顺龙控股(00361) - 2025 - 中期财报

Company Information The company's board comprises executive, non-executive, and independent non-executive directors, with established audit, remuneration, and nomination committees - The Board of Directors includes executive (Chairman), non-executive, and independent non-executive directors, with established audit, remuneration, and nomination committees[5] - Ms. Choi Ka Ying is the Company Secretary, and Grant Thornton Hong Kong Limited is the auditor[5] - The company's stock code is 00361, listed on the Main Board of The Stock Exchange of Hong Kong Limited[6] Financial Highlights The company reported a significant revenue decline and increased comprehensive expenses for the six months ended June 30, 2025, primarily due to a decrease in the golf equipment segment Financial Highlights for the Six Months Ended June 30 | Metric | 2025 (HK$'000) | 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 88,956 | 129,126 | (31)% | | - Golf Equipment Segment | 79,318 | 119,673 | (34)% | | - Golf Bag Segment | 9,638 | 9,453 | 2% | | Gross Profit | 21,561 | 29,250 | (26)% | | Loss (Profit) Before Interest, Tax, Depreciation and Amortisation (EBITDA) | (3,358) | 9,036 | (137)% | | Total Comprehensive Expense Attributable to Owners of the Company for the Period | (14,610) | (759) | 1,825% | | Loss Per Share (HK cents) | (0.28) | (0.01) | - | | Interim Dividend Per Ordinary Share | – | – | - | - The Board of Directors announced the unaudited condensed consolidated interim results and financial position for the six months ended June 30, 2025, which have been reviewed by the Audit Committee[8] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The statement details the company's financial performance, showing a significant increase in loss for the period due to decreased revenue and higher administrative and finance costs Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the Six Months Ended June 30) | Metric | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Revenue | 88,956 | 129,126 | | Cost of Sales | (67,395) | (99,876) | | Gross Profit | 21,561 | 29,250 | | Other Operating Income | 1,340 | 2,970 | | Selling and Distribution Expenses | (26) | (95) | | Administrative Expenses | (31,825) | (27,857) | | Finance Costs | (5,116) | (3,847) | | Loss (Profit) Before Tax | (14,066) | 421 | | Income Tax Expense | (544) | (1,180) | | Loss for the Period | (14,610) | (759) | | Total Comprehensive Expense for the Period | (14,610) | (759) | | Loss for the Period Attributable to Owners of the Company | (14,610) | (759) | | Basic and Diluted Loss Per Share (HK cents) | (0.28) | (0.01) | Condensed Consolidated Statement of Financial Position The statement presents the company's assets, liabilities, and equity as of June 30, 2025, indicating a decrease in net assets and total equity compared to the previous year Condensed Consolidated Statement of Financial Position (As at June 30) | Metric | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Non-Current Assets | | | | Property, Plant and Equipment | 62,914 | 65,295 | | Right-of-Use Assets | 158,936 | 161,902 | | Current Assets | | | | Inventories | 12,238 | 18,736 | | Trade and Other Receivables | 34,399 | 36,581 | | Bank Balances and Cash | 109,525 | 116,008 | | Current Liabilities | | | | Trade and Other Payables | 70,622 | 50,984 | | Bank Borrowings | 28,723 | 56,383 | | Non-Current Liabilities | | | | Convertible Bonds | 66,057 | 63,351 | | Net Assets | 213,002 | 227,612 | | Total Equity | 213,002 | 227,612 | Condensed Consolidated Statement of Changes in Equity The statement outlines changes in the company's equity components, reflecting the impact of losses for the period on accumulated losses and total equity Condensed Consolidated Statement of Changes in Equity (For the Six Months Ended June 30) | Item | As at January 1, 2024 (HK$'000) | Loss and Total Comprehensive Expense for the Period (HK$'000) | As at June 30, 2024 (HK$'000) | As at January 1, 2025 (HK$'000) | Loss and Total Comprehensive Expense for the Period (HK$'000) | As at June 30, 2025 (HK$'000) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Share Capital | 52,013 | – | 52,013 | 52,013 | – | 52,013 | | Share Premium | 399,369 | – | 399,369 | 399,369 | – | 399,369 | | Accumulated Losses | (294,732) | (759) | (295,491) | (297,096) | (14,610) | (311,706) | | Total Equity Attributable to Owners of the Company | 227,542 | (759) | 226,783 | 224,882 | (14,610) | 210,272 | | Non-Controlling Interests | 2,730 | – | 2,730 | 2,730 | – | 2,730 | | Total Equity | 230,272 | (759) | 229,513 | 227,612 | (14,610) | 213,002 | - The Group's contributed surplus includes the difference between the nominal value of shares of subsidiaries acquired and shares issued, and credits arising from capital reorganisation[13] - Chinese subsidiaries are required to transfer 10% of their after-tax profit (after offsetting prior year losses) to a statutory surplus reserve fund until it reaches 50% of their registered capital[13] Condensed Consolidated Cash Flow Statement The statement summarizes the cash flows from operating, investing, and financing activities, showing a net decrease in cash and cash equivalents for the period Condensed Consolidated Cash Flow Statement (For the Six Months Ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (9,001) | (5,530) | | Net Cash Generated From (Used in) Investing Activities | 612 | (1,776) | | Net Cash Generated From Financing Activities | 1,906 | 14,971 | | Net (Decrease) Increase in Cash and Cash Equivalents | (6,483) | 7,665 | | Cash and Cash Equivalents at January 1 | 116,008 | 111,965 | | Cash and Cash Equivalents at June 30 | 109,525 | 119,630 | Notes to the Condensed Consolidated Financial Information This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements, covering general information, accounting policies, and specific financial items 1. General Information The company is incorporated in Bermuda and listed in Hong Kong, with primary businesses in golf equipment and integrated resort development, presenting financial data in HKD - The company is an exempted company incorporated in Bermuda, with its shares listed on The Stock Exchange of Hong Kong Limited[15] - The Group's principal activities include manufacturing and trading golf equipment, golf bags, and accessories, and developing an integrated resort in the Commonwealth of Northern Mariana Islands[16] - The functional currency for the company and its Hong Kong and CNMI subsidiaries is USD, for Chinese subsidiaries it is RMB, and the condensed consolidated financial information is presented in HKD[16] 2. Basis of Preparation The condensed consolidated financial information is prepared in accordance with HKAS 34 and the disclosure requirements of Appendix D2 of the Listing Rules - The condensed consolidated financial information is prepared in accordance with Appendix D2 of the Listing Rules and Hong Kong Accounting Standard 34 'Interim Financial Reporting'[17] 3. Principal Accounting Policies The financial information is prepared using the historical cost convention, with leasehold land and building interests measured at revalued amounts, and new accounting standards having no material impact - The condensed consolidated financial information is prepared under the historical cost convention, with leasehold land and building interests measured at revalued amounts[18] - HKAS 21 (Revised) 'Lack of Exchangeability' was first applied in this interim period, but it had no material impact on financial performance or position[18] 4. Revenue Revenue primarily represents income generated from the sale of goods during the reporting period - Revenue refers to income generated from the sale of goods during the period[19] 5. Segment Information The Group operates three reportable segments: golf equipment, golf bags, and hotel, with golf equipment revenue significantly declining and all segments reporting losses or reduced profits - The Group has three reportable operating segments: golf equipment (manufacturing and sales), golf bags (trading), and hotel (integrated resort development)[20][21][22] Segment Revenue and Results (For the Six Months Ended June 30) | Segment | 2025 Revenue (HK$'000) | 2024 Revenue (HK$'000) | Revenue Change (%) | 2025 Results (HK$'000) | 2024 Results (HK$'000) | | :--- | :--- | :--- | :--- | :--- | :--- | | Golf Equipment | 79,318 | 119,673 | (33.7)% | 763 | 11,536 | | Golf Bags | 9,638 | 9,453 | 2.0% | (1,000) | (631) | | Hotel | – | – | - | (2,833) | (2,863) | | Consolidated Total | 88,956 | 129,126 | (31.0)% | (3,070) | 8,042 | - Segment results represent the profit/(loss) generated by each segment, excluding allocation of interest income, central administrative expenses, directors' emoluments, and finance costs[24] 6. Other Operating Income Total other operating income for the period significantly decreased to HK$1,340 thousand, primarily due to a reduction in net exchange gains Other Operating Income (For the Six Months Ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Interest Income | 851 | 1,175 | | Gain on Disposal of Property, Plant and Equipment | 7 | 5 | | Rental Income | 213 | 173 | | Scrap Sales Income | 35 | – | | Sample Income | 67 | 89 | | Mould Income | – | 226 | | Miscellaneous Income | 167 | 163 | | Net Exchange Gain | – | 1,139 | | Total | 1,340 | 2,970 | 7. Finance Costs Total finance costs increased to HK$5,116 thousand, mainly driven by higher interest expenses on amounts due to a former director and convertible bonds Finance Costs (For the Six Months Ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Interest Expense on Amount Due to a Former Director | 1,448 | 255 | | Interest Expense on Convertible Bonds | 2,706 | 2,494 | | Interest Expense on Bank Borrowings | 950 | 1,083 | | Interest Expense on Lease Liabilities | 12 | 15 | | Total | 5,116 | 3,847 | 8. Income Tax Expense Income tax expense for the period was HK$544 thousand, primarily from Chinese enterprise income tax, with no provision for Hong Kong profits tax due to tax losses Income Tax Expense (For the Six Months Ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Hong Kong Profits Tax | – | 150 | | PRC Enterprise Income Tax | 544 | 1,017 | | Underprovision in Prior Periods | – | 13 | | Total | 544 | 1,180 | - No provision for Hong Kong profits tax was made for the six months ended June 30, 2025, due to no assessable profits or offset by tax losses[28] - Chinese subsidiaries are taxed at 25%, and CNMI corporate income tax is calculated at 30% of estimated profits, but no provision was made due to no income during the period[28] 9. Loss (Profit) Before Tax The loss before tax for the period was HK$14,066 thousand, influenced by inventory recognized as expense, depreciation of property, plant and equipment, right-of-use assets, and net exchange losses Components of Loss (Profit) Before Tax (For the Six Months Ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Amount of Inventories Recognised as Expense | 67,395 | 99,876 | | Depreciation of Property, Plant and Equipment | 2,627 | 1,737 | | Depreciation of Right-of-Use Assets | 2,966 | 3,031 | | Net Exchange Loss (Gain) | 490 | (1,139) | | Expenses Relating to Short-Term Leases | 987 | 984 | | Gain on Disposal of Property, Plant and Equipment | (7) | (5) | 10. Dividends The Board of Directors decided not to declare or pay any dividends for the six months ended June 30, 2025 - No dividends were paid, declared, or proposed during the period, and the Board decided not to pay any dividends[30] 11. Loss Per Share Basic and diluted loss per share attributable to owners of the company increased significantly to 0.28 HK cents, with diluted loss per share not assuming convertible bond conversion as it would be anti-dilutive Loss Per Share Calculation (For the Six Months Ended June 30) | Item | 2025 | 2024 | | :--- | :--- | :--- | | Loss for the Period Attributable to Owners of the Company (HK$'000) | (14,610) | (759) | | Number of Ordinary Shares (thousands of shares) | 5,201,250 | 5,201,250 | | Basic and Diluted Loss Per Share (HK cents) | (0.28) | (0.01) | - The calculation of diluted loss per share did not assume conversion of the company's outstanding convertible bonds, as their exercise would reduce the loss per share[31] 12. Property, Plant and Equipment The Group acquired HK$246 thousand in property, plant and equipment and recognized a HK$7 thousand gain from asset disposals, with certain leasehold land and building interests pledged as collateral for bank borrowings - Acquisitions of property, plant and equipment amounted to approximately HK$246 thousand during the period (2024: HK$2,755 thousand)[32] - Net gain on disposal of assets with zero net book value was approximately HK$7 thousand (2024: HK$5 thousand)[32] - As at June 30, 2025, leasehold land and building interests with a carrying amount of HK$56,447 thousand were pledged as collateral for bank borrowings[32] 13. Right-of-Use Assets and Lease Liabilities The Group's right-of-use assets primarily consist of land use rights in China and CNMI, with some pledged as collateral, and total lease liabilities amounting to HK$564 thousand Right-of-Use Assets (As at June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Land | 158,416 | 161,320 | | Buildings | 520 | 582 | | Total | 158,936 | 161,902 | - Approximately HK$5,803 thousand of right-of-use assets were pledged as collateral for bank borrowings[33] Lease Liabilities (As at June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Non-current | 448 | 508 | | Current | 116 | 108 | | Total | 564 | 616 | - Total cash outflow for leases (including expenses related to short-term leases) during the period was approximately HK$1,051 thousand[36] 14. Trade and Other Receivables Total trade and other receivables decreased to HK$34,399 thousand as of June 30, 2025, with credit terms typically ranging from 30 to 60 days Trade and Other Receivables (As at June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Trade Receivables at Amortised Cost | 29,182 | 30,731 | | Deposits and Other Receivables | 2,714 | 2,971 | | Prepayments | 2,427 | 2,768 | | Prepayments to Suppliers | 76 | 111 | | Total | 34,399 | 36,581 | - The Group's trade terms with customers are primarily credit-based, with credit periods generally ranging from 30 to 60 days[37] Ageing Analysis of Trade Receivables (As at June 30) | Ageing | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | 0 to 30 days | 20,662 | 24,876 | | 31 to 90 days | 8,520 | 5,586 | | 91 to 180 days | – | 269 | | Total | 29,182 | 30,731 | 15. Trade and Other Payables Total trade and other payables increased to HK$70,622 thousand as of June 30, 2025, mainly due to an increase in amounts due to a former director, with average credit terms of 30 to 90 days Trade and Other Payables (As at June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Trade Payables | 16,223 | 23,991 | | Contract Liabilities | 597 | 553 | | Accruals and Other Payables | 23,222 | 26,440 | | Amount Due to a Former Director | 30,580 | – | | Total | 70,622 | 50,984 | - The amount due to Mr. Chu Chun Man, a former director of the company, bears interest at an annual rate of 9.75%[39] - The average credit period for purchases of goods ranges from 30 to 90 days, and the Group has established financial risk management policies to ensure all payables are settled within credit terms[40] 16. Bank Borrowings Bank borrowings significantly decreased to HK$28,723 thousand as of June 30, 2025, comprising secured fixed-rate loans repayable within one year and collateralized by property, plant and equipment and right-of-use assets Bank Borrowings (As at June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Secured Bank Loans Repayable Within One Year | 28,723 | 56,383 | - New bank borrowings of approximately HK$21,276 thousand were raised, and bank borrowings of approximately HK$48,936 thousand were repaid during the period[41] - Bank borrowings are fixed-rate loans bearing interest at an annual rate of 3.20% and are secured by leasehold land and building interests and certain right-of-use assets[41][42] 17. Convertible Bonds The company issued HK$74,100 thousand zero-coupon convertible bonds to Gold Sail Limited, maturing on November 7, 2026, with a conversion price of HK$0.114 per ordinary share and an effective interest rate of 8.8% for the liability component - The company issued zero-coupon convertible bonds with a principal amount of HK$74,100 thousand to Gold Sail Limited, maturing on November 7, 2026[43] - Holders of the convertible bonds have the right to convert them into ordinary shares of the company at a conversion price of HK$0.114 per ordinary share[44] Movements in Convertible Bonds (As at June 30) | Item | Liability Component (HK$'000) | Equity Component (HK$'000) | Total (HK$'000) | | :--- | :--- | :--- | :--- | | As at January 1, 2024 | 58,227 | 8,333 | 66,560 | | Actual Interest Expense for the Year | 5,124 | – | 5,124 | | As at December 31, 2024 and January 1, 2025 | 63,351 | 8,333 | 71,684 | | Actual Interest Expense for the Period | 2,706 | – | 2,706 | | As at June 30, 2025 | 66,057 | 8,333 | 74,390 | - The effective annual interest rate for the liability component of the convertible bonds is 8.8%[45] 18. Share Capital As of June 30, 2025, the company's authorized share capital remained 10,000,000 thousand shares, with 5,201,250 thousand shares issued and fully paid, totaling HK$52,013 thousand Share Capital Structure (As at June 30) | Item | Number of Shares (thousands of shares) | Share Capital (HK$'000) | | :--- | :--- | :--- | | Authorised Share Capital | 10,000,000 | - | | Issued and Fully Paid Share Capital | 5,201,250 | 52,013 | 19. Capital Commitments As of June 30, 2025, the Group had capital commitments of HK$72 thousand for plant and equipment, contracted but not yet provided for in the financial statements Capital Commitments (As at June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Capital Commitments for Plant and Equipment Contracted But Not Provided For | 72 | 72 | 20. Litigation The Group had no significant contingent liabilities as of June 30, 2025 - The Group had no significant contingent liabilities as at June 30, 2025, and December 31, 2024[52] 21. Fair Value Disclosure Directors believe that the carrying amounts of financial assets and liabilities measured at amortized cost approximate their fair values due to their short-term maturity and minimal discount effect - The directors believe that the carrying amounts of financial assets and financial liabilities measured at amortised cost approximate their fair values due to their short-term maturity and minimal discount effect[53] 22. Related Party Transactions The Group engaged in significant related party transactions, including short-term lease payments, interest expenses on convertible bonds to its direct holding company, and interest expenses to a former director Related Party Transactions (For the Six Months Ended June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Short-Term Lease Payments to Sino Orange (China) Company Limited | 840 | 840 | | Interest Expense on Convertible Bonds Paid to Direct Holding Company | 2,706 | 2,494 | | Interest Expense on Amount Due to a Former Director | 1,448 | 255 | - Lease payments to a related company, in which Mr. Chu, a former director of the company, has beneficial interest, were determined at agreed rates[55] - Total key management personnel remuneration increased to HK$6,628 thousand from HK$5,554 thousand in the prior year period[56] 23. Events After the Reporting Period No significant events occurred between June 30, 2025, and the date of this interim report - No significant events occurred between June 30, 2025, and the date of this interim report[57] 24. Approval of Unaudited Condensed Consolidated Financial Information The unaudited condensed consolidated financial information was approved and authorized for issue by the Board of Directors on August 27, 2025 - The unaudited condensed consolidated financial information was approved and authorised for issue by the Board of Directors on August 27, 2025[58] Management Discussion and Analysis This section provides an overview of the company's financial performance, business segments, and future outlook, highlighting the impact of external factors and strategic responses Financial Performance and Business Review The Group experienced a 31% revenue decline and a significant loss in H1 2025 due to US tariffs, leading to rationalization efforts and exploration of diversification opportunities - Exorbitant US tariffs on exports from China adversely impacted the Group's business, leading to a significant decline in sales in the first half of 2025[59] - US tariff rates were temporarily reduced from as high as 145% to 30%, with a 90-day period for trade negotiation outcomes, yet sales still significantly declined[59] Key Financial Performance (For the Six Months Ended June 30) | Metric | 2025 (HK$'000) | 2024 (HK$'000) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 88,956 | 129,126 | (31)% | | Loss for the Period Attributable to Owners of the Company | (14,610) | (759) | 1,825% | | Basic and Diluted Loss Per Share (HK cents) | (0.28) | (0.01) | - | Golf Equipment Business The golf equipment business saw a 33.7% revenue drop and a substantial profit decline due to US tariffs, prompting cost optimization and supply chain diversification efforts, with a cautious outlook for H2 - Revenue from the golf equipment business plummeted by approximately 33.7% to HK$79,318 thousand, accounting for about 89.2% of the Group's total revenue[61] - Sales to the largest segment customer decreased by approximately 26.9% to HK$65,725 thousand, representing about 82.9% of segment revenue[61] - The Group implemented rationalization measures at its Shandong production facilities to enhance production efficiency, reduce manufacturing costs, and expand its supply chain for better sources[62] - Profit from the golf equipment segment significantly decreased to HK$763 thousand (2024: HK$11,536 thousand), with a cautious outlook for the second half of the year[62] Golf Bag Business The golf bag segment, now operating as a trading business, saw a 2.0% revenue increase to HK$9,638 thousand but recorded a HK$1,000 thousand loss, as some customers shifted to non-Chinese suppliers, leading to continued cost optimization efforts - The golf bag segment has transitioned to a trading business model, with production outsourced to external factories[63] - Segment revenue slightly increased by approximately 2.0% to HK$9,638 thousand, accounting for about 10.8% of the Group's total revenue[63] - Sales to the largest segment customer surged by approximately 81.9% to HK$7,633 thousand, but sales to other customers decreased or disappeared as they shifted to non-Chinese suppliers[64] - The golf bag segment recorded a loss of approximately HK$1,000 thousand (2024: HK$631 thousand), with a cautious outlook for the second half of the year[64] Hotel Business The hotel development project in CNMI has been delayed due to a shortage of local construction workers and uncertainty regarding overseas work visa quotas, resulting in no revenue for the period - The hotel development plan has been delayed due to a shortage of local construction workers and uncertainty regarding overseas work visa quotas[65] - At the end of the period, the hotel business generated no revenue (2024: nil)[66] Outlook Facing persistent US tariffs, the Group is actively seeking to establish or acquire overseas manufacturing bases, streamline operations, optimize costs, and strengthen customer relationships, while deferring hotel development until optimal timing - The US high tariff policy adversely affected the Group's business, with major customers shifting orders or suspending shipments[67] - The Group is actively seeking to establish or acquire golf factories outside China to counter high tariffs and retain customer business[67] - The Group has implemented stringent measures to rationalize operations, optimize costs, and strengthen customer relationships through value-added services[67] - The hotel development plan is currently delayed, but the Group will continue to monitor market conditions and initiate it at the optimal time[68] Dividends The Board of Directors does not recommend paying any dividends for the six months ended June 30, 2025 - The Board of Directors does not recommend paying any dividends for the six months ended June 30, 2025 (2024: nil)[69] Financial Resources, Liquidity, and Gearing Ratio The Group's funding primarily comes from operations, borrowings, and directors' advances, with bank balances and cash at HK$109,525 thousand, interest-bearing borrowings at HK$28,723 thousand, and a gearing ratio of 7.4% as of June 30, 2025 Financial Resources Overview (As at June 30) | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Bank Balances and Cash | 109,525 | 116,008 | | Interest-Bearing Borrowings (Bank Borrowings) | 28,723 | 56,383 | | Amount Due to a Former Director | 30,580 | – | | Gearing Ratio | 7.4% | 1.6% | | Current Ratio | 1.56 | 1.58 | | Quick Ratio | 1.44 | 1.41 | - The amount due to a former director is unsecured, bears interest at an annual rate of 9.75%, and is repayable on demand[70] - The Group's total assets and net assets were approximately HK$379,462 thousand and HK$213,002 thousand, respectively[72] Significant Acquisitions and Disposals of Subsidiaries, Associates, and Joint Ventures The Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures during the six months ended June 30, 2025 - The Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures for the six months ended June 30, 2025[73] Pledge of Assets As of June 30, 2025, bank borrowings of approximately HK$28,723 thousand were secured by property, plant and equipment and right-of-use assets with a carrying amount of approximately HK$62,250 thousand - As at June 30, 2025, bank borrowings of approximately HK$28,723 thousand were secured by property, plant and equipment and right-of-use assets with a carrying amount of approximately HK$62,250 thousand[74] Exchange Rate Fluctuation Risk The Group is primarily exposed to exchange rate fluctuations between RMB, HKD, and USD, but did not enter into any derivative contracts to hedge this risk during the period, continuously monitoring currency exposure - The Group's foreign exchange risk primarily arises from transactions denominated in currencies other than its functional currency, mainly RMB[75] - The Group did not enter into any derivative contracts to hedge this risk for the six months ended June 30, 2025[75] Contingent Liabilities The Group had no significant contingent liabilities as of June 30, 2025 - The Group had no significant contingent liabilities as at June 30, 2025[76] Events After Reporting Period No significant events occurred between June 30, 2025, and the date of this interim report - No significant events occurred between June 30, 2025, and the date of this interim report[77] Capital Commitments As of June 30, 2025, the Group's capital commitments for plant and equipment, contracted but not provided for, amounted to approximately HK$72 thousand - As at June 30, 2025, the Group's capital commitments for plant and equipment, contracted but not provided for in the condensed consolidated financial information, amounted to approximately HK$72 thousand[78] Employees and Remuneration Policy The Group employed approximately 530 employees as of June 30, 2025, providing competitive remuneration and career development opportunities based on responsibilities, experience, performance, and market practices - As at June 30, 2025, the Group employed approximately 530 employees (December 31, 2024: 680 employees)[79] - Employee remuneration is determined based on responsibilities, experience, performance, and market practices, with annual reviews of remuneration packages and discretionary bonuses[79] Other Information This section covers disclosures regarding directors' and major shareholders' interests, securities transactions, corporate governance, and committee structures Directors' Interests in Shares and Underlying Shares As of June 30, 2025, no directors or chief executives held any disclosable interests or short positions in the company's shares, underlying shares, or debentures - As at June 30, 2025, no directors or chief executives of the company had any interests or short positions in the shares, underlying shares, or debentures of the company or its associated corporations that were required to be disclosed to the company and the Stock Exchange[80] Major Shareholders' and Other Persons' Interests in Shares and Underlying Shares As of June 30, 2025, several major shareholders, including China CITIC Financial Asset Management Co., Ltd. and its affiliates, Wise Choice Ventures Limited, Gold Sail Limited, Ever Victory Limited, and Mr. Wong You Lung, held 67.50% of the company's issued share capital, with Surplus Excel Limited and Ms. Lok Tsui Kwan holding 6.03% Major Shareholders' and Other Persons' Interests in Shares and Underlying Shares (As at June 30) | Name | Capacity and Nature of Interest | Number of Ordinary Shares Held and Interests in Underlying Shares | Percentage of the Company's Issued Share Capital | | :--- | :--- | :--- | :--- | | China CITIC Financial Asset Management Co., Ltd. | Charged Interest Held by Controlled Corporation | 3,511,000,000 | 67.50% | | China CITIC Financial Asset International Holdings Limited | Charged Interest Held by Controlled Corporation | 3,511,000,000 | 67.50% | | Right Select International Limited | Charged Interest Held by Controlled Corporation | 3,511,000,000 | 67.50% | | Wise Choice Ventures Limited | Charged Interest | 3,511,000,000 | 67.50% | | Gold Sail Limited | Beneficial Owner | 3,511,000,000 | 67.50% | | Ever Victory Limited | Beneficial Interest Held by Controlled Corporation | 3,511,000,000 | 67.50% | | Mr. Wong You Lung | Beneficial Interest Held by Controlled Corporation | 3,511,000,000 | 67.50% | | Ms. So Kit Yee | Receiver | 3,511,000,000 | 67.50% | | Ms. Lau Wan Man | Receiver | 3,511,000,000 | 67.50% | | Surplus Excel Limited | Beneficial Owner | 313,814,355 | 6.03% | | Ms. Lok Tsui Kwan | Beneficial Interest Held by Controlled Corporation | 313,814,355 | 6.03% | - Ms. So Kit Yee and Ms. Lau Wan Man of EY Corporate Finance Limited were appointed as joint and several receivers over 2,861,000,000 shares of the company and convertible bonds with a principal amount of HK$74,100,000[82] - Mr. Wong You Lung is the sole ultimate beneficial owner and sole director of Gold Sail Limited, indirectly holding 100% of Gold Sail Limited's issued share capital through his wholly-owned company, Ever Victory Limited[83] Purchase, Sale or Redemption of the Company's Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025 - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the six months ended June 30, 2025[85] Corporate Governance The company complied with the Corporate Governance Code during the period, with a deviation where the Chairman and Chief Executive Officer roles are combined, which the Board believes provides strong and consistent leadership - The company complied with all 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[86] - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Wong Hin Shing, which is a deviation from Code Provision C.2.1 of the Corporate Governance Code[86] - The Board believes this deviation is appropriate, providing strong and consistent leadership for the company and enabling effective and efficient planning and implementation of business decisions and strategies[86] Standard Code for Securities Transactions by Directors The company adopted the Standard Code for Securities Transactions by Directors, and all directors confirmed compliance for the six months ended June 30, 2025 - The company has adopted the Standard Code set out in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions[87] - All directors confirmed their compliance with the required standards of the Standard Code for the six months ended June 30, 2025[87] Audit Committee The Audit Committee, composed of three independent non-executive directors, reviewed the Group's accounting policies, auditing, internal controls, and financial reporting, including the unaudited condensed consolidated financial information - The Audit Committee comprises three independent non-executive directors: Mr. Ho Kwong Yu (Chairman), Mr. Sheng Baojun, and Ms. Lam Lam[88] - The Audit Committee reviewed the Group's accounting policies and practices with management and discussed auditing, internal controls, and financial reporting matters[88] Remuneration Committee The Remuneration Committee, consisting of three independent non-executive directors, is responsible for formulating and recommending the Group's remuneration policies and structure for directors and senior management - The Remuneration Committee comprises three independent non-executive directors: Mr. Sheng Baojun (Chairman), Mr. Ho Kwong Yu, and Ms. Lam Lam[89] - The Remuneration Committee is primarily responsible for formulating and recommending to the Board all policies and structures regarding the remuneration of the Group's directors and senior management[89] Nomination Committee The Nomination Committee, composed of one executive director and three independent non-executive directors, met once to review the Board's structure, size, composition, independence of INEDs, and effectiveness of the board diversity policy - The Nomination Committee comprises one executive director, Mr. Wong Hin Shing (Chairman), and three independent non-executive directors[90] - The Nomination Committee met once during the interim period to review the Board's structure, size, and composition, assess the independence of independent non-executive directors, and examine the effectiveness of the board diversity policy[90] Acknowledgements The Board expresses gratitude to all Group employees for their contributions and commitment, and thanks shareholders, customers, suppliers, and business partners for their long-term support - The Board expresses its gratitude to all employees of the Group for their contributions and commitment[91] - The Board extends its sincere appreciation to shareholders, customers, suppliers, and business partners for their long-term support and dedication[91] By Order of the Board This interim report was issued by Mr. Wong Hin Shing, Chairman of the Board, on behalf of the Board of Directors on August 27, 2025 - This interim report was issued by Mr. Wong Hin Shing, Chairman of the Board, on August 27, 2025[92]