Share Capital and Options - As of March 31, 2023, the total number of issued shares was 112,251,000, an increase from 107,152,000 as of October 1, 2021, representing a growth of approximately 4.9%[2] - The company has updated its share option plan to allow for the issuance of up to 30,742,766 shares, which accounts for 10% of the issued shares as of the approval date, and 9.95% of the shares as of the interim report date[3] - The fair value of the share options granted on July 2, 2020, was approximately HKD 1,204,000, with each option valued at HKD 1.3687[17] - The fair value of the share options granted on April 3, 2019, was approximately HKD 8,854,000, with each option valued at HKD 1.4299[22] - The expected volatility for the share options granted was 36.68% for the July 2020 grant and 55.66% for the April 2019 grant, based on historical price volatility of similar listed companies[16][22] - The risk-free interest rate used for the July 2020 grant was 0.643%, while for the April 2019 grant it was 1.543%[16][22] - There are no market vesting conditions or non-market performance conditions associated with the granted share options[18][25] - The total number of share options granted and not exercised will vest on specific annual dates following the grant date, with a third of the options vesting each year[9] - The company granted 3,650,000 stock options on October 16, 2019, with an exercise price of HKD 4.36 per share[26] - The fair value of the stock options granted on October 16, 2019, was approximately HKD 6,190,000, equating to HKD 1.6959 per option[28] - As of March 31, 2023, there were 543,334 unexercised stock options remaining, down from 1,075,334 on September 30, 2022[33] - The weighted average closing price of shares on the exercise date for the unexercised options was HKD 3.18[33] - The stock options granted on July 2, 2020, totaled 880,000 with an exercise price of HKD 3.28 per share[31] - The expected volatility for the stock options granted was 34.73% based on historical price volatility of similar listed companies[27] - The risk-free interest rate used for the stock options valuation was 1.427% as of October 16, 2019[27] - The total share-based payment expense for the six months ended March 31, 2023, was HKD 35,000, compared to HKD 369,000 for the same period in 2022[33] - There were no unexercised stock options related to the options granted on October 16, 2019, as of March 31, 2023[30] Financial Performance - The company recorded a net loss of approximately HKD 232.4 million for the period, compared to a net loss of HKD 48.8 million in the previous year[66] - The group recorded a loss before tax of approximately HKD 233.0 million for the period, compared to a loss of approximately HKD 44.6 million for the same period in 2022, primarily due to an impairment loss of approximately HKD 99.4 million related to cryptocurrency assets[104] - The group reported a basic and diluted loss per share of HKD 0.7817 for the period, compared to HKD 0.1584 for the same period in 2022[113] - The group recorded a post-tax loss of approximately HKD 232.4 million for the period, compared to a post-tax loss of approximately HKD 48.8 million in the previous period[155] - The total comprehensive loss for the six months ended March 31, 2023, was approximately HKD 225.2 million, compared to a loss of HKD 41.9 million in the same period of 2022[186] Revenue and Costs - The total revenue for the group in the six months ended March 31, 2023, was approximately HKD 2,505.9 million, an increase of about 612.3% or HKD 2,154.1 million compared to approximately HKD 351.8 million for the same period in 2022[112] - Revenue from technology solution services decreased to approximately HKD 7.1 million, down from approximately HKD 44.5 million in the previous period[93] - Revenue from energy-related and electric/electronic products decreased by approximately HKD 101.6 million or 48.3%, from approximately HKD 210.4 million in 2022 to approximately HKD 108.8 million in 2023[114] - The group generated approximately HKD 2,385.7 million from virtual asset lending and trading services during the period[126] - The group incurred a sales cost of approximately HKD 2,399.6 million, resulting in a recognized loss of approximately HKD 13.9 million[127] - Sales costs for the period were approximately HKD 99.2 million, a decrease of approximately HKD 72.8 million or 42.3% from approximately HKD 172.0 million in the previous period[90] - Gross profit for the period was approximately HKD 9.6 million, with a gross margin of approximately 8.8%, down from a gross profit of approximately HKD 38.4 million and a gross margin of approximately 18.3% in the previous period[91] - The group has invested a total of USD 10 million (approximately HKD 78 million) in the New World Pioneer Mining Fund No. 1, which recorded a profit of approximately HKD 3.6 million during 2023[101] Market and Economic Conditions - The global economic growth is projected to decline from 3.4% in 2022 to 2.8% in 2023, influenced by inflation control policies and geopolitical tensions[48] - Bitcoin has regained a value above $30,000, highlighting its role as a hedge for investors amid increased volatility in global risk assets[49] - The total market value of virtual assets has surpassed $1 trillion, indicating a shift towards mainstream acceptance and regulation of the industry[56] - The new licensing regime for virtual asset trading platforms in Hong Kong will take effect on June 1, 2023, allowing retail investors to trade on licensed platforms[59] - Over 80 companies from mainland China and overseas have expressed interest in establishing Web3 businesses in Hong Kong, indicating a positive market expansion outlook[71] Business Developments and Strategies - The company has launched the Sinohope platform, integrating centralized and decentralized digital asset services, and has begun offering decentralized Staking technology support services[51] - The company has partnered with Coinbase to provide licensed virtual asset management services for professional investors in the Hong Kong market[52] - The company has obtained licenses from the Hong Kong Securities and Futures Commission for asset management and securities advisory, allowing it to manage portfolios that invest 100% in virtual assets[73] - The company is focusing on compliance and safety as core service principles, enhancing asset protection standards through partnerships with recognized insurance organizations[73] - The company aims to leverage advancements in AI and Web3 technologies to drive future growth in the industry[75] - The company is focusing on providing differentiated quality products and services in response to regulatory dynamics in the virtual asset industry[80] - The company is evaluating its future business strategies and plans in light of the new VASP licensing regime expected to take effect in June 2023[184] Cash Flow and Financial Position - The net cash position as of March 31, 2023, was approximately HKD (453.1) million, compared to HKD (144.5) million as of September 30, 2022[135] - In the period of 2023, the net cash used in operating activities was approximately HKD 164.1 million, a decrease from HKD 273.8 million in 2022, primarily due to the impact of the FTX incident on payment liabilities and restricted deposits[158] - The net cash used in investing activities for 2023 was approximately HKD 68.3 million, compared to HKD 76.1 million in 2022, mainly due to the purchase of financial assets and deposits for property, plant, and equipment[159] - The net cash generated from financing activities in 2023 was approximately HKD 37.4 million, a significant decrease from HKD 170.8 million in 2022, with inflows primarily from a loan of approximately HKD 79.9 million from an associated company[160] - Capital expenditures for 2023 amounted to approximately HKD 63.0 million, a substantial increase from HKD 9.5 million in 2022[161] Compliance and Governance - The company has adopted a code of conduct regarding securities trading by directors, which complies with the standards set out in the listing rules[11] - The company has confirmed that all directors have fully complied with the trading standards during the reporting period[11] - The company completed a SOC2 Type2 security system control report, demonstrating its commitment to compliance and security in operations[73] - The company has undergone a rebranding, changing its name from "Huobi Tech" to "New Huo Tech" effective November 22, 2022[61] - The company’s statutory reserves stood at HKD 7,956 million as of March 31, 2022, indicating a commitment to regulatory compliance and financial prudence[190] Risk and Concentration - The major suppliers accounted for 95.5% of total procurement during the period, indicating a high concentration risk[166] - The company had no bank financing from wholly-owned subsidiaries in mainland China and Hong Kong as of March 31, 2023, down from HKD 23.6 million on September 30, 2022[165] - The company’s debt-to-equity ratio was approximately -660.1%, compared to 317.5% on September 30, 2022, with total borrowings of approximately HKD 489.2 million[164]
新火科技控股(01611) - 2023 - 中期财报