开源控股(01215) - 2025 - 中期财报

Corporate Information The company's executive and independent non-executive directors are listed, along with its stock code, official website, and auditor - Executive Directors include Mr. Xue Jian (Chief Executive Officer) and Mr. Luo Yongzhi [4] - Independent Non-executive Directors include Mr. Tam San Wing, Mr. Ng Chi Pan, Mr. He Yi, and Ms. Kwok Pui Ha [4] - The company's stock code is 1215, and its official website is www.kaiyuanholdings.com [5] - The auditor is Ernst & Young [6] Report on Review of Interim Condensed Consolidated Financial Information Ernst & Young reviewed the interim financial information, concluding no material non-compliance with HKAS 34, without expressing an audit opinion - Ernst & Young reviewed the interim financial information in accordance with Hong Kong Standard on Review Engagements 2410 [10] - The review concluded that nothing has come to their attention to suggest the interim financial information is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 [11][13] - The scope of review is less than an audit, thus no audit opinion was expressed [10] Interim Condensed Consolidated Financial Statements This section presents the group's interim financial statements, including profit or loss, comprehensive income, financial position, equity changes, and cash flows Interim Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the Group turned from profit to loss, primarily due to a significant decrease in revenue, gross loss, increased finance costs, and a substantial rise in impairment provision for loans to an associate | Indicator | For the six months ended June 30, 2025 (HK$ Thousand) | For the six months ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Revenue | 74,662 | 143,797 | | Cost of sales | (84,801) | (112,948) | | Gross (loss)/profit | (10,139) | 30,849 | | Other income and gains | 13,823 | 18,709 | | Finance costs | (36,803) | (20,780) | | Loss provision for loan to an associate | (63,664) | (1,544) | | (LOSS)/PROFIT BEFORE TAX | (113,080) | 9,544 | | (LOSS)/PROFIT FOR THE PERIOD | (99,956) | 7,925 | | Basic and diluted (losses)/earnings per share | HK(0.78) cents | HK0.06 cents | Interim Condensed Consolidated Statement of Comprehensive Income Despite a net loss for the period, the Group's total comprehensive income turned positive due to a significant positive reversal in exchange differences from translating foreign operations | Indicator | For the six months ended June 30, 2025 (HK$ Thousand) | For the six months ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | (LOSS)/PROFIT FOR THE PERIOD | (99,956) | 7,925 | | Exchange differences on translation of foreign operations | 149,571 | (28,649) | | TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD | 44,773 | (38,347) | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets increased, but a significant rise in current liabilities due to reclassification of interest-bearing bank borrowings from non-current to current liabilities, resulted in a net current liabilities position | Indicator | As of June 30, 2025 (HK$ Thousand) | As of December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total non-current assets | 2,667,065 | 2,253,400 | | Total current assets | 1,085,841 | 1,214,563 | | Total assets | 3,752,906 | 3,467,963 | | Total current liabilities | 1,680,482 | 82,472 | | Total non-current liabilities | 155,990 | 1,513,830 | | Net assets | 1,916,434 | 1,871,661 | | NET CURRENT (LIABILITIES)/ASSETS | (594,641) | 1,132,091 | - Interest-bearing bank borrowings were reclassified from non-current to current liabilities due to non-compliance with financial ratio covenants, leading to a significant increase in current liabilities [17][28][111] - Loans to an associate were reclassified from current assets to non-current assets [17][110] Interim Condensed Consolidated Statement of Changes in Equity The Group's total equity slightly increased, primarily driven by a substantial rise in exchange differences from foreign currency translation, offsetting the period's loss and negative impact from cash flow hedges | Indicator | As of June 30, 2025 (HK$ Thousand) | As of January 1, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total equity at beginning of period | 1,871,661 | 1,927,822 | | Loss for the period | (99,956) | 7,925 | | Exchange differences on translation of foreign operations | 149,571 | (28,649) | | Total comprehensive income for the period | 44,773 | (38,347) | | Total equity at end of period | 1,916,434 | 1,889,475 | Interim Condensed Consolidated Statement of Cash Flows The Group's cash and cash equivalents decreased, mainly due to cash outflows from operating and financing activities, despite a positive impact from exchange rate changes, with investing activities also consuming cash for property, plant, and equipment acquisitions | Indicator | For the six months ended June 30, 2025 (HK$ Thousand) | For the six months ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Net cash flows (used in)/generated from operating activities | (447) | 59,109 | | Net cash flows (used in)/generated from investing activities | (54,895) | 21,078 | | Net cash flows used in financing activities | (60,967) | (17,433) | | NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS | (116,309) | 62,754 | | CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 928,655 | 938,253 | - Operating cash flow turned from positive to negative, investing cash flow turned from positive to negative, and financing cash outflow increased [22][23] - Expenditure on property, plant, and equipment acquisitions significantly increased from HK$3,922 thousand in 2024 to HK$54,895 thousand in 2025 [23] Notes to the Interim Condensed Consolidated Financial Information This section provides detailed notes supporting the interim condensed consolidated financial statements, covering corporate information, accounting policies, segment data, revenue, expenses, tax, dividends, earnings per share, property, plant and equipment, receivables, payables, borrowings, share capital, capital commitments, related party transactions, share option scheme, fair value of financial instruments, and post-reporting period events 1. CORPORATE INFORMATION This note reiterates the company's primary business as an investment holding company, with subsidiaries engaged in hotel operations in France and financing business in Hong Kong - The Company's principal business is investment holding, with its subsidiaries primarily engaged in hotel operations and financing business [26][29] 2.1 BASIS OF PREPARATION The interim financial information is prepared in accordance with HKAS 34; despite current liabilities exceeding current assets, management deems the going concern basis appropriate due to a lender waiver, and accounting policies remain consistent with the prior year, with no significant impact expected from the adoption of revised HKAS 21 - The interim financial information has been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting" [27][30] - Despite current liabilities exceeding current assets by HK$594,641 thousand, the Board considers the going concern basis appropriate due to a waiver obtained from the lender [28][30] - The adoption of the revised Hong Kong Financial Reporting Standards (HKAS 21 "Lack of Exchangeability") is not expected to have a significant impact on the Group's operating results and financial position [31][32][34] 3. SEGMENT INFORMATION The Group operates two reportable segments: hotel operations in France, which recorded a loss this period, and financing business in Hong Kong, which incurred a minor loss, with non-current assets primarily concentrated in France - The Group has two reportable operating segments: the hotel operations segment, which operates hotels in France, and the financing business segment, which provides mortgage loans in Hong Kong [36] Segment Results (For the six months ended June 30, 2025) | Segment | Revenue (HK$ Thousand) | Segment (Loss)/Profit (HK$ Thousand) | | :--- | :--- | :--- | | Hotel Operations | 74,662 | (53,031) | | Financing Business | – | (469) | | Total | 74,662 | (53,500) | Segment Results (For the six months ended June 30, 2024) | Segment | Revenue (HK$ Thousand) | Segment (Loss)/Profit (HK$ Thousand) | | :--- | :--- | :--- | | Hotel Operations | 143,797 | 3,801 | | Financing Business | – | (467) | | Total | 143,797 | 3,334 | Geographical Distribution of Non-current Assets (As of June 30, 2025) | Region | Amount (HK$ Thousand) | | :--- | :--- | | France | 2,533,656 | | Mainland China | 27,791 | | Hong Kong | 4,321 | | Total | 2,565,768 | 4. REVENUE, OTHER INCOME AND GAINS The Group's total revenue from customer contracts significantly decreased, mainly due to reduced income from hotel accommodation and catering services in France, while other income also declined due to lower bank interest income Revenue Components (For the six months ended June 30, 2025) | Type | Amount (HK$ Thousand) | | :--- | :--- | | Provision of accommodation services | 67,540 | | Provision of catering services | 6,019 | | Provision of travel agency services | 943 | | Provision of laundry services | 160 | | Total revenue from customer contracts | 74,662 | Revenue Components (For the six months ended June 30, 2024) | Type | Amount (HK$ Thousand) | | :--- | :--- | | Provision of accommodation services | 123,481 | | Provision of catering services | 17,392 | | Provision of travel agency services | 2,548 | | Provision of laundry services | 376 | | Total revenue from customer contracts | 143,797 | Other Income and Gains (For the six months ended June 30, 2025) | Type | Amount (HK$ Thousand) | | :--- | :--- | | Bank interest income | 13,291 | | Fixed lease payments | 532 | | Total | 13,823 | Other Income and Gains (For the six months ended June 30, 2024) | Type | Amount (HK$ Thousand) | | :--- | :--- | | Bank interest income | 17,377 | | Fixed lease payments | 694 | | Exchange gains | 638 | | Total | 18,709 | 5. OTHER EXPENSES The Group recorded exchange losses in the current period, with no such expenses in the prior corresponding period | Item | For the six months ended June 30, 2025 (HK$ Thousand) | For the six months ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Exchange losses | 167 | – | 6. (LOSS)/PROFIT BEFORE TAX The Group's loss before tax was primarily driven by a significant increase in impairment provision for loans to an associate and net exchange differences, with hotel service costs and depreciation also being major components Major Expense Items (For the six months ended June 30, 2025) | Item | Amount (HK$ Thousand) | | :--- | :--- | | Hotel service costs | 67,175 | | Depreciation of property, plant and equipment | 18,758 | | Loss provision for loan to an associate | 63,664 | | Net exchange differences | 167 | Major Expense Items (For the six months ended June 30, 2024) | Item | Amount (HK$ Thousand) | | :--- | :--- | | Hotel service costs | 91,044 | | Depreciation of property, plant and equipment | 21,883 | | Loss provision for loan to an associate | 1,544 | | Net exchange differences | (638) | 7. INCOME TAX The Group's income tax shifted from an expense last year to a credit this period, reflecting the current period's pre-tax loss, with varying tax rates across its operating jurisdictions including Hong Kong, Mainland China, France, and Luxembourg Income Tax (Credit)/Expense | Period | Amount (HK$ Thousand) | | :--- | :--- | | For the six months ended June 30, 2025 | (13,124) (Credit) | | For the six months ended June 30, 2024 | 1,619 (Expense) | - Hong Kong profits tax rate is 16.5%, with the first HK$2,000,000 for eligible subsidiaries taxed at 8.25% [51][54] - Income tax rates for Mainland China, France, and Luxembourg are 25%, 25%, and 24.94%, respectively [52][53][54] 8. DIVIDENDS The Board does not recommend the payment of any interim dividend for the current period, consistent with the prior corresponding period - The Board does not recommend the payment of any dividend for the current period (for the six months ended June 30, 2024: nil) [56] 9. (LOSSES)/EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE COMPANY The Group recorded a basic and diluted loss per share of 0.78 HK cents this period, a reversal from the prior year's earnings per share, with the weighted average number of ordinary shares remaining unchanged (Losses)/Earnings Per Share | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Basic and diluted (losses)/earnings per share | HK(0.78) cents | HK0.06 cents | | Weighted average number of ordinary shares (thousand shares) | 12,778,880 | 12,778,880 | - For the six months ended June 30, 2025 and 2024, the Group had no issued potential dilutive ordinary shares [57][58] 10. PROPERTY, PLANT AND EQUIPMENT The Group's expenditure on property, plant, and equipment acquisitions significantly increased this period, and as of the period-end, most hotel properties were pledged as collateral for bank financing - The cost of property, plant and equipment acquired this period was HK$54,895 thousand, a significant increase from HK$3,922 thousand in the prior corresponding period [61] - Depreciation for the period was HK$18,758 thousand, compared to HK$21,883 thousand in the prior corresponding period [61] - As of June 30, 2025, hotel properties with a net book value of approximately HK$2,533,296 thousand were pledged as collateral for bank financing [62][63] 11. TRADE RECEIVABLES Trade receivables remained stable, with all amounts due within one month, indicating efficient collection Ageing Analysis of Trade Receivables (by invoice date) | Period | Amount (HK$ Thousand) | | :--- | :--- | | June 30, 2025 | 12,798 | | December 31, 2024 | 13,188 | | Ageing: within one month | 12,798 | | Ageing: within one month | 13,188 | 12. TRADE PAYABLES Trade payables slightly decreased, with all amounts due within one month, reflecting normal operational payment cycles Ageing Analysis of Trade Payables (by invoice date) | Period | Amount (HK$ Thousand) | | :--- | :--- | | June 30, 2025 | 3,055 | | December 31, 2024 | 4,061 | | Ageing: within one month | 3,055 | | Ageing: within one month | 4,061 | 13. INTEREST-BEARING BANK BORROWINGS The Group's €175 million bank loan was reclassified as a current liability due to non-compliance with financial covenants; the Group has entered into an interest rate swap contract to hedge future cash flow variability risks of this loan, which has been assessed as highly effective - The Group renewed a €175 million loan on November 28, 2024, bearing interest at three-month EURIBOR plus 2.5%, with a maturity date of November 28, 2027 [68][70] - Due to non-compliance with financial ratios in the loan covenants, all outstanding bank borrowings were classified as current liabilities as of June 30, 2025 [68][70] - The Group has entered into an interest rate swap contract with a notional amount of €175 million to pay fixed interest at 2.123%, hedging floating interest rate risk, and it has been assessed as highly effective [69][70] 14. SHARE CAPITAL The company's authorized and issued share capital remained unchanged during the period Share Capital Status | Indicator | As of June 30, 2025 (Thousand shares/HK$ Thousand) | As of December 31, 2024 (Thousand shares/HK$ Thousand) | | :--- | :--- | :--- | | Authorized share capital (number of shares) | 20,000,000 | 20,000,000 | | Authorized share capital (amount) | 2,000,000 | 2,000,000 | | Issued and fully paid share capital (number of shares) | 12,778,880 | 12,778,880 | | Issued and fully paid share capital (amount) | 1,277,888 | 1,277,888 | 15. CAPITAL COMMITMENTS The Group has contracted but unprovided capital commitments for hotel properties, with the amount decreasing compared to the end of the previous year Capital Commitments (Hotel Properties) | Period | Amount (HK$ Thousand) | | :--- | :--- | | June 30, 2025 | 75,687 | | December 31, 2024 | 92,125 | 16. RELATED PARTY TRANSACTIONS AND BALANCES The Group's loan to an associate was reclassified as a non-current asset and incurred a significantly increased impairment loss due to a local court-approved bankruptcy reorganization plan that suspended the Group's right to liquidate collateral, while key management personnel remuneration remained stable Loan to an Associate | Indicator | As of June 30, 2025 (HK$ Thousand) | As of December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Loan to an associate | 215,789 | 209,625 | | Impairment provision | (170,256) | (102,440) | | Total | 45,533 | 107,185 | - The local court approved the associate's bankruptcy reorganization plan, suspending the Group's right to liquidate collateral, leading to the loan's reclassification as a non-current asset [78][79] - An impairment loss of HK$63,664 thousand was recognized this period, a significant increase from HK$1,544 thousand in the prior corresponding period [78][79] Key Management Personnel Remuneration | Item | For the six months ended June 30, 2025 (HK$ Thousand) | For the six months ended June 30, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Short-term employee benefits | 1,980 | 1,980 | | Post-employment benefits | 18 | 18 | | Total remuneration paid to key management personnel | 1,998 | 1,998 | 17. SHARE OPTION SCHEME The company implemented a share option scheme on June 2, 2022, to incentivize eligible participants, with a 10-year validity period (approximately 6.9 years remaining as of June 30, 2025), and no options were granted, exercised, cancelled, or lapsed during the period - The company implemented a share option scheme on June 2, 2022, to reward or compensate employees and directors who have contributed to the Group [80][81] - The scheme has a validity period of 10 years, with approximately 6.9 years remaining as of June 30, 2025 [80][81] - The total number of share options shall not exceed 10% of the total issued shares, and no single participant shall exceed 1% within 12 months [83][86] - The vesting period for share options shall not be less than 12 months, and the exercise period shall not exceed ten years from the grant date [87] - From the effective date of the scheme to the date of approval of the financial statements, no share options were granted, exercised, cancelled, or forfeited/lapsed [88][91] 18. FAIR VALUE AND FAIR VALUE HIERARCHY OF FINANCIAL INSTRUMENTS Management assesses that the fair value of most financial instruments (such as cash, receivables, payables, bank borrowings, and loans to an associate) approximates their carrying amounts, while derivative financial instruments (primarily interest rate swaps) are measured using Level 2 valuation techniques - The fair value of cash and cash equivalents, pledged deposits, trade receivables, trade payables, interest-bearing bank borrowings, and loans to an associate approximates their carrying amounts [89][90][92] - Derivative financial instruments (primarily interest rate swap contracts) are measured using valuation techniques (present value calculation method) for similar swap patterns, classified as Level 2 in the fair value hierarchy [94][95][98][99] - The corporate finance team is responsible for determining policies and procedures for fair value measurement of financial instruments and reports directly to the Chief Financial Officer and the Audit Committee [93][95] 19. EVENTS AFTER THE REPORTING PERIOD As of the date of approval of the financial information, the Group had no significant post-reporting period events - As of the date of approval of the financial information, the Group had no significant post-reporting period events [100][101] Management Discussion and Analysis This section provides an overview of the Group's financial performance and position, including business review, prospects, liquidity, acquisitions, foreign exchange exposure, contingent liabilities, asset pledges, and employee information Interim Dividend The Board does not recommend the payment of any interim dividend for the current period, consistent with the prior corresponding period - The Board does not recommend the payment of any interim dividend for the current period (for the six months ended June 30, 2024: nil) [102][107] Business Review The Group's revenue significantly decreased this period, turning from profit to loss, primarily due to reduced income from the second phase renovation of Paris Marriott Hotel, a substantial increase in impairment provision for loans to an associate, and higher finance costs - Revenue for the period was approximately HK$74.7 million, a 48.1% decrease from HK$143.8 million in the prior corresponding period [103][108] - The Group recorded a loss of approximately HK$100.0 million for the period, compared to a profit of approximately HK$7.9 million in the prior corresponding period [105][109] - Key reasons include: reduced income and gross loss due to partial closure of Paris Marriott Hotel for renovation; impairment provision for loans to an associate of approximately HK$63.7 million; increased finance costs; and decreased other income and gains due to lower bank deposit interest rates [103][104][105][108][109] - Basic and diluted loss per share for the period was 0.78 HK cents, compared to earnings of 0.06 HK cents in the prior corresponding period [106][109] Overview The Group's non-current assets increased due to Euro appreciation and reclassification of loans to an associate, while current assets decreased; current liabilities significantly grew due to reclassification of bank borrowings, resulting in a net current liabilities position despite a lender waiver - As of June 30, 2025, total non-current assets were approximately HK$2,667.1 million, an 18.4% increase from December 31, 2024, mainly due to the appreciation of the Euro against the Hong Kong Dollar and reclassification of loans to an associate [110][113] - As of June 30, 2025, total current liabilities were approximately HK$1,680.5 million, a 1,937.6% increase from December 31, 2024, primarily due to the reclassification of interest-bearing bank borrowings for non-compliance with financial ratio covenants [111][114] - As of June 30, 2025, the Group had net current liabilities of approximately HK$594.6 million, compared to net current assets of approximately HK$1,132.1 million as of December 31, 2024 [111][114] - The Group obtained a waiver from the lender for non-compliance with financial ratio covenants, but interest-bearing bank borrowings are still classified as current liabilities under Hong Kong Financial Reporting Standards [111][114] Hotel Operation The hotel operations segment experienced a significant decline in revenue and turned from profit to loss, primarily because the second phase renovation of the Paris Marriott Hotel reduced available rooms and severely impacted operational performance - Revenue from the hotel operations segment was approximately HK$74.7 million, a 48.1% decrease from HK$143.8 million in the prior corresponding period [112][115] - The segment recorded a loss of approximately HK$53.0 million for the period, compared to a profit of approximately HK$3.8 million in the prior corresponding period [116][117] - The decrease in revenue was mainly due to the commencement of the second phase renovation of the Paris Marriott Hotel, with fewer than 70 rooms available for guests [112][115] Paris Marriott Hotel Operating Performance | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Occupancy | 33.4% | 78.9% | | Average Room Rate | €695 | €545 | | RevPAR | €232 | €430 | Money Lending The financing business segment recorded no revenue and maintained a minor loss this period, consistent with the prior corresponding period, with no mortgage loan receivables at period-end - No revenue was recorded for this segment in both the current period and the prior corresponding period [119][121] - A loss of approximately HK$0.5 million was recorded for the period, consistent with the prior corresponding period [119][121] - As of June 30, 2025, there were no mortgage loan receivables [119][121] Equity Investment The Group's loan to an associate was impacted by a local court-approved bankruptcy reorganization plan, which suspended the right to liquidate collateral, leading to the loan's reclassification and a significant increase in expected credit loss provision - The Group's loan to Beijing Kai Rui Ying Technology Co., Ltd. (an associate) is secured by pledged assets [120][122] - The local court approved the associate's bankruptcy reorganization plan, resulting in the suspension of the Group's right to liquidate collateral until the end of the reorganization period [123][125] - The reorganization plan may lead to dilution of the Group's equity interest in the pledged associate, but the loan itself is not affected by the reorganization [123][125] Loan to an Associate The Group's loan to an associate is secured by collateral; due to a court-approved bankruptcy reorganization plan suspending the Group's right to liquidate collateral, the loan is classified as a non-current asset, and a significant impairment loss has been recognized - The loan to an associate is secured by collateral provided by that associate [77][79] - The local court approved the associate's proposed bankruptcy reorganization plan, and the Group's right to liquidate collateral will be suspended until the end of the reorganization period [78][79][123][125] - Consequently, the loan is presented as a non-current asset as of June 30, 2025 [78][79] - As of the reporting date, the Group indirectly holds a 37.125% equity interest in the pledged associate [123][125] Expected Credit Loss Assessment The Group conducted an Expected Credit Loss (ECL) assessment for pledged assets under HKFRS 9, classifying them as Stage 3; the ECL calculation considers the orderly liquidation value of pledged assets, unpaid construction costs, the impact of the reorganization plan, and the exposure at default, leading to a substantial increase in ECL provision this period - The Company conducts an Expected Credit Loss assessment for pledged assets in accordance with Hong Kong Financial Reporting Standard 9 [124][126] - The pledged assets are classified as "Stage 3," indicating a deterioration in asset quality to a "non-performing stage" with credit impairment [127][130] - The ECL calculation formula is: Pledged Asset Value - Unpaid Construction Costs - Impact of Reorganization Plan - Exposure at Default [127][129] - As of June 30, 2025, the ECL amount was approximately RMB157.1 million (approximately HK$170.3 million), with an impairment provision of approximately HK$63.7 million recognized for the period [138][143] Prospects The Group anticipates challenges in hotel operations from rising European prices and geopolitical tensions, despite optimistic prospects for the renovated Paris Marriott Hotel; the Hong Kong money lending market faces intense competition and an uncertain outlook, and the Group will continue to monitor the progress of its loan to an associate - In hotel operations, the second phase renovation of the Paris Marriott Hotel is expected to be completed by the end of 2025, offering a new look in 2026, but faces challenges from rising European prices, geopolitical tensions, and French new energy policies [139][140][144] - In money lending business, the Hong Kong mortgage loan market is highly competitive with an uncertain outlook, and the Board will act prudently [141][145] - In equity investment, the company will continue to monitor significant developments regarding the loan to an associate [142][146] Looking Ahead The Board plans to review and restructure the Group's asset portfolio to enhance quality and will continue to explore investment opportunities in new business segments to improve shareholder returns - The Board will review and restructure the Group's asset portfolio to enhance the quality of its holdings [147][150] - The Board will also continue to explore investment opportunities in new business segments to enhance and improve returns for the Company's stakeholders [147][150] Liquidity and Financial Resources The Group's total assets and net assets increased, but due to the reclassification of bank borrowings, it shifted from a net current asset position to a net current liability position; cash and bank balances decreased, and the gearing ratio rose, while the Group maintains a prudent financial approach and continuously monitors its financial condition - As of June 30, 2025, total assets were approximately HK$3,752.9 million, and net assets were approximately HK$1,916.4 million [148][151] - As of June 30, 2025, cash and bank balances were approximately HK$928.7 million, a decrease from December 31, 2024 [148][151] - As of June 30, 2025, the Group had net current liabilities of approximately HK$594.6 million, compared to net current assets of approximately HK$1,132.1 million as of December 31, 2024 [148][151] - As of June 30, 2025, outstanding bank loans and other borrowings were approximately HK$1,582.1 million, none of which are repayable within one year (despite accounting reclassification to current) [148][151] - As of June 30, 2025, the Group's gearing ratio (total borrowings/total assets) was 42.2%, an increase from 39.8% as of December 31, 2024 [148][151] Acquisitions and Disposals During the period, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - During the period, the Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures [149][152] Foreign Exchange Exposure The Group faces foreign exchange risk from its operations in France, Luxembourg, China, and Hong Kong, primarily in Euro and RMB; no forward contracts were used for hedging this period, but the Group regularly monitors and considers hedging when necessary - The Group operates in France, Luxembourg, China, and Hong Kong, facing foreign exchange risk in Euro and RMB [153][157] - For the six months ended June 30, 2025, the Group did not enter into any forward contracts for hedging foreign exchange risk [153][157] - The Group manages foreign exchange risk through regular review and monitoring and will consider hedging arrangements when appropriate and necessary [153][157] Contingent Liabilities As of June 30, 2025, the Group had no contingent liabilities - As of June 30, 2025, the Group had no contingent liabilities [154][158] Pledge on the Group's Assets The Group's cash deposits and hotel properties have been pledged as collateral for bank loans - As of June 30, 2025, cash deposits of approximately HK$67.3 million and hotel properties of approximately HK$2,533.3 million were pledged [155][159] - These assets serve as collateral for bank loans granted to the Group [155][159] Employees and Remuneration The Group's employee headcount remained stable, with a slight increase in total remuneration; the Group offers competitive compensation and benefits, including a share option scheme - As of June 30, 2025, the Group had a total of 9 employees, consistent with December 31, 2024 [156][160] - Total employee remuneration for the period was approximately HK$3.6 million, an increase from HK$3.2 million in the prior corresponding period [156][160] - The Group provides employee benefits including bonuses, Mandatory Provident Fund schemes, medical insurance plans, and participation in the share option scheme [156][160] Directors' and Chief Executives' Interests and Short Positions in Shares, Underlying Shares and Debentures As of June 30, 2025, no directors or chief executives of the company held any registrable interests or short positions in the shares, underlying shares, or debentures of the company or any associated corporation - As of June 30, 2025, none of the Company's directors or chief executives had any registrable interests or short positions in the shares, underlying shares, and debentures of the Company or any associated corporation [161][162] Persons Holding 5% or More Interests in Shares and Underlying Shares This section details the shareholdings of individuals and entities holding 5% or more interests in the company's shares and underlying shares as of June 30, 2025 Major Shareholders' Shareholdings (Long Positions, as of June 30, 2025) | Shareholder Name/Entity | Capacity | Number of Ordinary Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Du Shuang Hua | Interest of controlled corporation | 708,000,000 | 5.54% | | Happy Sino International Limited | Beneficial interest | 708,000,000 | 5.54% | | Mr. Zhang He Yi | Beneficial interest | 1,400,000,000 | 10.96% | | Ms. Lu Xiaomei | Interest of controlled corporation | 753,190,000 | 5.89% | | Sincere Profit Group Limited | Beneficial interest | 753,190,000 | 5.89% | | Ga Leung Investment Company Limited | Beneficial interest | 1,866,666,666 | 14.61% | | Mr. Sun Yong Feng | Interest of controlled corporation | 1,866,666,666 | 14.61% | | Ms. Meng Ya | Spouse's interest | 1,999,666,666 | 15.65% | | Mr. Hu Yishi | Beneficial interest | 1,300,000,000 | 10.17% | Share Option Scheme The company has a share option scheme in place to reward and compensate eligible participants for their contributions to the Group's success, with further details provided in Note 17 to the interim condensed consolidated financial information - The Company has a share option scheme in place, designed to reward and compensate eligible participants for their contributions to the Group's successful operations [166][169] - Further details of the scheme are disclosed in Note 17 to the interim condensed consolidated financial information [166][169] Purchase, Sale or Redemption of Listed Securities of the Company During the period, neither the company nor any of its subsidiaries purchased, redeemed, or sold any of the company's listed securities - During the period, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities [167][170] Corporate Governance Report This section outlines the company's corporate governance practices, including the roles and activities of its Audit, Remuneration, and Nomination Committees Audit Committee The Audit Committee, composed of four independent non-executive directors, has reviewed the Group's accounting policies, risk management, and internal control systems, expressing satisfaction with internal control procedures and financial reporting disclosures - The Audit Committee is composed of four independent non-executive directors, with Mr. Tam San Wing as Chairman [175][177] - The Committee has reviewed the accounting policies and practices adopted by the Group and discussed matters related to risk management and internal control systems [175][177] - The Audit Committee is satisfied with the Group's internal control procedures and financial reporting disclosures [175][177] Remuneration Committee The Remuneration Committee has been established in accordance with the Listing Rules and is responsible for making recommendations to the Board on the remuneration policy and structure for all directors and senior management of the company - The Remuneration Committee has been established in accordance with the Listing Rules and has formulated its written terms of reference [179][183] - The Committee is responsible for making recommendations to the Board on the remuneration policy and structure for all directors and senior management of the Company [179][183] - The Remuneration Committee comprises one executive director and four independent non-executive directors, with Mr. Tam San Wing as Chairman [179][183] Nomination Committee The Nomination Committee has been established in accordance with the Listing Rules and is responsible for reviewing the structure, size, and composition of the Board - The Nomination Committee has been established in accordance with the Listing Rules and has formulated its written terms of reference [180][184] - The Committee is responsible for reviewing the structure, size, and composition of the Board [180][184] - The Nomination Committee currently comprises one executive director and four independent non-executive directors, with Mr. Ng Chi Pan as Chairman [180][184] Model Code for Securities Transactions by Directors The company has adopted a code of conduct for directors' securities transactions, which is no less exacting than the Model Code in Appendix C3 of the Listing Rules, and directors have confirmed their compliance throughout the period - The Company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than the Model Code set out in Appendix C3 of the Listing Rules [186][188] - The Company has confirmed with its directors, after specific enquiry, that they have complied with the required standards set out in the Model Code and the Company's code of conduct for directors' securities transactions throughout the period [186][188] Update on the Director's Information Under Rule 13.51B of the Listing Rules Independent Non-executive Director Ms. Kwok Pui Ha was appointed as an independent non-executive director for two other listed companies, Interstellar Group Limited and Digital Domain Holdings Limited, effective July 1, 2025, and August 15, 2025, respectively - Independent Non-executive Director Ms. Kwok Pui Ha was appointed as an independent non-executive director of Interstellar Group Limited (stock code: 01725), effective July 1, 2025 [181][185] - Ms. Kwok Pui Ha was also appointed as an independent non-executive director of Digital Domain Holdings Limited (stock code: 02350), effective August 15, 2025 [181][185] Publication of Interim Results and Interim Report The interim results announcement is published on the HKEX and company websites, and the interim report will be dispatched to shareholders and posted on the same websites in due course - The interim results announcement is published on the HKEX website (www.hkex.com.hk) and the Company's website (www.kaiyuanholdings.com) [187][189] - The Company will dispatch the interim report for the period to shareholders in due course and will also post it on the aforementioned websites [187][189] Board of Directors As of the report date, the Board of Directors comprises Executive Directors Mr. Xue Jian and Mr. Luo Yongzhi, and Independent Non-executive Directors Mr. Tam San Wing, Mr. Ng Chi Pan, Mr. He Yi, and Ms. Kwok Pui Ha - As of the date of this report, the Board of Directors includes Executive Directors Mr. Xue Jian and Mr. Luo Yongzhi [190] - Independent Non-executive Directors include Mr. Tam San Wing, Mr. Ng Chi Pan, Mr. He Yi, and Ms. Kwok Pui Ha [190]