Economic Indicators - In the first half of 2023, the U.S. Consumer Price Index (CPI) rose by 4.0% year-on-year, marking a decline for 11 consecutive months[4]. - The Federal Reserve raised interest rates by 25 basis points in February, March, and May 2023, with expectations that the rate hike cycle is not yet over[4]. - The European Central Bank raised interest rates by 50 basis points in February and March 2023, indicating continued inflationary pressures[5]. - The outlook for the second half of 2023 indicates continued economic uncertainty, with expectations of further interest rate hikes and potential market volatility due to geopolitical tensions[23]. Stock Market Performance - In the first half of 2023, the U.S. stock market indices rebounded, with increases ranging from 3.4% to 12.8%, and an overall gain of 3.8% to 31.7%[5]. - The Hong Kong stock market saw a decline of 4.4% in the first half of 2023, with the Hang Seng Index closing at 18,916 points[11]. - The average daily trading volume in the Hong Kong stock market dropped by 16.4% year-on-year to HKD 115.5 billion in the first half of 2023[11]. Corporate Financial Performance - The group's total revenue for the first half of 2023 was HKD 69.73 million, a 7% increase from HKD 65.25 million in 2022[15]. - The group's net profit after tax for the first half of 2023 was HKD 280,000, compared to a net loss of HKD 39.47 million in the same period last year[15]. - The asset management segment reported operating income of HKD 32.22 million, a 4% increase from HKD 31.04 million in 2022[18]. - The corporate finance segment's operating income decreased by 58% to HKD 4.59 million, down from HKD 10.81 million in the previous year[19]. - The sales and trading segment's operating income fell by 12% to HKD 21.47 million, compared to HKD 24.31 million in the same period last year[20]. - The group's operating costs (excluding commission expenses and finance costs) decreased by 8% to HKD 31.31 million from HKD 33.85 million in 2022[15]. - The financing costs increased by 62% compared to the same period last year due to rising market interest rates[15]. Market and Business Outlook - The group anticipates a rebound in inbound tourism and improvement in the labor market, which may support recovery in the retail and dining sectors in Hong Kong[24]. - The group will continue to strengthen integration with Xinda Securities, focusing on cross-border financial services, including USD bond issuance and Hong Kong IPOs[27]. - The group aims to expand its sales and trading business while adhering to risk management principles, targeting institutional and high-net-worth clients[28]. - The group plans to diversify its wealth management products to meet clients' asset allocation needs and explore opportunities in capital markets[28]. - The group believes that the local market will maintain a positive sentiment post-pandemic, leveraging established foundations to enhance market operations[28]. Corporate Governance and Compliance - The company has adhered to all corporate governance codes as stipulated in the corporate governance code during the period from January 1, 2023, to June 30, 2023[62]. - The audit committee has reviewed the unaudited interim consolidated financial statements for the six months ended June 30, 2023[67]. - The company is committed to maintaining high standards of corporate governance in accordance with the listing rules[61]. - The company’s board will continue to oversee and review the group’s corporate governance practices to ensure compliance with the relevant codes[63]. - The company has adopted the standard code for securities transactions by directors and confirmed compliance for the six months ended June 30, 2023[66]. Financial Position and Assets - The company's financial position as of June 30, 2023, reflects adherence to the relevant financial reporting standards[72]. - The total assets as of June 30, 2023, were HKD 1,619,306,000, down from HKD 1,625,110,000 at the end of 2022[80]. - The company's current liabilities decreased to HKD 659,675,000 from HKD 688,952,000, indicating improved liquidity[80]. - The company’s equity attributable to equity holders decreased to HKD 940,079,000 from HKD 948,113,000[81]. - The company reported a significant reduction in financing costs, which increased to HKD 12,095,000 from HKD 7,461,000, reflecting a rise of 62.5%[76]. Revenue and Income Sources - Revenue for the six months ended June 30, 2023, was HKD 58,669,000, a decrease of 11.7% compared to HKD 66,312,000 in 2022[76]. - Revenue from asset management services increased to HKD 31,949,000 in 2023 from HKD 30,749,000 in 2022, reflecting a growth of 3.9%[99]. - Revenue from sales and trading business decreased significantly to HKD 10,040,000 in 2023 from HKD 16,644,000 in 2022, a decline of 39.6%[99]. - The company reported a net loss from foreign exchange of HKD (4,761,000) for the six months ended June 30, 2023, compared to a loss of HKD (6,544,000) in the same period of 2022, indicating an improvement[103]. - Government grants received amounted to HKD 5,546,000 in 2023, significantly higher than HKD 915,000 in 2022, showing a substantial increase in support for business innovation and transformation[102]. Debt and Financing - As of June 30, 2023, the group had available bank revolving loans and overdraft facilities amounting to HKD 1.538 billion, with HKD 310 million already utilized[29]. - The company’s bank borrowings amounted to HKD 380,975,000, down from HKD 656,400,000 in the previous year, indicating a reduction in reliance on bank financing[87]. - The group’s net debt to adjusted capital ratio increased to 18.29% as of June 30, 2023, compared to 11.98% as of December 31, 2022[181]. - The fair value of liabilities under repurchase agreements was HKD 157,037,000 as of June 30, 2023, up from HKD 83,642,000 as of December 31, 2022[177]. Risk Management - The group faces various financial risks, including market risk (foreign exchange risk, equity price risk, and interest rate risk), credit risk, and liquidity risk, with a focus on minimizing adverse impacts on financial performance[192]. - The foreign exchange risk primarily arises from financial assets and liabilities denominated in foreign currencies, mainly RMB and USD, with ongoing reviews by the risk management committee to address market volatility[194]. - As of June 30, 2023, the group is exposed to cash flow interest rate risk related to floating-rate financial instruments, including margin financing loans and bank balances, with no current hedging policy in place[197]. - Credit risk primarily stems from debt instruments measured at fair value through other comprehensive income, bank deposits, and receivables, with policies in place to ensure credit is granted to clients with good credit records[199].
信达国际控股(00111) - 2023 - 中期财报