Financial Performance - Total revenue for the six months ended June 30, 2022, was approximately HKD 857.77 million, a decrease of 13.8% compared to HKD 994.59 million for the same period in 2021[5]. - Operating expenses for the same period were approximately HKD 554.37 million, down 11.6% from HKD 626.98 million in 2021[5]. - EBITDA for the six months ended June 30, 2022, was approximately HKD 33.85 million, a decline of 62.3% from HKD 89.84 million in 2021[8]. - The net loss attributable to shareholders for the period was approximately HKD 54.65 million, an increase of 98.6% compared to a net loss of HKD 27.52 million in the same period last year[8]. - The company reported a loss for the period of HKD 54,650 thousand, compared to a loss of HKD 27,521 thousand in the previous year, indicating a deterioration in performance[84]. - The company’s basic and diluted loss per share was HKD 1.20, compared to HKD 0.63 in the previous year, indicating a worsening loss per share[85]. - The total loss attributable to owners of the company for the six months ended June 30, 2022, was HKD 52,094,000, compared to HKD 27,396,000 for the same period in 2021[13]. Revenue Breakdown - Total revenue for the six months ended June 30, 2022, was HKD 857,771,000, with contributions from watch and clock products (HKD 685,987,000), property investment (HKD 9,124,000), and banking and financial services (HKD 162,660,000) [118]. - Non-banking and financial business gross profit was approximately HKD 354.31 million, a decrease of 23.1% from HKD 460.46 million in the previous year[8]. - EBO's revenue for the first half of 2022 was HKD 152,613,000, down 9.4% from HKD 168,447,000 in the same period last year, with a net loss of HKD 8,122,000 compared to a profit of HKD 4,306,000 in the previous year[14]. - The local brand subsidiary, Zhuhai Rossini Watch Co., recorded revenue of HKD 243.04 million, a decrease of 28.7% from HKD 340.86 million in the previous year[10]. Assets and Liabilities - Total assets as of June 30, 2022, were HKD 16.94 billion, a decrease of 15.1% from HKD 19.96 billion at the end of 2021[6]. - Total liabilities decreased by 17.9% to HKD 12.59 billion from HKD 15.34 billion at the end of 2021[6]. - The group's total assets decreased from HKD 19,962,419,000 on December 31, 2021, to HKD 16,940,637,000 on June 30, 2022[36]. - Total liabilities as of June 30, 2022, decreased to HKD 12,591,321,000 from HKD 15,338,879,000 as of December 31, 2021, primarily due to a reduction in payables to customers[49]. Market Strategy and Development - The company’s strategy focuses on long-term sustainable development by investing in existing and new businesses[4]. - The company plans to expand sales points into lower-tier cities to enhance market penetration despite challenges from the pandemic[10]. - EBO is focusing on developing a new series of smartwatches to penetrate the growing smartwatch market[16]. - The company plans to establish dedicated teams for watch business development, banking business development, and new business development to adapt to changing market conditions[61]. Operational Challenges - Visitor numbers for industrial tourism dropped significantly from approximately 30,000 to about 1,000, resulting in revenue of only HKD 749,000, a decline of about 68.1%[13]. - Physical store revenue for EBO decreased by approximately 25.5% year-on-year due to COVID-19 restrictions and competition from smartwatches[14]. - The impact of the COVID-19 pandemic led to a significant decline in customer footfall in physical stores, resulting in reduced sales revenue[55]. Corporate Governance - The company maintained compliance with the corporate governance code during the reporting period[73]. - The company’s governance practices were evaluated against the applicable code provisions, with one exception noted[73]. - The company’s independent non-executive director was unable to attend the annual general meeting due to other commitments[74]. Financial Management - The company has implemented plans to manage liquidity needs and improve financial conditions, ensuring the ability to continue as a going concern for at least the next twelve months[114]. - The company incurred financial expenses totaling HKD 32,853,000 during the reporting period[118]. - The company recognized a loss of HKD 10,395,000 from the sale of subsidiaries[118]. Investments and Fair Value - The investment in Guancheng Datong Co., Ltd. had a fair value of HKD 128,168,000, representing 0.8% of total assets, with a fair value loss of HKD 18,965,000 for the six months ended June 30, 2022[28]. - The fair value measurements of financial and non-financial assets and liabilities are based on observable market inputs where possible, classified into three levels of fair value hierarchy[115]. - The fair value of financial assets recognized in other comprehensive income was HKD 17,881,000, all classified as Level 2[174]. Employee and Social Responsibility - As of June 30, 2022, the group employed approximately 3,800 full-time employees in Hong Kong and mainland China, and about 260 in Europe[62]. - The company is committed to supporting various charitable activities, particularly in education and social welfare, as part of its corporate social responsibility initiatives[58].
冠城钟表珠宝(00256) - 2022 - 中期财报