常达控股(01433) - 2025 - 中期财报

Corporate Information This section outlines Cirtek Holdings Limited's key corporate details, including its board, committees, registered information, and stock code Corporate Information Details This section details Cirtek Holdings Limited's key corporate information, including its board, committees, registered details, principal bankers, auditor, and stock code - Executive Directors include Chairman Mr. Chan Sing Ming, CEO Ms. Law Miu Lan, and Mr. Chan Tsz Fung[5][6] - The Audit Committee is chaired by Ms. Luk Mei Yan, the Remuneration Committee by Mr. Lee Tak Cheong, and the Nomination Committee by Mr. Chan Sing Ming[5][6] - The company's auditor is Ernst & Young, with principal bankers including HSBC, Bank of China (Hong Kong), and Citibank (Hong Kong)[8][9] - The company's stock code is 1433, and its website is http://www.cirtek.com[9](index=9&type=chunk)[10] Management Discussion and Analysis This section provides a comprehensive overview of the Group's operational and financial performance, strategic initiatives, liquidity, and future outlook amidst global economic challenges Review of Operations Despite global macroeconomic challenges, the Group maintained stable H1 2025 operations with slight revenue decrease but improved gross margin, driven by strategic expansion, innovation, and successful integration - The global macroeconomic environment remains complex, with ongoing trade frictions and tariff adjustments pressuring global supply chains and increasing market caution[11][13] - In H1 2025, Mainland China's GDP grew 5.3% year-on-year, with retail sales up 5.0%; Eurozone GDP slightly increased 0.1% quarter-on-quarter; US GDP growth slowed to 1.25% year-on-year, but retail sales still rose 3.6% year-on-year[11][13] Group's Key Operating Indicators for H1 2025 | Indicator | H1 2025 (HKD Million) | H1 2024 (HKD Million) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 258.2 | 264.5 | -2.4% | | Gross Profit Margin | 47.1% | 46.9% | +0.2 percentage points | - The Group strategically expanded its overseas sales team in H2 2024 to retain existing clients and secure more orders, leading to increased operating costs during the period[12][14] - The Group's sales network spans over 40 markets globally, with production bases in Mainland China, Vietnam, Bangladesh, India, Turkey, Central America, and Southern Europe, effectively diversifying market and operational risks[15][17] - The Group is committed to applying RFID technology to label products and actively introducing new eco-friendly materials and products to meet market demand for sustainable development, strengthening and expanding its customer base[16][18] - The business integration of French packaging company Primway S.A.R.L was completed last year, successfully introducing new French clients and securing orders for the Group during the review period[19][24] Business and Financial Review This section reviews H1 2025 financial performance, showing slight revenue and gross profit declines, increased operating expenses, a shift to other operating expenses, and reduced profit for the period Key Financial Data for H1 2025 | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 258,178 | 264,519 | -2.4% | | Gross Profit | 121,611 | 124,174 | -2.1% | | Gross Profit Margin | 47.1% | 46.9% | +0.2 percentage points | | Other income and gains | 2,451 | 2,525 | -2.9% | | Selling and distribution expenses | 33,732 | 31,557 | +6.9% | | Administrative expenses | 60,283 | 57,323 | +5.2% | | Other operating (expenses)/income, net | (913) | 1,084 | Shift from income to expense | | Finance costs | 1,181 | 1,263 | -6.5% | | Income tax expense | 3,518 | 6,556 | -46.3% | | Profit for the period | 24,340 | 31,292 | -22.3% | - The slight decrease in gross profit was primarily due to a shift in product mix and margin pressure from customers and suppliers[22][28] - Increased selling and distribution expenses were mainly attributable to higher staff costs and consultancy fees[30][34] - The rise in administrative expenses was primarily due to inflationary impacts and increased operating costs from the Group's expansion strategy[31][36] - Other operating income shifted to expense, mainly due to exchange differences and impairment of trade receivables[32][37] - Reduced finance costs resulted from the repayment of certain bank loans during the reporting period[33][39] - The significant decrease in income tax expense was mainly due to lower profit leading to reduced tax provisions[40][41][47] Capital Structure, Liquidity and Financial Resources As of June 30, 2025, the Group maintained robust liquidity with increased cash, reduced borrowings, and ample unutilized credit, despite a slight dip in net current assets Liquidity Position as of June 30, 2025 | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Net current assets | 81,100 | 88,100 | -7.9% | | Inventories | 69,000 | 83,200 | -17.1% | | Trade receivables | 53,900 | 57,600 | -6.5% | | Trade payables | 47,100 | 64,200 | -26.6% | | Cash and cash equivalents | 76,200 | 68,500 | +11.2% | | Pledged deposits | 4,400 | 4,300 | +2.3% | | Interest-bearing bank borrowings | 4,000 | 6,200 | -35.5% | | Total bank facilities | 120,800 | N/A | N/A | | Utilized bank facilities | 4,100 | N/A | N/A | | Unutilized bank facilities | 116,700 | N/A | N/A | - The Group's working capital is primarily sourced from cash generated by daily operations, equity funding, and interest-bearing loans[43][49] - The Company has no intention to draw down the unutilized bank credit facilities, indicating confidence in its current liquidity[51][55] Foreign Exchange Exposure The Group's transactions and monetary assets are primarily denominated in HKD, RMB, EUR, and USD. While currently lacking a hedging policy, the Group faced no significant difficulties from exchange rate fluctuations in H1 2025 and will continue to monitor foreign exchange risks - The Group's transactions and monetary assets are primarily denominated in HKD, RMB, EUR, and USD[52][56] - The Group currently has no foreign exchange hedging policy, but its operations or liquidity did not face any significant difficulties or impacts from exchange rate fluctuations for the six months ended June 30, 2025[52][56] - The Group will continue to monitor its foreign exchange exposure and consider hedging significant currency risks when necessary[53][57] Charges on Group Assets As of June 30, 2025, the Group pledged plant and machinery with a net book value of approximately HK$6.7 million and life insurance policies with a book value of approximately HK$6.2 million to secure bank loans Pledged Assets | Pledged Assets | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Plant and machinery | 6,700 | N/A | | Life insurance policies | 6,200 | 6,000 | Prospects For 2025, the Group anticipates global economic constraints, responding by deepening global strategy, controlling costs, expanding RFID technology, strengthening sales, and maintaining financial prudence to seize opportunities - According to UN reports, global economic growth in 2025 will continue to face dual constraints from geopolitical tensions and trade policies, leading to cautious corporate investment and suppressed recovery by high debt and low productivity[59][62] - The Group will leverage the advantages of its diverse regional production bases to serve local and neighboring markets, swiftly adjusting production capacity in response to market demand[60][62] - The Group will strictly control costs through automated production and a centralized procurement system, while continuously expanding RFID technology related products and application markets to strengthen its competitive advantage[60][61][62][63] - To expand market coverage, the Group will recruit local sales talent, broaden its sales network, and strive for high-quality clients and high-value orders[61][63] - The Group will adhere to a prudent financial policy, controlling debt levels, strengthening cash flow, and maintaining ample cash reserves to enhance financial resilience and seize medium-to-long-term development opportunities[61][63] Corporate Governance and Other Information This section details the Company's adherence to corporate governance standards, policies on securities transactions, dividend practices, public float, and other significant corporate events and employee information Compliance with the Corporate Governance Code The Company maintains high corporate governance standards, with the Board confirming full compliance with Listing Rules Appendix C1 during the review period - The Company is committed to maintaining high standards of corporate governance to safeguard shareholders' interests, enhance company value, and ensure accountability[65][67] - The Board has confirmed that the Company complied with all code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules during the review period[65][67] Model Code for Securities Transactions by Directors of the Company The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules, with all directors and senior management confirming compliance during the reporting period - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 to the Listing Rules[68][74] - All Directors and senior management confirmed their compliance with the relevant provisions of the Model Code from the Listing Date up to the date of this report[68][74] Interim Dividend The Board does not recommend paying an interim dividend for the six months ended June 30, 2025 (2024: nil) - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 (2024: nil)[69][75] Sufficiency of Public Float As of the date of this report, the Company maintained the prescribed public float of not less than 25% as required by the Listing Rules - The Company maintained the prescribed public float of not less than 25% as required by the Listing Rules[69][76] Material Acquisitions and Disposals During the reporting period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group had no material acquisitions and disposals of subsidiaries, associates, and joint ventures[70][77] Significant Investments During the reporting period, the Group held no significant investments whose fair value exceeded 5% of the Group's total assets - During the reporting period, the Group held no significant investments whose fair value accounted for more than 5% of the Group's total assets[71][78] Event After Reporting Period Subsequent to the six months ended June 30, 2025, and up to the date of this report, the Directors are not aware of any significant events related to the Group's business or financial performance - Subsequent to the six months ended June 30, 2025, and up to the date of this report, no significant events related to the Group's business or financial performance have occurred[72][79] Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil) - As of June 30, 2025, the Group had no significant contingent liabilities (December 31, 2024: nil)[73][80] Employees As of June 30, 2025, the Group employed 1,421 staff, with employee benefit expenses (excluding directors' emoluments) of approximately HK$82.6 million for the six months then ended, and remuneration reviewed annually based on market terms and individual qualifications Employees and Benefit Expenses | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Number of employees | 1,421 | N/A | | Employee benefit expenses (excluding directors' emoluments) | 82.6 Million HKD | 78.6 Million HKD | - Remuneration packages are generally determined by reference to market terms and individual qualifications, with salaries and wages reviewed annually based on performance appraisals and other relevant factors[81][85] Share Option Scheme The Company adopted a Share Option Scheme on February 21, 2020, valid for ten years. As of June 30, 2025, 198,000,000 options were authorized for grant. No new options were granted during the period, but 2,000,000 options granted to a senior management member at an exercise price of HK$0.057 per share remain outstanding, representing 0.1% of weighted average issued shares - The Share Option Scheme was adopted on February 21, 2020, and is valid for ten years from March 12, 2020[82][86] - As of January 1, 2025, and June 30, 2025, the total number of share options authorized for grant under the scheme was 198,000,000[84][86] - On September 15, 2020, 2,000,000 share options were granted to a senior management member with an exercise price of HK$0.057 per share, with vesting and exercise periods extending to September 14, 2025[83][89] - For the six months ended June 30, 2025, the Company did not grant any share options under the Share Option Scheme[84][86] - The total number of shares that may be issued upon exercise of granted share options (2,000,000 shares) represents 0.1% of the weighted average number of issued shares (2,000,000,000 shares) for the six months ended June 30, 2025[87] Purchase, Sale or Redemption of Listed Securities of the Company Including Treasury Shares During the reporting period, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities. As of June 30, 2025, the Company held 10,460,000 treasury shares, with their disposition to be determined based on market conditions and capital management needs - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[90][91] Changes in Treasury Shares | Item | June 30, 2025 (shares) | December 31, 2024 (shares) | | :--- | :--- | :--- | | Balance at beginning of period | 10,410,000 | 0 | | Purchased during the period | 50,000 | 10,410,000 | | Balance at end of period | 10,460,000 | 10,410,000 | - The Company intends to decide whether and when to cancel or sell these repurchased treasury shares at market price from time to time, based on market conditions and the Group's capital management needs[90][91] Disclosure of Interests This section discloses the long positions of Directors, chief executives, and substantial shareholders in the Company's shares. Mr. Chan Sing Ming and Ms. Law Miu Lan indirectly hold 65.4% through Charming International Limited, while Mr. Chan Tsz Fung directly holds 0.6%. Charming International Limited is the only substantial shareholder (excluding Directors) with 5% or more interest. No short positions were disclosed during the reporting period Directors' and Chief Executives' Long Positions in the Company's Shares | Name of Director | Nature of interest | Number and class of securities | Approximate percentage of total issued share capital | | :--- | :--- | :--- | :--- | | Mr. Chan Sing Ming | Controlled corporation interest | 1,308,000,000 shares | 65.4% | | Ms. Law Miu Lan | Controlled corporation interest | 1,308,000,000 shares | 65.4% | | Mr. Chan Tsz Fung | Beneficial owner | 12,000,000 shares | 0.6% | Substantial Shareholders' Long Positions in the Company's Ordinary Shares | Name of shareholder | Capacity/Nature of interest | Number of shares | Approximate percentage of the Company's total issued share capital | | :--- | :--- | :--- | :--- | | Charming International Limited | Beneficial interest | 1,308,000,000 | 65.4% | - Mr. Chan Sing Ming and Ms. Law Miu Lan respectively own 51% and 49% of the issued share capital of Charming International, and are therefore deemed to have an interest in the shares held by Charming International[102][103] - As of June 30, 2025, no Directors and/or chief executives of the Company or their associates held any short positions in the shares or underlying shares of the Company[97][100][104][108] Competing Interests For the six months ended June 30, 2025, the Directors were unaware of any business or interest directly or indirectly competing with the Group's business, or any other conflicts of interest, involving Directors, substantial shareholders, or their respective associates - The Directors are not aware of any business or conflicts of interest that directly or indirectly compete or may compete with the Group's business[105][109] Audit Committee and Review of Unaudited Interim Condensed Consolidated Financial Information The Audit Committee, chaired by Ms. Luk Mei Yan, reviewed the H1 2025 unaudited interim condensed consolidated financial information, confirming compliance with accounting standards and adequate disclosure - The Audit Committee comprises three independent non-executive directors, with Ms. Luk Mei Yan as its chairwoman[106][110] - The Committee is responsible for independently reviewing the effectiveness of financial reporting processes, internal controls, and risk management systems, and assisting the Board in safeguarding the Group's assets[106][110] - The Audit Committee has reviewed the unaudited interim condensed consolidated financial information for the six months ended June 30, 2025, and is of the opinion that it has complied with the applicable accounting standards and made adequate disclosures[111][113] Forward Looking Statements This report contains forward-looking statements regarding the Group's future financial position, operating results, and business, which involve known and unknown risks and uncertainties that could cause actual results to differ materially from expectations - This report contains forward-looking statements regarding the Group's financial position, operating results, and business[112][114] - These forward-looking statements involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements[112][114] Appreciation The Board expresses sincere gratitude to all staff for their hard work and contributions, and to shareholders, customers, and suppliers for their continued support - The Board expresses its appreciation for the dedication, contribution, and professionalism of all staff[115] - The Board extends its sincere gratitude to all shareholders, customers, and suppliers for their consistent and valuable support to the Group[115] Interim Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the Group experienced slight decreases in revenue and gross profit, increased selling and administrative expenses, a shift from other operating income to expense, reduced finance costs, and significantly lower income tax, resulting in a notable decline in profit and earnings per share for the period Summary of Interim Condensed Consolidated Statement of Profit or Loss | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 258,178 | 264,519 | -2.4% | | Cost of sales | (136,567) | (140,345) | -2.7% | | Gross profit | 121,611 | 124,174 | -2.1% | | Other income and gains | 2,451 | 2,525 | -2.9% | | Selling and distribution expenses | (33,732) | (31,557) | +6.9% | | Administrative expenses | (60,283) | (57,323) | +5.2% | | Other operating (expenses)/income, net | (913) | 1,084 | Shift from income to expense | | Finance costs | (1,181) | (1,263) | -6.5% | | Share of (loss)/profit of an associate | (95) | 208 | Shift from profit to loss | | Profit before tax | 27,858 | 37,848 | -26.4% | | Income tax expense | (3,518) | (6,556) | -46.3% | | Profit for the period | 24,340 | 31,292 | -22.3% | | Basic earnings per share (HK cents) | 1.22 | 1.56 | -21.8% | | Diluted earnings per share (HK cents) | 1.22 | 1.56 | -21.8% | Interim Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, the Group's profit for the period was HK$24.34 million. Due to other comprehensive loss from net exchange differences on translating foreign operations of HK$12.96 million, total comprehensive income attributable to owners of the Company was HK$11.38 million, a significant decrease from the prior year Summary of Interim Condensed Consolidated Statement of Comprehensive Income | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Profit for the period | 24,340 | 31,292 | -22.3% | | Net exchange differences arising from translation of foreign operations | (12,957) | (9,979) | +29.8% (Loss widened) | | Total comprehensive income for the period attributable to owners of the Company | 11,383 | 21,313 | -46.6% | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total non-current assets slightly decreased, as did total current assets. Total current liabilities decreased, leading to a slight reduction in net current assets. Both total assets less current liabilities and net assets showed a minor downward trend Summary of Interim Condensed Consolidated Statement of Financial Position | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Total non-current assets | 209,328 | 211,864 | -1.2% | | Total current assets | 226,378 | 240,566 | -5.9% | | Inventories | 68,992 | 83,227 | -17.1% | | Trade receivables | 53,939 | 57,562 | -6.3% | | Cash and cash equivalents | 76,222 | 68,519 | +11.2% | | Total current liabilities | 145,258 | 152,500 | -4.7% | | Trade payables | 47,089 | 64,233 | -26.6% | | Interest-bearing bank borrowings | 4,047 | 6,246 | -35.2% | | Net current assets | 81,120 | 88,066 | -7.9% | | Total assets less current liabilities | 290,448 | 299,930 | -3.2% | | Net assets | 242,315 | 245,934 | -1.5% | | Total equity | 242,315 | 245,934 | -1.5% | Interim Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, the Group's total equity decreased from HK$245.934 million at the beginning of the period to HK$242.315 million, influenced by a profit for the period of HK$24.34 million, other comprehensive loss from foreign currency translation differences (HK$12.957 million), and final dividend payments (HK$15 million), resulting in a net reduction in equity Summary of Interim Condensed Consolidated Statement of Changes in Equity | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Total equity at January 1 | 245,934 | 195,032 | | Profit for the period | 24,340 | 31,292 | | Net exchange differences arising from translation of foreign operations | (12,957) | (9,979) | | Total comprehensive income for the period | 11,383 | 21,313 | | Final dividend | (15,000) | 0 | | Repurchase of shares | (2) | 0 | | Total equity at June 30 | 242,315 | 216,345 | Interim Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash flow from operating activities slightly decreased. Investing activities shifted from net inflow to outflow, mainly due to significantly increased property, plant, and equipment purchases. Net cash used in financing activities decreased, primarily from reduced bank loan repayments. Cash and cash equivalents increased by period-end, but the net increase was lower than the prior year Summary of Interim Condensed Consolidated Statement of Cash Flows | Indicator | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Net cash flows from operating activities | 33,908 | 34,902 | -2.8% | | Net cash (used in)/from investing activities | (15,914) | 5,248 | Shift from inflow to outflow | | Purchase of items of property, plant and equipment | (15,849) | (6,000) | +164.2% (Expenditure increased) | | Net cash flows used in financing activities | (8,454) | (12,182) | -30.6% (Expenditure decreased) | | Repayment of bank loans | (4,282) | (14,277) | -70.0% (Expenditure decreased) | | Net increase in cash and cash equivalents | 9,540 | 27,968 | -65.9% | | Cash and cash equivalents at end of period | 80,653 | 61,105 | +32.0% | - Cash flow from investing activities shifted from a net inflow of HK$5.248 million in H1 2024 to a net outflow of HK$15.914 million in H1 2025, primarily due to a significant increase in purchases of property, plant, and equipment[122] - Net cash flows used in financing activities decreased, mainly due to a significant reduction in bank loan repayments[122] Notes to Interim Condensed Consolidated Financial Information This section provides detailed notes on the Group's corporate information, basis of preparation, accounting policy changes, operating segments, revenue, profit before tax, income tax, dividends, earnings per share, property, plant and equipment, trade receivables, trade payables, share capital, commitments, related party transactions, and fair value of financial instruments Corporate and Group Information This note clarifies Cirtek Holdings Limited's registration, principal place of business, primary business of manufacturing and selling printed products, and identifies Charming International Limited as its direct and ultimate holding company - The Company is a limited liability company incorporated in the Cayman Islands, with its principal place of business in Lai Chi Kok, Kowloon, Hong Kong[124][129] - The Group is principally engaged in the manufacture and sale of printed products[125][129] - Charming International Limited is the Company's direct and ultimate holding company[125][129] Basis of Preparation This unaudited interim condensed consolidated financial information is prepared in accordance with HKAS 34 Interim Financial Reporting and applicable disclosure requirements of the Listing Rules, and should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024 - The financial information is prepared in accordance with HKAS 34 Interim Financial Reporting and the applicable disclosure requirements of the Listing Rules[126][130] - It should be read in conjunction with the Group's annual consolidated financial statements for the year ended December 31, 2024[126][130] Changes in Accounting Policies and Disclosures Accounting policies align with 2024 annual statements, except for new HKFRS standards (HKAS 21, HKFRS 1 Amendments) with no significant financial impact, and no early adoption of other new standards - Revised HKFRS accounting standards were adopted, including HKAS 21 and HKFRS 1 (Amendments) Lack of Exchangeability[127][131] - The adoption of the above revised standards had no significant financial impact on this interim condensed consolidated financial information[128][131] - The Group has not early adopted any new and revised HKFRS accounting standards that have been issued but are not yet effective[128][131] Operating Segment Information The Group has one reportable operating segment: manufacturing and selling printed products. Geographically, Mainland China remains the largest revenue market, but US revenue significantly decreased, while other regions grew. Non-current assets are primarily located in Mainland China and Bangladesh - The Group has only one reportable operating segment, which is the manufacture and sale of printed products[133][135] Revenue by Location of Customers | Region | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Mainland China | 85,437 | 93,527 | -8.6% | | Bangladesh | 45,108 | 44,476 | +1.4% | | Hong Kong | 25,298 | 27,293 | -7.3% | | Vietnam | 24,205 | 21,610 | +12.0% | | India | 13,146 | 15,940 | -17.5% | | United States | 4,355 | 7,797 | -44.1% | | Other countries/regions | 60,629 | 53,876 | +12.5% | | Total revenue | 258,178 | 264,519 | -2.4% | Non-current Assets by Location of Assets | Region | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Mainland China | 90,485 | 101,094 | -10.5% | | Bangladesh | 57,300 | 47,420 | +20.8% | | Hong Kong | 22,659 | 18,821 | +20.4% | | Vietnam | 8,314 | 5,258 | +58.1% | | Other countries/regions | 23,327 | 30,137 | -22.6% | | Total non-current assets | 202,085 | 202,730 | -0.3% | Revenue, Other Income and Gains The Group's revenue primarily stems from printed product sales, recognized upon goods transfer. For the six months ended June 30, 2025, total revenue was HK$258.178 million, slightly down year-on-year. Other income and gains totaled HK$2.451 million, mainly from freight and transport income, scrap material sales, government grants, and net fair value gains on financial assets at fair value through profit or loss - Revenue refers to the net invoiced value of goods sold, after deducting provisions for returns, trade discounts, and rebates[142] - Revenue primarily arises from the sale of printed products, with revenue recognized at the point in time when goods are transferred[144] Details of Other Income and Gains | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Freight and transport income | 194 | 104 | +86.5% | | Interest income | 17 | 218 | -92.2% | | Sales of scrap materials | 758 | 749 | +1.2% | | Government grants | 197 | 138 | +42.8% | | Net fair value gains on financial assets at fair value through profit or loss | 163 | 94 | +73.4% | | Others | 1,122 | 1,222 | -8.2% | | Total | 2,451 | 2,525 | -2.9% | - Government grants primarily relate to unemployment insurance compensation paid to local governments and the acquisition of new machinery for the Group, recognized in profit or loss over the useful lives of the related assets from deferred income[151][152] Profit Before Tax This note details expenses impacting profit before tax, showing increases in various costs and depreciation, a shift in net exchange differences to expense, and a reversal in trade receivables impairment Components of Profit Before Tax | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Cost of sales | 136,567 | 140,345 | -2.7% | | Depreciation of property, plant and equipment | 10,099 | 10,258 | -1.5% | | Depreciation of right-of-use assets | 6,696 | 6,397 | +4.7% | | Amortisation of other intangible assets | 44 | 31 | +41.9% | | Short-term lease expenses | 745 | 857 | -13.0% | | Employee benefit expenses (excluding directors' emoluments) | 82,559 | 78,594 | +5.0% | | Net exchange differences | 1,569 | (1,126) | Shift from income to expense | | Trade receivables (reversal of impairment)/impairment | (656) | 324 | Shift from impairment to reversal | | Net gain on disposal of items of property, plant and equipment | 0 | (282) | Shift from gain to nil | - Cost of inventories sold includes employee benefit expenses and depreciation of property, plant and equipment and right-of-use assets[155] - For the six months ended June 30, 2025, a reversal of inventory provision of HK$217,000 (2024: HK$1,649,000) was included in cost of sales[156] Income Tax The Group is exempt from income tax in the Cayman Islands and British Virgin Islands. Hong Kong profits tax is levied at 16.5%, with qualifying subsidiaries paying 8.25% on the first HK$2 million of assessable profits under the two-tiered system. Total tax expense for the six months ended June 30, 2025, was HK$3.518 million, a significant decrease year-on-year - The Group is not subject to any income tax in the Cayman Islands and the British Virgin Islands[158][161] - Hong Kong profits tax is provided at a rate of 16.5%, with qualifying subsidiaries subject to the two-tiered profits tax regime paying 8.25% on the first HK$2,000,000 of assessable profits[159][161] Details of Income Tax Expense | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Current - Hong Kong | 556 | 948 | -41.4% | | Current - Elsewhere | 2,962 | 5,578 | -46.9% | | Deferred | 0 | 30 | -100.0% | | Total tax expense for the period | 3,518 | 6,556 | -46.3% | Dividend The Board does not recommend paying an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: same) - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025[163][167] Earnings Per Share Attributable to Ordinary Equity Holders of the Company For the six months ended June 30, 2025, both basic and diluted earnings per share attributable to ordinary equity holders of the Company were 1.22 HK cents, down from 1.56 HK cents in the prior year. Calculations are based on profit for the period and the weighted average number of ordinary shares outstanding, with share options having an anti-dilutive effect on basic EPS Earnings Per Share Data | Indicator | H1 2025 | H1 2024 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the Company | 24,340,000 HKD | 31,292,000 HKD | -22.3% | | Weighted average number of ordinary shares in issue | 1,989,540,278 shares | 2,000,000,000 shares | -0.5% | | Basic earnings per share | 1.22 HK cents | 1.56 HK cents | -21.8% | | Diluted earnings per share | 1.22 HK cents | 1.56 HK cents | -21.8% | - No adjustment has been made to the basic earnings per share amounts for dilution as the outstanding share options had an anti-dilutive effect on the basic earnings per share amounts presented[165][168] Property, Plant and Equipment For the six months ended June 30, 2025, the Group's acquisitions of property, plant and equipment amounted to approximately HK$15.85 million, a significant increase from HK$5.642 million in the prior year Acquisition Cost of Property, Plant and Equipment | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Acquisition cost | 15,850 | 5,642 | +180.9% | Trade Receivables As of June 30, 2025, the Group's net book value of trade receivables was HK$53.939 million, a decrease from December 31, 2024. Credit terms typically range from 30 to 90 days. The aging analysis shows a significant reduction in receivables over three months old Trade Receivables and Impairment | Indicator | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Trade receivables | 55,855 | 60,134 | -7.1% | | Impairment | (1,916) | (2,572) | -25.5% | | Net book value | 53,939 | 57,562 | -6.3% | - The Group primarily enters into trade terms with customers on credit, with credit periods generally ranging from 30 to 90 days from the statement date[171][172] Aging Analysis of Trade Receivables (Net of Loss Allowance) | Aging | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Within 1 month | 29,637 | 32,204 | -8.0% | | 1 to 2 months | 14,444 | 14,381 | +0.4% | | 2 to 3 months | 9,063 | 6,629 | +36.7% | | Over 3 months | 795 | 4,348 | -81.7% | | Total | 53,939 | 57,562 | -6.3% | Trade Payables As of June 30, 2025, the Group's total trade payables were HK$47.089 million, a significant decrease from December 31, 2024. Trade payables are non-interest-bearing and typically settled within 30 to 150 days. The aging analysis shows a notable reduction in payables within one month, while those aged two to three months increased Aging Analysis of Trade Payables | Aging | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Within 1 month | 8,912 | 26,093 | -65.9% | | 1 to 2 months | 10,974 | 17,992 | -38.9% | | 2 to 3 months | 24,059 | 10,317 | +133.2% | | Over 3 months | 3,144 | 9,831 | -68.0% | | Total | 47,089 | 64,233 | -26.6% | - Trade payables are non-interest-bearing and are normally settled within 30 to 150 days[177][178] Share Capital As of June 30, 2025, the Company's authorized and issued and fully paid share capital remained stable. During the period, the Company repurchased 50,000 shares on the Stock Exchange for a total consideration of HK$2,000, increasing total treasury shares to 10,460,000 Share Capital Structure | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | Authorized share capital (5,000,000,000 shares of HK$0.01 each) | 50,000 | 50,000 | | Issued and fully paid share capital (2,000,000,000 shares of HK$0.01 each) | 20,000 | 20,000 | Changes in Treasury Shares | Item | Number of ordinary shares | Amount (HK$ Thousand) | | :--- | :--- | :--- | | Balance at January 1, 2025 | 10,410,000 | 416 | | Purchased during the period | 50,000 | 2 | | Balance at June 30, 2025 | 10,460,000 | 418 | Commitments As of June 30, 2025, the Group's contracted but unprovided commitments for plant and machinery were HK$0.523 million, a significant decrease from HK$3.418 million as of December 31, 2024 Contractual Commitments | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Plant and machinery (contracted but not provided for) | 523 | 3,418 | -84.7% | Related Party Transactions During the period, the Group engaged in product sales (HK$1.821 million) and commission expenses (HK$2.708 million) with an associate. Sales to the associate were at published prices for major customers but with longer credit terms. Key management personnel emoluments totaled HK$3.188 million Details of Related Party Transactions | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Sales of products to an associate | 1,821 | 1,104 | +65.0% | | Commission expenses | 2,708 | 2,364 | +14.6% | - Sales to an associate are conducted at published prices offered to the Group's major customers, but generally with longer credit terms of up to six months[186][190] - Commission expenses arose from sales of subsidiary products arranged by an associate, with commissions charged at 3% to 5% of the transaction value[187] Key Management Personnel Emoluments | Item | H1 2025 (HK$ Thousand) | H1 2024 (HK$ Thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Salaries, allowances and benefits in kind | 3,170 | 3,771 | -15.9% | | Pension scheme contributions | 18 | 27 | -33.3% | | Total | 3,188 | 3,798 | -16.1% | Fair Value and Fair Value Hierarchy of Financial Instruments This note details fair value measurement of financial instruments, with key management insurance contracts (Level 3) valued at HK$6.23 million, showing an increase, and no transfers between fair value hierarchy levels Financial Assets at Fair Value Through Profit or Loss | Item | June 30, 2025 (HK$ Thousand) | June 30, 2024 (HK$ Thousand) | Change | | :--- | :--- | :--- | :--- | | Financial assets | 6,230 | 6,034 | +3.2% | - The fair values of financial instruments such as cash and cash equivalents, trade receivables, trade payables, and lease liabilities approximate their carrying amounts, primarily due to their short maturities[193][197] - Key management personnel insurance contracts are classified as financial assets at fair value through profit or loss, with their fair value measured based on account value less surrender charges[196][198] Changes in Fair Value Hierarchy (Level 3) | Item | June 30, 2025 (HK$ Thousand) | December 31, 2024 (HK$ Thousand) | | :--- | :--- | :--- | | At January 1 | 6,067 | 5,940 | | Total gains recognized in profit or loss | 163 | 127 | | At June 30/December 31 | 6,230 | 6,067 | - During the period, there were no transfers between Level 1 and Level 2 fair value measurements for financial assets and liabilities, nor any transfers into or out of Level 3[207]