Business Overview - The Group's principal business includes integrated financial services, investment holdings, computer graphic imaging (CGI), and entertainment business[9]. - Integrated Financial Services encompass securities brokerage, financial advisory services, margin financing, asset management, corporate finance advisory, money lending, securities investments, and proprietary trading[10]. Financial Performance - The unaudited interim report covers the six-month period ended June 30, 2022[8]. - Total revenue for the six months ended June 30, 2022, was HK$39,658,000, a decrease of 36.1% compared to HK$62,052,000 in 2021[134]. - The consolidated profit before tax for the Period under Review was approximately HK$18 million, an increase from HK$10.7 million in the Previous Period, primarily due to a decrease in unrealised losses from equity investments[49][50]. - Profit for the period was HK$18,286,000, an increase of 115.5% compared to HK$8,495,000 in 2021[140]. - Profit before tax increased to HK$18,276,000 from HK$10,695,000, reflecting a growth of 70.5%[140]. - The total comprehensive income for the period was HK$9,097,000, a significant recovery from a comprehensive expense of HK$2,764,000 in the previous year[145]. Revenue Breakdown - Imagi Brokerage generated approximately HK$14 million from asset management and financial services for the Period under Review, up from HK$4 million in the corresponding interim period in 2021, marking a 250% increase[15]. - Revenue from the money lending business increased by approximately 28% from approximately HK$6.9 million in the same interim period in 2021 to approximately HK$8.8 million for the Period under Review[27]. - The segment revenue for securities brokerage and asset management was approximately HK$37.5 million and HK$33.3 million respectively, compared to HK$50.6 million and HK$43.1 million for the same interim period last year, indicating a decline of 26% and 23% respectively[22]. - Brokerage related commission income and clearing fee income was HK$375,000, down from HK$14,438,000, representing a decline of 97.4%[134]. - Asset management fee income decreased to HK$1,871,000 from HK$4,098,000, a drop of 54.4%[134]. - Interest income on margin clients was HK$23,270,000, down 27.5% from HK$32,099,000[134]. Market Conditions and Challenges - The company faced challenges due to the COVID-19 pandemic, inflation, the Ukraine conflict, and regulatory actions in China, leading to a substantial decline in the Hong Kong equity market[22]. - Management believes the long-term prospects of the Hong Kong equity market remain promising despite current unstable conditions[22]. - The Company is taking a cautious approach towards new business ventures and expansion plans in light of the current market conditions[22]. - The Company has adopted a conservative approach towards growing the money lending business due to the current uncertain and poor economic environment[27]. - The Company intends to enter the mass market to diversify its business portfolio while adopting a cautious approach to near-term expansion due to challenging financial market conditions[57]. Investments and Acquisitions - The acquisition of a 51% shareholding in Supreme China was completed on May 27, 2022, for an adjusted cash consideration of HK$21,594,000, with expectations of additional contributions to the brokerage business[17]. - The Group had invested approximately HK$16.9 million in four proposed films out of a total budget of HK$20.4 million under the Film Investment Agreements[44][46]. - The Company has suspended investments in the movie industry during the review period but will continue to evaluate investment opportunities as they arise[59]. Corporate Governance and Structure - The Board consists of three executive directors and four independent non-executive directors, ensuring a diverse governance structure[117]. - The Company has complied with the Corporate Governance Code and maintains high standards of corporate governance practices[66]. Share Capital and Equity - As of June 30, 2022, the Company had 829,921,572 shares issued, with Kenson Investment Limited holding 21.31% of the shares[84][88]. - The Company holds approximately 93.72% of the share capital of Imagi Fin Group Limited after the issuance of new shares[39]. - The Company has not purchased, sold, or redeemed any of its listed securities during the review period[102]. - The 2022 Share Option Scheme allows for the issuance of up to 82,992,157 shares, approximately 10% of the issued share capital as of the interim report date[103]. Financial Position - As of June 30, 2022, the Group's bank balances amounted to approximately HK$161 million, with a current ratio of approximately 24 times[51]. - The company's net assets increased to HK$983,784,000 as of June 30, 2022, compared to HK$898,940,000 at the end of 2021[157]. - The total equity attributable to owners of the company was HK$802,486,000, an increase from HK$784,596,000 at the end of 2021[157]. - The company reported other comprehensive expenses of HK$9,189,000 for the period, an improvement from HK$11,259,000 in the previous year[145]. Cash Flow and Liquidity - Cash and cash equivalents at the end of the period increased to HK$160,866,000 from HK$98,939,000, marking a growth of about 63%[170]. - Net cash used in operating activities increased to HK$59,684,000 compared to HK$36,820,000 in the previous year, indicating a rise of about 62%[167]. - Operating cash flows before movements in working capital decreased to HK$34,215,000 from HK$43,870,000, representing a decline of approximately 22%[167]. Compliance and Accounting Standards - The interim financial report was prepared in accordance with Hong Kong Accounting Standard 34, ensuring compliance with relevant regulations[172]. - The Group has applied amendments to HKFRS 3, HKAS 16, and HKAS 37 during the current accounting period[180]. - The finance department collaborates with external valuers to establish appropriate valuation techniques when Level 1 inputs are unavailable[197].
元汇集团(00585) - 2022 - 中期财报