万成集团股份(01451) - 2025 - 中期财报

Company Information The company's governance structure includes a board with executive and independent non-executive directors and key committees, with PwC as auditor and listed on the HKEX main board Board of Directors and Committees The company's Board of Directors comprises four executive and three independent non-executive directors, supported by Audit, Remuneration, and Nomination Committees to ensure robust corporate governance - The Board of Directors consists of 4 executive directors and 3 independent non-executive directors[5] - Audit, Remuneration, and Nomination Committees are established to strengthen corporate governance[5] Company Basic Information The company has appointed PricewaterhouseCoopers as its auditor and is listed on the Main Board of the Hong Kong Stock Exchange with stock code 1451 - PricewaterhouseCoopers is the auditor[5] - The company is listed on the Main Board of the Hong Kong Stock Exchange, with stock code 1451[6] Financial Highlights The group's revenue slightly increased for the six months ended June 30, 2025, but gross profit, operating profit, and profit attributable to equity holders all declined, with no interim dividends declared Key Financial Data and Ratios For the six months ended June 30, 2025, the group's revenue saw a slight increase, but gross profit, operating profit, and profit attributable to equity holders all decreased, with no interim dividends distributed Key Financial Data and Ratios (Unaudited) | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 181,244 | 178,986 | | Gross Profit | 45,383 | 49,467 | | Gross Profit Margin | 25.0% | 27.6% | | Operating Profit | 19,837 | 24,233 | | Profit Attributable to Equity Holders | 15,554 | 18,967 | | Basic Earnings Per Share | 7.75 HK cents | 9.48 HK cents | | Interim Dividend Per Share | — | 3 HK cents | | Special Interim Dividend Per Share | — | 7 HK cents | - No interim dividend or special interim dividend was distributed in H1 2025, compared to 3 HK cents and 7 HK cents respectively in the same period of 2024[8] Management Discussion and Analysis Management discusses the group's stable revenue but declining profitability due to tariffs and market competition, alongside financial performance, liquidity, and future strategies Business Review The group's total revenue remained stable in H1 2025, but profitability declined due to tariffs, with both OEM and UOUO Monkey businesses facing significant industry challenges - Total revenue in H1 2025 remained stable compared to H1 2024, but profitability declined, primarily due to tariff impacts[10] - The OEM business, with its core market in the US, experienced a decline in revenue in Q2 due to reduced customer orders caused by US government tariffs[13] - The UOUO Monkey business, focused on the Chinese market, saw a significant year-on-year decrease in sales in H1 2025, particularly from physical retail stores, due to intense competition including price wars[13] Financial Review The group's revenue slightly increased in H1 2025, but gross profit and net profit decreased due to tariff impacts and higher administrative expenses, while selling expenses declined due to cost control Key Financial Data (Unaudited) | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 181,244 | 178,986 | | Gross Profit | 45,383 | 49,467 | | Profit Before Income Tax | 20,420 | 24,815 | | Net Profit Attributable to Equity Holders | 15,554 | 18,967 | - OEM business revenue was approximately HK$180.9 million, a 2.4% year-on-year increase, mainly from increased orders for plastic bottles and stainless steel sports water bottles from existing customers[14] - UOUO Monkey business revenue was approximately HK$329,000, a significant 85.9% year-on-year decrease, affected by intense local market competition and declining physical store sales[15] - Gross profit was approximately HK$45.4 million, with a gross profit margin of 25.0%, a decrease from the prior year period, primarily due to tariff impacts on product selling prices[16][19] - Selling expenses were approximately HK$2.2 million, a 39.2% year-on-year decrease, mainly due to reductions in employee benefits, transportation, and marketing promotion expenses[20] - Administrative expenses were approximately HK$24.2 million, an increase of approximately HK$1.6 million year-on-year, primarily due to additional employee severance compensation costs of approximately HK$2.8 million[21] - Net profit was approximately HK$15.6 million, a decrease of approximately HK$3.4 million year-on-year, mainly due to the decline in gross profit and gross profit margin[25] Liquidity, Financial Resources, and Capital Structure The group maintains strong liquidity with increased cash and cash equivalents, a zero gearing ratio, and no significant capital commitments or asset pledges - Cash and cash equivalents were approximately HK$138.2 million (December 31, 2024: approximately HK$114.5 million)[26] - Net cash generated from operating activities was approximately HK$61.7 million[26] - The gearing ratio is zero, indicating a sound financial position[26] - There are no capital commitments or asset pledges[28][32] - Capital expenditure was approximately HK$485,000, primarily for the acquisition of new machinery and equipment[28] Exchange Rate Risk The group faces exchange rate risk from fluctuations in RMB value but did not use derivative instruments for hedging in H1 2025 - Transactions are primarily denominated in USD, RMB, and HKD, exposing the group to RMB exchange rate fluctuation risk[30] - An exchange gain of approximately HK$0.5 million was recorded in H1 2025, with no derivative instruments used to hedge foreign exchange risk[31] Employees and Remuneration Policy The group's employee count decreased due to reduced sales orders, but employee benefit expenses increased, with the company emphasizing employee development and a share option scheme - Employee headcount decreased from 737 to 563, primarily due to reduced production demand[37] - Employee benefit expenses were approximately HK$40.2 million, an increase year-on-year[37] - A share option scheme has been adopted to offer employees opportunities to subscribe for equity interests in the company[38] Future Outlook The group anticipates continued significant challenges for its OEM and UOUO Monkey businesses, including complex macroeconomic conditions, US tariff policies, intense market competition, and declining birth rates in China - Both OEM and UOUO Monkey businesses are expected to continue facing significant challenges due to the complex macroeconomic environment, global inflation, regional conflicts, and geopolitical tensions[39] - US tariffs on Chinese imports adversely affect the OEM business, leading to reduced customer order intentions[39][40] - The OEM business will implement strategies including deepening cooperation with existing clients, engaging potential global clients to diversify reliance on the US market, exploring enhanced manufacturing capabilities, and evaluating the feasibility of expanding production facilities to other Asian regions[40] - The UOUO Monkey business faces intense competition in the Chinese market, a shift in customer shopping habits from offline to online, and a structural reduction in demand due to declining birth rates in China[41] - Management will adopt a prudent approach, closely monitoring environmental changes and carefully implementing feasible strategies to address increased market volatility[42] Independent Auditor's Review Report on Interim Financial Information PricewaterhouseCoopers reviewed the interim financial information for the six months ended June 30, 2025, finding no material non-compliance with HKAS 34 Review Conclusion PricewaterhouseCoopers has reviewed the group's interim financial information for the six months ended June 30, 2025, and found no matters indicating that the information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 - PricewaterhouseCoopers has reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410[46] - The review concluded that no matters were identified that would lead the auditor to believe the interim financial information was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[47] Condensed Consolidated Interim Statement of Profit or Loss The group's revenue slightly increased in H1 2025, but higher cost of sales led to reduced gross profit and net profit for the period Profit or Loss Statement Overview The group's revenue slightly increased in H1 2025, but the cost of sales rose, leading to a decrease in gross profit, while selling expenses decreased and administrative expenses increased, resulting in a lower profit for the period Condensed Consolidated Interim Statement of Profit or Loss (Unaudited) | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Revenue | 181,244 | 178,986 | | Cost of Sales | (135,861) | (129,519) | | Gross Profit | 45,383 | 49,467 | | Selling Expenses | (2,193) | (3,603) | | Administrative Expenses | (24,213) | (22,569) | | Operating Profit | 19,837 | 24,233 | | Net Finance Income | 583 | 1,825 | | Share of Results of an Associate | — | (1,243) | | Profit Before Tax | 20,420 | 24,815 | | Tax | (4,866) | (5,848) | | Profit for the Period | 15,554 | 18,967 | | Basic Earnings Per Share | 7.75 HK cents | 9.48 HK cents | Condensed Consolidated Interim Statement of Comprehensive Income Despite a decrease in profit for the period, a positive currency translation difference resulted in an increase in total comprehensive income for H1 2025 Comprehensive Income Overview The group's profit for the period decreased in H1 2025, but a favorable currency translation difference turned from a loss to a gain, leading to an increase in total comprehensive income for the period Condensed Consolidated Interim Statement of Comprehensive Income (Unaudited) | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Profit for the Period | 15,554 | 18,967 | | Currency Translation Differences | 3,747 | (2,642) | | Other Comprehensive Income/(Loss) for the Period, Net of Tax | 3,747 | (2,642) | | Total Comprehensive Income for the Period | 19,301 | 16,325 | - In H1 2025, currency translation differences recorded a gain of HK$3,747 thousand, compared to a loss of HK$2,642 thousand in the same period of 2024[51] Condensed Consolidated Interim Statement of Financial Position As of June 30, 2025, the group's total assets and total equity both decreased, primarily due to a reduction in trade and other receivables within current assets, and lower retained earnings Statement of Financial Position Overview As of June 30, 2025, the group's total assets and total equity decreased, mainly driven by a reduction in trade and other receivables and a decrease in retained earnings Condensed Consolidated Interim Statement of Financial Position (Unaudited) | Indicator | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 42,047 | 45,619 | | Current Assets | 214,932 | 242,952 | | Total Assets | 256,979 | 288,571 | | Equity | | | | Total Equity | 205,986 | 224,503 | | Liabilities | | | | Non-current Liabilities | 7,475 | 9,360 | | Current Liabilities | 43,518 | 54,708 | | Total Liabilities | 50,993 | 64,068 | | Net Current Assets | 171,414 | 188,244 | - Trade and other receivables significantly decreased from HK$90,543 thousand as of December 31, 2024, to HK$49,613 thousand as of June 30, 2025[53] - Cash and cash equivalents increased from HK$114,515 thousand as of December 31, 2024, to HK$138,240 thousand as of June 30, 2025[53] Condensed Consolidated Interim Statement of Changes in Equity The group's total equity decreased in H1 2025, mainly due to dividends paid, despite positive contributions from profit and currency translation differences Equity Changes Overview The group's total equity decreased in H1 2025, primarily impacted by dividends paid, even with positive contributions from profit for the period and currency translation gains Condensed Consolidated Interim Statement of Changes in Equity (Unaudited) | Indicator | H1 2025 (Thousand HKD) | H1 2024 (Thousand HKD) | | :--- | :--- | :--- | | Balance at Beginning of Period (Jan 1) | 224,503 | 209,567 | | Profit for the Period | 15,554 | 18,967 | | Other Comprehensive Income/(Loss) | 3,747 | (2,642) | | Dividends Paid | (40,440) | (12,000) | | Share-based Payments | 1,126 | 624 | | Shares Issued Upon Exercise of Share Options | 1,496 | — | | Balance at End of Period (Jun 30) | 205,986 | 214,516 | - Dividends paid in H1 2025 amounted to HK$40,440 thousand, significantly higher than HK$12,000 thousand in the same period of 2024[56] Condensed Consolidated Interim Statement of Cash Flows The group's operating cash flow significantly increased in H1 2025, and investing cash flow turned positive, but financing cash outflow rose substantially due to dividend payments, resulting in a net increase in cash and cash equivalents Cash Flow Overview The group experienced a substantial increase in net cash from operating activities and a positive shift in investing activities in H1 2025, but net cash used in financing activities rose significantly due to higher dividend payments Condensed Consolidated Interim Statement of Cash Flows (Unaudited) | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Net Cash From Operating Activities | 61,667 | 13,186 | | Net Cash From/(Used In) Investing Activities | 524 | (2,005) | | Net Cash Used In Financing Activities | (41,468) | (14,543) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 20,723 | (3,362) | | Cash and Cash Equivalents at End of Period | 138,240 | 122,906 | - Net cash generated from operating activities significantly increased from HK$13,186 thousand in H1 2024 to HK$61,667 thousand in H1 2025[57] - Net cash used in financing activities increased, primarily due to dividends paid rising from HK$12,000 thousand to HK$40,440 thousand[57] Notes to the Condensed Consolidated Interim Financial Information This section details the company's operational and financial context, including accounting policies, risk management, segment performance, and specific financial statement items Company Information and Basis of Presentation The company is an investment holding company incorporated in the Cayman Islands, primarily engaged in the manufacturing and sale of infant plastic bottles and sports water bottles, with financial information presented in thousands of HKD - The company is incorporated in the Cayman Islands and primarily engaged in the manufacturing and sale of infant plastic bottles and cups, as well as plastic and stainless steel sports water bottles[59] - This condensed consolidated interim financial information is presented in thousands of HKD[61] Basis of Preparation and Presentation The interim financial information is prepared in accordance with HKAS 34 and the Listing Rules, and should be read in conjunction with the annual consolidated financial statements - The interim financial information is prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and the applicable disclosure requirements of the Listing Rules[62] - It should be read in conjunction with the group's consolidated financial statements for the year ended December 31, 2024[62] Accounting Policies Except for income tax calculation, the accounting policies for this period are consistent with the prior year's consolidated financial statements, with no retrospective adjustments due to new standard adoption - The accounting policies and methods of computation used in the preparation of this interim financial information are consistent with those adopted in the group's consolidated financial statements for the year ended December 31, 2024, except for the calculation of income tax for the interim period[63] - The group has not changed its accounting policies or made retrospective adjustments due to the adoption of certain new or revised standards[63] Critical Accounting Estimates and Judgments The significant management judgments and estimates used in preparing this interim financial information are consistent with those applied in the prior year's consolidated financial statements - The significant judgments made by management in applying the group's accounting policies and the key sources of estimation uncertainty are the same as those applied in the consolidated financial statements for the year ended December 31, 2024[64] Financial Risk Management The group is exposed to foreign currency, credit, and liquidity risks, but its risk management policies have remained unchanged since the prior year - The group's operations expose it to foreign currency risk, credit risk, and liquidity risk[65] - Risk management policies have remained unchanged since the year ended December 31, 2024[66] Segment Information The group operates in two main segments: OEM business and own-brand products business, with OEM being the primary revenue source, though gross profit for both segments declined in H1 2025 - The group is primarily engaged in the OEM business (manufacturing and selling infant plastic bottles and cups, and plastic and stainless steel sports water bottles for OEM clients) and the own-brand products business (designing, manufacturing, and selling own-brand baby products)[68][70] Segment Revenue and Gross Profit (Unaudited) | Indicator | OEM Business (Thousand HKD) | Own-Brand Products (Thousand HKD) | Total (Thousand HKD) | | :--- | :--- | :--- | :--- | | H1 2025 | | | | | Revenue | 180,915 | 329 | 181,244 | | Gross Profit | 45,281 | 102 | 45,383 | | H1 2024 | | | | | Revenue | 176,649 | 2,337 | 178,986 | | Gross Profit | 48,587 | 880 | 49,467 | Net Finance Income The group's net finance income significantly decreased in H1 2025, primarily due to a reduction in bank interest income Net Finance Income (Unaudited) | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Interest on Bills Payable | (333) | (407) | | Interest Expense on Lease Liabilities | (107) | (45) | | Bank Interest Income | 1,023 | 2,277 | | Total | 583 | 1,825 | - Bank interest income decreased from HK$2,277 thousand in H1 2024 to HK$1,023 thousand in H1 2025[73] Profit Before Tax Profit before tax was affected by several factors, including increased inventory costs and employee benefit expenses, and a shift from a positive to a negative adjustment for expected credit losses on trade and other receivables Profit Before Tax Impact Factors (Unaudited) | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Cost of Inventories | 98,300 | 92,372 | | Employee Benefit Expenses | 40,253 | 37,173 | | Depreciation of Property, Plant and Equipment | 3,069 | 2,609 | | Adjustment for Expected Credit Losses on Trade and Other Receivables | (129) | 2,339 | - The adjustment for expected credit losses on trade and other receivables shifted from a HK$2,339 thousand gain in H1 2024 to a HK$129 thousand reversal in H1 2025[74] Taxation The group's tax expense decreased in H1 2025, mainly due to a reduction in the provision for China corporate income tax Tax Expense (Unaudited) | Indicator | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | | Current Period—Hong Kong | 1,836 | 1,352 | | Current Period—China | 3,232 | 3,964 | | Deferred | (305) | 450 | | Total Tax Expense | 4,866 | 5,848 | - Hong Kong profits tax is provided at a rate of 16.5%, and China corporate income tax is calculated at the prevailing Chinese tax rates[75] Dividends The company did not pay or declare any interim dividends for H1 2025 but distributed a total of HK$40 million in final and special final dividends for 2024 - The company did not pay or declare any dividends for the six months ended June 30, 2025 (2024: interim and special interim dividends of 10 HK cents)[77] - A total of HK$40 million in 2024 final dividend and special final dividend was distributed on June 26, 2025[77] Earnings Per Share — Basic and Diluted The group's basic earnings per share decreased in H1 2025, and diluted earnings per share were equal to basic earnings per share due to the anti-dilutive effect of potential dilutive ordinary shares Basic Earnings Per Share (Unaudited) | Indicator | 2025 (HK cents) | 2024 (HK cents) | | :--- | :--- | :--- | | Basic Earnings Per Share | 7.75 | 9.48 | - Diluted earnings per share are equal to basic earnings per share because the potential dilutive ordinary shares arising from the exercise of outstanding share options have an anti-dilutive effect[80] Property, Plant and Equipment The net book value of the group's property, plant and equipment slightly decreased, with additions in H1 2025 primarily for new machinery and equipment - The net book value of property, plant and equipment was HK$38,130 thousand as of June 30, 2025 (December 31, 2024: HK$39,718 thousand)[81] - Additions of approximately HK$485 thousand in H1 2025 were primarily for the acquisition of new machinery and equipment[81] Trade and Other Receivables The group's trade and other receivables significantly decreased in H1 2025, with an average credit period of 30 to 90 days Trade and Other Receivables (Unaudited) | Indicator | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Trade Receivables (Net of Loss Allowance) | 46,138 | 75,417 | | Other Receivables | 3,475 | 15,126 | | Total | 49,613 | 90,543 | - The average credit period granted for trade receivables ranges from 30 to 90 days[83] Ageing Analysis of Trade Receivables (Unaudited) | Ageing | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | 0 – 30 days | 20,235 | 54,507 | | 31 – 60 days | 24,473 | 19,212 | | 61 – 90 days | 1,296 | 457 | | Over 90 days | 134 | 1,241 | | Total | 46,138 | 75,417 | Trade and Other Payables The group's trade and other payables decreased in H1 2025, with an average credit period of 30 to 90 days Trade and Other Payables (Unaudited) | Indicator | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | Trade Payables | 4,121 | 9,468 | | Accrued Expenses and Other Payables | 21,158 | 22,682 | | Contract Liabilities | 2,083 | 2,322 | | Total | 27,362 | 34,472 | - The credit period for trade payables generally ranges from 30 to 90 days[88] Ageing Analysis of Trade Payables (Unaudited) | Ageing | June 30, 2025 (Thousand HKD) | December 31, 2024 (Thousand HKD) | | :--- | :--- | :--- | | 0 – 30 days | 2,184 | 5,559 | | 31 – 60 days | — | 2,437 | | 61 – 90 days | — | — | | Over 90 days | 1,937 | 1,472 | | Total | 4,121 | 9,468 | Share Capital The company's share capital increased in H1 2025 due to the issuance of 2,200,000 ordinary shares upon the exercise of share options Issued and Fully Paid Ordinary Shares (Unaudited) | Indicator | Number of Shares | Amount (Thousand HKD) | | :--- | :--- | :--- | | As at December 31, 2024 | 200,000,000 | 20,000 | | Ordinary Shares Issued Upon Exercise of Share Options | 2,200,000 | 220 | | As at June 30, 2025 | 202,200,000 | 20,220 | - In H1 2025, 2,200,000 shares of the company were exercised under the share option scheme for a total cash consideration of HK$1,496,000[89] Contingent Liabilities As of June 30, 2025, the group had no significant contingent liabilities - As of June 30, 2025, and December 31, 2024, the group had no significant contingent liabilities[90] Related Party Transactions The group engaged in several transactions with related parties controlled by directors or controlling shareholders, primarily involving utility expenses, depreciation of right-of-use assets, interest expenses on lease liabilities, and management fees - Related parties include Huafu Lai Green Energy (Shaoguan) Co, Ltd, Kwong Fai Trading Limited, and Penghui Enterprise (Wengyuan) Co, Ltd, all controlled by executive directors or controlling shareholders[91] Summary of Related Party Transactions (Unaudited) | Related Party | Type of Transaction | 2025 (Thousand HKD) | 2024 (Thousand HKD) | | :--- | :--- | :--- | :--- | | Huafu Lai | Utility Expenses | 760 | 599 | | Kwong Fai | Depreciation of Right-of-Use Assets | 263 | 281 | | | Interest Expense on Lease Liabilities | 20 | 3 | | Penghui | Management Fee Expenses | 1,034 | 1,044 | | | Depreciation of Right-of-Use Assets | 1,837 | 1,756 | | | Interest Expense on Lease Liabilities | 87 | 42 | - The group leases certain properties from Kwong Fai and Penghui, with a total carrying amount of right-of-use assets of HK$3,917 thousand and total lease liabilities of HK$4,003 thousand as of June 30, 2025[93] Investment in an Associate The group holds a 40% interest in BRH2 Plastics, LLC, and recorded no share of loss from the associate in H1 2025, compared to a loss in H1 2024 - The group acquired a 40% interest in BRH2 Plastics, LLC in 2021, with the associate primarily engaged in the manufacturing and sale of plastic products[95] - No share of loss from an associate was recorded in H1 2025 (H1 2024: approximately HK$1.2 million loss)[96] Share-based Payments The group recognized HK$1,126 thousand in share-based payment expenses in H1 2025 and has granted multiple share options under its share option scheme - In H1 2025, share-based payment expenses amounted to HK$1,126 thousand (H1 2024: HK$624 thousand)[100] - The company adopted a share option scheme and granted 6,000,000 and 10,000,000 share options on June 7, 2021, and May 27, 2024, respectively[100] Approval of Interim Financial Information The unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, was approved by the Board of Directors on August 22, 2025 - The unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, was approved by the Board of Directors on August 22, 2025[101] Other Information This section provides details on directors' and major shareholders' interests, the share option scheme, changes in director information, committee structures, and corporate governance compliance Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures of the Company or Any Associated Corporation As of June 30, 2025, several directors and the chief executive held long positions in the company's shares or underlying shares, including interests through controlled corporations and beneficial ownership Directors' and Chief Executive's Long Positions in Shares | Name of Director/Chief Executive | Capacity/Nature of Interest | Number of Shares Held/Interested | Approximate Percentage of Shareholding in the Company | | :--- | :--- | :--- | :--- | | Mr. Chung | Interest of Controlled Corporation | 72,172,000 | 35.7% | | | Beneficial Owner | 400,000 | 0.2% | | Mr. Chau | Interest of Controlled Corporation | 75,000,000 | 37.1% | | | Beneficial Owner | 400,000 | 0.2% | | Mr. Chung Sing Chun | Beneficial Owner | 2,360,000 | 1.2% | | Mr. Chau Wai | Beneficial Owner | 2,360,000 | 1.2% | | Ms. Lo Siu Fun | Beneficial Owner | 2,316,000 | 1.2% | | Mr. Yu | Beneficial Owner | 400,000 | 0.2% | | Mr. Szeto | Beneficial Owner | 400,000 | 0.2% | | Mr. Ma | Beneficial Owner | 400,000 | 0.2% | - Mr. Chung's and Mr. Chau's interests include shares held through their wholly-owned entities, L.V.E.P. Holdings and Ching Wai Holdings[102][104] Directors' Rights to Acquire Shares or Debentures For the six months ended June 30, 2025, no director, their spouse, or children were granted or exercised any rights to acquire shares or debentures of the company, except as otherwise disclosed in this interim report - For the six months ended June 30, 2025, no director or their respective spouse or children under 18 years of age were granted any rights to benefit from acquiring shares or debentures of the company, nor did they exercise any such rights[106] Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares As of June 30, 2025, L.V.E.P. Holdings and Ching Wai Holdings were substantial shareholders of the company, with their interests also extending to directors' spouses Substantial Shareholders' Long Positions in Shares | Name of Shareholder | Capacity/Nature of Interest | Number of Shares Held/Interested | Approximate Percentage of Shareholding in the Company | | :--- | :--- | :--- | :--- | | L.V.E.P. Holdings | Beneficial Owner | 72,172,000 | 35.7% | | Ching Wai Holdings | Beneficial Owner | 75,000,000 | 37.1% | | Ms. Cheung | Interest of Spouse | 75,400,000 | 37.3% | | Ms. Lee | Interest of Spouse | 72,572,000 | 35.9% | - Ms. Cheung (spouse of Mr. Chau) and Ms. Lee (spouse of Mr. Chung) are deemed to have interests in shares and share options held by their spouses under the Securities and Futures Ordinance[107][108] Share Option Scheme The company's share option scheme aims to incentivize eligible participants, with some options exercised in H1 2025 leading to an increase in share capital, and option values calculated using a binomial model - The share option scheme was adopted on May 15, 2018, to recognize the contributions of eligible participants to the group[109] - The exercise price of share options shall not be less than the highest of the closing price on the grant date, the average closing price for the 5 trading days immediately preceding the grant date, and the nominal value on the offer date[109] - For the six months ended June 30, 2025, a total of 2,200,000 share options were exercised by several directors and other employees[112][89] - The value of share options is calculated using a binomial model, considering variables such as risk-free interest rate, expected life, expected volatility, and expected annual dividends[115][116] Changes in Directors' Information The monthly salaries of Mr. Chau Wai, Mr. Chung Sing Chun, and Ms. Lo Siu Fun increased effective January 1, 2025, reflecting their increased duties and responsibilities and alignment with market salary levels - The monthly salaries of Mr. Chau Wai, Mr. Chung Sing Chun, and Ms. Lo Siu Fun have been increased to HK$142,000, HK$80,000, and HK$164,500 respectively, effective January 1, 2025[119] - The salary increases were made after considering their increased duties and responsibilities within the group and are consistent with market salary levels[119] Audit Committee The Audit Committee, composed entirely of independent non-executive directors, is responsible for reviewing and overseeing financial reporting, internal controls, and risk management systems - The Audit Committee comprises all independent non-executive directors: Mr. Yu (Chairman), Mr. Szeto, and Mr. Ma[121] - Its primary responsibilities include reviewing and overseeing the group's financial reporting system, internal controls, and risk management systems[121] Remuneration Committee The Remuneration Committee, consisting of all independent non-executive directors, is responsible for reviewing and approving management's remuneration proposals and making recommendations on directors' and senior management's remuneration packages - The Remuneration Committee comprises all independent non-executive directors: Mr. Szeto (Chairman), Mr. Yu, and Mr. Ma[122] - Its primary responsibilities are to review and approve management's remuneration proposals and to make recommendations to the Board on the remuneration packages for directors and senior management of the group[122] Nomination Committee The Nomination Committee is responsible for recommending the appointment of directors and senior management, with changes in its chairman and members effective August 22, 2025 - The Nomination Committee's primary responsibility is to make recommendations to the Board on the appointment of directors and senior management of the group[124] - Effective August 22, 2025, Mr. Yu was appointed as the Chairman of the Nomination Committee, and Ms. Lo Siu Fun was appointed as a member[124] Standard Securities Dealing Code for Directors The company has adopted a standard code, and all directors confirmed compliance with it during H1 2025 - The company has adopted a standard code, and all directors confirmed their compliance with the required standards set out in the standard code for the six months ended June 30, 2025[125] Purchase, Sale or Redemption of the Company's Listed Securities Neither the company nor any of its subsidiaries purchased, sold, or redeemed any listed securities in H1 2025, and no treasury shares were held - 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[126] - As of June 30, 2025, the company held no treasury shares[127] Interim Dividends and Special Interim Dividends The Board of Directors does not recommend the payment of an interim dividend for H1 2025 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (H1 2024: interim and special interim dividends of 10 HK cents)[128] Corporate Governance Code The company is committed to maintaining high standards of corporate governance and complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules in H1 2025 - For the six months ended June 30, 2025, the company adopted and complied with the code provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules[129] Review of Financial Information The Audit Committee has reviewed the unaudited condensed consolidated interim financial information for H1 2025 with management and the independent auditor - The Audit Committee has reviewed the unaudited condensed consolidated interim financial information for the six months ended June 30, 2025, with the company's management and auditor[131] - The independent auditor, PricewaterhouseCoopers, has reviewed this interim financial information[131] Definitions This section provides definitions for key terms and abbreviations used throughout the report to ensure consistent understanding Glossary of Terms This section defines key terms used in the report, such as "Board," "BRH2 Plastics, LLC," "OEM Business," and "Share Option Scheme" - This section defines key terms used in the report, such as "Board," "BRH2 Plastics, LLC," "OEM Business," "Share Option Scheme," and others[132][133][134]