Financial Performance - For the period from April 1, 2020, to September 30, 2020, the joint venture group recorded unaudited turnover of approximately HK$8,946,000 and achieved net profit after tax of approximately HK$2,361,000[11]. - For the period ended September 30, 2020, the Group recorded a turnover of approximately HK$128,648,000, representing an increase of 207.2% compared to HK$41,874,000 for the same period in 2019[31]. - The Group's gross profit for the period was approximately HK$2,977,000, representing an increase of approximately four times from HK$609,000 in the same period of 2019[34]. - The loss from operating activities decreased to HK$12,263,000 from HK$32,542,000 year-on-year, showing a reduction of approximately 62%[73]. - The total comprehensive loss for the period was HK$9,747,000, compared to HK$39,975,000 in the same period of 2019, indicating a reduction of about 76%[73]. - The loss for the period for the six months ended September 30, 2020, was HK$12,455,000, compared to a loss of HK$32,980,000 for the same period in 2019, indicating an improvement in financial performance[105]. - The company reported a total comprehensive loss for the period of HK$9,747,000 for the six months ended September 30, 2020[85]. Revenue and Profitability - Revenue from trading of daily cleaning and sanitizing products and licensed branded watches contributed approximately HK$8,946,000 and HK$672,000 respectively for the period, compared to HK$0 for both in the same period of 2019[31]. - The gross profit margin for the commodities trading business was approximately 2.3%, up from 0.8% in the same period of 2019[34]. - The Group's loss from operating activities for the six months ended September 30, 2020, was HK$125,671,000, compared to HK$41,265,000 in 2019, indicating a substantial increase in costs[136]. Cost Management - The Company saved approximately HK$17 million in operating costs through various cost control measures at the beginning of the year[22]. - Selling expenses decreased to approximately HK$2,655,000 from HK$5,650,000 in the same period of 2019, due to cost control measures and workforce streamlining[41]. - Other operating expenses decreased by approximately 54.9% to HK$13,063,000, representing about 10.2% of the total revenue for the period[42]. Business Expansion and Strategy - The Group is expanding its business into the consumer products market, aligning with its principle of "making life easier and benefiting people's livelihood" (易生活，惠民生)[8]. - The Company anticipates that the business in cleaning and sanitizing products will improve its results in the future[22]. - The management expects 2021 to be a challenging year and will continue to monitor the development of COVID-19 while exploring new business opportunities[23]. Joint Ventures and Operations - The Company has established two joint venture groups for trading cleaning and sanitizing products and licensed branded watches in the PRC and overseas[22]. - The joint venture group for cleaning and sanitizing products commenced operations in mid-July 2020 and recorded unaudited turnover of approximately HK$672,000 for the period ended September 30, 2020[19]. - The joint venture for licensed branded watches will utilize various sales channels, including direct export sales and e-commerce platforms[12]. Cash Flow and Liquidity - For the six months ended 30 September 2020, the Group had a net cash outflow from operating activities of approximately HK$5,194,000, compared to a net cash outflow of approximately HK$8,370,000 for the same period in 2019[52]. - As at 30 September 2020, the Group's available cash and cash balances amounted to approximately HK$13,251,000, down from approximately HK$16,201,000 as of 31 March 2020[52]. - Cash and cash equivalents were reported at HK$82,025,000, slightly down from HK$84,429,000[80]. Assets and Liabilities - The Group's total current assets and current liabilities were approximately HK$119,530,000 and HK$62,135,000 respectively, resulting in a current ratio of approximately 1.9 times[52]. - The Group's gearing ratio was approximately 87.7%, an increase from approximately 71.4% as of 31 March 2020[52]. - The Group's total liabilities decreased to HK$62,135,000 from HK$71,780,000, showing a reduction of approximately 13%[80]. Employee and Shareholder Information - The Group had a total of 43 employees as at 30 September 2020, down from 67 employees as of 30 September 2019[58]. - During the period ended 30 September 2020, 59,100,000 share options were granted, while 88,460,000 share options lapsed, leaving 232,307,000 share options outstanding[59]. - The company’s substantial shareholders include Ms. Liu Qiuhua and Mr. Gao Feng, holding approximately 12.1% and 5.21% of the issued ordinary share capital, respectively[91]. Taxation and Compliance - The company is subject to a two-tier profits tax system in Hong Kong, with a tax rate of 8.25% on the first HK$2,000,000 of taxable profits and 16.5% on profits exceeding that amount[145]. - The corporate income tax rate for the company's subsidiaries in China is set at 25% as per the Chinese Corporate Income Tax Law[145]. Share Options and Capital Structure - The share option scheme allows for a maximum of 10% of the company's issued shares to be granted as unexercised share options[188]. - The exercise price of share options must not be less than the higher of the closing price on the offer date or the average closing price for the five trading days preceding the offer[191]. - The fair value of share options is recognized as an employee cost, measured using the Black-Scholes-Merton option pricing model[192].
易生活控股(00223) - 2021 - 中期财报