Financial Performance - The Group's revenue decreased by approximately HK$2.6 million or approximately 6.0%, from approximately HK$43.9 million for the six months ended June 30, 2022, to approximately HK$41.2 million for the Review Period [31]. - The gross loss for the Review Period amounted to approximately HK$14.9 million, representing a decrease of approximately 39.8% compared to approximately HK$24.8 million for the six months ended June 30, 2022 [32]. - The gross loss margin for the Review Period was approximately 36.2%, down from approximately 56.6% for the six months ended June 30, 2022, indicating improved cost control [32]. - The net loss attributed to owners of the Company was approximately HK$23.0 million for the Review Period, an improvement from a net loss of approximately HK$34.7 million for the six months ended June 30, 2022 [41]. - Loss before tax for the period was approximately HK$23.0 million, compared to a loss of approximately HK$34.8 million for the same period in 2022, indicating a reduction in losses [71]. - The company reported a loss before tax of HK$22,960,000 for the six months ended June 30, 2023, an improvement from a loss of HK$34,796,000 in the same period of 2022, reflecting a reduction of approximately 34% [79]. - Operating cash flow before movement in working capital was negative at HK$17,786,000, compared to negative HK$28,246,000 in the prior year, showing an improvement of about 37% [79]. - Cash and cash equivalents at the end of the period decreased to HK$7,797,000 from HK$14,006,000, a decline of approximately 44% [81]. Market Conditions - The construction market in Hong Kong is facing challenges due to high competition, which is expected to pressure the Group's profit margins for new projects [25]. - The overall business environment has gradually improved, yet the Group's tendering results remain unsatisfactory due to intense market competition [25]. - The easing of COVID-19-related restrictions has not yet translated into significant economic benefits for the construction industry [23]. - The Directors anticipate that the construction industry will continue to face a difficult and challenging business environment [24]. Operational Developments - The Group established an online platform to assist subscribers in managing payment requests for wet trade services, enhancing operational efficiency during the Review Period [22]. - The Group's expertise in providing wet trade solutions has been leveraged to create a database for payment applications, aiming to improve service delivery [12]. - The Group's ongoing projects include a wide range of specialties, such as brick work, plastering, and tiling, reflecting its diverse capabilities in the wet trades sector [13]. - The Group plans to explore business opportunities and expand geographical coverage beyond the Hong Kong market to enhance future development and strengthen revenue bases [30]. - The Group aims to maintain market share in the wet trades works industry by improving competitiveness and seeking opportunities to expand its customer base [29]. Financial Position - As of June 30, 2023, the Group's total bank balances and cash amounted to approximately HK$7.8 million, a decrease from approximately HK$14.0 million as of December 31, 2022 [50]. - The total borrowings of the Group remained stable at approximately HK$9.7 million as of June 30, 2023, consistent with the figure from December 31, 2022 [50]. - The gearing ratio increased to approximately 11.8% as of June 30, 2023, up from approximately 9.3% as of December 31, 2022, primarily due to an increase in accumulated losses [54]. - As of June 30, 2023, the company's net assets decreased to HK$81,826,000 from HK$104,786,000 as of December 31, 2022, representing a decline of approximately 22% [74]. - The total equity attributable to owners of the company fell to HK$81,826,000, down from HK$104,786,000, indicating a decrease of about 22% [76]. - The company’s reserves decreased significantly from HK$73,586,000 to HK$50,626,000, a reduction of approximately 31% [76]. Revenue and Income - For the six months ended June 30, 2023, total revenue was HK$41,235,000, a decrease of 6.0% from HK$43,881,000 in the same period of 2022 [102]. - Construction Services revenue decreased to HK$40,869,000, down 6.0% from HK$43,564,000 year-on-year [109]. - Public sector projects contributed HK$33,493,000 to Construction Services, an increase of 24.5% from HK$26,868,000 in 2022 [102]. - Other income increased significantly by approximately 12,628.1% to approximately HK$4.1 million, primarily due to increased government subsidies and gains from the disposal of property, plant, and equipment [38]. - Interest income for the period was HK$72,000, with unallocated other income amounting to HK$3,917,000 [109]. Staff and Management - Total staff costs for the Review Period amounted to approximately HK$3.1 million, an increase from approximately HK$2.9 million in the previous year [64]. - The remuneration for key management personnel increased to HK$1,503,000 in the six months ended June 30, 2023, compared to HK$1,386,000 in the same period of 2022, reflecting a rise of approximately 8.4% [179]. - The group’s short-term benefits for key management personnel increased to HK$1,462,000 in the first half of 2023, up from HK$1,345,000 in the same period of 2022, marking an increase of approximately 8.7% [179]. Shareholder Information - Mr. Adam Cheung holds a long position of 1,950,000,000 shares, representing 62.5% of the company's shareholding [190][198]. - Wonderful Renown, a direct shareholder of the company, is beneficially owned 84% by Mr. Adam Cheung and 16% by Ms. LC Cheung, collectively controlling 62.5% of the entire issued share capital [199]. - The company reported no significant changes in the interests of substantial shareholders as of June 30, 2023 [196]. Future Outlook - The company provided a future outlook with a revenue guidance of HKD 2.5 billion for the full year, representing a 20% increase compared to 2022 [200]. - Overall, the company remains optimistic about achieving double-digit growth in the next fiscal year [200].
恒新丰控股(01920) - 2023 - 中期财报