Brockman Mining Limited — Interim / Quarterly Report 2021

Aug 26, 2021

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

==> picture [215 x 117] intentionally omitted <==

(Incorporated in Bermuda with limited liability) (Stock Code: 99)

INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2021

FINANCIAL HIGHLIGHTS:

• The profit attributable to owners of the Company was HK$27.8 million.

• Profit from EMS Division decreased by HK$10.2 million due to slightly reduction in profit margin and change in product mix.

UNAUDITED INTERIM RESULTS

The board of directors (the “Board” or “Directors”) of Wong’s International Holdings Limited (the “Company”) is pleased to announce the unaudited condensed consolidated results of the Company and its subsidiaries (the “Group”) for the six months ended 30 June 2021 as follows:

– 1 –

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2021

Note Revenue 2 Other income Changes in inventories of finished goods and work in progress Raw materials and consumables used Employee benefit expenses Depreciation Other operating expenses Change in fair value of investment properties Other gains – net 3 Provision of impairment losses on trade receivables Operating profit/(loss) Finance income Finance costs Share of profit/(loss) of an associate Share of profits/(losses) of joint ventures 7 Profit/(loss) before income tax Income tax expense 4 Profit/(loss) after income tax Profit/(loss) attributable to owners of the Company Non-controlling interests Dividends 5 Earnings/(loss) per share attributable to owners of the Company during the period Basic 6 Diluted 6	Unaudited 2021 2020 HK$’000 HK$’000 1,556,820 1,438,904 7,795 9,212 (60,562) (41,920) (1,089,386) (1,011,007) (228,839) (208,722) (38,918) (35,118) (83,355) (77,322) (11,700) (353,220) 5,076 10,372 (1,104) (920) 55,827 (269,741) 8,202 10,854 (22,553) (31,137) 297 (891) 4,306 (303,881) 46,079 (594,796) (18,267) (18,370) 27,812 (613,166) 27,812 (613,166) – – 27,812 (613,166) 7,177 9,570 HK$0.06 (HK$1.28) HK$0.06 (HK$1.28)	Unaudited 2021 2020 HK$’000 HK$’000 1,556,820 1,438,904 7,795 9,212 (60,562) (41,920) (1,089,386) (1,011,007) (228,839) (208,722) (38,918) (35,118) (83,355) (77,322) (11,700) (353,220) 5,076 10,372 (1,104) (920) 55,827 (269,741) 8,202 10,854 (22,553) (31,137) 297 (891) 4,306 (303,881) 46,079 (594,796) (18,267) (18,370) 27,812 (613,166) 27,812 (613,166) – – 27,812 (613,166) 7,177 9,570 HK$0.06 (HK$1.28) HK$0.06 (HK$1.28)
		(41,920) (1,011,007)
		(208,722) (35,118) (77,322) (353,220) 10,372 (920) (269,741) 10,854 (31,137) (891) (303,881) (594,796) (18,370) (613,166) (613,166) – (613,166) 9,570 (HK$1.28) (HK$1.28)

– 2 –

CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED 30 JUNE 2021

	Unaudited	Unaudited
	2021	2020
	HK$’000	HK$’000
Profit/(loss) for the period	27,812	(613,166)
Other comprehensive income:
Items that may be reclassified to consolidated income statement:
Cash flow hedge – fair value gains/(losses) for the period	8,016	(23,084)
Cash flow hedge – deferred income tax recognised	(1,323)	3,809
Currency translation differences
– Group	16,075	(30,476)
– Associates	323	(53)
Item that will not be reclassified subsequently to
consolidated income statement:
Changes in fair value of financial assets at
fair value through other comprehensive income	964	25
Other comprehensive income/(loss) for the period,
net of tax	24,055	(49,779)
Total comprehensive income/(loss) for the period	51,867	(662,945)
Attributable to:
Owners of the Company	51,867	(662,945)
Non-controlling interests	–	–
Total comprehensive income/(loss) for the period	51,867	(662,945)

– 3 –

CONDENSED CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021

Note ASSETS Non-current assets Property, plant and equipment Investment properties Right-of-use assets Investments in associates Interests in joint ventures 7 Financial assets at fair value through other comprehensive income Deferred income tax assets Deposits and other receivables Restricted cash Current assets Inventories Stock of completed properties Trade receivables 8 Prepayments, deposits and other receivables Financial assets at fair value through other comprehensive income Current income tax recoverable Restricted cash Short-term bank deposits Cash and cash equivalents Total assets	Unaudited As at 30 June 2021 HK$’000 229,802 2,041,057 142,104 26,339 2,138,677 8,400 26,821 12,338 3,002 4,628,540 384,473 213,410 904,602 72,606 46 1,108 130,887 834,770 532,783 3,074,685 7,703,225	Audited As at 31 December 2020 HK$’000 249,956 2,052,585 110,176 25,719 2,148,651 7,454 27,301 12,107 2,981
		4,636,930
		313,566 213,410 912,141 89,366 28 1,372 – 738,916 680,202
		2,949,001
		7,585,931

– 4 –

Note EQUITY Equity attributable to owners of the Company Share capital Other reserves Retained earnings – Dividends – Others Total equity LIABILITIES Non-current liabilities Derivative financial instruments Accruals and other payables Lease liabilities Deferred income tax liabilities Borrowings 10 Current liabilities Trade payables 9 Accruals and other payables Contract liabilities Derivative financial instruments Lease liabilities Current income tax liabilities Borrowings 10 Total liabilities Total equity and liabilities Net current assets Total assets less current liabilities	Unaudited As at 30 June 2021 HK$’000 47,848 623,637 7,177 3,697,409 4,376,071 11,081 8,527 37,093 70,972 1,343,313 1,470,986 664,240 185,091 164,714 7,495 20,580 47,566 766,482 1,856,168 3,327,154 7,703,225 1,218,517 5,847,057	Audited As at 31 December 2020 HK$’000 47,848 598,884 9,570 3,677,472
		4,333,774
		26,592 11,290 27,946 70,136 1,184,662
		1,320,626
		668,278 192,077 164,190 – 5,147 47,831 854,008
		1,931,531
		3,252,157
		7,585,931
		1,017,470
		5,654,400

– 5 –

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED 30 JUNE 2021

As at 1 January 2021 Comprehensive income Profit for the period Other comprehensive income Currency translation differences Changes in fair value of financial assets at fair value through other comprehensive income Cash flow hedge – fair value gains for the period Cash flow hedge – deferred income tax recognised Total other comprehensive income Total comprehensive income Transactions with owners Dividend declared to owners of the Company Total transactions with owners As at 30 June 2021	Unaudited	Unaudited		Total HK$’000 4,333,774 27,812 16,398 964 8,016 (1,323) 24,055 51,867 (9,570) (9,570) 4,376,071
	Attributable to owners of the Company Share Share Other capital premium reserves HK$’000 HK$’000 HK$’000 47,848 153,025 4,132,901 – – 27,812 – – 16,398 – – 964 – – 8,016 – – (1,323) – – 24,055 – – 51,867 – – (9,570) – – (9,570) 47,848 153,025 4,175,198		Non– controlling interests HK$’000 – – – – – – – – – – –
	Share capital HK$’000 47,848 – – – – – – – – – 47,848	Share premium HK$’000 153,025 – – – – – – – – – 153,025

– 6 –

Unaudited

As at 1 January 2020 Comprehensive income Loss for the period Other comprehensive income Currency translation differences Changes in fair value of financial assets at fair value through other comprehensive income Cash flow hedge – fair value losses for the period Cash flow hedge – deferred income tax recognised Total other comprehensive loss Total comprehensive loss Transactions with owners Dividend declared to owners of the Company Total transactions with owners As at 30 June 2020	Attributable to owners of the Company Share Share Other capital premium reserves HK$’000 HK$’000 HK$’000 47,848 153,025 4,805,347 – – (613,166) – – (30,529) – – 25 – – (23,084) – – 3,809 – – (49,779) – – (662,945) – – (14,355) – – (14,355) 47,848 153,025 4,128,047	Attributable to owners of the Company Share Share Other capital premium reserves HK$’000 HK$’000 HK$’000 47,848 153,025 4,805,347 – – (613,166) – – (30,529) – – 25 – – (23,084) – – 3,809 – – (49,779) – – (662,945) – – (14,355) – – (14,355) 47,848 153,025 4,128,047	Non– controlling interests HK$’000 4 – – – – – – – – – 4	Total HK$’000 5,006,224 (613,166) (30,529) 25 (23,084) 3,809 (49,779) (662,945) (14,355) (14,355) 4,328,924
	Share capital HK$’000 47,848 – – – – – – – – – 47,848	Share premium HK$’000 153,025 – – – – – – – – – 153,025

– 7 –

NOTES:

1. BASIS OF PREPARATION

This unaudited condensed consolidated interim financial information (“Interim Financial Information”) for the six months ended 30 June 2021 has been prepared in accordance with Hong Kong Accounting Standard (“HKAS”) 34, “Interim financial report” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”). The Interim Financial Information should be read in conjunction with the annual financial statements for the year ended 31 December 2020, which have been prepared in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”).

This Interim Financial Information has been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities (including derivative financial instruments) at fair value through profit or loss, financial assets at fair value through other comprehensive income and investment properties, which are carried at fair value.

Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2020, as described in those annual financial statements.

Amended standards adopted by the Group

The following amendments to standards are mandatory for first time for the financial year beginning 1 January 2021:

Amendments to HKFRS 9, Interest Rate Benchmark Reform – Phase 2 HKAS 39, HKFRS 7, HKFRS 4 and HKFRS 16

There are no amendments to standards that are effective for the first time for this interim period that could be expected to have a material impact on the Group.

– 8 –

Standards issued but not yet applied by the Group

Certain new standards, amendments to existing standards, interpretations and annual improvements have been published but are not effective for the Group’s accounting periods beginning on or after 1 January 2021 and have not been early adopted by the Group. These new standards, amendments to existing standards, interpretation and annual improvements are set out below:

		Effective for
		annual periods
		beginning on
		or after
Amendments to HKFRS 16	COVID-19-Related Rent Concessions	1 April 2021
	beyond 30 June 2021
Annual Improvements to	Annual Improvements to HKFRS Standards	1 January 2022
HKFRS Standards	2018-2020
2018-2020
Amendments to HKAS 16	Property, Plant and Equipment:	1 January 2022
	Proceeds before Intended Use
Amendments to HKAS 37	Onerous Contract: Cost of Fulfilling a Contract	1 January 2022
Amendments to HKFRS 3	Reference to the Conceptual Framework	1 January 2022
Revised Accounting	Merger Accounting for Common	1 January 2022
Guideline 5	Control Combination
Amendments to HKAS 1	Classification of Liabilities as Current	1 January 2023
	or Non-current
Hong Kong Interpretation 5	Presentation of Financial Statements –	1 January 2023
(2020)	Classification by the Borrower of
	a Term Loan that Contains
	a Repayment on Demand Clause
HKFRS 17	Insurance Contracts	1 January 2023
Amendments to HKAS 12	Deferred Tax related to Assets and	1 January 2023
	Liabilities arising from a
	Single Transaction
Amendments to HKFRS 10	Sale or Contribution of Assets between	To be determined
and HKAS 28	an Investor and its Associate or
	Joint Venture

The Directors of the Company are in the process of assessing the financial impact of the adoption of the above new standard, amendments to standards, interpretation and annual improvements. The Directors of the Company will adopt the new standard, amendments to standards, interpretation and annual improvements when they become effective.

– 9 –

2. SEGMENT INFORMATION

The Group’s senior executive management is considered as the Chief Operating Decision Maker (“CODM”). The Group is currently organised into two operating divisions:

Electronic Manufacturing Service (“EMS”) – manufacture and distribution of electronic products for EMS customers.

Property Holding – development, sale and lease of properties.

The CODM reviews the performance of the Group on a regular basis and reviews the Group’s internal reporting in order to assess performance and allocate resources. The CODM assesses the performance of the operating segments based on a measure of segment results. This measurement basis includes profit or loss of the operating segments before other income, other gains – net, finance costs – net and share of profit/(loss) of an associate but excludes corporate and unallocated expenses. Other information provided to CODM is measured in a manner consistent with that in the Interim Financial Information.

For the six months ended 30 June 2021 External revenue Revenue from contracts with customers Timing of revenue recognition – At a point of time Revenue from other sources – Rental income Segment results Depreciation Share of profits of joint ventures Change in fair value of investment properties Capital expenditure	EMS division HK$’000 1,523,794 – 38,073 37,775 – – 5,493	Property Holding division HK$’000 – 33,026 17,572 21 4,306 (11,700) 13	Total HK$’000 1,523,794 33,026 55,645 37,796 4,306 (11,700) 5,506

– 10 –

For the six months ended 30 June 2020 External revenue Revenue from contracts with customers Timing of revenue recognition – At a point of time Revenue from other sources – Rental income Segment results Depreciation Share of losses of joint ventures Change in fair value of investment properties Capital expenditure	EMS division HK$’000 1,404,503 – 48,238 33,901 – – 48,813	Property Holding division HK$’000 – 34,401 (630,387) 20 (303,881) (353,220) –	Total HK$’000 1,404,503 34,401 (582,149) 33,921 (303,881) (353,220) 48,813

– 11 –

As at 30 June 2021 Segment assets Interests in joint ventures Total reportable segment assets As at 31 December 2020 Segment assets Interests in joint ventures Total reportable segment assets	EMS division HK$’000 3,125,082 – 3,125,082 3,005,529 – 3,005,529	Property Holding division HK$’000 2,273,148 2,138,677 4,411,825 2,280,684 2,148,651 4,429,335	Total HK$’000 5,398,230 2,138,677 7,536,907 5,286,213 2,148,651 7,434,864

Segment assets consist primarily of property, plant and equipment, investment properties, right-of-use assets, interests in joint ventures, restricted cash, inventories, stock of completed properties, trade receivables, prepayments, deposits and other receivables, cash and cash equivalents and short-term bank deposits, but exclude investments in associates, financial assets at fair value through other comprehensive income, deferred income tax assets, current income tax recoverable and corporate and unallocated assets.

A reconciliation of reportable segment results to profit/(loss) before income tax is provided as follows:

	For the six months	ended 30 June
	2021	2020
	HK$’000	HK$’000
Reportable segment results	55,645	(582,149)
Other income	7,795	9,212
Other gains – net	5,076	10,372
Finance costs – net	(14,351)	(20,283)
Share of profit/(loss) of an associate	297	(891)
Corporate and unallocated expenses	(8,383)	(11,057)
Profit/(loss) before income tax	46,079	(594,796)

– 12 –

Reportable segments assets are reconciled to total assets as follows:

	As at	As at
	30 June	31 December
	2021	2020
	HK$’000	HK$’000
Reportable segment assets	7,536,907	7,434,864
Investments in associates	26,339	25,719
Financial assets at fair value through other
comprehensive income	8,446	7,482
Deferred income tax assets	26,821	27,301
Current income tax recoverable	1,108	1,372
Corporate and unallocated assets	103,604	89,193
Total assets per condensed consolidated
statement of financial position	7,703,225	7,585,931
Reconciliations of other material items are as follows:
For the six months ended 30 June
	2021	2020
	HK$’000	HK$’000
Depreciation
– Reportable segment total	37,796	33,921
– Corporate headquarters	1,122	1,197
	38,918	35,118
Capital expenditure
– Reportable segment total	5,506	48,813

– 13 –

The Company is domiciled in Bermuda. Analysis of the Group’s revenue by geographical market, which is determined by the destination of the invoices billed, is as follows:

	For the six months	ended 30 June
	2021	2020
	HK$’000	HK$’000
North America	171,028	325,098
Asia (excluding Hong Kong)	934,519	682,542
Europe	234,205	224,344
Hong Kong	217,068	206,920
	1,556,820	1,438,904

For the six months ended 30 June 2021, revenue of approximately HK$652,369,000 and HK$170,192,000 were derived from the top two external customers respectively. For the six months ended 30 June 2020, revenue of approximately HK$563,184,000 was derived from the top external customer. These customers individually account for 10 percent or more of the Group’s revenue. These revenues are attributable to the EMS division.

Analysis of the Group’s non-current assets by geographical market is as follows:

North America Asia (excluding Hong Kong) Europe Hong Kong	As at 30 June 2021 HK$’000 10 325,335 37 4,276,337 4,601,719	As at 31 December 2020 HK$’000 14 311,930 20 4,297,665
		4,609,629

Non-current assets comprise property, plant and equipment, investment properties, right-of-use assets, investments in associates, interests in joint ventures, financial assets at fair value through other comprehensive income, deposits and other receivables and restricted cash. They exclude deferred income tax assets.

– 14 –

3. OTHER GAINS – NET

	For the six months ended 30 June	For the six months ended 30 June	For the six months ended 30 June
		2021	2020
		HK$’000	HK$’000
	Gains/(losses) on financial instrument – net
	– Unrealised	–	76
	– Realised	–	(77)
	Gains on disposal of property, plant and equipment	593	209
	Exchange (losses)/gains – net	(2,827)	10,164
	Reversal of impairment losses of amounts due from an associate	7,310	–
		5,076	10,372
4.	INCOME TAX EXPENSE
	For the six months ended 30 June
		2021	2020
		HK$’000	HK$’000
	Current income tax
	– Hong Kong profits tax	3,484	5,205
	– Overseas taxation	19,660	11,850
	Over-provision in prior periods
	– Current income tax	(5,025)	(919)
	Deferred income tax	148	2,234
		18,267	18,370

Hong Kong profits tax has been provided at the rate of 16.5% (2020: 16.5%) on the estimated assessable profit arising in or derived from Hong Kong.

The Group’s subsidiaries in Mainland China are subject to the China Corporate Tax (“CIT”) at the rate of 25% (2020: 25%) on the estimated profits, except for Welco Technology (Suzhou) Limited (“WTSZ”), a wholly-owned subsidiary of the Group. WTSZ is eligible for preferential CIT rate of 15% (2020: 15%) under the New and High Technology Enterprises status till 31 December 2021.

– 15 –

5. DIVIDENDS

		For the six months	ended 30 June
		2021	2020
		HK$’000	HK$’000
Interim dividend – HK$0.015	(2020: HK$0.02) per share	7,177	9,570

On 26 August 2021, the Board has resolved to pay an interim dividend of HK$0.015 per share (2020: HK$0.02 per share) which is payable on Thursday, 30 September 2021 to the shareholders whose names appear on the Register of Members of the Company on Thursday, 16 September 2021. This interim dividend, amounting to HK$7,177,000 (2020: HK$9,570,000) has not been recognised as a liability in this Interim Financial Information. It will be recognised in shareholders’ equity in the year ending 31 December 2021.

6. EARNINGS/(LOSS) PER SHARE

(a) Basic

Basic earnings/(loss) per share is calculated by dividing the profit/(loss) attributable to owners of the Company by the weighted average number of ordinary shares in issue during the period.

	For the six months ended 30 June	For the six months ended 30 June	For the six months ended 30 June
	2021	2020
Profit/(loss) attributable to owners of the Company
(HK$’000)	27,812	(613,166)
Weighted average number of ordinary shares in issue
(in thousands)	478,484	478,484
Basic earnings/(loss) per share_(HK$)_	0.06	(1.28)

(b) Diluted

No diluted earnings/(loss) per share is presented for both periods because there is no dilutive potential ordinary shares outstanding throughout both periods.

– 16 –

7. INTERESTS IN JOINT VENTURES

Share of net assets Loans to joint ventures	As at 30 June 2021 HK$’000 1,018,285 1,120,392 2,138,677	As at 31 December 2020 HK$’000 1,013,979 1,134,672
		2,148,651

The loans to joint ventures are unsecured, interest-free and will not be repaid in the coming twelve months.

Movements in share of net assets is analysed as follows:

At 1 January Share of profits/(losses) of joint ventures At 30 June	2021 HK$’000 1,013,979 4,306 1,018,285	2020 HK$’000 1,338,210 (303,881) 1,034,329

Share of profits/(losses) of joint ventures included the share of fair value losses, net of deferred income tax, of investment properties owned by the joint ventures of approximately HK$19,652,000 (2020: HK$323,717,000).

8. TRADE RECEIVABLES

Trade receivables Less: allowance for impairment of trade receivables	As at 30 June 2021 HK$’000 907,680 (3,078) 904,602	As at 31 December 2020 HK$’000 914,115 (1,974) 912,141

The credit period allowed by the Group to its trade customers mainly ranges from 30 days to 120 days and no interest is charged.

– 17 –

Ageing analysis of the Group’s trade receivables by invoice date is as follows:

0 – 60 days 61 – 90 days Over 90 days	As at 30 June 2021 HK$’000 565,319 202,706 139,655 907,680	As at 31 December 2020 HK$’000 572,521 186,848 154,746
		914,115

9. TRADE PAYABLES

Ageing analysis of the Group’s trade payables by invoice date is as follows:

0 – 60 days 61 – 90 days Over 90 days BORROWINGS Trust receipt bank loans, unsecured Short-term bank loans, unsecured Portion of long-term loans due for repayment within one year, secured Portion of long-term loans due for repayment after one year, secured Total borrowings Non-current Current Total borrowings	As at 30 June 2021 HK$’000 553,546 60,106 50,588 664,240 As at 30 June 2021 HK$’000 316,442 319,000 131,040 1,343,313 2,109,795 1,343,313 766,482 2,109,795	As at 31 December 2020 HK$’000 586,833 40,407 41,038
		668,278
		As at 31 December 2020 HK$’000 324,943 410,000 119,065 1,184,662
		2,038,670
		1,184,662 854,008
		2,038,670

10. BORROWINGS

– 18 –

11. EVENT OCCURRING AFTER THE DATE OF STATEMENT OF FINANCIAL POSITION

On 30 July 2021, Welco Technology Vietnam Company Limited, a wholly-owned subsidiary of the Company, signed a Letter of Acceptance confirming that they accepted a tender submitted by Investcorp Group Joint Stock Company, a company incorporated in Vietnam with limited liability, for the provision of construction and related services for a new factory in Hai Duong Province of Vietnam for expansion of the Group’s current manufacturing capability in Vietnam with an accepted contract amount of VND230,391,944,379 (equivalent to approximately HK$78,766,477).

– 19 –

INTERIM DIVIDEND

On 26 August 2021, the Board has resolved to pay an interim dividend of HK$0.015 per share (2020: HK$0.02 per share) which is payable on Thursday, 30 September 2021 to the shareholders whose names appear on the Register of Members of the Company on Thursday, 16 September 2021.

CLOSURE OF REGISTER OF MEMBERS

The Register of Members of the Company will be closed from Tuesday, 14 September 2021 to Thursday, 16 September 2021, both days inclusive, during which period no transfer of shares shall be effected. To qualify for the above interim dividend, all transfers accompanied by the relevant share certificates must be lodged with the Company’s Hong Kong branch share registrar, Tricor Standard Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on Monday, 13 September 2021.

REVIEW OF BUSINESS ACTIVITIES

Review of Results

The profit attributable to owners of the Company for the six months ended 30 June 2021 amounted to HK$27.8 million, as compared to the loss attributable to owners of the Company of HK$613.2 million for the corresponding period last year. This was mainly attributable to the decrease in fair value losses of investment properties held by the Group and the Group’s joint ventures (the “Joint Ventures”). The fair value losses of investment properties held by the Group and the Joint Ventures was HK$31.4 million as compared to the fair value losses of HK$676.9 million for the corresponding period last year. The fair value losses reflect the commercial property market conditions which were adversely affected by the outbreak of COVID-19. Earnings per share for the six months were HK$0.06 as compared to loss per share of HK$1.28 for the corresponding period last year.

The Group’s revenue for the six months ended 30 June 2021 was HK$1,556.8 million, as compared to HK$1,438.9 million for the corresponding period last year. Operating profit for the six months ended 30 June 2021 was HK$55.8 million, as compared to operating loss of HK$269.7 million for the corresponding period last year. The improvement in the operating results was mainly due to the significant decrease in the fair value losses of investment properties held by the Group.

Electronic Manufacturing Service (“EMS”) Division

Revenue for the EMS Division for the six months ended 30 June 2021 was HK$1,523.8 million, as compared to HK$1,404.5 million for the corresponding period last year. The segment profit attributable to the EMS Division was HK$38.0 million, a 21.0% decrease as compared to HK$48.2 million for the corresponding period last year. The decrease in the segment profit was attributable to slightly reduction in profit margin and change in product mix.

– 20 –

Property Holding Division

The Property Holding Division reported revenue of HK$33.0 million, as compared to HK$34.4 million for the corresponding period last year. The segment profit for the period was HK$17.6 million as compared to segment loss of HK$630.4 million for the corresponding period last year. The improvement in the segment results was mainly attributable to the decrease in fair value losses of investment properties held by the Group and the Joint Ventures.

LIQUIDITY AND FINANCIAL RESOURCES

As at 30 June 2021, the Group had a total of HK$3,559.1 million (2020 December: HK$3,221.7 million) of banking facilities. Total bank borrowings were HK$2,109.8 million (2020 December: HK$2,038.7 million). Cash and cash equivalents, short-term bank deposits and restricted cash were HK$1,501.4 million at 30 June 2021 (2020 December: HK$1,422.1 million).

As at 30 June 2021, the Group had net bank borrowings of HK$608.4 million, as compared to HK$616.6 million at 31 December 2020. Sufficient banking facilities and bank balance are available to meet the cash needs of the Group for its manufacturing operations as well as Property Holding Division.

Net gearing ratio for the Group as at 30 June 2021 is 0.15 (2020 December: 0.15). The net gearing ratio was calculated as net debt divided by total equity. Net debt is calculated as total borrowings and lease liabilities less cash and cash equivalents, short-term bank deposits and restricted cash.

FOREIGN EXCHANGE AND RISK MANAGEMENT

Most of the Group’s sales are conducted in United States dollars and costs and expenses are mainly in United States dollars, Hong Kong dollars, Japanese Yen, Vietnam Dong and Chinese Renminbi. Consistent with its prudent policy on financial risk management, the Group does not use any foreign exchange hedging products. The Group recognise the currency risk in the fluctuation of Chinese Renminbi and will closely monitor and actively manage the risk involved.

CAPITAL STRUCTURE

There has been no material change in the Group’s capital structure since 31 December 2020 which consists of bank borrowings, cash and cash equivalents, short-term bank deposits and equity attributable to owners of the parent, comprising issued share capital and reserves.

EMPLOYEES

As at 30 June 2021, the Group employed approximately 3,700 employees. The Group adopts a remuneration policy which is commensurate with job nature, qualification and experience of employees. In addition to the provision of annual bonuses and employee related insurance benefits, discretionary bonuses are also rewarded to employees based on individual performance. The remuneration packages and policies are reviewed periodically. The Group also provides in-house and external training programs to its employees.

– 21 –

PROSPECTS

Following the gradual recovery of the global economy, customer demand for the EMS business has significantly increased. On the other hand, worldwide supply chain bottlenecks caused by the COVID global pandemic, which have resulted in unpredictable demand and supply, raw material shortages, longer logistics time, lockdowns and material price increases etc., continue to affect delivery to customers and gross margin. On balance, the Directors are cautiously optimistic about the performance of the EMS business for the second half of the year. The Directors will observe the development of the pandemic closely, especially the COVID Delta variant, putting the health of our employees and benefits of our business partners in the first priority.

Presently, a main focus of the EMS business is the development of the manufacturing facility in Hai Duong Province, Vietnam. The Directors believe that the facility will meet the needs of global customers, bring in new sales opportunities, enhance cost competitiveness and assist to cope with the US tariff issue. Responses from customers and potential customers regarding the new facility in Vietnam have been very enthusiastic though progress of development has been somewhat hampered by COVID lockdowns. Recently, the EMS business has contracted to lease a new site of about 17,000 square meters near the present facility for the construction of a new facility with a floor area of 30,000 square meters for expansion purpose. Construction of the new factory building is expected to complete in the first quarter of 2022.

The EMS business will continue to focus on customer base expansion, cost control, operating efficiency and value-added services to customers, including product design and technology services, to drive to enhance competitiveness.

Market conditions for commercial properties in Hong Kong have somewhat stabilized, and in view of the current pandemic and economic situation, the Directors do not expect the valuation of the commercial properties held by the Group or the joint venture with Sun Hung Kai Properties to have substantial fluctuations in the second half of 2021. Presently, the commercial properties held by the Group, directly or indirectly, have been almost fully leased out.

AWARD AND RECOGNITION

The Company and its wholly-owned subsidiary, Wong’s Electronics Company Limited, were awarded the Caring Company Logo by The Hong Kong Council of Social Service for the ninth consecutive year. These serve as recognition of the Group’s active participation in community activities and good corporate citizenship.

PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SECURITIES

During the six months ended 30 June 2021, neither the Company nor any of its subsidiaries purchased, sold or redeemed any of the Company’s listed securities.

– 22 –

CORPORATE GOVERNANCE CODE

During the six months ended 30 June 2021, the Company has complied with the code provisions under the Corporate Governance Code (the “CG Code”) as set out in Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) (the “Listing Rules”), except for the following deviations:

Code provision A.2.1

Code provision A.2.1 provides that the roles of chairman and chief executive should be separate and should not be performed by the same individual.

Mr. Wong Chung Mat, Ben is the Group’s Chairman and Chief Executive Officer and has occupied these two positions since February 2003. In allowing the two positions to be occupied by the same person, the Company has considered the following:

• (a) Both positions require in-depth knowledge and considerable experience of the Group’s business. Candidates with the suitable knowledge, experience and leadership are difficult to find both within and outside the Group. If either of the positions is occupied by an unqualified person, the Group’s performance could be gravely compromised.

• (b) The Company believes that the supervision of the Board and its Independent Non-executive Directors can provide an effective check and balance mechanism and ensures that the interests of the shareholders are adequately represented.

Code provision A.4.1

Code provision A.4.1 provides that non-executive directors should be appointed for a specific term, subject to re-election.

None of the existing Independent Non-executive Directors of the Company is appointed for a specific term. However, every Director of the Company is now subject to retirement by rotation and re-election under Bye-law 112 of the Bye-laws of the Company. As such, the Company considers that sufficient measures have been taken to ensure that the Company’s corporate governance practices are no less exacting than those in the CG Code.

Code provisions A.5.1 to A.5.4

Code provisions A.5.1 to A.5.4 provide that a nomination committee should be established with specific terms of reference which should be made available on the websites of the Stock Exchange and the listed issuer, and that sufficient resources should be provided to such committee to perform its duties.

– 23 –

The Company does not have present intention to establish a Nomination Committee in view that the Board itself shall discharge all duties expected to be dealt with by a Nomination Committee. In addition, a Policy and Procedure for Nomination of Directors have been set out in writing and adopted by the Board to serve as a guideline in order to ensure that there is a formal, considered and transparent procedure for the appointment of new Directors with suitable experience and capabilities to maintain and improve the competitiveness of the Company.

COMPLIANCE WITH THE MODEL CODE FOR SECURITIES TRANSACTIONS BY DIRECTORS OF LISTED ISSUERS

The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers (the “Model Code”) as set out in Appendix 10 to the Listing Rules. Having made specific enquiry to all Directors, all Directors confirmed that they had complied with the required standard set out in the Model Code during the six months ended 30 June 2021.

AUDIT COMMITTEE

The Audit Committee, which comprises of three Independent Non-executive Directors, has reviewed with management the accounting principles and practices adopted by the Group and discussed auditing, internal controls and financial reporting matters including a review of the unaudited interim financial information for the six months ended 30 June 2021.

PUBLICATION OF RESULTS AND INTERIM REPORT

This results announcement is published on the Company’s website at www.wih.com.hk/investor07.asp and the Stock Exchange at www.hkexnews.hk. The 2021 interim report will be dispatched to shareholders of the Company and will be available on the above websites in due course.

By order of the Board WONG CHUNG MAT, BEN Chairman and Chief Executive Officer

Hong Kong, 26 August 2021

As at the date of this announcement, the Executive Directors are Mr. Wong Chung Mat, Ben, Ms. Wong Yin Man, Ada, Dr. Chan Tsze Wah, Gabriel, Mr. Hung Wing Shun, Edmund and Mr. Chan Wai Ming, Hermes; and the Independent Non-executive Directors are Dr. Li Ka Cheung, Eric GBS, OBE, JP, Dr. Yu Sun Say GBM, JP, Mr. Alfred Donald Yap JP and Mr. Cheung Chi Chiu, David.

Website: www.wih.com.hk

– 24 –