Financial Performance - The company's revenue for the six months ended December 31, 2021, increased by approximately 46% to about HKD 12,000,000, while it recorded a loss of approximately HKD 54,000,000 compared to a loss of HKD 47,000,000 in the same period of 2020[10]. - For the six months ended December 31, 2021, the company's revenue was HKD 12,231,000, an increase of 46.5% compared to HKD 8,393,000 for the same period in 2020[72]. - The total loss before tax for the company was HKD 54,080 thousand for the six months ended December 31, 2021, compared to a loss of HKD 47,111 thousand for the same period in 2020, reflecting an increase in losses[137]. - The total comprehensive loss for the period was HKD 53,738,000, compared to HKD 43,680,000 in the previous year, reflecting a 23.4% increase in losses[74]. - Basic and diluted loss per share for the period was HKD 3.60, compared to HKD 3.04 and HKD 3.18 for the same period in 2020, respectively[75]. - Basic loss per share for the six months ended December 31, 2021, was HKD (50,430,000), compared to HKD (42,869,000) for the same period in 2020, representing an increase in loss[144]. - Diluted loss per share for the six months ended December 31, 2021, was HKD (50,430,000), slightly improved from HKD (50,914,000) in the previous year[144]. Revenue Sources - Rental income from investment properties for the same period was approximately HKD 4,000,000, up from HKD 3,000,000 in 2020[11]. - The property investment segment generated revenue of HKD 4,341 thousand, while the R&D segment generated HKD 7,890 thousand, indicating a shift in revenue sources[134]. - The largest customer accounted for 40% of total revenue, while the top five customers represented 90% of total revenue, indicating a high customer concentration risk[59]. Investment and Development - The technology department has made progress in developing new generation technologies involving imaging, monitoring, navigation, and advanced semiconductor processing, with an investment of approximately HKD 140,000,000 in collaboration with the Finnish National Technology Innovation Agency[13]. - The technology department is expected to generate USD 100,000,000 in revenue by 2026 from several technology products or systems currently under development[13]. - Dynim Oy, a subsidiary, is developing high-end camera products and AI software for industrial applications, with a commercial version of its robust stereo camera expected to be launched in Q1 2022[21]. - The IPESSA Classic product, developed by Navigs Oy, is aimed at automated agriculture and has shown limited market appeal, leading to a focus on specific applications requiring high positioning performance[23]. - The technology department consists of approximately 50 R&D engineers across five operational sites in four countries[13]. - The company’s R&D efforts focus on producing and selling portable X-ray systems and advanced algorithms, indicating a commitment to innovation and technology development[128]. Financial Position - As of December 31, 2021, the group’s net current liabilities were approximately HKD 23,445,000, indicating significant uncertainty regarding the group's ability to continue as a going concern[93]. - The group reported a loss of approximately HKD 50,430,000 for the six months ended December 31, 2021[93]. - The group has a mortgage loan of approximately HKD 84,588,000, which is expected to be repaid according to the scheduled repayment dates[93]. - The fair value of investment properties located in Hong Kong was reported at HKD 539,300,000 as of December 31, 2021[102]. - The company reported a net asset value of HKD 756,293 thousand as of December 31, 2021, down from HKD 809,961 thousand in June 2021, reflecting a decrease of about 6.6%[82]. - Total liabilities increased to HKD 153,669 thousand from HKD 165,623 thousand, indicating a reduction of approximately 7.2% in current liabilities[80]. - The company incurred financing activities cash outflow of HKD (19,700) thousand, compared to HKD (2,686) thousand in the previous year, indicating a significant increase in financing costs[87]. Shareholder Information - As of December 31, 2021, Basurto Holdings Limited, Cityguard Holdings Limited, and Five Star Investments Limited each hold 508,848,531 shares, representing 36.31% of the total equity[47]. - Gold Seal Holdings Limited holds 309,388,211 shares and convertible securities totaling 537,993,892 shares, representing 38.39% of the total equity[47]. - The total number of shares held by major shareholders amounts to 1,176,614,613, which is 83.96% of the total equity[47]. - The company has a stock option plan adopted on December 8, 2015, with a total of 397,721,900 stock options granted to employees and directors[54]. - Major shareholders, including Mr. Ong and Ms. Xu, hold significant portions of stock options, with Mr. Ong holding 13,676,400 options at an exercise price of HKD 0.321[54]. - The total number of shares held by Ms. Xu amounts to 537,993,892, representing 38.39% of the total equity[47]. Operational Challenges - The company has decided to terminate the operation of its subsidiary Next Level A.I. Solutions, LLC due to various macroeconomic factors and challenges in the technology productization process[13]. - The company has not established a formal board diversity policy, believing that the skills and experience of board members are more critical for effective governance[67]. - The company confirmed that it has implemented various strategies to enhance its revenue and profitability despite the current financial challenges[93]. Cash Flow and Assets - The net cash used in operating activities was HKD (30,270) thousand for the six months ended December 31, 2021, compared to HKD (31,605) thousand in the same period of 2020, showing an improvement of about 4.2%[87]. - Cash and cash equivalents at the end of the period were HKD 111,003 thousand, down from HKD 180,287 thousand year-over-year, a decrease of approximately 38.4%[87]. - Non-current assets totaled HKD 801,794 thousand as of December 31, 2021, down from HKD 828,826 thousand in June 2021, representing a decrease of approximately 3.3%[80]. - Current assets decreased to HKD 130,224 thousand from HKD 170,174 thousand, a decline of about 23.5%[80]. - The company’s inventory increased to HKD 9,794 thousand from HKD 3,254 thousand, representing a rise of approximately 201.5%[80]. Debt and Financing - The company had outstanding related party payables totaling HKD 20,669,000 as of December 31, 2021, down from HKD 24,712,000 as of June 30, 2021[167]. - The company’s mortgage loans were HKD 84,588,000 as of December 31, 2021, with repayment scheduled over the next 293 months[170]. - The company issued 194,208,539 convertible bonds in 2017, raising approximately HKD 48,552,000 from the public offering[175]. - The company’s convertible bonds are set to mature on November 23, 2024, and can be converted into ordinary shares at a price of HKD 0.25 per share[175]. - The company’s total liabilities include a significant portion classified as current liabilities due to the nature of the convertible bonds and their potential impact on public shareholding[182].
PALADIN(00495) - 2022 - 中期财报