Economic Environment - In the first half of 2022, the U.S. inflation rate, as measured by the core Personal Consumption Expenditures (PCE) index, rose by 4.7% year-on-year, remaining near a 40-year high[5]. - The Federal Reserve raised interest rates by a total of 1.5% in the first half of 2022, with expectations to increase rates above 3% by the end of the year[5]. - The U.S. dollar index increased by 9.4% in the first half of 2022, reaching a high of 105.79 in mid-June, the highest level since January 2003[6]. - The external environment for the second half of 2022 remains complex, with economic pressures expected to increase due to inflation and geopolitical tensions[23][24]. - The group recognizes the ongoing challenges in the Chinese economy, including rising commodity prices and tight liquidity in the real estate market, which may impact investor sentiment[27]. Market Performance - The Hang Seng Index closed at 21,860 points at the end of the first half of 2022, down 6.6% from the end of 2021, while the Hang Seng Tech Index fell by 14.1%[12]. - The total turnover of A-shares exceeded RMB 114 trillion in the first half of 2022, representing a year-on-year increase of 6.5%[9]. - The number of new companies listed on the Hong Kong main board in the first half of 2022 was only 26, a significant decrease of 41% compared to 44 in the same period of 2021[13]. - The total issuance of offshore Chinese bonds in the first half of 2022 was USD 95.26 billion, a decrease of 39.1% year-on-year[13]. - The average daily trading volume of Hong Kong stocks in the first half of 2022 was HKD 138.3 billion, a decrease of 26.5% year-on-year[12]. Financial Performance - The group reported a net loss of HKD 39.47 million for the first half of 2022, compared to a net profit of HKD 53.32 million in the same period last year, representing a significant decline[16]. - Total revenue for the first half of 2022 was HKD 65.25 million, down 53% from HKD 137.46 million in the previous year, with operating income decreasing by 41% to HKD 66.31 million[16]. - The asset management segment's operating income decreased by 25% to HKD 31.04 million, while profit dropped 57% to HKD 16.55 million due to market conditions and project exits[18]. - The corporate finance segment's operating income fell by 48% to HKD 10.81 million, with a loss of HKD 5.45 million compared to a loss of HKD 2.46 million in the previous year[20]. - The sales and trading segment's operating income decreased by 51% to HKD 24.31 million, with a loss of HKD 6.53 million compared to a profit of HKD 13.52 million last year[21]. Cost Management - The group managed to reduce personnel costs by 45% year-on-year, contributing to a 22% decrease in operating costs to HKD 67.13 million[16]. - The company incurred financing costs of HKD 7,461,000, a decrease of 35% from HKD 11,599,000 in the prior year[76]. - Employee costs amounted to HKD 33,283,000, down from HKD 60,963,000, reflecting a reduction of 45.5%[76]. - Other operating expenses increased to HKD 33,848,000 from HKD 24,697,000, representing a rise of 37%[76]. Strategic Initiatives - The group plans to continue exploring innovative cross-border asset management opportunities despite the challenges posed by the pandemic and market conditions[18]. - The group aims to enhance collaboration with Xinda Securities, focusing on integrated financial services, including USD bond issuance for domestic institutions and Hong Kong IPOs[29]. - The group has received a Type 4 license from the Hong Kong Securities and Futures Commission in July 2022, allowing it to diversify into wealth management products[30]. - The group plans to develop asset management products, including problem asset funds and merger funds, to capitalize on market opportunities[30]. Shareholder Returns - The company did not recommend the distribution of an interim dividend for the six months ended June 30, 2022, compared to no dividend for the same period in 2021[39]. - The company paid dividends amounting to HKD 12,824,000 during the period, marking a commitment to return value to shareholders despite the losses[95]. Compliance and Governance - The company has complied with all provisions of the Corporate Governance Code during the reporting period, except for one instance of non-attendance by a non-executive director at the annual general meeting[63]. - The audit committee has reviewed the accounting principles and practices adopted by the group and discussed internal controls and financial reporting matters[68]. - The company has confirmed compliance with the standard code for securities transactions by directors for the six months ending June 30, 2022[65]. - The company has adopted appropriate corporate governance practices to enhance transparency[64]. Asset and Liability Management - The company's total assets as of June 30, 2022, were HKD 1,683,816,000, an increase from HKD 1,583,155,000 at the end of 2021[82]. - Current liabilities rose to HKD 1,253,062,000 from HKD 524,681,000, indicating a significant increase in short-term obligations[82]. - The company's cash and cash equivalents stood at HKD 825,602,000, up from HKD 781,142,000, showing a slight increase in liquidity[82]. - The equity attributable to equity holders decreased to HKD 953,318,000 from HKD 1,022,640,000, reflecting a decline of approximately 6.8%[88]. Investment Performance - The company reported a significant foreign exchange loss of HKD 6,544,000 for the six months ended June 30, 2022, compared to a foreign exchange gain of HKD 2,628,000 in the prior year[135]. - The company recorded a loss of HKD 4,517,000 from the sale of debt instruments classified as fair value through other comprehensive income, compared to a gain of HKD 3,409,000 in the previous year[93]. - The total recognized loss for the group in the six months ended June 30, 2022, was HKD 14,151,000 from Hanstone, HKD 15,038,000 from CPIAR Fund, and HKD 1,302,000 from CIIH, indicating a challenging investment environment[170][171][172]. Receivables and Credit Risk - As of June 30, 2022, total receivables amounted to HKD 498,927,000, an increase of 13% from HKD 441,540,000 as of December 31, 2021[183]. - Receivables from corporate finance decreased to HKD 10,573,000, down 29% from HKD 15,031,000 in the previous period[185]. - Receivables from securities brokerage increased significantly to HKD 223,999,000, up 58% from HKD 141,392,000[185]. - The expected credit loss provision for debt instruments measured at fair value through other comprehensive income was HKD 22,438,000 as of June 30, 2022, compared to HKD 18,564,000 as of December 31, 2021[177].
信达国际控股(00111) - 2022 - 中期财报