隽思集团(01412) - 2023 - 中期业绩

Executive Summary Financial Highlights QPP Holdings Limited reported a 33.3% decrease in profit to HK$35.8 million and a 30.0% decrease in total revenue to HK$460.7 million in H1 2023, with basic EPS at 6.72 HK cents H1 2023 Financial Performance Overview | Metric | H1 2023 (HK$'000) | H1 2022 (HK$'000) | Change (%) | | :-------------------------------------- | :---------------- | :---------------- | :--------- | | Profit Attributable to Equity Holders | 35,800 | 53,668 | -33.3% | | Total Revenue | 460,700 | 657,770 | -30.0% | | Basic Earnings Per Share (HK cents) | 6.72 | 10.09 | -33.4% | - In H1 2023, revenue from Original Equipment Manufacturer (OEM) sales and website sales accounted for approximately 79.8% and 20.2% of total revenue, respectively[12] Dividend Declaration The Board resolved to declare an interim dividend of 2.0 HK cents per share for H1 2023, a decrease from 3.0 HK cents per share in the same period of 2022 Interim Dividend Declaration | Period | Dividend Per Share (HK cents) | | :----- | :---------------------------- | | H1 2023 | 2.0 | | H1 2022 | 3.0 | Interim Condensed Consolidated Financial Statements Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2023, the Group reported revenue of HK$460,691 thousand, gross profit of HK$153,884 thousand, and profit for the period of HK$35,770 thousand, with both revenue and profit decreasing year-on-year Key Data from Statement of Profit or Loss (For the six months ended June 30) | Metric | 2023 (HK$'000) | 2022 (HK$'000) | | :-------------------------- | :------------- | :------------- | | Revenue | 460,691 | 657,770 | | Cost of Sales | (306,807) | (457,385) | | Gross Profit | 153,884 | 200,385 | | Operating Profit | 37,136 | 62,820 | | Profit Before Income Tax | 39,840 | 62,483 | | Income Tax Expense | (4,070) | (8,815) | | Profit for the Period | 35,770 | 53,668 | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2023, the Group's total assets decreased to HK$1,119,121 thousand from HK$1,179,235 thousand on December 31, 2022, with total equity at HK$790,906 thousand and total liabilities at HK$328,215 thousand Key Data from Statement of Financial Position (As of June 30) | Metric | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :-------------------------- | :------------- | :-------------------------- | | Total Assets | 1,119,121 | 1,179,235 | | Non-current Assets | 636,193 | 599,016 | | Current Assets | 482,928 | 580,219 | | Total Equity | 790,906 | 842,841 | | Total Liabilities | 328,215 | 336,394 | | Non-current Liabilities | 9,131 | 9,993 | | Current Liabilities | 319,084 | 326,401 | Notes to the Interim Condensed Consolidated Financial Information General Information and Basis of Preparation The Company, incorporated in the Cayman Islands, primarily engages in paper product manufacturing and trading, with interim condensed consolidated financial information prepared in HKD under HKAS 34 and Listing Rules, applying consistent accounting policies with no significant impact from new standards - The Company is incorporated in the Cayman Islands, and its subsidiaries are primarily engaged in the manufacturing and trading of paper products[7][19] - The interim condensed consolidated financial information is prepared in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting' issued by the HKICPA and the applicable disclosure requirements of Appendix 16 to the Listing Rules of The Stock Exchange of Hong Kong Limited[8] - The adoption of new and revised standards has no significant impact on the Group's results and financial position, requiring no retrospective adjustments[10] Significant Accounting Policies and Estimates The Group's accounting policies are consistent with the prior year, adopting new standards effective January 1, 2023, with no significant financial impact, while management's judgments, estimates, and assumptions in preparing financial information may lead to different actual results - The accounting policies adopted are consistent with those applied in the annual financial statements for the year ended December 31, 2022[9] - Management is required to make judgments, estimates, and assumptions in preparing the interim condensed consolidated financial information, which affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses[23] New and Revised Standards Issued But Not Yet Effective | Standard | Content | Effective Date | | :--------------------------------------------------------------------- | :-------------------------------------------------------------------- | :------------- | | HKAS 1 (Amendments) | Classification of Liabilities as Current or Non-current | January 1, 2024 | | HKAS 1 (Amendments) | Non-current Liabilities with Covenants | January 1, 2024 | | HKFRS 16 (Amendments) | Lease Liability in a Sale and Leaseback | January 1, 2024 | | HK(IFRIC)-Int 5 (Revised) | Presentation of Financial Statements — Classification by a Borrower of a Term Loan with a Repayment on Demand Clause | January 1, 2024 | | HKFRS 7 (Amendments) and HKAS 7 (Amendments) | Supplier Finance Arrangements (Amendments) | January 1, 2024 | | HKFRS 10 and HKAS 28 (Amendments) | Sale or Contribution of Assets between an Investor and its Associate or Joint Venture | To be determined | Revenue and Segment Information The Group's revenue primarily from paper and other product sales is segmented into website and OEM sales, with total revenue of HK$460,691 thousand in H1 2023, a decrease from the prior year, where OEM sales, though largest, declined, while website sales remained stable - Management has identified two reportable segments based on sales channels: (i) website sales; and (ii) OEM sales[27] Revenue by Business Segment (For the six months ended June 30) | Segment | 2023 (HK$'000) | 2022 (HK$'000) | | :----------- | :------------- | :------------- | | Website Sales | 92,904 | 91,016 | | OEM Sales | 367,787 | 566,754 | | Total | 460,691 | 657,770 | Revenue from Major Customers (For the six months ended June 30) | Customer | 2023 (HK$'000) | 2022 (HK$'000) | | :------- | :------------- | :------------- | | Customer A | 112,531 | 166,190 | | Customer B | 90,727 | 136,620 | Geographical Information The Group's revenue primarily originates from the US and European markets, collectively accounting for 84.0% in H1 2023, with both regions experiencing decreased revenue mainly due to reduced demand from key OEM customers Revenue from External Customers by Location (For the six months ended June 30) | Location | 2023 (HK$'000) | 2022 (HK$'000) | | :------- | :------------- | :------------- | | US | 317,562 | 452,514 | | Europe | 69,450 | 119,228 | | China | 30,425 | 36,750 | | Others | 43,254 | 49,278 | | Total | 460,691 | 657,770 | Location of Non-current Assets (As of June 30) | Location | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------- | :------------- | :-------------------------- | | China | 535,382 | 536,893 | | Vietnam | 89,293 | 50,364 | | Total | 624,675 | 587,257 | Other Net Income and Other Income In H1 2023, other net income significantly increased to HK$12,731 thousand, driven by exchange gains and fair value gains on derivative financial instruments, while other income decreased to HK$5,060 thousand due to reduced scrap sales and government grants Other Net Income (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :------------------------------------------ | :------------- | :------------- | | Exchange Gain | 11,175 | 11,501 | | Fair Value Gain/(Loss) on Derivative Financial Instruments | 1,343 | (10,740) | | Gain on Disposal of Property, Plant and Equipment | 213 | 6 | | Total | 12,731 | 767 | Other Income (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :-------------- | :------------- | :------------- | | Rental Income | 25 | 25 | | Scrap Sales | 2,908 | 5,949 | | Government Grants | 2,018 | 4,127 | | Others | 109 | 210 | | Total | 5,060 | 10,311 | Expenses by Nature In H1 2023, total cost of sales, selling and distribution expenses, and administrative expenses decreased to HK$441,346 thousand year-on-year, with key expense items including raw materials, employee benefits, and subcontracting fees Total Expenses by Nature (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :---------------------------------------------------------------- | :------------- | :------------- | | Raw Materials and Consumables Used | 137,503 | 227,547 | | Employee Benefit Expenses (including directors' emoluments) | 161,655 | 178,455 | | Subcontracting Fees | 43,306 | 65,461 | | Depreciation of Property, Plant and Equipment | 25,541 | 27,149 | | Transportation Costs | 19,393 | 31,040 | | Total Cost of Sales, Selling and Distribution Expenses, and Administrative Expenses | 441,346 | 606,028 | Net Finance Income/(Costs) In H1 2023, the Group recorded net finance income of HK$2,704 thousand, compared to net finance costs of HK$337 thousand in the prior year, primarily driven by increased bank interest income Net Finance Income/(Costs) (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :---------------------------- | :------------- | :------------- | | Bank Interest Income | 4,947 | 270 | | Interest Expense on Bank Borrowings | (2,217) | (565) | | Interest Expense on Lease Liabilities | (26) | (42) | | Net Finance Income/(Costs) | 2,704 | (337) | Income Tax Expense Income tax expense decreased to HK$4,070 thousand in H1 2023, reflecting varied tax rates and preferential policies for the Group's subsidiaries in China, Hong Kong, and Vietnam, including corporate income tax, small-profit enterprise rates, high-tech enterprise rates, and tax holidays/reductions Income Tax Expense (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :------------------ | :------------- | :------------- | | Current Income Tax | 7,975 | 8,915 | | Deferred Income Tax | (3,905) | (100) | | Total | 4,070 | 8,815 | - Subsidiaries established and operating in China are subject to China Corporate Income Tax at a rate of 25%, with certain entities qualifying as small-profit enterprises enjoying a preferential tax rate of 5.0%[34][35] - Dongguan QPP Printing Co., Ltd and Tengda Printing (Heshan) Co., Ltd are certified as High and New Technology Enterprises, enjoying a preferential tax rate of 15%[62] - The Vietnamese subsidiary, Q P Enterprise (Vietnam) Company Limited, benefits from tax holidays and tax rate reductions[63] Earnings Per Share Attributable to Equity Holders of the Company Basic earnings per share for H1 2023 decreased to 6.72 HK cents from 10.09 HK cents in the prior year, primarily due to a reduction in profit attributable to equity holders of the Company Earnings Per Share Calculation (For the six months ended June 30) | Metric | 2023 (HK$'000/Shares '000/HK cents) | 2022 (HK$'000/Shares '000/HK cents) | | :-------------------------------------- | :---------------------------------- | :---------------------------------- | | Profit Attributable to Equity Holders | 35,770 | 53,668 | | Weighted Average Number of Ordinary Shares | 532,000 | 532,000 | | Earnings Per Share (HK cents per share) | 6.72 | 10.09 | - The Group had no potentially dilutive ordinary shares in issue for the six months ended June 30, 2023 and 2022[38] Dividends The Board declared an interim dividend of 2.0 HK cents per ordinary share for H1 2023, totaling HK$10,640 thousand, in addition to the final dividend of 11.0 HK cents per ordinary share, totaling HK$58,520 thousand, approved and paid for the previous financial year Dividend Declaration and Payment (For the six months ended June 30) | Dividend Type | Dividend Per Share (HK cents) | 2023 (HK$'000) | 2022 (HK$'000) | | :-------------------- | :---------------------------- | :------------- | :------------- | | Interim Dividend | 2.0 | 10,640 | 15,960 | | Final Dividend for Previous Financial Year | 11.0 | 58,520 | 58,520 | - The interim dividend declared after the end of the reporting period was not recognized as a liability at the end of the reporting period[66] Property, Plant and Equipment In H1 2023, the Group's total cost of additions to property, plant, and equipment significantly increased to approximately HK$58,104 thousand, while the net book value of disposals was approximately HK$380 thousand Changes in Property, Plant and Equipment (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :-------------------- | :------------- | :------------- | | Total Cost of Additions | 58,104 | 23,787 | | Net Book Value of Disposals | 380 | 88 | Trade and Other Receivables As of June 30, 2023, trade receivables increased to HK$156,123 thousand from December 31, 2022, with credit terms typically 30 to 90 days, no impairment provision made, and primarily denominated in USD and HKD Trade Receivables (As of June 30) | Metric | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :---------------------- | :------------- | :-------------------------- | | Total Trade Receivables | 156,123 | 144,432 | Aging Analysis of Trade Receivables (As of June 30) | Aging | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :----------- | :------------- | :-------------------------- | | Within 30 days | 73,852 | 63,648 | | 31 to 60 days | 60,414 | 54,291 | | 61 to 90 days | 21,825 | 23,150 | | Over 90 days | 32 | 3,343 | Trade Receivables by Currency (As of June 30) | Currency | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------- | :------------- | :-------------------------- | | USD | 89,918 | 89,535 | | HKD | 63,031 | 51,128 | | RMB | 2,966 | 3,712 | | Others | 208 | 57 | Borrowings As of June 30, 2023, total bank borrowings decreased to HK$99,781 thousand from December 31, 2022, primarily denominated in HKD, bearing floating interest rates, and secured by right-of-use assets and property, plant, and equipment Bank Borrowings (As of June 30) | Metric | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------------------ | :------------- | :-------------------------- | | Total Bank Borrowings | 99,781 | 116,319 | Borrowings Repayment Period (As of June 30) | Repayment Period | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :--------------- | :------------- | :-------------------------- | | Within one year | 68,721 | 73,043 | | One to two years | 13,252 | 19,506 | | Two to five years | 11,204 | 16,793 | | Over five years | 6,604 | 6,977 | Assets Pledged for Borrowings (As of June 30) | Asset | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------------------------ | :------------- | :-------------------------- | | Right-of-use Assets | 81,130 | 82,025 | | Property, Plant and Equipment | 71,345 | 73,162 | | Total | 152,475 | 155,187 | Trade Payables As of June 30, 2023, trade payables increased to HK$82,257 thousand from December 31, 2022, with the majority denominated in RMB Trade Payables (As of June 30) | Metric | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :---------------------- | :------------- | :-------------------------- | | Total Trade Payables | 82,257 | 68,159 | Aging Analysis of Trade Payables (As of June 30) | Aging | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :----------- | :------------- | :-------------------------- | | Within 30 days | 63,571 | 49,112 | | 31 to 60 days | 9,051 | 12,476 | | 61 to 90 days | 3,730 | 3,671 | | Over 90 days | 5,905 | 2,900 | Trade Payables by Currency (As of June 30) | Currency | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------- | :------------- | :-------------------------- | | RMB | 63,468 | 54,167 | | HKD | 10,990 | 11,785 | | USD | 7,102 | 1,754 | | Others | 697 | 453 | Share Capital As of June 30, 2023, the Company's authorized share capital remained at 2,000,000,000 shares, with issued and fully paid share capital at 532,000,000 shares, amounting to HK$5,320 thousand, unchanged from December 31, 2022 Share Capital Structure (As of June 30) | Share Capital Type | 2023 Number of Shares | December 31, 2022 Number of Shares | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------------------------ | :-------------------- | :--------------------------------- | :------------- | :-------------------------- | | Authorized Share Capital | 2,000,000,000 | 2,000,000,000 | 20,000 | 20,000 | | Issued and Fully Paid Share Capital | 532,000,000 | 532,000,000 | 5,320 | 5,320 | Management Discussion and Analysis Company Profile Established in 1985, QPP Group is a paper product manufacturing and printing service provider headquartered in Hong Kong with production facilities in China and Vietnam, offering products like board games, greeting cards, educational items, and packaging boxes to OEM clients and individual/corporate customers via online channels - The Group was established in 1985 as a paper product manufacturing and printing service provider, offering diverse customized product and printing solutions to customers[80] - Our headquarters are located in Hong Kong, with production facilities in Dongguan City and Heshan City, Guangdong Province, China, and Phu Ly City, Ha Nam Province, Vietnam[80] - Our main product categories include board games, greeting cards, early childhood education products, and packaging color boxes, sold to (i) OEM customers who place large orders for direct sales and distribution through their channels; and (ii) individual and corporate customers ordering through online sales channels[80] Business Review In H1 2023, amidst global economic slowdown, inflation, and geopolitical conflicts impacting consumer sentiment, the Group actively promoted OEM and website sales through exhibitions and digital marketing, with the Vietnam plant completed in July 2023 and expected to commence production in Q3, and the Heshan plant expansion due for completion in December 2023 to enhance capacity and operational efficiency - Global economic growth continues to slow, with high inflation leading some consumers to reduce daily spending, impacting the retail market[129] - During the reporting period, the Group actively promoted its OEM and website sales businesses, including participating in various domestic and international trade exhibitions, strengthening digital marketing to reach potential customers, and investing resources in developing new product lines with market potential[129] - Construction of the Vietnam plant was completed in July 2023, with interior decoration and equipment installation underway, expected to commence formal production in Q3 2023; the new factory building at the Heshan plant, aimed at enhancing the Group's production capacity and overall operational efficiency, is expected to be completed in December 2023[129] Financial Review In H1 2023, the Group's revenue decreased by 30.0% to HK$460.7 million, primarily due to reduced OEM sales, while gross profit decreased by 23.2% to HK$153.9 million, but gross margin improved from 30.5% to 33.4%, and profit for the period decreased by 33.3% to HK$35.8 million Financial Performance Overview (For the six months ended June 30) | Metric | 2023 (HK$'000) | 2022 (HK$'000) | Change (%) | | :---------- | :------------- | :------------- | :--------- | | Revenue | 460,691 | 657,770 | -30.0% | | Gross Profit | 153,884 | 200,385 | -23.2% | | Gross Margin | 33.4% | 30.5% | +2.9pp | | Profit for the Period | 35,770 | 53,668 | -33.3% | | Net Margin | 7.8% | 8.2% | -0.4pp | Revenue Breakdown OEM sales revenue decreased by 35.1% to HK$367.8 million, primarily impacted by inflation and global economic slowdown, while website sales revenue saw a stable 2.1% increase to HK$92.9 million Revenue by Business Segment (For the six months ended June 30) | Segment | 2023 (HK$'000) | Share (%) | 2022 (HK$'000) | Share (%) | | :----------- | :------------- | :-------- | :------------- | :-------- | | OEM Sales | 367,787 | 79.8 | 566,754 | 86.2 | | Website Sales | 92,904 | 20.2 | 91,016 | 13.8 | | Total | 460,691 | 100.0 | 657,770 | 100.0 | - OEM sales revenue decreased by 35.1%, primarily due to persistent inflationary pressures and a slowdown in global economic growth, which dampened consumer sentiment and reduced demand from key OEM customers for the Group's products[136] - Website sales revenue increased by approximately 2.1% from approximately HK$91.0 million in the first six months of 2022 to approximately HK$92.9 million in the first six months of 2023[109] Cost of Sales Cost of sales decreased by 32.9% to HK$306.8 million, primarily due to reduced production volume resulting from lower demand for OEM products Cost of Sales (For the six months ended June 30) | Metric | 2023 (HK$'000) | 2022 (HK$'000) | Change (%) | | :---------- | :------------- | :------------- | :--------- | | Cost of Sales | 306,807 | 457,385 | -32.9% | - The decrease in cost of sales was primarily due to reduced production volume resulting from lower demand for our OEM products during the reporting period[111] Gross Profit and Gross Margin Gross profit decreased by 23.2% to HK$153.9 million, but gross margin increased by 2.9 percentage points to 33.4%, primarily driven by a higher proportion of website sales revenue and RMB depreciation against HKD, partially offset by reduced economies of scale from lower sales volume Gross Profit and Gross Margin (For the six months ended June 30) | Metric | 2023 (HK$'000) | 2022 (HK$'000) | Change (%) | | :---------- | :------------- | :------------- | :--------- | | Gross Profit | 153,884 | 200,385 | -23.2% | | Gross Margin | 33.4% | 30.5% | +2.9pp | - The increase in gross margin was mainly attributable to a higher proportion of revenue from website sales and the depreciation of RMB against HKD, although this positive impact was partially offset by reduced economies of scale due to lower sales volume during the reporting period[139] Other Net Income and Other Income Analysis The increase in other net income was primarily due to RMB depreciation against HKD and fair value gains on derivative financial instruments, while the decrease in other income was mainly due to reduced scrap sales and government grants - The increase in other net income was mainly due to the depreciation of RMB against HKD, and the Group did not enter into forward foreign currency contracts to hedge against the risk of RMB appreciation against USD during the reporting period[139] - The decrease in other income was mainly due to reduced scrap sales and lower government grants received from China (including Hong Kong)[140] Operating Expenses Selling and distribution expenses decreased by 18.7% to HK$47.1 million, primarily due to lower freight costs, while administrative expenses remained stable, decreasing by 3.6% to HK$87.4 million Operating Expenses (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | Change (%) | | :------------------------ | :------------- | :------------- | :--------- | | Selling and Distribution Expenses | 47,147 | 58,018 | -18.7% | | Administrative Expenses | 87,392 | 90,625 | -3.6% | - The decrease in selling and distribution expenses was mainly due to lower freight costs and the implementation of related improvement strategies during the reporting period[140] Net Finance Income and Income Tax Expense The Group recorded net finance income of HK$2.7 million in H1 2023, compared to net finance costs in the prior year, driven by higher surplus cash levels and rising interest rates, while income tax expense decreased by 53.8% to HK$4.1 million due to lower recognized profit - The Group recognized net finance income of approximately HK$2.7 million in the first six months of 2023, compared to net finance costs of approximately HK$0.3 million in the first six months of 2022, attributable to higher surplus cash levels placed in time deposits and debt instruments, and continuously rising interest rates since 2022[170] - The decrease in income tax expense was primarily due to lower recognized profit during the reporting period[117] Liquidity and Financial Resources As of June 30, 2023, the Group's net current assets were approximately HK$163.8 million and cash and cash equivalents were approximately HK$184.9 million, both lower than December 31, 2022, while maintaining a healthy liquidity position and prudent cash and financial management policies Liquidity Position (As of June 30) | Metric | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :---------------------- | :------------- | :-------------------------- | | Net Current Assets | 163,800 | 253,800 | | Cash and Cash Equivalents | 184,900 | 294,700 | - The Group maintained a healthy liquidity position in the first six months of 2023, with working capital primarily funded by internal resources, and adopted prudent cash and financial management policies[172] - As of June 30, 2023, the Group's total borrowings and lease liabilities amounted to approximately HK$101.7 million (December 31, 2022: approximately HK$119.2 million)[173] Contingent Liabilities As of June 30, 2023, the Group had no significant contingent liabilities - As of June 30, 2023, the Group had no significant contingent liabilities (December 31, 2022: Nil)[120] Foreign Exchange Rate Risk and Related Hedging The Group faces foreign currency risk primarily from revenue, production costs, and operating expenses denominated in non-HKD currencies, managing this risk by closely monitoring exchange rate fluctuations and using financial instruments for hedging when necessary, without adopting a formal hedging accounting policy - The Group is exposed to foreign currency risk primarily because its revenue, production costs, and operating expenses are denominated in currencies other than HKD[121] - The Group has established policies to manage foreign currency risk by closely monitoring exchange rate movements and utilizing financial instruments for hedging when necessary, without adopting a formal hedging accounting policy[175] - In the first six months of 2023, fair value gain on derivative financial instruments was approximately HK$1.3 million (first six months of 2022: fair value loss of approximately HK$10.7 million)[147] Capital Commitments As of June 30, 2023, the Group's capital commitments for the acquisition of property, plant, and equipment amounted to approximately HK$46.2 million, a slight increase from December 31, 2022 Capital Commitments (As of June 30) | Item | 2023 (HK$'000) | December 31, 2022 (HK$'000) | | :------------------------------ | :------------- | :-------------------------- | | Acquisition of Property, Plant and Equipment | 46,200 | 45,000 | Significant Acquisitions or Disposals of Subsidiaries, Associates, and Joint Ventures In H1 2023, the Group did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures - In the first six months of 2023, the Group had no significant acquisitions or disposals of subsidiaries, associates, or joint ventures[148] Future Plans for Material Investments and Capital Assets Beyond what is disclosed in this announcement, the Group currently has no other plans for material investments or capital assets and held no significant investments in H1 2023 - Save as disclosed in this announcement, as of the date of this announcement, the Group has no other plans regarding material investments or capital assets[149] - The Group did not hold any material investments in the first six months of 2023[150] Employees and Remuneration Policy As of June 30, 2023, the Group had 2,434 employees with total staff costs of approximately HK$161.7 million, and its remuneration policy is regularly reviewed based on market conditions and individual performance, including basic salary, directors' emoluments, pension scheme contributions, and discretionary bonuses Employee and Remuneration Data (As of June 30) | Metric | 2023 | December 31, 2022 | | :---------- | :---- | :---------------- | | Total Employees | 2,434 | 2,280 | Total Staff Costs (For the six months ended June 30) | Item | 2023 (HK$'000) | 2022 (HK$'000) | | :-------------- | :------------- | :------------- | | Total Staff Costs | 161,700 | 178,500 | - The Company's remuneration policy is regularly reviewed primarily with reference to market conditions and the performance of the Company and individual employees (including directors), with remuneration packages including (where applicable) basic salary, directors' emoluments, contributions to pension schemes, and discretionary bonuses linked to the Group's financial performance and individual performance[178] Future Outlook Facing manufacturing market challenges, the Group will steadfastly execute strategic deployments, including expanding into high-end collectible card product manufacturing, extending the QPMN e-commerce platform internationally, optimizing production base positioning with Dongguan as an R&D center and Heshan/Vietnam focusing on OEM services to mitigate geopolitical risks and enhance competitiveness, and exploring Own Brand Manufacturing (OBM) card products and cybersecurity services for business diversification - The Group will intensify efforts to develop the production business for high-end collectible card products, having introduced specialized production equipment, and the sales team is actively increasing exposure in the domestic Chinese market[104] - The Group will continue to focus on developing its e-commerce platform, Q P Market Network (QPMN), and is committed to expanding QPMN into international markets, including allocating human resources for business promotion in North America and participating in major exhibitions worldwide[105] - In the long term, the Dongguan plant will strengthen its role and capabilities as a product engineering, research and development, and digital production center, while the Heshan and Vietnam plants will focus on providing end-to-end OEM services to enhance the geographical advantages of the supply chain[106] - The Group intends to explore Own Brand Manufacturing (OBM) business for related products and plans to invest resources in developing cybersecurity-related maintenance and consulting services to increase its business diversity[132] Other Information Corporate Governance Practices The Company has adopted the principles and code provisions of the Corporate Governance Code in Appendix 14 of the Listing Rules; despite the Chairman and CEO being the same person, deviating from Code Provision C.2.1, the Board believes this arrangement provides strong and consistent leadership with sufficient safeguards for power balance - The Company has adopted the principles and code provisions of the Corporate Governance Code (the 'CG Code') set out in Appendix 14 to the Listing Rules as its own corporate governance code[153] - Mr. Cheng Wan Wai currently holds both the positions of Chairman of the Board and Chief Executive Officer of the Company, which deviates from Code Provision C.2.1 of the CG Code; the Board believes this arrangement provides strong and consistent leadership for the Group and facilitates effective execution of business strategies[180] Standard Code for Securities Transactions The Company has adopted a code of conduct for directors' securities transactions, with terms no less exacting than the Standard Code in Appendix 10 of the Listing Rules, and all directors confirmed compliance throughout H1 2023 - The Company has adopted a code of conduct regarding securities transactions by directors on terms no less exacting than the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules[155] - All Directors confirmed that they have complied with the required standards set out in the adopted Standard Code throughout the six months ended June 30, 2023[181] Share Option Scheme The Company adopted a Share Option Scheme on December 20, 2019, to incentivize eligible individuals, but no share options have been granted to any directors, eligible employees, or other third parties under the scheme from its adoption date up to June 30, 2023 - On December 20, 2019, the Company adopted a Share Option Scheme to provide incentives or rewards to selected eligible persons for their contributions to the Group[181] - No share options have been granted under the Share Option Scheme to any directors, eligible employees, or other third parties from the date of its adoption up to June 30, 2023[157] Use of Proceeds The Company listed on January 16, 2020, with net proceeds of approximately HK$111.9 million; as of June 30, 2023, approximately HK$108.05 million has been utilized, with HK$3.8 million remaining, primarily for enhancing production capacity and operational flexibility - The Company's shares were listed on the Main Board of the Stock Exchange on January 16, 2020, with actual net proceeds of approximately HK$111.9 million[157] Use of Net Proceeds from Listing (As of June 30, 2023) | Purpose | Actual Net Proceeds (HK$'000) | Actual Use of Net Proceeds (HK$'000) | Unutilized Net Proceeds (HK$'000) | Expected Timeline | | :------------------------------------------------ | :---------------------------- | :----------------------------------- | :-------------------------------- | :---------------- | | Enhance the Group's production capacity and operational flexibility | 58,726 | (54,918) | 3,808 | Before December 31, 2023 | | Optimize the Group's product portfolio and production expertise | 27,964 | (27,964) | — | N/A | | Enhance the Group's technological capabilities and upgrade IT infrastructure | 13,087 | (13,087) | — | N/A | | Working capital and other general corporate purposes | 12,081 | (12,081) | — | N/A | | Total | 111,858 | (108,050) | 3,808 | | - As of June 30, 2023, the Company had unutilized net proceeds from the listing of approximately HK$3.8 million[184] Changes in Directors' Information Several directors received new appointments or honors during the reporting period, including Independent Non-executive Directors Mr. Chan Hiu Fung, Mr. Ng Sung, Professor Cheng Man Chung, and Chairman and Executive Director Mr. Cheng Wan Wai, with no other disclosable changes to directors' biographical details beyond those disclosed - Independent Non-executive Director Mr. Chan Hiu Fung was appointed as a member of the Social Development Expert Group under the Chief Executive's Policy Unit Expert Group and Chairman of the 'Innovation and Technology Venture Fund' Advisory Committee[160][187] - Independent Non-executive Director Mr. Ng Sung was appointed as Chairman of the Executive Committee of the Hong Kong Owners Association[161] - Independent Non-executive Director Professor Cheng Man Chung was appointed as a member of the Carbon Neutrality and Sustainable Development Committee[186] - Mr. Cheng Wan Wai, Chairman and Executive Director of the Company, was awarded the Medal of Honour by the Government of the Hong Kong Special Administrative Region[195] Purchase, Sale or Redemption of the Company's Listed Securities In H1 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - In the first six months of 2023, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[196] Interim Dividend The Board resolved to declare an interim dividend of 2.0 HK cents per ordinary share for H1 2023, payable on or about October 11, 2023, to shareholders registered on September 22, 2023 - The Board resolved to declare an interim dividend of 2.0 HK cents per ordinary share for the first six months of 2023, totaling approximately HK$10.6 million[163] - The interim dividend will be paid on or about Wednesday, October 11, 2023, to shareholders whose names appear on the register of members of the Company at the close of business on Friday, September 22, 2023[163] Closure of Register of Members To determine eligibility for the interim dividend, the Company will suspend its register of members from September 20, 2023, to September 22, 2023, inclusive - To determine the entitlement to the interim dividend, the Company's register of members will be closed from Wednesday, September 20, 2023, to Friday, September 22, 2023, both days inclusive[164] Events After the Reporting Period No significant events affecting the Group occurred after the end of H1 2023 and up to the date of this announcement - No significant events affecting the Group occurred after the first six months of 2023 and up to the date of this announcement[191] Review by Independent Auditor of Unaudited Interim Condensed Consolidated Financial Information The Company's Audit Committee, with management, reviewed the Group's accounting principles and practices, and discussed audit and financial reporting matters, while independent auditor PricewaterhouseCoopers reviewed the unaudited interim condensed consolidated financial information in accordance with HKSRS 2410 - The Company's Audit Committee, together with management, has reviewed the accounting principles and practices adopted by the Group and discussed audit and financial reporting matters, including the review of the Group's unaudited interim condensed consolidated financial statements for the first six months of 2023[198] - The Company's independent auditor, PricewaterhouseCoopers, has reviewed the unaudited interim condensed consolidated financial information in accordance with Hong Kong Standard on Review Engagements 2410 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the HKICPA[166] Publication of Interim Results Announcement and Interim Report The H1 2023 interim results announcement will be published on the Stock Exchange and Company websites, and the interim report will be dispatched to shareholders and published on the aforementioned websites in due course - The interim results announcement for the first six months of 2023 will be published on the website of the Stock Exchange (www.hkexnews.hk) and the Company's website (www.qpp.com) in accordance with the Listing Rules[167] - The interim report for the first six months of 2023, containing all information required by the Listing Rules, will be dispatched to shareholders and published on the aforementioned websites in due course[167]