草姬集团(02593) - 2025 - 中期财报

Company Information Board of Directors and Committees This section lists the executive, non-executive, and independent non-executive directors of Herbs Group Holdings Limited and their roles in key committees - Ms. Kwok Chi Yan serves as Chairperson and Chief Executive Officer, with Mr. Li Yat Sing and Ms. Yeung Yuen Pik as Executive Directors[5] - The composition and chairpersons of the Audit, Remuneration, and Nomination Committees are clearly defined[5] Company Structure and Advisors This section provides key information on the company's principal bankers, registered office, Hong Kong business location, legal advisors, auditors, and compliance advisors - Principal bankers include Industrial and Commercial Bank of China (Asia) Limited and Hang Seng Bank Limited[5] - KPMG is the company's auditor, and Deacons is the Hong Kong legal advisor[5] - The company's stock code is 2593, and its website is www.herbs.hk[7](index=7&type=chunk) Financial Highlights Performance Overview For H1 2025, the Group's revenue slightly decreased by 0.4%, gross profit fell by 5.5%, shifting from profit to a HK$7.5 million net loss, with 5.65 HK cents loss per share Six Months Ended June 30 Performance | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Revenue | 117,292 | 117,811 | | Gross Profit | 82,643 | 87,426 | | Operating (Loss) / Profit | (8,503) | 11,173 | | (Loss) / Profit and Total Comprehensive Income for the Period | (7,535) | 7,483 | | (Loss) / Earnings Per Share | (5.65) HK cents | 7.48 HK cents | - Revenue slightly decreased by 0.4%, gross profit decreased by 5.5%, and the period saw a shift from profit to a net loss of approximately HK$7.5 million[8] Financial Position Overview As of June 30, 2025, the Group's non-current and current assets decreased, with net assets falling from HK$187.2 million to HK$159.6 million Financial Position Overview | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Non-current Assets | 34,412 | 44,529 | | Current Assets | 174,650 | 197,470 | | Non-current Liabilities | 11,574 | 17,275 | | Current Liabilities | 37,840 | 37,541 | | Net Assets | 159,648 | 187,183 | - Net assets decreased from HK$187.2 million as of December 31, 2024, to HK$159.6 million as of June 30, 2025[9] Management Discussion and Analysis Business Review and Outlook Facing H1 2025 Hong Kong retail market challenges, the Group, a health and beauty product supplier, saw revenue decline, gross profit decrease, and recorded a loss, responding with increased promotions and new product development - The Group operates nine proprietary brands, including "Herbs" and "ZINO," selling products through retail, wholesale, and consignment models[10] - The Hong Kong retail market experienced a 3.3% year-on-year decline in total sales in H1 2025, adversely impacting the Group's business[11] - The Group recorded a slight revenue decrease of 0.4%, a 5.5% reduction in gross profit, and a shift from net profit to a net loss of approximately HK$7.5 million, primarily due to increased promotional activities, higher advertising and promotion expenses, and increased staff costs[11] - The Group actively developed new products like "Herbs Tiger Milk Mushroom Cough & Asthma Relief" and new brand "MedHerbs," planning continued innovation in H2 2025 to mitigate losses[11] Financial Review H1 2025 revenue slightly decreased by 0.4% to HK$117.3 million, with retail growth offset by wholesale/consignment declines, and increased costs and reduced gross margin led to a period loss Revenue Breakdown by Sales Channel | Sales Channel | 2025 (HK$'000) | 2025 (%) | 2024 (HK$'000) | 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Retail Business | 71,484 | 60.9 | 69,035 | 58.6 | | Wholesale Business | 43,831 | 37.4 | 45,555 | 38.7 | | Consignment Arrangements | 1,977 | 1.7 | 3,221 | 2.7 | | Total | 117,292 | 100.0 | 117,811 | 100.0 | - Retail business revenue increased by 3.5% to HK$71.5 million, primarily due to an increase in the number of self-operated retail stores from 23 to 33[15] - Wholesale business revenue decreased by 3.8% to HK$43.8 million, and consignment arrangement revenue decreased by 38.6% to HK$2.0 million, both impacted by the overall decline in Hong Kong retail sales[16][17] - Cost of sales increased by 14.0% to HK$34.6 million, gross profit decreased by 5.5% to HK$82.6 million, and the overall gross profit margin decreased by 3.7 percentage points to 70.5%, mainly due to increased promotional activities[18] - Other income increased by HK$0.8 million, primarily from bank interest income generated from unutilized proceeds of the global offering[19] - Selling and distribution costs increased by 35.3% to HK$66.5 million, mainly due to increased advertising and promotion expenses and higher staff costs from retail store expansion[20] - Administrative and other operating expenses increased by 43.8% to HK$26.8 million, primarily due to increased staff costs, depreciation of leased properties, and post-listing compliance expenses[21] - Finance costs increased by 21.7% to HK$0.58 million, mainly due to increased interest expenses on lease liabilities from a higher average number of self-operated retail stores[23] - A net loss of approximately HK$7.5 million was recorded for the period, compared to a net profit of approximately HK$7.5 million in the prior period, primarily attributable to decreased gross profit, increased advertising and promotion expenses, and higher staff costs[26] Liquidity and Capital Resources As of June 30, 2025, the Group held HK$89.8 million in cash, maintained sufficient liquidity without bank borrowings, and saw significantly reduced capital expenditure - As of June 30, 2025, the Group's cash and cash equivalents were approximately HK$89.8 million[28] - As the Group has no bank borrowings (excluding lease liabilities), the capital gearing ratio and net debt to equity ratio are not applicable[29][30] - Capital expenditure in H1 2025 was approximately HK$0.2 million, a significant decrease from HK$3.2 million in H1 2024, primarily for the acquisition of property, plant, and equipment[32] - Future capital expenditure is expected to increase with business growth, funded by cash flow from operating activities and net proceeds from the global offering[32] Risk Management and Operational Matters The Group manages foreign exchange risk from non-HKD operating expenses, reported no significant contingent liabilities or post-period events, and had 238 employees as of June 30, 2025 - The Group faces foreign exchange fluctuation risk primarily from operating expenses denominated in currencies other than HKD, managed by monitoring exchange rate movements[33] - As of June 30, 2025, the Group had 238 employees, with remuneration determined based on performance, experience, Group results, and market conditions[38] - During the reporting period, there were no significant contingent liabilities, off-balance sheet commitments (except for advertising and promotion commitments), post-reporting period events, significant investments, acquisitions or disposals of subsidiaries, or asset pledges[35][36][37][39][40][42] Corporate Governance and Equity Matters The Board did not recommend H1 2025 interim dividend, maintained corporate governance (with combined Chairperson/CEO roles), and utilized HK$18.3 million of global offering proceeds for marketing and working capital - The Board does not recommend an interim dividend for the six months ended June 30, 2025 (HK$30 million for the same period in 2024)[44] - The Company complies with the Corporate Governance Code, except for the combined roles of Chairperson and Chief Executive Officer held by Ms. Kwok Chi Yan, which the Board believes is in the Group's best interest[45][46] - The share award scheme became effective on December 19, 2024, but no share awards were granted as of June 30, 2025[49] Use of Net Proceeds from Global Offering | Intended Use | Planned Allocation (HK$ million) | Amount Utilized During Period (HK$ million) | Unutilized Amount as of June 30, 2025 (HK$ million) | | :--- | :--- | :--- | :--- | | Strategic marketing and promotion activities | 33.7 | 9.1 | 24.6 | | Expand, improve, and optimize sales network | 35.7 | 0.3 | 35.4 | | Expand and enrich product portfolio | 4.4 | – | 4.4 | | Recruit talent | 11.7 | – | 11.7 | | General working capital | 8.9 | 8.9 | – | | Total | 94.4 | 18.3 | 76.1 | - Net proceeds from the global offering were approximately HK$94.4 million, of which HK$18.3 million was utilized during the reporting period, primarily for strategic marketing and general working capital[50][51] Review Report to the Board of Directors Review Conclusion KPMG reviewed this interim financial report under HKSRS 2410, finding no material non-compliance with HKAS 34 - KPMG has reviewed this interim financial report and found no material non-compliance with Hong Kong Accounting Standard 34[57] - The scope of a review is substantially less than an audit, thus no audit opinion is expressed[56] Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement shows H1 2025 consolidated profit or loss, reflecting a shift from profit to loss due to decreased revenue, higher cost of sales, and increased operating expenses Summary of Consolidated Statement of Profit or Loss and Other Comprehensive Income | Indicator | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Revenue | 117,292 | 117,811 | | Cost of Sales | (34,649) | (30,385) | | Gross Profit | 82,643 | 87,426 | | Other Income | 2,062 | 1,310 | | Selling and Distribution Costs | (66,458) | (49,104) | | Administrative and Other Operating Expenses | (26,750) | (18,604) | | Listing Expenses | – | (9,855) | | Operating (Loss) / Profit | (8,503) | 11,173 | | Finance Costs | (583) | (479) | | (Loss) / Profit Before Tax | (9,086) | 10,694 | | Income Tax Credit / (Expense) | 1,551 | (3,211) | | (Loss) / Profit and Total Comprehensive Income for the Period | (7,535) | 7,483 | | Basic and Diluted (Loss) / Earnings Per Share | (5.65) HK cents | 7.48 HK cents | Consolidated Statement of Financial Position This statement presents the consolidated financial position as of June 30, 2025, showing decreased total assets, net assets, and net current assets Summary of Consolidated Statement of Financial Position | Indicator | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Non-current Assets | 34,412 | 44,529 | | Current Assets | 174,650 | 197,470 | | Current Liabilities | 37,840 | 37,541 | | Net Current Assets | 136,810 | 159,929 | | Total Assets Less Current Liabilities | 171,222 | 204,458 | | Non-current Liabilities | 11,574 | 17,275 | | Net Assets | 159,648 | 187,183 | | Total Equity | 159,648 | 187,183 | Consolidated Statement of Changes in Equity This statement reflects H1 2025 equity changes, showing a decrease in total equity due to period loss and dividends paid Summary of Consolidated Statement of Changes in Equity | Item | Share Capital (HK$'000) | Share Premium (HK$'000) | Capital Reserve (HK$'000) | Retained Profits (HK$'000) | Total (HK$'000) | | :--- | :--- | :--- | :--- | :--- | :--- | | Balance as at January 1, 2025 | 1,333 | 112,251 | 1,510 | 72,089 | 187,183 | | Loss and Total Comprehensive Income for the Period | – | – | – | (7,535) | (7,535) | | Dividends Approved for Prior Year | – | – | – | (20,000) | (20,000) | | Balance as at June 30, 2025 | 1,333 | 112,251 | 1,510 | 44,554 | 159,648 | - A loss of HK$7.535 million for the period and dividends of HK$20 million approved for the prior year led to a decrease in total equity[64] - The Group underwent a reorganization in 2024, with the Company becoming the holding company for the listed business, and consolidated financial statements prepared as a continuation of Herbs International[65][66] Condensed Consolidated Statement of Cash Flows This statement summarizes H1 2025 cash flows, showing a shift to net cash outflow from operations, increased financing outflow, and a significant decrease in period-end cash Summary of Condensed Consolidated Statement of Cash Flows | Activity Type | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Net Cash (Used in) / From Operating Activities | (1,349) | 23,564 | | Net Cash From / (Used in) Investing Activities | 952 | (2,036) | | Net Cash Used in Financing Activities | (29,063) | (17,464) | | Net (Decrease) / Increase in Cash and Cash Equivalents | (29,460) | 4,064 | | Cash and Cash Equivalents at End of Period | 89,755 | 26,546 | - Net cash from operating activities shifted from an inflow of HK$23.6 million in H1 2024 to a net outflow of HK$1.3 million in H1 2025[69] - Net cash outflow from financing activities increased to HK$29.1 million, primarily due to dividends paid and the capital portion of lease rentals[69] - Cash and cash equivalents at period-end decreased by HK$29.5 million to HK$89.8 million[69] Notes to the Financial Information Basis of Preparation and Changes in Accounting Policies This interim financial report, reviewed by KPMG, is prepared under HKEX Listing Rules and HKAS 34, with HKAS 21 (Amendment) having no significant impact - This interim financial report is prepared in accordance with Hong Kong Accounting Standard 34 and has been reviewed by KPMG[72][73] - HKAS 21 (Amendment) "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability" was applied in this accounting period but had no significant impact on this interim report[74] Revenue and Segment Reporting The Group develops and sells health and beauty products, recognizing revenue upon customer acceptance, with one reportable segment primarily in Hong Kong Classification of Revenue from Contracts with Customers by Major Sales Channel | Sales Channel | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Retail Business | 71,484 | 69,035 | | Wholesale Business | 43,831 | 45,555 | | Consignment Arrangements | 1,977 | 3,221 | | Total | 117,292 | 117,811 | - The Group has one reportable segment, which is the development and sale of health and beauty products[79] - Transactions with Customer A exceeded 10% of the Group's revenue, totaling HK$43.5 million in H1 2025[78] Other Income and Expense Analysis Other income, mainly bank interest and government grants, increased, while loss before tax was driven by higher staff costs, depreciation, impairment, and auditor fees Other Income Details | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Bank Interest Income | 1,120 | 109 | | Government Grants | 818 | 1,080 | | Others | 124 | 121 | | Total | 2,062 | 1,310 | Staff Costs Details | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Salaries, Wages, and Other Benefits | 41,926 | 33,386 | | Contributions to Defined Contribution Retirement Plans | 1,580 | 1,401 | | Total | 43,506 | 34,787 | - Depreciation expense increased to HK$10.8 million, and an impairment loss of HK$1.036 million on property, plant and equipment was recognized[83][88] - Auditor's remuneration increased to HK$1.12 million[83] Taxation and Earnings Per Share The Group recorded a HK$1.551 million income tax credit in H1 2025 due to deferred tax from period loss, resulting in 5.65 HK cents basic and diluted loss per share Taxation in Consolidated Statement of Profit or Loss and Other Comprehensive Income | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Current Tax – Hong Kong Profits Tax | – | 3,355 | | Deferred Tax | (1,551) | (144) | | Total | (1,551) | 3,211 | - Basic and diluted loss per share was 5.65 HK cents, compared to earnings of 7.48 HK cents in the prior period[85] Notes to the Statement of Financial Position This section details changes in PPE, inventories, receivables, and payables, noting impairment on PPE due to underperforming stores, and increases in inventories and trade payables - The Group recognized an increase in right-of-use assets of HK$3.585 million, primarily for retail store and office leases[86] - An impairment loss of HK$1.036 million was recognized on property, plant and equipment and right-of-use assets due to underperforming retail stores[88] Inventory Details | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Health and Beauty Products | 33,883 | 22,992 | | Packaging Materials and Consumables | 4,123 | 3,677 | | Provision for Obsolete Inventories | (59) | (126) | | Total | 37,947 | 26,543 | Trade and Other Receivables Details | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Trade Receivables, Net of Loss Allowance | 25,242 | 26,293 | | Prepayments, Deposits, and Other Receivables | 20,309 | 25,419 | | Total | 45,551 | 51,712 | Trade and Other Payables Details | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Trade Payables | 4,677 | 3,782 | | Other Payables and Accrued Expenses | 14,041 | 13,473 | | Total | 18,718 | 17,255 | Capital, Reserves, and Dividends This section details dividend policy, share capital structure, and changes, noting no H1 2025 interim dividend but a HK$20 million prior-year final dividend paid, and share capital increase from IPO - No interim dividend was declared for H1 2025, compared to HK$30 million declared in H1 2024[95] - A final dividend of HK$20 million for the prior financial year was approved and paid in H1 2025[96] Changes in Share Capital | Item | Number of Shares | Amount (HK$'000) | | :--- | :--- | :--- | | Issued and fully paid ordinary shares as at December 31, 2024, January 1, 2025, and June 30, 2025 | 133,333,600 | 1,333 | - Share capital changes primarily resulted from a capitalization issue of 99,999,990 shares and an initial public offering of 33,333,600 new shares[99] Significant Related Party Transactions This section discloses significant related party transactions, including key management compensation, director endorsement fees, sales to directors/shareholders, and lease arrangements Key Management Personnel Compensation | Item | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | | Salaries, Wages, and Other Benefits | 1,758 | 1,650 | | Contributions to Defined Contribution Retirement Plans | 27 | 27 | | Total | 1,785 | 1,677 | Transactions with Related Parties | Transaction Type | Related Party | 2025 (HK$'000) | 2024 (HK$'000) | | :--- | :--- | :--- | :--- | | Endorsement Fees Paid | Mr. Kwok | 320 | 320 | | Sales of Goods | Ms. Yeung | 15 | – | | Sales of Goods | Ms. Kwok | 2 | – | - Lease arrangements with related parties resulted in lease liabilities of HK$2.478 million, involving office rental from Bomi Art Creation Limited[101] Other Information Directors' and Major Shareholders' Interests This section discloses directors' and major shareholders' interests in the Company's shares, with Ms. Kwok Chi Yan and Mr. Li Yat Sing holding significant stakes via controlled corporations and spousal interests Directors' Interests in the Company's Shares | Director Name | Nature of Interest | Number of Shares | Approximate Percentage | | :--- | :--- | :--- | :--- | | Ms. Kwok | Interest in controlled corporation | 90,000,000 (L) | 67.50% | | Ms. Kwok | Spouse's interest | 10,000,000 (L) | 7.50% | | Mr. Li Yat Sing | Interest in controlled corporation | 10,000,000 (L) | 7.50% | | Mr. Li Yat Sing | Spouse's interest | 90,000,000 (L) | 67.50% | Major Shareholders' Interests in Shares and Related Shares | Shareholder Name | Nature of Interest | Number of Shares | Approximate Percentage | | :--- | :--- | :--- | :--- | | Joy & Love | Beneficial owner | 90,000,000 (L) | 67.50% | | Joy & Faith | Beneficial owner | 10,000,000 (L) | 7.50% | Company Securities and Audit Committee During the period, no company securities were purchased, sold, or redeemed, and the Audit Committee reviewed the interim report, confirming compliance with accounting principles and disclosure - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's securities[106] - The Audit Committee, comprising three independent non-executive directors, reviewed this interim report and the unaudited condensed consolidated financial statements, confirming compliance with all applicable accounting principles and disclosure requirements[107]