion project, will provide the Group with a competitive advantage through vertical integration[146][148] DISCLOSURE OF INTERESTS DIRECTORS' INTERESTS IN SHARES, UNDERLYING SHARES AND DEBENTURES This section discloses the interests and short positions of directors and their associates in the shares, underlying shares, and debentures of the Company and its associated corporations as at June 30, 2025 Directors' Interests in Shares of the Company (As at June 30) | Name of Director | Capacity | Number and class of securities | Approximate % of issued share capital | | :--- | :--- | :--- | :--- | | Mr. Hui Sum Ping | Beneficial owner | 132,400,681 shares | 16.19% | | | Interest in controlled corporation | 107,755,400 shares | 13.17% | | | Interest of spouse | 27,256,000 shares | 3.33% | | Mr. Hui Sum Tai | Beneficial owner | 150,556,430 shares | 18.41% | | | Interest of spouse | 5,110,000 shares | 0.62% | | Ms. Hui Yuk Ling | Beneficial owner | 1,200,000 shares | 0.14% | | | Interest of spouse | 500,000 shares | 0.06% | | Mr. Chow Suk Ming | Beneficial owner | 180,000 shares | 0.02% | | | Interest of spouse | 1,553,007 shares | 0.18% | - Mr. Hui Sum Ping and Mr. Hui Sum Tai are each deemed to have interests and short positions in 3,000,000 non-voting deferred shares of Hop Fung Gong Ming[157][158][160][161] SUBSTANTIAL SHAREHOLDERS' INTERESTS IN SHARES, UNDERLYING SHARES AND DEBENTURES This section lists the interests or short positions of substantial shareholders in the Company's shares or underlying shares as at June 30, 2025 Substantial Shareholders' Interests in Shares of the Company (As at June 30) | Name of Shareholder | Capacity | Number of issued shares held | Number of share options held | Approximate % of issued share capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Hui Sum Ping | Beneficial owner/Interest in controlled corporation/Interest of spouse | 267,412,081 | 3,984,000 | 33.19% | | Goldspeed | Beneficial owner | 107,755,400 | – | 13.17% | | Mr. Hui Sum Tai | Beneficial owner/Interest of spouse | 155,666,430 | 3,984,000 | 19.52% | | Mr. Hui Sum Kwok | Beneficial owner/Interest of spouse | 171,227,882 | – | 20.94% | - Mr. Hui Sum Ping and his spouse, Ms. Kan Kin Yee, collectively hold 33.19% of the Company's share interests and 3,984,000 share options[169][173] - Goldspeed Holdings Limited, wholly-owned by Mr. Hui Sum Ping, holds 13.17% of the share interests[169][173] SHARE OPTIONS This section details the terms, grants, and changes of the Company's 2013 and 2023 share option schemes, designed to incentivize employees and directors - The 2013 Share Option Scheme expired on June 2, 2023, but options granted thereunder remain valid and exercisable according to their terms[175][178] Movements of Share Options (As at June 30) | Category | Date of Grant | Exercise Price per Share (HK$) | Outstanding at beginning of period | Outstanding at end of period | | :--- | :--- | :--- | :--- | :--- | | Director (Mr. Hui Sum Ping) | 2018.10.15 | 0.435 | 3,984,000 | 3,984,000 | | Director (Mr. Hui Sum Tai) | 2018.10.15 | 0.435 | 3,984,000 | 3,984,000 | | Director (Mr. Wong Chu Leung) | 2018.10.15 | 0.435 | 1,000,000 | 1,000,000 | | Associate of Director (Mr. Tsui Yung Wai) | 2018.10.15 | 0.435 | 3,484,000 | 3,484,000 | | Total for all categories | | | 12,452,000 | 12,452,000 | - As at June 30, 2025, a total of 12,452,000 share options granted under the 2013 Scheme remained outstanding, representing approximately 1.52% of the issued shares[188][190] - The 2023 New Share Option Scheme was approved by shareholders with a ten-year validity; as at June 30, 2025, no options were granted under this scheme, with 81,764,000 options available for grant[189][190][193][195][206][207] - The exercise price of share options must not be less than the highest of the closing price on the grant date, the average closing price for the five business days immediately preceding the grant date, and the nominal value of the shares[182][183][208] OTHER INFORMATION Interim Dividend The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - The Directors do not recommend the payment of an interim dividend for the six months ended June 30, 2025[209][213] Human Resources As at June 30, 2025, the Group employed approximately 206 full-time staff, offering competitive remuneration packages that may include share options and discretionary bonuses based on performance - As at June 30, 2025, the Group employed approximately 206 full-time staff, a decrease from 229 as at December 31, 2024[210][214] - The Group offers competitive remuneration packages, potentially including share options and discretionary bonuses based on Group and individual performance[210][214] Corporate Governance The Group is committed to high corporate governance standards, complying with Appendix C1 of the Listing Rules, though some deviations exist regarding the Chairman and CEO's responsibilities, audit committee meetings, and remuneration committee scope - The Group complies with the Corporate Governance Code, though the division of responsibilities between the Chairman and CEO is not formally documented, but directors believe responsibilities are clearly defined[215][216] - The Audit Committee meets with the auditor once a year, deviating from the Code's requirement of at least twice annually, but communication occurs electronically[221][222] - The Remuneration Committee reviews and recommends remuneration packages only for directors, not senior management, whose remuneration is handled by the Chairman and/or Chief Executive Officer[221][222] Purchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities, and no treasury shares were held - For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities[223][227] - As at June 30, 2025, the Company held no treasury shares as defined by the Listing Rules[224][228] Model Code for Securities Transactions The Company has adopted its own code of conduct for directors' securities transactions, with terms no less exacting than the Model Code in Appendix C3 of the Listing Rules - The Company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than the Model Code set out in Appendix C3 of the Listing Rules[225][229] Review of Accounts The Audit Committee has reviewed the interim financial results and report with management, discussing risk management, internal controls, and financial reporting matters - The Audit Committee has reviewed the interim financial results and report, discussing risk management, internal controls, and financial reporting matters[226][230] Appreciation The Board extends its sincere gratitude to shareholders, business partners, and all staff - The Board expresses gratitude to shareholders, business partners, and staff for their support, commitment, and diligence[231]