Financial Performance - For the six months ended June 30, 2023, the company reported revenue of HKD 36,992,000, a decrease of 35.5% compared to HKD 57,091,000 in the same period of 2022[5] - The gross profit for the same period was HKD 10,720,000, down 4.7% from HKD 11,251,000 year-on-year[5] - Operating profit for the first half of 2023 was HKD 3,327,000, a significant recovery from an operating loss of HKD 9,617,000 in the previous year[5] - The company achieved a profit before tax of HKD 767,000, compared to a loss before tax of HKD 12,463,000 in the prior year[5] - Net profit attributable to equity holders for the period was HKD 766,000, a turnaround from a loss of HKD 12,488,000 in the same period last year[5] - The total comprehensive income for the period was HKD 370,000, compared to a total comprehensive loss of HKD 13,775,000 in the previous year[6] - The company's pre-tax profit for the six months ended June 30, 2023, was HKD 766,000, a significant improvement from a loss of HKD 12,488,000 in the same period of 2022[26] - The group reported a profit attributable to equity holders of approximately HKD 800,000 for the six months ended June 30, 2023, compared to a loss of HKD 12.5 million for the same period last year[53] Revenue Breakdown - Revenue from external customers for the six months ended June 30, 2023, was HKD 36,992,000, a decrease of 35.5% compared to HKD 57,091,000 for the same period in 2022[19] - Revenue from the Asia region (excluding China) for the six months ended June 30, 2023, was HKD 12,925,000, a decline of 44.6% from HKD 23,460,000 in 2022[19] - Revenue from the United States for the same period was HKD 16,734,000, down 19.9% from HKD 20,796,000 in 2022[19] Cost and Expenses - The cost of sold inventory for the six months ended June 30, 2023, was HKD 26,272,000, down from HKD 45,840,000 in the previous year, reflecting a decrease of 42.7%[21] - Administrative expenses decreased to approximately HKD 5.5 million for the six months ended June 30, 2023, from HKD 19 million for the same period in 2022, mainly due to the absence of impairment charges related to business restructuring[52] - The company incurred financial expenses of HKD 2,560,000 for the six months ended June 30, 2023, compared to HKD 2,846,000 in the same period of 2022[21] Assets and Liabilities - As of June 30, 2023, total assets were HKD 122,664,000, slightly down from HKD 125,083,000 at the end of 2022[8] - The company's cash and cash equivalents at the end of the period were HKD 35,133,000, a decrease from HKD 38,050,000 at the beginning of the year[11] - The company reported a net cash inflow from operating activities of HKD 6,690,000, compared to an outflow of HKD 6,058,000 in the previous year[11] - The carrying amount of property, plant, and equipment decreased from HKD 93,214,000 as of June 30, 2022, to HKD 77,457,000 as of June 30, 2023, representing a decline of approximately 16.9%[31] - The carrying amount of right-of-use assets decreased from HKD 28,559,000 as of June 30, 2022, to HKD 24,150,000 as of June 30, 2023, a decrease of about 15.5%[33] - Trade receivables increased from HKD 22,116,000 as of December 31, 2022, to HKD 23,328,000 as of June 30, 2023, an increase of approximately 5.5%[35] - The total bank loans decreased from HKD 76,112,000 as of June 30, 2022, to HKD 63,505,000 as of June 30, 2023, a reduction of about 16.5%[38] Tax and Earnings - The total tax losses as of June 30, 2023, amounted to HKD 69,345,000, a decrease from HKD 77,757,000 as of June 30, 2022[24] - Basic earnings per share for the six months ended June 30, 2023, was HKD 0.00095, compared to a loss per share of HKD 0.0154 in the same period of 2022[26] - The company did not recognize deferred tax assets due to uncertainty regarding future taxable profits, with total tax losses expected to expire within five years amounting to HKD 26,821,000[24] Dividends - The company did not declare any dividends for the period[5] - No interim dividend was recommended for the six months ended June 30, 2023, consistent with the previous year[29] - The board did not recommend the payment of an interim dividend for the period ended June 30, 2023[61] Corporate Governance - The company has complied with the corporate governance code, with the exception of the separation of the roles of Chairman and CEO[71] - The audit committee consists of three members, including Mr. Jiang Xing Qi as the chairman, overseeing financial reporting and internal control systems[74] - The company has established a Compensation Committee with a written terms of reference that complies with corporate governance codes[75] - The Compensation Committee consists of three members, including Ms. Leung Yuen Man (Chair), Mr. Fung Kin Chung, and Mr. Cheung Hing Ki, all of whom are independent non-executive directors[75] - A Nomination Committee has been formed with a written terms of reference in accordance with corporate governance code section B.3.1[76] - The Nomination Committee comprises five members, including Mr. Fung Kin Chung (Chair), Mr. Song Kaiqing, Mr. Cheung Kong Cheung, Ms. Leung Yuen Man, and Mr. Cheung Hing Ki[76] Shareholder Information - The company has a total of 808,096,025 shares issued as of June 30, 2023[66] - Mr. Song Qi Qing holds 288,596,777 shares, representing 35.71% of the total equity[64] - King Right Holdings Limited, fully owned by Mr. Song, holds 258,906,777 shares, accounting for 32.04%[65] - Mr. Zhang Gang Zhang owns 62,040,465 shares, which is 7.68% of the total equity[64] - United Sino Limited, fully owned by Mr. Zhang, holds 54,840,465 shares, representing 6.79%[65] - The company has a stock option plan that allows for the issuance of up to 80,809,602 shares, equivalent to 10% of the issued share capital[70] - No stock options were granted under the stock option plan from May 17, 2019, to the reporting date[68] Employee Information - The group employed approximately 130 employees as of June 30, 2023, down from about 150 employees a year earlier[60] - The total remuneration for key management personnel increased from HKD 1,294,000 in the previous year to HKD 1,349,000 for the six months ended June 30, 2023, an increase of approximately 4.3%[45] Other Information - There were no significant events related to the company's business or financial performance after the reporting period[46] - The interim report for the year 2023 has been published on the Hong Kong Stock Exchange website and the company's website[78] - The accounting information in the interim report has not been audited but has been reviewed by the company's Audit Committee[77] - The company expresses gratitude to shareholders, customers, and business partners for their continued support[80] - The Chairman and CEO of the company is Mr. Song Kaiqing, who signed the report on August 25, 2023[81] - The management will continue to monitor the overall operational and financial performance of the group to adapt to the changing business environment[54]
兴利(香港)控股(00396) - 2023 - 中期财报