Financial Performance - Revenue for the six months ended June 30, 2022, was HKD 51,576,000, an increase of 26.4% compared to HKD 40,818,000 for the same period in 2021[2]. - Gross profit for the same period was HKD 29,808,000, up 49.9% from HKD 19,880,000 in 2021[2]. - Operating loss increased to HKD 64,058,000 from HKD 56,382,000 year-on-year, reflecting a 13.0% increase in losses[2]. - Loss attributable to owners of the company was HKD 85,939,000, compared to HKD 68,538,000 in the previous year, representing a 25.5% increase[2]. - Total comprehensive loss for the period was HKD 90,328,000, compared to HKD 79,236,000 in 2021, indicating a 14.0% increase[3]. - The group reported a net loss of approximately HKD 87,415,000 for the six months ended June 30, 2022, with current liabilities exceeding current assets by about HKD 168,946,000[15]. - Operating loss for the six months ended June 30, 2022, was HKD 22,832,000, compared to a loss of HKD 4,060,000 in the same period of 2021, reflecting a significant increase in losses[32]. - Other income decreased significantly to HKD 241,000 for the six months ended June 30, 2022, down from HKD 17,369,000 in the same period of 2021, indicating a decline of 99%[31]. Cash Flow and Assets - Cash and cash equivalents decreased to HKD 53,029,000 from HKD 101,049,000 at the end of 2021, a decline of 47.5%[5]. - The company reported a net cash outflow from operating activities of HKD 43,691,000, compared to HKD 51,732,000 in the previous year[12]. - Total assets as of June 30, 2022, amounted to HKD 553,999,000, a decrease from HKD 573,206,000 as of December 31, 2021[26]. - The company’s total assets decreased to HKD 553,999,000 from HKD 573,206,000, a reduction of 3.3%[5]. - The group’s cash and bank balances were HKD 53,029,000 as of June 30, 2022, raising concerns about its ability to meet liabilities unless sufficient cash flow is generated[15]. - As of June 30, 2022, the company's net current liabilities were approximately HKD 168.9 million, a decrease from HKD 238.4 million as of December 31, 2021[75]. - The company's debt ratio was approximately 98.2% as of June 30, 2022, compared to 82.5% as of December 31, 2021[78]. Liabilities and Financial Obligations - Total liabilities increased to HKD 543,971,000 as of June 30, 2022, compared to HKD 472,978,000 as of December 31, 2021, representing a growth of 15%[27]. - The liability portion of the convertible bonds increased to HKD 155,773,000 as of June 30, 2022, from HKD 127,062,000 as of December 31, 2021, reflecting a growth of 22%[40]. - The group has engaged in discussions with banks to extend the repayment of outstanding loans totaling HKD 197,000,000, using properties in Hong Kong as collateral[16]. - The group has successfully extended the maturity date of convertible bonds from November 7, 2022, to November 7, 2023[16]. Revenue Sources - Revenue from the sale of lottery terminals and related equipment was HKD 24,820,000, up from HKD 19,206,000, representing a growth of 29.5%[20]. - Revenue from the People's Republic of China reached HKD 50,796,000 for the six months ended June 30, 2022, up from HKD 40,818,000 in the same period of 2021, indicating a growth of 24%[29]. - Total revenue for the six months ended June 30, 2022, was HKD 51,576,000, an increase of 26.5% compared to HKD 40,818,000 for the same period in 2021[20]. Employee and Operational Changes - The total number of full-time employees increased to 219 as of June 30, 2022, up from 184 in the previous year, indicating a focus on enhancing workforce quality[85]. - The company’s employee costs (excluding share-based payment expenses) decreased to HKD 39,735,000 for the six months ended June 30, 2022, from HKD 43,088,000 in the same period of 2021, showing a reduction of approximately 8%[33]. - The company is in the process of appointing a new CEO following the resignation of the previous one on January 14, 2022[108]. Strategic Initiatives and Future Plans - The company aims to diversify its business strategy by consolidating its existing lottery operations while expanding into eco-tourism and natural health food sectors[49]. - The company plans to focus on expanding its live-streaming sales channels and collaborating with Multi-Channel Network (MCN) organizations to enhance sales performance in the second half of 2022[71]. - The company aims to integrate resources and leverage market opportunities arising from the easing of domestic pandemic measures and government support for ecological tourism and natural health food businesses[72]. - The group is actively preparing for the launch of handheld terminal lottery and mobile lottery projects in the Philippines, with plans to provide over 10,000 handheld terminals nationwide[58]. - The group has developed a comprehensive smart retail solution that integrates innovative technologies such as IoT, big data, and AI for lottery sales operations and management[59]. Market Trends and External Factors - The Chinese lottery market saw a total sales increase to RMB 182.063 billion in the first half of 2022, a year-on-year growth of 2.0%[50]. - The sales of welfare lottery increased by RMB 7.160 billion, representing a growth of 10.6%, while sports lottery sales decreased by RMB 3.534 billion, a decline of 3.2%[50]. - The domestic tourism market in China showed signs of recovery, with total domestic tourism revenue reaching RMB 2.29 trillion in 2021, a year-on-year increase of 31%[52]. - The government has implemented supportive policies to boost the tourism industry, which is expected to accelerate recovery in 2022[54]. Legal and Compliance Matters - The group is pursuing legal action to recover RMB 54.8357 million in usage fees from Zhongcai Online Company for the continued use of terminal equipment after the contract expiration[62]. Shareholder and Capital Management - Major shareholder Liu Ting held 1,100,655,686 shares, representing 35.64% of the issued share capital as of June 30, 2022[92]. - The company completed a rights issue on June 10, 2021, raising approximately HKD 220.75 million by issuing 2,058,961,466 shares at HKD 0.10 each[96]. - The company raised approximately HKD 199.4 million from the placement and rights issue, net of related expenses[99]. - The company has allocated HKD 50 million for offsetting, which is fully utilized[99]. - The company has a cash flow demand due to debt repayment obligations, making fundraising critical for improving financial conditions[99].
中国生态旅游(01371) - 2022 - 中期财报