力丰(集团)(00387) - 2025 - 中期财报

Management Discussion and Analysis The Group's financial performance in the first half of 2025 saw a revenue decrease but significant gross profit growth and improved net profit, driven by new business models and reduced finance costs Financial Performance The Group's revenue decreased by 7.2% to HK$237 million in H1 2025, but gross profit increased by 8.9% to HK$73.3 million, with a significant rise in gross profit margin to 30.9% Revenue | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 236,882 | 255,249 | -7.2% | | Gross Profit | 73,263 | 67,246 | +8.9% | | Gross Profit Margin | 30.9% | 26.3% | +4.6pp | - Revenue decreased but gross profit margin increased, primarily due to a new business model shifting to commission income, where only net income is recognized as revenue[5] Other Income and Net Gains | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Other Income and Net Gains | (6) | 8,948 | | Fair value changes of financial assets at FVTPL | Loss 2,815 | Gain 6,507 | | Rental income | 1,975 | 1,809 | | Supplier incentive income | 689 | 486 | - Other income and net gains turned from a gain to a loss compared to the same period last year, mainly due to fair value losses on financial assets[6] - Rental income increased by 9.2% year-on-year, and supplier incentive income increased by 41.8%[6][7] Operating Expenses | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Expenses | 12,232 | 9,383 | +30.4% | | Administrative Expenses | 40,291 | 49,570 | -18.7% | - Selling and distribution expenses increased by 30.4%, primarily due to higher supply chain expenses[8] - Administrative expenses decreased by 18.7%, mainly due to the recognition of exchange gains in 2025[8] Net Finance Costs | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Net Finance Costs | 2,356 | 4,790 | -50.8% | | Finance income | 668 | 808 | -17.3% | | Finance costs | 3,024 | 5,598 | -46.0% | - Net finance costs significantly decreased by 50.8%, mainly due to lower-cost loan financing and lower HIBOR rates[9][10] - The net debt-to-equity ratio increased from 21.7% at the end of December 2024 to 25.7% at the end of June 2025[10] Share of Loss of Associates after Tax | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Share of Loss of Associates after Tax | 5,254 | 5,511 | - Associates OPS-Ingersoll Funkenerosion GmbH and Prima Power Sheet Metal Machinery (Suzhou) Co Ltd both recorded losses[11] Income Tax Expense | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Income Tax Expense | 3,113 | 401 | - Income tax expense significantly increased due to taxable profits generated in the current period and the full offset of tax losses carried forward from prior years[12] Profit Attributable to Owners of the Company and Earnings Per Share | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Profit Attributable to Owners of the Company | 10,023 | 8,430 | +18.9% | | Operating Profit from Trading Business | 20,745 | 19,130 | +8.4% | | Basic Earnings Per Share (HK Cents) | 4.36 | 3.66 | +19.1% | Closure of Register of Members The company will close its register of members from September 16 to 17, 2025, to determine eligibility for the interim dividend, with the deadline for share transfers being 4:30 p.m. on September 15, 2025 - The register of members will be closed from Tuesday, September 16, 2025, to Wednesday, September 17, 2025[15] - Shareholders must complete share transfers by 4:30 p.m. on Monday, September 15, 2025, to qualify for the interim dividend[15] Interim Dividend The Board resolved to declare an interim dividend of HK 3 cents per share, consistent with the prior year, payable on or about October 2, 2025, to shareholders on record as of September 17, 2025 | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interim Dividend (HK Cents per share) | 3 | 3 | - The dividend will be paid to shareholders whose names appear on the register of members on Wednesday, September 17, 2025[16] - The interim dividend is expected to be distributed to shareholders on or about Thursday, October 2, 2025[16] Business Review Despite economic challenges in China, H1 GDP grew by 5.5%, with strong exports and domestic consumption, benefiting the Group's trading business, particularly the machine tools division, which saw a 130.4% increase in total order volume, while investment associates continued to incur losses due to weak European economy and market competition Trading - China's economy grew by 5.5% in H1 GDP, with exports increasing by 7.2% and domestic consumption contributing 68.8% to GDP growth[17] - Manufacturing investment grew by 7.5%, high-tech industries by 9.5%, and new energy vehicle sales by 40.3%[18] - The machine tools division performed well, supported by strong demand from new energy vehicle and mobile phone manufacturers, securing large orders from key customers[18] | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Total Order Volume | 1,106,143 | 480,038 | +130.4% | Investment - The weak European economy, particularly in Germany, negatively impacted the associate OPS Ingersoll Funkenerosion GmbH[19] - Prima Power Sheet Metal Machinery (Suzhou) Co Ltd also faced intense competition from local manufacturers in China[19] - Both associates continued to record losses[19] Liquidity and Financial Resources As of June 30, 2025, the Group's cash and cash equivalents slightly decreased, while inventory and trade receivables increased, extending turnover days. Short-term borrowings rose to meet working capital needs, pushing the net debt-to-equity ratio to 25.7%, though the Group maintains sufficient bank facilities with pledged assets | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Cash and Cash Equivalents | 25,487 | 26,048 | | Inventories | 77,901 | 69,993 | | Trade and Bills Receivables | 242,139 | 206,372 | | Trade and Bills Payables | 58,341 | 76,678 | | Short-term Borrowings | 141,938 | 128,071 | - Inventory turnover days increased from 61 days to 87 days, and trade receivables turnover days increased from 125 days to 188 days[20] - The net debt-to-equity ratio increased from 21.7% at the end of December 2024 to 25.7% at the end of June 2025, partly due to increased borrowings[10][22] - The Group has total bank facilities of approximately HK$227 million, with approximately HK$155 million utilized, secured by land and buildings, investment properties, and financial assets[22] Future Plans and Prospects The Group anticipates continued economic momentum in China, supported by government policies, and plans to focus on high-tech clients, expand product offerings, invest in a new CRM system, and leverage a new metal sheet machinery joint venture for growth, expecting improved financial results for 2025 despite potential short-term delivery delays - China's economy in H2 will continue to benefit from government support for domestic consumption (new energy vehicles, smart home appliances) and high-tech industries (smartphones, computers, printed circuit boards)[23] - The Group will continue to maintain key customer relationships, expand its product range for new energy vehicle and smartphone manufacturers, and focus on high-tech clients[23] - A joint venture with a European metal sheet machinery manufacturer, covering China and Southeast Asian markets, is expected to drive growth[24] - Investment in a new customer relationship management system aims to enhance sales management and customer service[25] - While a large number of machine tool orders in H2 2025 may not be delivered by year-end, the Group is confident in achieving better financial results compared to 2024[25] Employees As of June 30, 2025, the Group had 225 employees, a slight decrease from the end of 2024, offering competitive remuneration packages and benefits including basic salary, pension schemes, medical plans, education allowances, and discretionary performance bonuses | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Employees | 225 | 233 | | Hong Kong Employees | 37 | - | | Mainland China Employees | 176 | - | | Employees in other Asian offices | 12 | - | - The Group offers competitive remuneration packages based on individual responsibilities, qualifications, performance, and seniority, along with benefits such as medical plans, education allowances, and discretionary performance bonuses[26] Particulars of Pledged Assets of the Group As of June 30, 2025, certain land and buildings, investment properties, and a financial asset at fair value through profit or loss, with a total carrying amount of approximately HK$92.45 million, were pledged as fixed charges to secure the Group's banking facilities | Type of Pledged Assets | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total carrying amount of land and buildings, investment properties, and financial assets at FVTPL | 92,453 | 97,273 | - The pledged assets are used to secure the Group's banking facilities[27] Capital Expenditure and Contingent Liabilities The Group's total capital expenditure for H1 2025 was HK$54 thousand, mainly for plant and equipment, a decrease from the prior year. As of June 30, 2025, the Group had no capital commitments but contingent liabilities of HK$4.208 million for customer guarantees | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total Capital Expenditure | 54 | 111 | | Contingent Liabilities (Customer Guarantees) | 4,208 | 3,811 | - Capital expenditure primarily included plant and equipment[28] - As of June 30, 2025, the Group had no capital commitments[28] Exchange Rate Fluctuations and Related Hedging Risks The Group faces exchange rate risk as most of its revenue and purchases are denominated in foreign currencies, managing this by offsetting foreign currency receipts against payments to overseas suppliers and entering into forward foreign exchange contracts when necessary, with no open contracts during the reporting period - The Group is exposed to exchange rate risk as most of its revenue and purchases are denominated in foreign currencies[29] - The Group will utilize foreign currencies received from customers to settle payments to overseas suppliers and may enter into forward foreign exchange contracts to minimize exchange rate risk[29] - As of June 30, 2025, the Group had no outstanding gross settlement foreign currency forward contracts[29] Purchase, Sale or Redemption of Shares During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares, and as of June 30, 2025, the Company held no treasury shares - The Company did not redeem any of its shares during the period, and neither the Company nor any of its subsidiaries purchased or sold any of the Company's shares[31] - As of June 30, 2025, the Company had no treasury shares[31] Share Option Scheme The Company's share option scheme expired on May 14, 2023. As of June 30, 2025, there was no share option scheme, and no options were granted, cancelled, exercised, or lapsed during the period, nor were there any outstanding options - The Company's share option scheme expired on May 14, 2023[32] - As of June 30, 2025, the Company had no share option scheme, and no share options were granted, cancelled, exercised, or lapsed during the period, nor were there any outstanding share options[32] Major Transactions in August 2025 Details of major transactions in August 2025 are provided in Note 17 to the condensed consolidated financial information - Details of major transactions are set out in Note 17 to the condensed consolidated financial information[33] 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, Mr. Li Sau Leung held a 74.41% equity interest in the Company, including personal, corporate, and other interests, while Mr. Chan Ching Suen and Mr. ZAVATTI Salvatore also held minor personal interests | Director's Name | Type of Interest | Number of Ordinary Shares Held | Percentage (%) | | :--- | :--- | :--- | :--- | | Mr. Li Sau Leung | Personal Interest | 25,176,000 | | | | Corporate Interest | 1,500,000 | | | | Other Interest | 144,529,982 | | | | Total | 171,205,982 | 74.41% | | Mr. Chan Ching Suen | Personal Interest | 1,104,000 | 0.48% | | Mr. ZAVATTI Salvatore | Personal Interest | 110,000 | 0.05% | - Mr. Li Sau Leung's interests include shares held by Peak Power Technology Limited as trustee of the Li Family Unit Trust, and shares held by J AND LEM Limited, which is wholly owned by him[34] Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company As of June 30, 2025, the Company had not received any notification from substantial shareholders holding 5% or more of the Company's issued share capital, other than the directors' interests already disclosed - Apart from the interests and short positions of the Directors disclosed above, the Company had not received any notification from any substantial shareholder holding 5% or more of the Company's issued share capital and short positions[36] Corporate Governance For the six months ended June 30, 2025, the Company complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, except for the combined roles of Chairman and Group Chief Executive Officer held by Mr. Li Sau Leung, which the Board believes is sufficient to ensure a balance of power and will be continuously reviewed - The Company has complied with the Corporate Governance Code set out in Appendix C1 of the Listing Rules, except for the combined roles of Chairman and Group Chief Executive Officer[37] - The Board believes the current arrangement is sufficient to ensure a balance of power and will continue to review the effectiveness of the Group's corporate governance structure from time to time[37] Standard of Dealings in Securities The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules, and all Directors confirmed their compliance throughout the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules[38] - All Directors confirmed their compliance with the Model Code throughout the period ended June 30, 2025[38] Audit Committee The Audit Committee has reviewed the Group's accounting principles, internal controls, and financial reporting matters, including the unaudited condensed consolidated financial information for the six months ended June 30, 2025, and this report - The Audit Committee has reviewed the accounting principles and practices adopted by the Group with management and discussed internal controls and financial reporting matters[39] - The review included the unaudited condensed consolidated financial information for the six months ended June 30, 2025, and this report with the Directors[39] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The Group achieved a profit for the period of HK$10.022 million in H1 2025, an 18.9% increase year-on-year, primarily due to improved gross profit margin and reduced finance costs, with total comprehensive income significantly rising to HK$14.54 million, mainly from a reversal of foreign currency translation losses | Metric | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 236,882 | 255,249 | -7.2% | | Gross Profit | 73,263 | 67,246 | +8.9% | | Operating Profit | 20,745 | 19,130 | +8.4% | | Profit Before Tax | 13,135 | 8,829 | +48.8% | | Profit for the Period | 10,022 | 8,428 | +18.9% | | Profit Attributable to Owners of the Company | 10,023 | 8,430 | +18.9% | | Basic and Diluted Earnings Per Share (HK Cents) | 4.36 | 3.66 | +19.1% | | Other Comprehensive Income/(Loss) | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Exchange differences on translation of foreign operations | 4,273 | (5,192) | | Gain on revaluation of land and buildings | – | 433 | | Deferred tax movement | 245 | 203 | | Other comprehensive income/(loss) for the period | 4,518 | (4,556) | | Total Comprehensive Income for the Period | 14,540 | 3,872 | - Exchange differences on translation of foreign operations turned from a loss to a gain compared to the same period last year, which is the main reason for the significant increase in total comprehensive income[41] Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets slightly decreased, with non-current assets declining and current assets increasing. Net current assets significantly grew, mainly due to the reclassification of financial assets at FVTPL from non-current to current, and increases in inventories and trade receivables, while total equity also increased | Metric | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total Non-current Assets | 330,170 | 400,969 | | Total Current Assets | 456,988 | 336,349 | | Total Current Liabilities | 304,289 | 263,452 | | Net Current Assets | 152,699 | 72,897 | | Net Assets | 452,686 | 445,048 | | Total Equity | 452,686 | 445,048 | - HK$67 million of financial assets at fair value through profit or loss were reclassified from non-current to current assets[42] - Both inventories and trade and bills receivables balances increased[42] - Borrowings increased to meet working capital requirements for trading operations[21][43] Condensed Consolidated Statement of Changes in Equity As of June 30, 2025, total equity attributable to owners of the Company increased to HK$457.538 million, primarily driven by profit for the period and positive foreign currency translation differences, despite dividend payments | Equity Item | January 1, 2025 (HK$ Thousand) | June 30, 2025 (HK$ Thousand) | | :--- | :--- | :--- | | Share Capital | 23,007 | 23,007 | | Share Premium | 37,510 | 37,510 | | Land and Buildings Revaluation Reserve | 185,196 | 184,606 | | Exchange Reserve | (23,116) | (19,494) | | Other Reserve | (261) | (261) | | Merger Reserve | 11,310 | 11,310 | | Retained Earnings | 216,253 | 220,860 | | Total Attributable to Ordinary Equity Holders of the Company | 449,899 | 457,538 | | Non-controlling Interests | (4,851) | (4,852) | | Total Equity | 445,048 | 452,686 | - Profit for the period of HK$10.023 million and exchange differences on translation of foreign operations of HK$4.273 million had a positive impact on total equity[44] - Dividends payable related to 2024 of HK$6.902 million reduced retained earnings[44] Condensed Consolidated Statement of Cash Flows In H1 2025, the Group's net cash flow from operating activities was an outflow of HK$17.631 million, a reversal from an inflow in the prior year. Net cash flow from investing activities turned into an inflow of HK$0.614 million. Net cash flow from financing activities was an inflow of HK$15.702 million, mainly from new bank borrowings, resulting in a slight decrease in cash and cash equivalents at period-end | Cash Flow Type | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net cash flows from/(used in) operating activities | (17,631) | 46,664 | | Net cash flows from/(used in) investing activities | 614 | (1,374) | | Net cash flows from/(used in) financing activities | 15,702 | (41,916) | | Net increase/(decrease) in cash and cash equivalents | (1,315) | 3,374 | | Cash and cash equivalents at end of period | 25,487 | 32,516 | - Net cash flow from operating activities changed from an inflow to an outflow, primarily due to increased cash used in operations[46] - Net cash flow from financing activities turned into an inflow, mainly due to new bank borrowings exceeding repayments[46] Notes to the Condensed Consolidated Financial Information This section provides detailed notes to the condensed consolidated financial information, covering general information, accounting policies, segment data, and specific financial instrument disclosures 1. General Information Leeport (Holdings) Limited and its subsidiaries primarily engage in the trading of metal processing machinery, measuring instruments, cutting tools, and electronic equipment. The Company is incorporated in Bermuda and listed on the Main Board of the Hong Kong Stock Exchange. This condensed consolidated financial information is presented in Hong Kong Dollars and was approved for issue on August 28, 2025 - The Group is principally engaged in the trading of metal processing machinery, measuring instruments, cutting tools, and electronic equipment[47] - The Company is a limited liability company incorporated in Bermuda and listed on the Main Board of The Stock Exchange of Hong Kong Limited[47][48] - This condensed consolidated financial information is presented in Hong Kong Dollars and was approved for issue on August 28, 2025[48] 2.1 Basis of Preparation This condensed consolidated financial information is prepared in accordance with HKAS 34 "Interim Financial Reporting" issued by the HKICPA and the applicable disclosure requirements of Appendix D2 of the Listing Rules, and should be read in conjunction with the annual consolidated financial statements for the year ended December 31, 2024 - The Group's unaudited condensed consolidated 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 Appendix D2 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[50] - The condensed consolidated financial information should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024, prepared in accordance with Hong Kong Financial Reporting Standards[50] 2.2 Changes in Accounting Policies and Disclosures The accounting policies adopted for this condensed consolidated financial information are consistent with those used for the 2024 annual consolidated financial statements, except for the initial adoption of the amended HKAS 21 "Lack of Exchangeability," which had no impact as the Group's transaction and functional currencies are exchangeable - The accounting policies adopted for the preparation of the condensed consolidated financial information are consistent with those adopted for the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024, except for the initial adoption of amended Hong Kong Financial Reporting Standards in the current period[51] - The initial adoption of HKAS 21 (Amendment) "Lack of Exchangeability" had no impact on the condensed consolidated financial information, as the currencies in which the Group transacts with group entities and the functional currencies of group entities translated into the Group's presentation currency are exchangeable[52] 3. Segment Information The Group's business is segmented by region (Mainland China, Hong Kong, and other countries), primarily trading metal processing machinery, measuring instruments, cutting tools, and electronic equipment. In H1 2025, Mainland China contributed the vast majority of revenue and segment results, though its revenue decreased year-on-year, while revenue from Hong Kong and other countries slightly increased their share - The Group is principally engaged in the trading of metal processing machinery, measuring instruments, cutting tools, and electronic equipment in three main geographical areas: Mainland China, Hong Kong, and other countries[53] | Region | H1 2025 Revenue (HK$ Thousand) | H1 2024 Revenue (HK$ Thousand) | H1 2025 Segment Results (HK$ Thousand) | H1 2024 Segment Results (HK$ Thousand) | | :--- | :--- | :--- | :--- | :--- | | Mainland China | 227,584 | 242,606 | 19,278 | 13,823 | | Hong Kong | 1,661 | 6,157 | 843 | 3,594 | | Other Countries | 7,637 | 6,486 | 624 | 1,713 | | Total | 236,882 | 255,249 | 20,745 | 19,130 | - Mainland China's revenue decreased year-on-year, but its segment results significantly increased[54][55] - Capital expenditure is primarily concentrated in Mainland China[54][55][57] 4. Revenue The Group's revenue is derived from the sale of goods, provision of agency services, and other after-sales services. In H1 2025, commission income significantly increased to HK$59.527 million, representing a higher proportion of total revenue, reflecting the contribution from new revenue models, while revenue from the sale of goods decreased - Revenue is derived from the sale of goods, provision of agency services, and other after-sales services[58] | Type of Goods or Services | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Sale of Goods | 167,976 | 215,160 | -21.9% | | Commission Income | 59,527 | 28,677 | +107.6% | | Service Income | 9,379 | 11,412 | -17.7% | | Total | 236,882 | 255,249 | -7.2% | - Commission income significantly increased, mainly from a new revenue model adopted since H2 2023[59] - As of H1 2025, approximately HK$59.551 million in revenue was derived from a single customer, accounting for more than 10% of the Group's total revenue[59] 5. Profit Before Tax The Group's profit before tax is stated after deducting or crediting various expenses and income, including cost of inventories sold, depreciation, employee benefit expenses, net exchange gains, provision for obsolete inventories, and professional service fees | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Cost of inventories sold | 160,315 | 185,299 | | Depreciation of property, plant and equipment | 1,072 | 1,070 | | Depreciation of right-of-use assets | 2,272 | 2,760 | | Employee benefit expenses (including directors' emoluments) | 29,731 | 28,689 | | Exchange (gains)/losses, net | (4,495) | 5,829 | | Provision for obsolete inventories | 2,152 | 944 | - Net exchange differences turned from a loss to a gain, positively impacting profit before tax[61] 6. Income Tax Expense The Group's income tax expense for H1 2025 was HK$3.113 million, primarily from Hong Kong profits tax, whereas the prior period's tax was mainly from Mainland China and other countries. The Hong Kong profits tax provision is due to taxable profits generated in the current period, with tax losses carried forward from prior years having been fully offset | Tax Source | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong Profits Tax | 3,113 | – | | Mainland China and Other Countries | – | 401 | | Total Tax Expense for the Period | 3,113 | 401 | - Hong Kong profits tax has been provided at a rate of 16.5% on the estimated assessable profits arising in Hong Kong for the period, as the Group had available tax losses brought forward from prior years that offset the assessable profits generated during the period[12][62] 7. Dividends The Board has resolved to declare an interim dividend of HK 3 cents per share, consistent with the prior year. This dividend was declared after the reporting period and is therefore not recognized as a liability in the condensed consolidated statement of financial position | Dividend Type | H1 2025 (HK Cents per share) | H1 2024 (HK Cents per share) | | :--- | :--- | :--- | | Interim Dividend | 3 | 3 | - The final dividend of HK$6.902 million for the year ended December 31, 2024, was payable as of June 30, 2025[64] - This interim dividend was declared after the reporting period and is therefore not recognized as a liability in the condensed consolidated statement of financial position[64] 8. Earnings Per Share Attributable to Owners of the Company Basic earnings per share for H1 2025 was HK 4.36 cents, an increase of 19.1% from the prior year. EPS is calculated based on profit attributable to owners of the Company and the weighted average number of ordinary shares outstanding. There were no issued or outstanding share options during the period, resulting in no dilutive effect | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit Attributable to Owners of the Company (HK$ Thousand) | 10,023 | 8,430 | | Weighted Average Number of Ordinary Shares (Thousand Shares) | 230,076 | 230,076 | | Basic Earnings Per Share Attributable to Owners of the Company (HK Cents per share) | 4.36 | 3.66 | - For the periods ended June 30, 2025, and 2024, there were no issued or outstanding share options, thus diluted earnings per share were the same as basic earnings per share[66] 9. Property, Plant and Equipment, Right-of-Use Assets and Investment Properties As of June 30, 2025, the carrying amounts of the Group's property, plant and equipment, right-of-use assets, and investment properties were HK$7.356 million, HK$177.894 million, and HK$74.354 million, respectively. Additions during the period were minimal, and depreciation continued. The Directors believe there have been no significant changes in the value of land and buildings and investment properties since the last annual report date | Asset Category | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Property, Plant and Equipment | 7,356 | 8,336 | | Right-of-Use Assets | 177,894 | 177,729 | | Investment Properties | 74,354 | 73,643 | - Bank borrowings are secured by land and buildings and investment properties with a carrying amount of HK$85.55 million[68] - The Directors believe that there have been no significant changes in the value of the Group's land and buildings and investment properties held as of June 30, 2025, since the date of the last annual report[67] 10. Investments in Associates As of June 30, 2025, the Group's investments in associates had a carrying amount of HK$32.493 million, a decrease from the beginning of the period, primarily due to the share of loss of associates after tax, partially offset by exchange differences | Metric | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Investments at beginning of period | 35,817 | 47,061 | | Share of loss of associates after tax | (5,254) | (5,511) | | Exchange differences | 1,930 | (875) | | Investments at end of period | 32,493 | 40,675 | - Associates continued to record losses, impacting the Group's investment value[11][19][69] 11. Trade and Bills Receivables As of June 30, 2025, total trade and bills receivables amounted to HK$242.1 million, an increase from the end of 2024. An aging analysis shows a significant increase in receivables aged 7 to 12 months, leading to an extended trade receivables turnover period. The Group maintains strict credit control and has made adequate impairment provisions | Aging (by invoice date) | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Within 3 months | 144,707 | 145,397 | | 4 to 6 months | 3,189 | 31,902 | | 7 to 12 months | 83,430 | 1,795 | | Over 12 months | 13,232 | 29,638 | | Less: Impairment | (2,419) | (2,360) | | Total | 242,139 | 206,372 | - Trade receivables aged 7 to 12 months significantly increased, and trade receivables turnover days increased from 125 days to 188 days[20][70][71] - The Group maintains strict credit control over its customers and outstanding receivables, making impairment provisions on an individual basis for high-risk customers and on a collective basis for low-risk customers[20] 12. Trade and Bills Payables As of June 30, 2025, total trade and bills payables amounted to HK$58.341 million, a decrease from the end of 2024, including HK$0.688 million payable to an associate | Aging (by invoice date) | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Within 3 months | 48,144 | 65,652 | | 4 to 6 months | 2,489 | 6,113 | | 7 to 12 months | 5,524 | 1,237 | | Over 12 months | 2,184 | 3,676 | | Total | 58,341 | 76,678 | - Trade and bills payables include HK$0.688 million payable to an associate, which is unsecured, interest-free, and repayable on demand[72] 13. Borrowings As of June 30, 2025, the Group's total short-term borrowings increased to HK$141.9 million from the end of 2024, primarily comprising trust receipt loans and bank term loans repayable within one year. All bank borrowings are secured by certain land and buildings, investment properties, and a financial asset at fair value through profit or loss | Type of Borrowing | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Trust Receipt Loans | 83,575 | 75,963 | | Bank Term Loans repayable within one year | 58,363 | 52,108 | | Total Borrowings | 141,938 | 128,071 | - The increase in borrowings is to meet working capital requirements for trading operations[21] - Bank borrowings are secured by certain land and buildings, investment properties, and a financial asset at fair value through profit or loss of the Group[73] 14. Contingent Liabilities As of June 30, 2025, the Group had contingent liabilities of HK$4.208 million related to bank guarantees granted to customers, an increase from the end of 2024 | Type of Contingent Liability | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Bank Guarantees granted to customers | 4,208 | 3,811 | - Certain subsidiaries have undertaken to banks to fulfill certain non-financial contractual obligations to third parties, for which the banks have provided bank guarantees on behalf of these subsidiaries to the third parties[75] 15. Related Party Transactions The Group is controlled by Peak Power Technology Limited. During the period, the Group had significant transactions with associates, including purchases of goods from Prima Power Sheet Metal Machinery (Suzhou) Co Ltd and interest income from a loan to OPS-Ingersoll Holding GmbH. Total key management personnel compensation amounted to HK$4.101 million - As of June 30, 2025, the Group is controlled by Peak Power Technology Limited (incorporated in the British Virgin Islands), which owns 62.8% of the Company's shares[76] | Type of Transaction | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Purchases of goods from an associate (Prima Power Sheet Metal Machinery (Suzhou) Co Ltd) | 1,597 | 2,471 | | Interest income from a loan to an associate (OPS-Ingersoll Holding GmbH) | 545 | 574 | | Total key management personnel compensation | 4,101 | 4,169 | - The loan provided to OPS is unsecured, bears interest at 6% per annum, and is not repayable within twelve months from the reporting date[78] 16. Fair Value and Fair Value Hierarchy of Financial Instruments The Group's management assesses that the fair value of most financial instruments approximates their carrying amounts. Fair values of unlisted securities are determined using the market approach, applying valuation multiples of comparable companies and considering discounts for lack of marketability. The fair value of unlisted key management personnel insurance contracts is considered their surrender cash value. During the period, financial assets at fair value through profit or loss recognized a HK$3 million fair value loss on unlisted securities and a HK$0.185 million fair value gain on unlisted key management personnel insurance contracts - Management has assessed that the fair value of financial instruments such as cash and cash equivalents, trade and bills receivables, trade and bills payables, and borrowings approximates their carrying amounts[82] - The fair value of unlisted securities classified as financial assets at fair value through other comprehensive income is determined using the market approach, with key unobservable inputs including EV/EBITDA ratios, price-to-revenue ratios, and discounts for lack of marketability[83] - The fair value of unlisted policy investments classified as financial assets at fair value through profit or loss is considered the surrender cash value of the policies[84] | Financial Asset Category | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Financial assets at fair value through other comprehensive income (Unlisted securities) | 7,389 | 7,389 | | Financial assets at fair value through profit or loss (Unlisted securities) | 67,000 | 70,000 | | Financial assets at fair value through profit or loss (Unlisted key management personnel insurance contracts) | 6,903 | 6,718 | | Total | 81,292 | 84,107 | - During the period, a fair value loss of HK$3 million on unlisted securities and a fair value gain of HK$0.185 million on unlisted key management personnel insurance contracts were recognized in the condensed consolidated statement of profit or loss and other comprehensive income, respectively[86] 17. Events After the Reporting Period On August 1, 2025, a wholly-owned subsidiary of the Group entered into a share redemption agreement with Femto S.à.r.l. to redeem target shares for a consideration of EUR 7.5 million (approximately HK$68.119 million). This transaction was completed on August 1, 2025, with estimated net proceeds of approximately HK$67.771 million. The Group also announced a special dividend of HK$0.1 per share to be paid on September 12, 2025 - On August 1, 2025, a wholly-owned subsidiary of the Group entered into a share redemption agreement with Femto S.à.r.l. to redeem target shares[89] | Transaction Details | Amount | | :--- | :--- | | Redemption Consideration | EUR 7,500,000 (approximately HK$68,119,000) | | Estimated Net Proceeds | approximately HK$67,771,000 | - The completion of the share redemption took effect on August 1, 2025[89] - The Group announced a special dividend of HK$0.1 per share to be paid on September 12, 2025[89] 18. Approval of Condensed Consolidated Financial Information The condensed consolidated financial information was approved and authorized for issue by the Company's Board of Directors on August 28, 2025 - The condensed consolidated financial information was approved and authorized for issue by the Company's Board of Directors on August 28, 2025[90]