Financial Performance - The company's revenue for the six months ended June 30, 2023, was HKD 1,667,320,000, a decrease of 26.3% compared to HKD 2,261,973,000 in the same period of 2022[10]. - Gross profit fell to HKD 298,212,000, down 43.4% from HKD 526,653,000, with a gross margin of 17.9%, down from 23.3%[10][12]. - Operating loss recorded was HKD 172,050,000, compared to a profit of HKD 31,253,000 in the previous year[10][14]. - The net loss attributable to equity holders was HKD 163,214,000, compared to a profit of HKD 20,522,000 in the same period last year[10]. - Basic and diluted loss per share was HKD 12.7, compared to earnings of HKD 1.6 per share in the prior year[50]. - Total comprehensive loss for the period was HKD 209,640, compared to a total comprehensive income of HKD 32,965 in 2022[51]. - Cash generated from operating activities was HKD 273,812, an increase of 144.4% from HKD 111,945 in the previous year[56]. - The company reported a decrease in sales costs to HKD 1,369,108, down 21.1% from HKD 1,735,320 in 2022[50]. Business Segments - The sportswear production business revenue decreased by HKD 552.7 million to HKD 954.1 million, a decline of 36.7% due to reduced consumer demand and inventory buildup[19]. - The operating loss for the sportswear production business reached HKD 115.9 million, compared to a profit of HKD 63.4 million in the same period last year[19]. - The high-performance outdoor apparel production business revenue decreased by HKD 58.7 million to HKD 221.3 million, a decline of 21.0%, primarily due to reduced orders from Europe and mainland China[21]. - The operating loss for the high-performance outdoor apparel production business was HKD 9.3 million, compared to a profit of HKD 4.4 million in the previous year[21]. - The high-end fashion retail business revenue increased by HKD 16.8 million to HKD 492.0 million, a slight increase of 3.5%[23]. - The operating loss for the high-end fashion retail business was HKD 46.9 million, compared to a loss of HKD 36.5 million in the same period last year[23]. Liquidity and Financial Position - The net debt to equity ratio improved to 11.7% from 22.8% at the end of 2022[10]. - The current ratio increased to 1.6 from 1.5, indicating improved liquidity[10]. - The company anticipates stable cash inflows from operations and has sufficient liquidity to meet its operational costs for the next twelve months[32]. - The group expects stable cash inflows from operations and additional cash inflows from liquidating assets to meet future operational costs and financial obligations[64]. - The group has maintained sufficient cash and bank balances to support its operations despite ongoing challenges from COVID-19 and macroeconomic factors[64]. Inventory and Procurement - The company faced challenges due to excess inventory, particularly in the sportswear market, impacting overall business performance[17]. - Inventory turnover period was 133 days, slightly up from 131 days in the previous year[10]. - Procurement costs were approximately 83.5% in USD, 13.0% in RMB, and 2.1% in HKD during the same period[33]. Employee and Operational Changes - The company had approximately 16,000 employees as of June 30, 2023, down from about 19,000 employees as of December 31, 2022[35]. - The total number of stores decreased to 208 from 248, with 180 located in mainland China[24]. Shareholder and Governance - The company did not recommend an interim dividend for the six months ended June 30, 2023, due to challenging market conditions[15]. - The board does not recommend the payment of an interim dividend for the six months ended June 30, 2023[124]. - The audit committee has reviewed the unaudited interim financial information for the six months ended June 30, 2023[128]. - The company has adhered to the corporate governance code as per the listing rules during the six months ended June 30, 2023[127]. Foreign Currency and Risk Management - The company continues to monitor foreign currency risks closely to maintain net risk at an acceptable level[33]. - The company may use appropriate financial instruments to mitigate foreign currency risks based on future operational and investment needs[33]. Capital and Assets - The company's total assets pledged by the company amounted to HKD 1,200,000 for bank deposits and HKD 72,600,000 for land and properties as of June 30, 2023[36]. - The company's net assets were reported at HKD 1,643,725,000 as of June 30, 2023, compared to HKD 1,859,765,000 as of December 31, 2022[47]. - The company's total equity decreased from HKD 1,866,137,000 as of December 31, 2022, to HKD 1,671,852,000 as of June 30, 2023[47]. - Total assets as of June 30, 2023, amounted to HKD 2,911,541, down from HKD 3,465,184 as of December 31, 2022, representing a decrease of 16%[75]. - Total liabilities decreased to HKD 1,267,816 as of June 30, 2023, from HKD 1,605,419 at the end of 2022, a reduction of 21%[75]. Stock Options and Shareholding - The company has a stock option plan that allows for the issuance of up to 10% of the issued share capital as of the listing date, subject to shareholder approval for any excess[110]. - The new stock option plan, effective from June 20, 2016, allows for the issuance of up to 128,440,000 shares, equivalent to 10% of the company's issued share capital as of the mid-term report date[114]. - The total number of stock options under the stock option plan as of June 30, 2023, is 31,000,000[117]. - Mr. Li Guodong holds 743,769,967 shares, representing 57.91% of the company's total issued shares of 1,284,400,000[103]. - Mr. Li Guodong controls 70% of Quinta Asia Limited, which is considered as part of his equity in the company[104].
永嘉集团(03322) - 2023 - 中期财报