Financial Performance - For the first half of the fiscal year 2023, the group's revenue decreased by 33.9% to HKD 45,500,000 from HKD 68,800,000 in the same period last year, primarily due to lockdown policies in mainland China and COVID-19 prevention measures [11]. - Gross profit for the first half of fiscal year 2023 fell by 45.8% to HKD 13,600,000, with a gross margin decline from 36.4% to 29.9% [11]. - The attributable loss to owners of the company for the first half of fiscal year 2023 was HKD 47,400,000, compared to HKD 32,300,000 in the same period last year [12]. - The loss per share for the first half of fiscal year 2023 was HKD 0.78, compared to HKD 0.54 in the previous year [12]. - The net loss for the period was HKD 47,562,000, compared to a net loss of HKD 32,347,000 in the prior year, indicating a 47.0% increase in net losses [77]. - Total comprehensive loss for the period amounted to HKD 95,709,000, significantly higher than HKD 57,253,000 in the same period last year, reflecting a 67.1% increase [78]. - The company reported a loss before tax of HKD 47,513,000, compared to a loss of HKD 31,777,000 in the previous year, representing a 49.6% increase in losses [77]. - The company reported a significant decrease in other comprehensive income, with a loss of HKD 48,147,000 compared to a loss of HKD 24,906,000 in the prior year, marking a 93.5% increase in losses [78]. Revenue Breakdown - In the first half of the fiscal year 2023, total revenue from Hong Kong, mainland China, and Macau amounted to HKD 33,000,000, accounting for 72.6% of the group's total revenue [29]. - Revenue from Hong Kong increased by 57.5% from HKD 12,800,000 in the first half of fiscal year 2022 to HKD 20,200,000 in the first half of fiscal year 2023, representing 44.4% of total revenue [30]. - Revenue from mainland China and Macau decreased to HKD 12,900,000 in the first half of fiscal year 2023 from HKD 46,500,000 in the same period of fiscal year 2022, accounting for 28.3% of total revenue [31]. - Other regions saw revenue growth of 47.9%, increasing from HKD 4,900,000 in the first half of fiscal year 2022 to HKD 7,300,000 in the first half of fiscal year 2023 [32]. - The revenue from watch wholesale was HKD 24,367,000, while retail sales generated HKD 14,407,000, and repair services contributed HKD 1,510,000 [145]. Expenses and Costs - Selling and distribution costs decreased by 25.3% to HKD 12,900,000 from HKD 17,200,000 in the previous year, mainly due to a reduction in depreciation expenses of right-of-use assets [11]. - General and administrative expenses increased by 29.9% to HKD 38,500,000 from HKD 29,600,000, primarily due to rising professional fees and employee costs [11]. - Financial costs rose by 2.1% to HKD 10,000,000 from HKD 9,800,000, mainly due to an increase in total loans and borrowings [12]. - Total employee costs amounted to HKD 18,670,000 for the six months ended September 30, 2022, slightly up from HKD 18,111,000 in the previous year, indicating a 3.1% increase [172]. Assets and Liabilities - The company's total assets decreased to HKD 523,105,000 as of September 30, 2022, down from HKD 583,748,000 as of March 31, 2022 [82]. - Current liabilities increased to HKD 208,114,000 from HKD 170,212,000, representing a 22.2% rise [82]. - The company's equity decreased to HKD 451,721,000 as of September 30, 2022, down from HKD 546,879,000, indicating a decline of 17.4% [84]. - The total amount of trade receivables was HKD 4,138,000 as of September 30, 2022, significantly down from HKD 19,429,000 as of March 31, 2022, indicating a decrease of approximately 78.7% [192]. - The total accounts payable and other payables amounted to HKD 128,517,000 as of September 30, 2022, up from HKD 101,342,000 as of March 31, 2022 [197]. Cash Flow and Financing - The net cash generated from operating activities for the six months ended September 30, 2022, was HKD 19,625,000, a decrease of 40% compared to HKD 32,731,000 for the same period in 2021 [92]. - The net cash used in investing activities was HKD 5,772,000 for the six months ended September 30, 2022, compared to HKD 1,333,000 in the same period of 2021, indicating increased investment expenditures [92]. - Financing activities resulted in a net cash outflow of HKD 48,686,000 for the six months ended September 30, 2022, compared to a net inflow of HKD 5,035,000 in the same period of 2021, reflecting changes in financing strategies [92]. - The total cash and cash equivalents at the end of the period decreased to HKD 24,052,000 from HKD 128,214,000, indicating a significant reduction in liquidity [92]. Corporate Governance and Compliance - The company has complied with all provisions of the Corporate Governance Code, except for the separation of roles between the Chairman and CEO, which is currently held by the same individual [69][71]. - The Audit Committee consists of four independent non-executive directors responsible for reviewing and supervising the company's financial reporting system and risk management [73]. - The company did not purchase, sell, or redeem any of its listed securities during the six months ending September 30, 2022 [68]. Future Outlook and Strategies - The company plans to strengthen its distribution network in Hong Kong, Macau, and mainland China, including opening new dealerships and exploring markets in other Asian countries [34]. - Future outlook includes potential market expansion in Mainland China and Macau, aiming to increase revenue from these regions [111]. - The company has implemented strategies to mitigate losses, including rental concessions related to COVID-19, which amounted to HKD 845,000 [164].
SINCEREWATCH HK(00444) - 2023 - 中期财报