(Incorporated in the Cayman Islands with limited liability)
(Stock code: 1523)
INTERIM REPORT
FOR THE SIX MONTHS ENDED 30 JUNE 2020
SUMMARY
- Revenue for the six months ended 30 June 2020 increased approximately 9.4% to US$24,102,000 from approximately US$22,025,000 for the six months ended 30 June 2019.
- Profit attributable to the owners of the Company for the six months ended 30 June 2020 decreased approximately 11.1% to US$5,120,000, from approximately US$5,758,000 for the six months ended 30 June 2019.
- For the six months ended 30 June 2020, the Company recorded basic earnings per share of approximately US0.49 cents (For the six months ended 30 June 2019: approximately US0.56 cents).
- The Board has determined that an interim dividend of HK3.03 cents per share for the six months ended 30 June 2020 be payable on 25 August 2020 to the shareholders whose names appear in the Company's register of members on 14 August 2020.
- 1 -
The board (the "Board") of directors (the "Directors") of Plover Bay Technologies Limited (the "Company") is pleased to announce the unaudited condensed consolidated interim results of the Company and its subsidiaries (the "Group") for the six months ended 30 June 2020, together with the comparative figures for the corresponding period in 2019 as follows:
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the six months ended 30 June 2020
(unaudited) | |||||
Six months ended 30 June | |||||
2020 | 2019 | ||||
Notes | US$'000 | US$'000 | |||
Revenue | 4 | 24,102 | 22,025 | ||
Cost of sales and services | (9,966) | (7,965) | |||
Gross profit | 14,136 | 14,060 | |||
Other income and gains, net | 4 | 284 | 219 | ||
Selling and distribution expenses | (1,337) | (1,168) | |||
Administrative expenses | (2,912) | (2,609) | |||
Research and development expenses | (4,070) | (3,513) | |||
Finance costs | 5 | (31) | (54) | ||
Profit before tax | 6 | 6,070 | 6,935 | ||
Income tax expense | 7 | (950) | (1,177) | ||
PROFIT FOR THE PERIOD ATTRIBUTABLE TO | |||||
OWNERS OF THE PARENT | 5,120 | 5,758 | |||
OTHER COMPREHENSIVE INCOME | |||||
Other comprehensive income / (loss) to be reclassified to | |||||
profit or loss in subsequent periods: | |||||
Exchange differences on translation of foreign operations | 63 | (14) | |||
TOTAL COMPREHENSIVE INCOME FOR THE | |||||
PERIOD ATTRIBUTABLE TO OWNERS OF THE | |||||
PARENT | 5,183 | 5,744 | |||
EARNINGS PER SHARE ATTRIBUTABLE TO | |||||
ORDINARY EQUITY HOLDERS OF THE PARENT | 9 | ||||
- Basic (US cents) | 0.49 | 0.56 | |||
- Diluted (US cents) | 0.48 | 0.54 | |||
- 2 -
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
At | At | |||
30 June | 31 December | |||
2020 | 2019 | |||
Notes | US$'000 | US$'000 | ||
(unaudited) | (audited) | |||
NON-CURRENT ASSETS | ||||
Property, plant and equipment | 3,774 | 4,403 | ||
Intangible assets | 1,098 | 1,087 | ||
Deferred tax assets | 40 | 30 | ||
TOTAL NON-CURRENT ASSETS | 4,912 | 5,520 | ||
CURRENT ASSETS | ||||
Inventories | 10 | 11,277 | 7,387 | |
Trade receivables | 11 | 6,978 | 6,223 | |
Prepayments, deposits and other receivables | 1,908 | 2,022 | ||
Cash and cash equivalents | 21,701 | 28,926 | ||
TOTAL CURRENT ASSETS | 41,864 | 44,558 | ||
CURRENT LIABILITIES | ||||
Trade payables, other payables and accruals | 12 | 3,477 | 2,614 | |
Lease liabilities | 1,040 | 999 | ||
Contract liabilities | 6,931 | 7,061 | ||
Tax payable | 2,669 | 1,839 | ||
Interest-bearing bank borrowings | 387 | 393 | ||
TOTAL CURRENT LIABILITIES | 14,504 | 12,906 | ||
NET CURRENT ASSETS | 27,360 | 31,652 | ||
TOTAL ASSETS LESS CURRENT LIABILITIES | 32,272 | 37,172 | ||
- 3 -
At | At | |||
30 June | 31 December | |||
2020 | 2019 | |||
Notes | US$'000 | US$'000 | ||
(unaudited) | (audited) | |||
NON-CURRENT LIABILITIES | ||||
Deferred tax liabilities | 141 | 133 | ||
Lease liabilities | 572 | 1,095 | ||
Contract liabilities | 2,038 | 1,830 | ||
TOTAL NON-CURRENT LIABILITIES | 2,751 | 3,058 | ||
NET ASSETS | 29,521 | 34,114 | ||
EQUITY | ||||
Equity attributable to owners of the parent | ||||
Issued capital | 13 | 1,355 | 1,349 | |
Reserves | 28,166 | 32,765 | ||
TOTAL EQUITY | 29,521 | 34,114 | ||
- 4 -
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the six months ended 30 June 2020
Attributable to owners of the parent | ||||||||||||||||||
Share | Share | Exchange | ||||||||||||||||
Issued | premium | option | fluctuation | Retained | Total | |||||||||||||
capital | account | reserve | reserve | profits | equity | |||||||||||||
Note | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | ||||||||||||
At 1 January 2019 (audited) | 1,326 | 15,832 | 1,298 | 1 | 14,261 | 32,718 | ||||||||||||
Profit for the period | - | - | - | - | 5,758 | 5,758 | ||||||||||||
Other comprehensive loss for | ||||||||||||||||||
period: | ||||||||||||||||||
Exchange differences on translation | ||||||||||||||||||
of foreign operations | - | - | - | (14) | - | (14) | ||||||||||||
Total comprehensive income/(loss) | ||||||||||||||||||
for the period | - | - | - | (14) | 5,758 | 5,744 | ||||||||||||
Issue of shares upon exercise of | ||||||||||||||||||
share options | 7 | 513 | (128) | - | - | 392 | ||||||||||||
Equity-settled share option | ||||||||||||||||||
arrangements | - | - | 275 | - | - | 275 | ||||||||||||
Second interim 2018 dividend | 8 | - | - | - | - | (5,724) | (5,724) | |||||||||||
Special dividend | 8 | - | - | - | - | (1,997) | (1,997) | |||||||||||
At 30 June 2019 (unaudited) | 1,333 | 16,345 | 1,445 | (13) | 12,298 | 31,408 | ||||||||||||
At 1 January 2020 (audited) | 1,349 | 17,350 | 1,413 | (5) | 14,007 | 34,114 | ||||||||||||
Profit for the period | - | - | - | - | 5,120 | 5,120 | ||||||||||||
Other comprehensive income for | ||||||||||||||||||
period: | ||||||||||||||||||
Exchange differences on translation | ||||||||||||||||||
of foreign operations | - | - | - | 63 | - | 63 | ||||||||||||
Total comprehensive income for | ||||||||||||||||||
the period | - | - | - | 63 | 5,120 | 5,183 | ||||||||||||
Issue of shares upon exercise of | ||||||||||||||||||
share options | 6 | 450 | (110) | - | - | 346 | ||||||||||||
Equity-settled share option | ||||||||||||||||||
arrangements | - | - | 174 | - | - | 174 | ||||||||||||
Second interim 2019 dividend | 8 | - | - | - | - | (6,270) | (6,270) | |||||||||||
Special dividend | 8 | - | - | - | - | (4,026) | (4,026) | |||||||||||
At 30 June 2020 (unaudited) | 1,355 | 17,800 | 1,477 | 58 | 8,831 | 29,521 | ||||||||||||
- 5 -
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended 30 June 2020
(unaudited) | ||||
Six months ended 30 June | ||||
2020 | 2019 | |||
US$'000 | US$'000 | |||
NET CASH FLOWS FROM OPERATING ACTIVITIES | 3,511 | 8,707 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Interest received | 159 | 187 | ||
Purchase of items of property, plant and equipment | (148) | (266) | ||
Increase in non-pledged bank deposit with original maturity of more | ||||
than three months when acquired | (5,555) | - | ||
Additions to intangible assets | (318) | (346) | ||
NET CASH FLOWS USED IN INVESTING ACTIVITIES | (5,862) | (425) | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from exercise of share options | 346 | 392 | ||
Dividends paid | (10,296) | (7,721) | ||
Interest elements of finance lease rental payments | (25) | (37) | ||
Repayment of bank loans | (9) | (455) | ||
Interest paid | (5) | (17) | ||
Principal portion of finance lease rental payments | (500) | (430) | ||
NET CASH FLOWS USED IN FINANCING ACTIVITIES | (10,489) | (8,268) | ||
NET (DECREASE)/INCREASE IN CASH AND CASH | ||||
EQUIVALENTS | (12,840) | 14 | ||
Cash and cash equivalents at beginning of the period | 28,926 | 26,850 | ||
Effect of foreign exchange rate changes, net | 60 | (6) | ||
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | 16,146 | 26,858 | ||
- 6 -
(unaudited) | |||
Six months ended 30 June | |||
2020 | 2019 | ||
US$'000 | US$'000 | ||
ANALYSIS OF BALANCES OF CASH AND CASH | |||
EQUIVALENTS | |||
Cash and bank balances | 16,146 | 26,858 | |
Non-pledged time deposit | 5,555 | - | |
Cash and cash equivalents as stated in the statement of financial | |||
position | 21,701 | 26,858 | |
Non-pledged time deposit not in the nature of cash and cash | |||
equivalents for the purpose of the statement of cash flows | (5,555) | - | |
CASH AND CASH EQUIVALENTS AS STATED IN THE | |||
STATEMENT OF CASH FLOWS | 16,146 | 26,858 | |
- 7 -
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the six months ended 30 June 2020
1. CORPORATE AND GROUP INFORMATION
Plover Bay Technologies Limited is a limited liability company incorporated in the Cayman Islands. The principal place of business of the Company is located at Unit B, 5/F, Dragon Industrial Building, 93 King Lam Street, Lai Chi Kok, Kowloon, Hong Kong.
During the period, the Group was involved in the following principal activities:
- designing, development and marketing of software defined wide area network (the "SD-WAN") routers; and
- provision of software licences and warranty and support services.
-
BASIS OF PREPARATION
The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 ("HKAS 34") Interim Financial Reporting issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") as well as with the applicable disclosure requirement of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules"). They have been prepared under the historical cost convention and are presented in United States Dollars ("US$") and all values are rounded to the nearest thousands except when otherwise indicated.
The condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements year ended 31 December 2019. - CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
Except as described below, the accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2020 are the same as those set out in the Group's annual financial statements for the year ended 31 December 2019.
In the current interim period, the Group has applied, for the first time, the following new and revised HKFRSs for the preparation of the Group's condensed consolidated financial statements.
Amendments to HKFRS 3 | Definition of a Business |
Amendments to HKFRS 9, HKAS 39 and HKFRS 7 | Interest Rate Benchmark Reform |
Amendments to HKAS 1 and HKAS 8 | Definition of Material |
The application of the new and revised standards in the current interim period has had no material impact on the amounts reported in these condensed consolidated financial statements and/or disclosures set in these condensed consolidated financial statements.
- 8 -
3. REVENUE AND SEGMENT INFORMATION
For management purposes, the Group is organised into business units based on their products and services and has two reportable operating segments as follows:
- the sales of SD-WAN routers segment that primarily engages in sales of wired and wireless routers; and
- software licences and warranty and support services segment that primarily engages in the provision of software licences and warranty and support services.
Management monitors the results of the Group's operating segments separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on reportable segment profit, which is a measure of adjusted profit before tax. The adjusted profit before tax is measured consistently with the Group's profit before tax except that other income and gains, net, selling and distribution expenses, unallocated administrative expenses and finance costs are excluded from such measurement.
There were no material intersegment sales and transfers during the current and prior reporting periods.
Operating segments:
Six months ended 30 June (unaudited)
Sales of SD-WAN routers | ||||||||||||||||||||||||||
Software licences and | ||||||||||||||||||||||||||
warranty and support | ||||||||||||||||||||||||||
Wired routers | Wireless routers | services | Total | |||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | |||||||||||||||||||
Segment revenue: | ||||||||||||||||||||||||||
Sales to external customers | 3,876 | 3,955 | 12,960 | 11,503 | 7,266 | 6,567 | 24,102 | 22,025 | ||||||||||||||||||
Segment result | 1,462 | 1,675 | 2,719 | 3,650 | 5,566 | 4,989 | 9,747 | 10,314 | ||||||||||||||||||
Reconciliation: | ||||||||||||||||||||||||||
Other income and gains, net | 284 | 219 | ||||||||||||||||||||||||
Selling and distribution expenses | (1,337) | (1,168) | ||||||||||||||||||||||||
Unallocated administrative expenses | (2,593) | (2,376) | ||||||||||||||||||||||||
Finance costs | (31) | (54) | ||||||||||||||||||||||||
Profit before tax | 6,070 | 6,935 | ||||||||||||||||||||||||
Geographical information | ||||||||||||||||||||||||||
Revenue from external customers | ||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||
Six months ended 30 June | ||||||||||||||||||||||||||
2020 | 2019 | |||||||||||||||||||||||||
US$'000 | US$'000 | |||||||||||||||||||||||||
North America | 13,628 | 13,941 | ||||||||||||||||||||||||
Europe, Middle East, Africa | 6,257 | 4,814 | ||||||||||||||||||||||||
Asia | 3,783 | 2,850 | ||||||||||||||||||||||||
Others | 434 | 420 | ||||||||||||||||||||||||
24,102 | 22,025 | |||||||||||||||||||||||||
- 9 -
4. REVENUE, OTHER INCOME AND GAINS, NET An analysis of revenue is as follows:
(unaudited) | |||||||||||||||
Six months ended 30 June | |||||||||||||||
2020 | 2019 | ||||||||||||||
US$'000 | US$'000 | ||||||||||||||
Revenue from contracts with customers | 24,102 | 22,025 | |||||||||||||
Revenue from contracts with customers | |||||||||||||||
Disaggregated revenue information | |||||||||||||||
Software licences and | |||||||||||||||
Sales of SD-WAN routers | warranty and support services | Total | |||||||||||||
2020 | 2019 | 2020 | 2019 | 2020 | 2019 | ||||||||||
US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | US$'000 | ||||||||||
Type of goods or services | |||||||||||||||
Sale of SD-WAN routers | |||||||||||||||
- Wired | 3,876 | 3,955 | - | - | 3,876 | 3,955 | |||||||||
- Wireless | 12,960 | 11,503 | - | - | 12,960 | 11,503 | |||||||||
Provision of warranty and support services | - | - | 5,987 | 5,515 | 5,987 | 5,515 | |||||||||
Sale of software and licence fee income | - | - | 1,279 | 1,052 | 1,279 | 1,052 | |||||||||
Total revenue from contract with customers | 16,836 | 15,458 | 7,266 | 6,567 | 24,102 | 22,025 | |||||||||
Geographical markets | |||||||||||||||
North America | 9,453 | 10,095 | 4,175 | 3,846 | 13,628 | 13,941 | |||||||||
EMEA | 4,512 | 3,221 | 1,745 | 1,593 | 6,257 | 4,814 | |||||||||
Asia | 2,569 | 1,864 | 1,214 | 986 | 3,783 | 2,850 | |||||||||
Others | 302 | 278 | 132 | 142 | 434 | 420 | |||||||||
Total revenue from contract with customers | 16,836 | 15,458 | 7,266 | 6,567 | 24,102 | 22,025 | |||||||||
Timing of revenue recognition | |||||||||||||||
Transferred at a point in time | 16,836 | 15,458 | 754 | 771 | 17,590 | 16,229 | |||||||||
Transferred over time | - | - | 6,512 | 5,796 | 6,512 | 5,796 | |||||||||
Total revenue from contracts with customers | 16,836 | 15,458 | 7,266 | 6,567 | 24,102 | 22,025 | |||||||||
Other income and gains, net | |||||||||||||||
(unaudited) | |||||||||||||||
Six months ended 30 June | |||||||||||||||
2020 | 2019 | ||||||||||||||
US$'000 | US$'000 | ||||||||||||||
Other income and gains, net | |||||||||||||||
Sales of parts | 13 | 26 | |||||||||||||
Bank interest income | 159 | 187 | |||||||||||||
Others | 112 | 6 | |||||||||||||
284 | 219 | ||||||||||||||
- 10 -
5. | FINANCE COSTS | ||||
(unaudited) | |||||
Six months ended 30 June | |||||
2020 | 2019 | ||||
US$'000 | US$'000 | ||||
Interest on bank borrowings | 6 | 17 | |||
Interest on lease liabilities | 25 | 37 | |||
31 | 54 | ||||
6. PROFIT BEFORE TAX
The Group's profit before tax is arrived at after charging/(crediting):
(unaudited) | ||||
Six months ended 30 June | ||||
2020 | 2019 | |||
US$'000 | US$'000 | |||
Cost of inventories sold | 8,548 | 7,088 | ||
Depreciation* | 803 | 753 | ||
Amortisation of intangible assets | 318 | 234 | ||
Government grants** | (350) | - | ||
Write-down of inventories to net realisable value | 490 | 132 | ||
Foreign exchange differences, net | 103 | 100 | ||
- Depreciation includes the depreciation of right-of-use assets of US$504,000 (2019: 463,000).
- During the period, the Company's subsidiary in Lithuania received approximately US$350,000 (2019: nil) grants from the Government of the Republic of Lithuania for several R&D projects. An amount of approximately US$108,000 grants related to R&D activities in 2019 is included in "Other income and gains, net" , and the remainder is recorded in "Research and development expenses" and "Administrative expenses".
7. INCOME TAX EXPENSE
Hong Kong profits tax has been provided at the rate of 16.5% (2019: 16.5%) on the estimated assessable profits arising in Hong Kong during the period.
(unaudited) | |||||
Six months ended 30 June | |||||
2020 | 2019 | ||||
US$'000 | US$'000 | ||||
Current - Hong Kong | |||||
Charge for the period | 948 | 1,164 | |||
Current - Elsewhere | |||||
Charge for the period | 4 | - | |||
Under/(over) provision in prior years | 2 | (1) | |||
Deferred | (4) | 14 | |||
Total tax charge for the period | 950 | 1,177 | |||
- 11 -
-
DIVIDENDS
During the period, a second interim dividend of HK4.64 cents per ordinary share and a special dividend of HK2.98 cents per ordinary share for the year ended 31 December 2019 were paid to the shareholders of the Company on 27 March 2020.
In the Board Meeting held on 30 July 2020, the Board has resolved to declare an interim dividend of HK3.03 cents per share for the six months ended 30 June 2020 (2019: HK3.49 cents). The interim dividend is payable on Tuesday, 25 August 2020 to the shareholders whose names appear in the register of members of the Company on Friday, 14 August 2020. - EARNINGS PER SHARE ATTRIBUTABLE TO ORDINARY EQUITY HOLDERS OF THE PARENT
The calculation of the basic earnings per share amounts is based on the profit for the period attributable to ordinary equity holders of the parent, and the 1,049,264,923 (2019: 1,030,617,768) weighted average number of ordinary shares in issue during the period.
The calculations of basic and diluted earnings per share are based on:
Earnings
The calculations of basic and diluted earnings per share are based on profit for the period attributable to ordinary equity holders of the parent.
Shares
(unaudited) | ||||
Six months ended 30 June | ||||
Number of shares | ||||
2020 | 2019 | |||
Weighted average number of ordinary shares in issue during the period | ||||
used in the basic earnings per share calculation | 1,049,264,923 | 1,030,617,768 | ||
Effect of dilution - weighted average number of ordinary shares: Share options | 16,194,989 | 27,968,978 | ||
1,065,459,912 | 1,058,586,746 | |||
10. | INVENTORIES | |||
(unaudited) | (audited) | |||
At | At | |||
30 June | 31 December | |||
2020 | 2019 | |||
US$'000 | US$'000 | |||
Raw materials and consumables | 8,132 | 5,006 | ||
Finished goods | 3,145 | 2,381 | ||
11,277 | 7,387 | |||
- 12 -
11. TRADE RECEIVABLES
(unaudited) | (audited) | |||
At | At | |||
30 June | 31 December | |||
2020 | 2019 | |||
US$'000 | US$'000 | |||
Trade receivables | 7,088 | 6,335 | ||
Impairment | (110) | (112) | ||
6,978 | 6,223 | |||
The Group's trading terms with its customers are mainly on credit, except for new and individual customers, where payment in advance is normally required. The overall credit period is generally between 30 to 60 days. The Group seeks to maintain strict control over its outstanding receivables and overdue balances are reviewed regularly by senior management. The Group does not hold any collateral or other credit enhancements over these balances. Trade receivables are non-interest-bearing.
An ageing analysis of the trade receivables as at the end of the reporting period, based on the invoice date and net of provisions, is as follows:
(unaudited) | (audited) | ||
At | At | ||
30 June | 31 December | ||
2020 | 2019 | ||
US$'000 | US$'000 | ||
Within 1 month | 5,102 | 4,323 | |
1 to 2 months | 1,477 | 1,857 | |
2 to 3 months | 236 | - | |
Over 3 months | 163 | 43 | |
6,978 | 6,223 | ||
12. TRADE PAYABLES, OTHER PAYABLES AND ACCRUALS
(unaudited) | (audited) | ||
At | At | ||
30 June | 31 December | ||
2020 | 2019 | ||
US$'000 | US$'000 | ||
Trade payables | 1,219 | 735 | |
Deposits received | 513 | 512 | |
Other payables | 509 | 27 | |
Accruals | 1,212 | 1,340 | |
3,453 | 2,614 | ||
- 13 -
13. | ISSUED CAPITAL | |||
(unaudited) | (audited) | |||
At | At | |||
30 June | 31 December | |||
2020 | 2019 | |||
US$'000 | US$'000 | |||
Authorised: | ||||
4,000,000,000 (31 December 2019: 4,000,000,000) ordinary shares of | ||||
HK$0.01 each | 5,152 | 5,152 | ||
Issued and fully paid: | ||||
1,051,864,000 (31 December 2019: 1,046,792,000) ordinary shares of | ||||
HK$0.01 each | 1,355 | 1,349 | ||
A summary of movements in the Company's issued capital is as follows:
Number of | ||||||
shares in issue | Issued capital | Issued capital | ||||
Notes | HK$'000 | US$'000 | ||||
At 1 January 2019 | 1,028,832,000 | 10,288 | 1,326 | |||
Share options exercised | (a) | 17,960,000 | 180 | 23 | ||
At 31 December 2019 and 1 January 2020 | 1,046,792,000 | 10,468 | 1,349 | |||
Share options exercised | (b) | 5,072,000 | 51 | 6 | ||
At 30 June 2020 | 1,051,864,000 | 10,519 | 1,355 | |||
Notes:
- The subscription rights attaching to 17,960,000 share options were exercised at the weighted average subscription prices of HK$0.499 per share, respectively, resulting in the issue of 17,960,000 ordinary shares for a total cash consideration, before expenses, of approximately US$1,143,000. An amount of approximately US$398,000 was transferred from the share option reserve to share premium account upon the exercise of the share options.
- The subscription rights attaching to 5,072,000 share options were exercised at the weighted average subscription prices of HK$0.530 per share, respectively, resulting in the issue of 5,072,000 ordinary shares for a total cash consideration, before expenses, of approximately US$346,000. An amount of approximately US$110,000 was transferred from the share option reserve to share premium account upon the exercise of the share options.
- 14 -
14. RELATED PARTY TRANSACTIONS
During the period, the Group entered into the following transactions with its related parties:
(unaudited)
Six months ended 30 June
20202019
US$'000 US$'000
Lease payments paid to related companies | 414 | 394 | |
These related party transactions also constitute continuing connected transactions as defined in Chapter 14A of the Listing Rules.
The lease payments were charged by related companies based on terms as agreed between the related parties. The controlling shareholder of the Company, Mr. Chan, is also a director and beneficial shareholder of the related companies.
15. SHARE OPTION SCHEME
The Company operates a share option scheme (the "Scheme") for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Group's operations. The Scheme became effective on 21 June 2016 and, unless otherwise cancelled or amended, will remain in force for 10 years from that date. The following share options were outstanding under the Scheme during the reporting period:
(unaudited) | (unaudited) | |||||||||||
2020 | 2019 | |||||||||||
Weighted | Weighted | |||||||||||
average exercise | Number of | average exercise | Number of | |||||||||
price per share | options | price per share | options | |||||||||
HK$ | HK$ | |||||||||||
At 1 January | 0.920 | 63,776,000 | 0.865 | 82,236,000 | ||||||||
Granted | - | - | 1.180 | 3,172,000 | ||||||||
Exercised | 0.530 | (5,072,000) | 0.521 | (5,896,000) | ||||||||
Forfeited | 1.064 | (708,000) | 1.787 | (3,972,000) | ||||||||
At 30 June | 0.952 | 57,996,000 | 0.857 | 75,540,000 | ||||||||
The weighted average share price at the date of exercise for share options exercised during six months ended 30 June 2020 was HK$1.071 per share (2019: HK$1.119 per share).
- 15 -
The exercise prices and exercise periods of the share options outstanding as at the end of reporting period are as follows:
Exercise period | Exercise price | (unaudited) | |||||
HK$ per share | Number of options outstanding as at 30 June | ||||||
2020 | 2019 | ||||||
20-7-2017 to 19-7-2021 | 0.483 | 892,000 | 1,476,000 | ||||
20-7-2018 to 19-7-2021 | 0.483 | 1,413,000 | 2,982,000 | ||||
20-7-2019 to 19-7-2021 | 0.483 | 4,321,000 | 18,100,000 | ||||
20-7-2020 to 19-7-2021 | 0.483 | 17,900,000 | 18,100,000 | ||||
5-4-2018 to 4-4-2022 | 0.72 | 10,000 | 18,000 | ||||
5-4-2019 to 4-4-2022 | 0.72 | 2,007,000 | 2,554,000 | ||||
5-4-2020 to 4-4-2022 | 0.72 | 1,861,000 | 2,475,000 | ||||
5-4-2021 to 4-4-2022 | 0.72 | 2,475,000 | 2,475,000 | ||||
10-10-2019 to 9-10-2022 | 1.872 | 2,720,000 | 3,070,000 | ||||
10-10-2020 to 9-10-2022 | 1.872 | 1,360,000 | 1,535,000 | ||||
10-10-2021 to 9-10-2022 | 1.872 | 1,360,000 | 1,535,000 | ||||
14-3-2019 to 13-3-2023 | 1.934 | 925,000 | 925,000 | ||||
14-3-2020 to 13-3-2023 | 1.934 | 2,325,000 | 2,367,000 | ||||
14-3-2021 to 13-3-2023 | 1.934 | 1,625,000 | 1,646,000 | ||||
14-3-2022 to 13-3-2023 | 1.934 | 1,625,000 | 1,646,000 | ||||
14-9-2019 to 13-9-2023 | 1.02 | 2,619,000 | 2,666,000 | ||||
14-9-2020 to 13-9-2023 | 1.02 | 3,062,000 | 3,066,000 | ||||
14-9-2021 to 13-9-2023 | 1.02 | 2,862,000 | 2,866,000 | ||||
14-9-2022 to 13-9-2023 | 1.02 | 2,862,000 | 2,866,000 | ||||
10-5-2021 to 9-5-2024 | 1.18 | 1,386,000 | 1,586,000 | ||||
10-5-2022 to 9-5-2024 | 1.18 | 693,000 | 793,000 | ||||
10-5-2023 to 9-5-2024 | 1.18 | 693,000 | 793,000 | ||||
31-12-2021 to 31-12-2024 | 1.12 | 500,000 | - | ||||
31-12-2022 to 31-12-2024 | 1.12 | 250,000 | - | ||||
31-12-2023 to 31-12-2024 | 1.12 | 250,000 | - | ||||
57,996,000 | 75,540,000 | ||||||
No share options were granted during the six months ended 30 June 2020. A share option expense of approximately US$174,000 was recognized during the reporting period.
16. EVENTS AFTER THE END OF THE REPORTING PERIOD
On 14 July 2020, the Group has been approved to receive monetary subsidy from the Employee Support Scheme implemented by the HKSAR Government amounting to approximately US$354,000 for the payment of staff salary.
- 16 -
MANAGEMENT DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Revenue and segment information
During the six months ended 30 June 2020, we generated revenue mainly from the sale of SD-WAN routers and the grant of software licences, including SpeedFusion and InControl cloud service for managing our devices, and the provision of warranty and support services in connection with our products. Our revenue represents the net invoiced value of (i) the products sold, after deducting allowances for returns and trade discounts; and (ii) services rendered.
Our product/service consist mainly of the following categories: (i) SD-WAN routers which are further divided into wired and wireless products; (ii) warranty and support services; and (iii) software licences.
For the six months ended 30 June 2020, revenue of the Group was approximately US$24,102,000, representing an increase of approximately 9.4% over the same period last year. The growth during the period was mainly driven by approximately 12.7% increase in wireless SD-WAN sales, approximately 8.6% increase in warranty and support services, approximately 21.6% increase in software licences and approximately 2.0% decrease in sales of wired SD-WAN routers.
Overall, the growth in our sales of wireless SD-WAN routers was driven by increasing demand for our general-purpose,volume-based product series, while the sales growth of software licences was due to increasing range of software licenses offered. Decrease in sales of wired SD-WAN is largely in line with our strategic focus in wireless SD-WAN.
The table below sets out our revenue by product/service category:
For the six months ended 30 June | |||||||||
2020 | 2019 | ||||||||
Revenue | % of total | Revenue | % of total | ||||||
US$'000 | % | US$'000 | % | ||||||
SD-WAN routers: | |||||||||
Wired | 3,876 | 16.1 | 3,955 | 18.0 | |||||
Wireless | 12,960 | 53.8 | 11,503 | 52.2 | |||||
Warranty and support services | 5,987 | 24.8 | 5,515 | 25.0 | |||||
Software licences | 1,279 | 5.3 | 1,052 | 4.8 | |||||
Total | 24,102 | 100.0 | 22,025 | 100.0 | |||||
- 17 -
During the reporting period, sales to North America declined approximately 2.2% year-on-year to approximately US$13,628,000. Sales to Europe, Middle East and Africa grew approximately 30.0% year-on-year to approximately US$6,257,000. Sales to Asia rose to about approximately US$3,783,000, a growth of approximately 32.7% year-on-year.
Sales to North America declined as channel partners experienced project delays caused by COVID-19 related shutdowns, while our strategic effort to setup regional warehouses near the end of 2019 has also relieved the needs for inventory restocking among our largest channel partners. Outside of North America, sales growth in multiple countries have recorded strong growth, including the Netherlands, United Kingdoms and Denmark in EMEA and Malaysia, Vietnam and Thailand in Asia. We believe the broad-based growth in multiple countries indicates a healthy uptrend in the demand for our products.
The table below sets out the breakdown of revenue by location of customers in terms of absolute amount and as a percentage of total revenue for the six months ended 30 June 2020 and 2019:
For the six months ended 30 June | |||||||||
2020 | 2019 | ||||||||
Revenue | Weight | Revenue | Weight | ||||||
US$'000 | % | US$'000 | % | ||||||
North America | 13,628 | 56.5 | 13,941 | 63.3 | |||||
EMEA | 6,257 | 26.0 | 4,814 | 21.9 | |||||
Asia | 3,783 | 15.7 | 2,850 | 12.9 | |||||
Others | 434 | 1.8 | 420 | 1.9 | |||||
Total | 24,102 | 100.0 | 22,025 | 100.0 | |||||
- 18 -
Gross profit and gross profit margin
For the six months ended 30 June 2020, our gross profit was approximately US$14,136,000, while gross profit margin was approximately 58.7%, a decrease of approximately 5.1 percentage points from last year's interim period.
The overall decrease in gross profit margin was mainly attributable to i) product mix shift to high- volume product series with lower gross margin, and ii) an inventory write down of USD490,000 (Six months ended 30 June 2019: USD132,000). Management regularly reviews inventory on hand and writes down any finished goods over 24 months and raw materials over 36 months of aging in accordance to the Company's accounting policies.
While increased mix of lower margin series diluted our overall gross margin during the period, this is in line with our strategy to expand our customer base today and monetise with product upgrades and new services in the future. Management views the likelihood of realising written-down products remains reasonably high as router products for enterprise markets tend to have long sales cycles. Moreover, raw materials can readily be repurposed into other products if required.
The table below sets out our Group's gross profit and gross profit margin by product/service category:
Six months ended 30 June | ||||||||
2020 | 2019 | |||||||
Gross profit | Gross profit | |||||||
Gross profit | margin | Gross profit | margin | |||||
US$'000 | % | US$'000 | % | |||||
SD-WAN routers: | ||||||||
Wired | 2,141 | 55.2 | 2,315 | 58.5 | ||||
Wireless | 5,149 | 39.7 | 5,680 | 49.4 | ||||
Warranty and support services | 5,567 | 93.0 | 5,013 | 90.9 | ||||
Software licences | 1,279 | 100.0 | 1,052 | 100.0 | ||||
Total | 14,136 | 58.7 | 14,060 | 63.8 | ||||
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Other income and gains, net
For the six months ended 30 June 2020, other income and gains, net was approximately US$284,000, an increase of approximately 29.7% year-on-year. Other income and gains, net mainly represented interest income, sale of parts and other revenues.
During the period, a portion of the government grants received amounting to approximately US$108,000 was recorded in this line item. For more details please see note 6 to the condensed consolidated financial statements.
Selling and distribution expenses
Selling and distribution expenses comprised mainly salaries and benefits of our sales and marketing staff and advertising and promotion expenses incurred to promote our products and other expenses relating to our sales and marketing activities.
Selling and distribution expenses for the six months ended 30 June 2020 increased approximately 14.5% year-on-year to approximately US$1,337,000, mainly because of increased marketing and business development headcount and spending on sponsorship to channel partners' marketing activities.
Administrative expenses
Administrative expenses mainly represented salaries and benefits of our administrative, finance and other supporting staff, depreciation of property, plant and equipment, amortisation of intangible assets, lease expenses and other office expenses.
Administrative expenses for the six months ended 30 June 2020 was approximately US$2,912,000, increasing approximately 11.6% year-on-year mainly due to increases in salaries and headcount, amortisation of intangible assets and legal and professional expenses incurred for application of government grants.
Research and development expenses
Research and development ("R&D") expenses represented mainly salaries and benefits of our engineering, testing and supporting staff, product testing fee, certification costs, tooling, components and parts used for product research and development purpose.
Research and development expenses for the six months ended 30 June 2020 was approximately US$4,070,000, increasing approximately 15.9% year-over-year. The increase is largely driven by development projects for new technologies and products and increased R&D headcount due to the formation of a new R&D team at the end of 2019 is now fully reflected.
- 20 -
Equity-settledshare-based payment expenses
Included in selling and distribution expenses, administrative expenses and research and development expenses were equity-settledshare-based payment expenses, mainly represented equity-settledshare-based payments to Directors and employees which are expensed on a straight-line basis over the vesting period since the grant date.
The Company grants share options to its directors, employees and consultants from time to time. Equity-settledshare-based payment expenses for the six months ended 30 June 2020 was approximately US$174,000, decreasing approximately 36.7% year-on-year. Details of share options granted by the Company are set out below under the heading "Share Option Scheme" of this Interim Report.
Total operating expenses
Total operating expenses, which includes selling and distribution expenses, administrative expenses and research and development expenses for the six months ended 30 June 2020 amounted to approximately US$8,319,000 an increase of approximately 14.1% year-on-year.
Finance costs
Finance costs mainly represented interests on bank borrowings and the interest portion of lease liabilities.
Finance costs for the six months ended 30 June 2020 was approximately US$31,000 compared to approximately US$54,000 during the same period last year, mainly due to decreased bank borrowing during the period.
Income tax expenses
We provided for Hong Kong profits tax at a rate of 16.5% on our estimated assessable profits arising in Hong Kong. The decrease in income tax expenses corresponded to the decrease of assessable profits during the six months ended 30 June 2020.
Profit attributable to owners of the Company
Profit attributable to owners of the Company for the six months ended 30 June 2020 was approximately US$5,120,000, representing a decrease of approximately 11.1%.
- 21 -
Impact of the coronavirus situation
Since the date of the publication of the 2019 annual report up to the date of this Interim Report, the coronavirus has not caused significant impact to our operations. Nevertheless, the virus could pose significant health risk to our employees and operating risks to our business. The Company has taken measures to minimize the risk of transmission at the workplace, including mandatory wearing of facemask at the work place, flexible working hours to avoid crowds during commute, and work from home arrangements.
BUSINESS REVIEW AND OUTLOOK
Year 2020 has been extremely challenging and difficult for all businesses globally. We are no exception. In the first half, we recorded a revenue growth of only 9.4%, which was below our expectations partly because the deployment of 5G has been hampered by the ongoing pandemic. Nevertheless, we remain confident in our business because connectivity is the cornerstone of any modern-day technology, whether it is to ensure business resiliency in today's pandemic, or to enable novel applications with 5G network's capabilities in the coming years.
During the first half, our net profit declined 11.1%. This was to a large extent due to the increased operating costs from our enlarged R&D and operation teams in Lithuania and Taiwan. We see the global expansion of our talent pool as a very important step to diversify the risk of doing business in a single location, and more importantly, expand our innovation pipeline going forward.
In the coming months, we will launch a new subscription service called SpeedFusion Cloud utilizing our proprietary technologies. Together with our wireless SD-WAN on 4G LTE and 5G, SpeedFusion Cloud enables secure and unbreakable access to enterprise and cloud resources anywhere with a simple and hassle-free setup. SpeedFusion Cloud bundles everything needed into one single subscription, from SD-WAN router, warranty to cloud management, and in future updates, mobile data plans from multiple operators.
In addition to new products, we have also launched a new website called the SpeedFusion Marketplace which is a centralized platform for our partners to showcase their best deployments with Peplink, and share knowledge with other partners. As content development is partner-driven, SpeedFusion Marketplace can accelerate content creation, improve marketing efficiency and generate new sales leads.
Vigorously reviewing our own products, services and business approaches, improving efficiency and resilience are the things that define our business culture. We believe diversified team locations, asset light structure, and an agile mindset will enable us to navigate through all challenging times.
- 22 -
LIQUIDITY, FINANCIAL RESOURCES AND CAPITAL STRUCTURE
As at 30 June 2020, our bank borrowings amounted to approximately US$387,000 (At 31 December 2019: approximately US$393,000). Gearing ratio (defined as total borrowings over total equity) as at 30 June 2020 was approximately 1.3% (At 31 December 2019: approximately 1.2%). The Directors confirm that the Group financed its operations principally from cash generated from its business operations and expect that this will continue to be the case in the foreseeable future. We did not experience any liquidity problem during the reporting period.
AGEING ANALYSIS OF TRADE RECEIVABLES
For details of our ageing analysis of trade receivables, please refer to note 11 to the condensed consolidated financial information.
FOREIGN CURRENCY EXPOSURE
A majority of the Group's sales and purchases, receipts and payments as well as most of our bank balances and cash are denominated in US$. Our bank loans and operating expenses are mainly denominated in US$ or HK$ which is pegged to US$. In this respect, there is no significant currency mismatch in our operational cash flows and the Group considers its exposure to foreign currency exchange risk to be insignificant.
EMPLOYEE AND SALARY POLICIES
The Directors consider the quality of employees as the most critical factor in maintaining the Group's business growth and enhancing our profitability. The Group offers remuneration packages including salary, bonuses and retirement benefits with reference to the performance and working experience of individual employees, and the prevailing market rates. As at 30 June 2020, the Group had 156 full-time employees (At 31 December 2019: 159 full time employees).
The Company also adopted a share option scheme approved on 21 June 2016 for the purpose of, among other things, recognition of employees' contribution to the Company's continued growth. Details have been set out in the section headed "Share Option Scheme" elsewhere in this Interim Report.
The emoluments of the Directors are decided by the Remuneration Committee having regard to the Group's operating results, individual performance and comparable market statistics.
SIGNIFICANT INVESTMENTS HELD AND FUTURE PLAN FOR MATERIAL INVESTMENT
As at 30 June 2020, the Group has no significant investment held and material investment plan.
- 23 -
MATERIAL ACQUISITIONS AND DISPOSALS
During the period ended 30 June 2020, the Group had no material acquisitions or disposals of subsidiaries and associated companies.
PLEDGE OF ASSETS
The Group's bank loans are secured by mortgages over the Group's leasehold land and buildings, which had an aggregate carrying value at the end of the reporting period of approximately US$1,092,000 (At 31 December 2019: approximately US$1,102,000).
USE OF PROCEEDS FROM THE LISTING
The Company's ordinary shares were listed on the Main Board of Stock Exchange on 13 July 2016 ("Listing Date"). The net proceeds ("Net Proceeds") from the initial public offering amounted to approximately HK$108.4 million (equivalent to approximately US$14.0 million). Unutilised Net Proceeds as at 30 June 2020 amounted to approximately HK$16.3 million (equivalent to approximately US$2.1 million) is deposited into a licensed bank in Hong Kong as short-term fixed term deposits. The Company intends to use the remaining net proceeds in the coming years in accordance with the purposes set out in the prospectus issued on 30 June 2016 (the "Prospectus").
As at 30 June 2020, the Group has utilised the Net Proceeds as follows:
Percentage | |||||||
of total | Net | Utilised | Unutilised | ||||
amount | proceeds | amount | amount | ||||
US$ million | US$ million | US$ million | |||||
Strengthen our R&D capabilities: | |||||||
Expansion of R&D team | 23% | 3.12 | 3.12 | - | |||
Upgrade R&D facilities | 13% | 1.74 | 0.32 | 1.42 | |||
Establishment of a R&D centre | 13% | 1.75 | 1.23 | 0.52 | |||
Promotional and marketing activities | 15% | 2.10 | 2.10 | - | |||
Improving marketing capabilities | 13% | 1.87 | 1.87 | - | |||
Improve brand awareness | 3% | 0.48 | 0.32 | 0.16 | |||
Install an enterprise resource planning | |||||||
system | 1% | 0.12 | 0.12 | - | |||
Strengthen patent portfolio | 10% | 1.40 | 1.40 | - | |||
Working capital and general | |||||||
corporate purposes | 10% | 1.40 | 1.40 | - | |||
100% | 13.98 | 11.88 | 2.10 | ||||
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DIVIDEND
The Board has resolved to declare an interim dividend of HK3.03 cents per share for the six months ended 30 June 2020. The interim dividend is expected to be paid on 25 August 2020 to the shareholders whose names appear in the Company's register of members of the Company at the close of business on 14 August 2020.
CLOSURE OF REGISTER OF MEMBERS
The register of members of the Company will be closed on Friday, 14 August 2020 for the purpose of determining the entitlement to the 2020 interim dividend. The record date for entitlement to receive the 2020 interim dividend is Friday, 14 August 2020. In order to be qualified for the 2020 interim dividend, all share transfer documents accompanied by the corresponding share certificates must be lodged with the Company's branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong for registration not later than 4:30 p.m. on Thursday, 13 August 2020. The cheques for dividend payment are expected be sent on Tuesday, 25 August 2020.
DIRECTORS' AND CHIEF EXECUTIVES' INTERESTS AND SHORT POSITION IN SHARES, UNDERLYING SHARES AND DEBENTURES
At 30 June 2020, the interests and short positions of the Directors and the chief executives of the Company in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the "SFO")), as recorded in the register required to be kept under section 352 of the SFO, or as notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the "Model Code") as set out in Appendix 10 of the Listing Rules were as follows:
- 25 -
Long positions in shares and underlying shares | ||||
Number of | ||||
underlying | ||||
ordinary | ||||
Number of | shares of the | |||
ordinary | Company | |||
shares of the | held under | Approximate | ||
Company | Share Option | percentage of | ||
Name of Directors | Nature of interest | interested | Scheme | shareholding |
% | ||||
Chan Wing Hong Alex | Beneficial owner | 754,496,000 | 1,504,000 | 71.9 |
Chau Kit Wai | Beneficial owner | 4,496,000 | 1,504,000 | 0.6 |
Yip Kai Kut Kenneth | Beneficial owner | 4,304,000 | 1,696,000 | 0.6 |
Chong Ming Pui | Beneficial owner | 4,496,000 | 1,504,000 | 0.6 |
Yeung Yu | Beneficial owner | 4,496,000 | 1,504,000 | 0.6 |
Save as disclosed above, as of the date of this Interim Report, so far as is known to any Director or chief executives of the Company, none of the Directors or chief executives of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were (i) required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO; or (ii) required to be recorded in the register kept by the Company pursuant to section 352 of the SFO; or (iii) otherwise notified to the Company and the Stock Exchange pursuant to the Model Code. Details of the Directors' interests in share options granted by the Company are set out below under the heading "Share Option Scheme".
ARRANGEMENTS TO ACQUIRE SHARES OR DEBENTURES
Save as disclosed in the paragraph headed "Share Option Scheme" below, at no time during the six months ended 30 June 2020 was the Group a party to any arrangements to enable the Directors, supervisors or chief executives of the Company, to acquire benefits by means of acquisition of shares in, or debt securities (including debentures) of, the Company or any other body corporate.
- 26 -
SHARE OPTION SCHEME
A share option scheme was conditionally adopted by the Company on 21 June 2016, and became effective on the Listing Date (the "Share Option Scheme"). Details of movements of the share options granted under the Share Option Scheme for the six months ended 30 June 2020 are as follows:
Movement of share options during the period | |||||||||||||
Exercise | At | At | |||||||||||
Date of | price per | Exercise | 1 January | Lapsed/ | 30 June | ||||||||
Grantee | grant | share | period | Note | 2019 | Granted | Exercised | cancelled | 2019 | ||||
(HK$) | |||||||||||||
Directors | |||||||||||||
Mr. Chan Wing Hong | 20/7/2016 | 0.483 | 20/7/2017- | (1), (2) | 1,504,000 | - | - | - | 1,504,000 | ||||
Alex | 19/7/2021 | ||||||||||||
Mr. Chau Kit Wai | 20/7/2016 | 0.483 | 20/7/2017- | (2) | 1,504,000 | - | - | - | 1,504,000 | ||||
19/7/2021 | |||||||||||||
Mr. Yip Kai Kut | 20/7/2016 | 0.483 | 20/7/2017- | (2) | 2,600,000 | - | (904,000) | - | 1,696,000 | ||||
Kenneth | 19/7/2021 | ||||||||||||
Mr. Chong Ming Pui | 20/7/2016 | 0.483 | 20/7/2017- | (2) | 1,504,000 | - | - | - | 1,504,000 | ||||
19/7/2021 | |||||||||||||
Mr. Yeung Yu | 20/7/2016 | 0.483 | 20/7/2017- | (2) | 1,504,000 | - | - | - | 1,504,000 | ||||
19/7/2021 | |||||||||||||
Consultants | 20/7/2016 | 0.483 | 20/7/2017- | (2) | 576,000 | - | - | - | 576,000 | ||||
19/7/2021 | |||||||||||||
10/10/2017 | 1.872 | 10/10/2019- | (4) | 2,600,000 | - | - | (100,000) | 2,500,000 | |||||
9/10/2022 | |||||||||||||
14/3/2018 | 1.934 | 14/3/2019- | (5) | 3,300,000 | - | - | - | 3,300,000 | |||||
13/3/2023 | |||||||||||||
14/9/2018 | 1.02 | 14/9/2019- | (6) | 2,200,000 | - | - | - | 2,200,000 | |||||
13/9/2023 | |||||||||||||
10/5/2019 | 1.18 | 10/5/2021- | (7) | 100,000 | - | - | - | 100,000 | |||||
9/5/2024 | |||||||||||||
Employees | 20/7/2016 | 0.483 | 20/7/2017- | (2) | 19,626,000 | - | (3,180,000) | (208,000) | 16,238,000 | ||||
19/7/2021 | |||||||||||||
5/4/2017 | 0.720 | 5/4/2018- | (3) | 7,319,000 | - | (966,000) | - | 6,353,000 | |||||
4/4/2022 | |||||||||||||
10/10/2017 | 1.872 | 10/10/2019- | (4) | 2,940,000 | - | - | - | 2,940,000 | |||||
9/10/2022 | |||||||||||||
14/3/2018 | 1.934 | 14/3/2019- | (5) | 3,200,000 | - | - | - | 3,200,000 | |||||
13/3/2023 | |||||||||||||
14/9/2018 | 1.02 | 14/9/2019- | (6) | 9,227,000 | - | (22,000) | - | 9,205,000 | |||||
13/9/2023 | |||||||||||||
10/5/2019 | 1.18 | 10/5/2021- | (7) | 2,972,000 | - | - | (300,000) | 2,672,000 | |||||
9/5/2024 | |||||||||||||
31/12/2019 | 1.12 | 31/12/2021- | (8) | 1,100,000 | - | - | (100,000) | 1,000,000 | |||||
30/12/2024 | |||||||||||||
Total: | 63,776,000 | - | (5,072,000) | (708,000) | 57,996,000 | ||||||||
- 27 -
Notes:
- Mr. Chan Wing Hong Alex is also the controlling shareholder of the Company.
- For all share options granted on 20 July 2016, the first 25% of the total options can be exercised 1 year after the date of grant, and each 25% of the total options will become exercisable in each subsequent year. The closing price of the Share immediately before the date on which the options were granted was HK$0.46.
- A total of 13,600,000 share options are granted on 5 April 2017. Among that, 25% of 8,400,000 can be exercised 1 year after the date of grant, and a further 25% will become exercisable in each subsequent year. For the remaining 5,200,000 options, 50% of the options can be exercised 2 years after the date of grant, and 25% will become exercisable in each subsequent year. The closing price of the Share immediately before the date on which the options were granted was HK$0.69.
- For all the share options granted on 10 October 2017, the first 50% can be exercised 2 years after the date of grant, and a further 25% of the total options will become exercisable in each subsequent year. The closing price of the Share immediately before the date on which the options were granted was HK$1.79.
- For the 13,500,000 share options granted on 14 March 2018, 25% of the 9,900,000 options can be exercised 1 year after the date of grant, and 25% will become exercisable in each subsequent year. For the remaining 3,600,000 options, 50% can be exercised 2 years after the date of grant, and 25% will become exercisable in each subsequent year. The closing price of the Share immediately before the date on which the options were granted was HK$1.90.
- For the 12,264,000 share options granted on 14 September 2018, 25% of 10,864,000 options can be exercised 1 year after the date of grant, and 25% will become exercisable in each subsequent year. For the remaining 1,400,000 options, 50% can be exercised 2 years after the date of grant, and 25% will become exercisable in each subsequent year. The closing price of the Share immediately before the date on which the options were granted was HK$0.93.
- For all the share options granted on 10 May 2019, the first 50% can be exercised 2 years after the date of grant, and 25% will become exercisable in each subsequent year. The closing price of the Share immediately before the date on which the options were granted was HK$1.12.
- For all the share options granted on 31 December 2019, the first 50% can be exercised 2 years after the date of grant, and 25% will become exercisable in each subsequent year. The closing price of the Share immediately before the date on which the options were granted was HK$1.10.
SUBSTANTIAL SHAREHOLDERS' INTERESTS AND SHORT POSITIONS IN SHARES AND UNDERLYING SHARES
Other than as disclosed in the paragraph headed "Directors' and chief executives' interests and short position in shares, underlying shares and debentures" above, the Directors have not been notified by any person (other than the Directors or chief executives of the Company) who had interests or short positions in the shares or underlying shares which shall be disclosed to the Company pursuant to the provisions of Divisions 2 and 3 of Part XV of the SFO as recorded in the register required to be kept pursuant to Section 336 of the SFO.
- 28 -
DIRECTORS' INTERESTS IN COMPETING BUSINESSES
As at 30 June 2020, in so far as the Directors were aware, none of the Directors or their respective associates had any interest in a business that competed or was likely to compete with the business of the Group.
EVENTS AFTER THE REPORTING PERIOD
Save for events disclosed in Note 16 of the notes to the unaudited condensed interim financial statements, there are no material subsequent events undertaken by the Company or by the Group after 30 June 2020 and up to the date of this Interim Report.
PRE-EMPTIVE RIGHTS
There are no provisions for pre-emptive rights under the Company's articles of association or the laws of Cayman Islands, which would oblige the Company to offer new shares on a pro-rata basis to existing shareholders.
PURCHASE, REDEMPTION OR SALE OF LISTED SECURITIES OF THE COMPANY
Neither the Company nor any of its subsidiaries purchased, redeemed or sold any of the Company's listed securities during the period.
CORPORATE GOVERNANCE CODE
The Company has adopted the Corporate Governance Code (the "CG Code") as its own code of corporate governance, and is committed to maintaining high standards of corporate governance as well as transparency. The Company has complied with all applicable code provisions of the CG Code during the period.
DIRECTORS' SECURITIES TRANSACTIONS
The Company has adopted the Model Code set out in Appendix 10 to the Listing Rules as the code of conduct for the Directors in their dealings in the Company's securities. Having made specific enquiries with each Director, the Company confirmed that the Directors had complied with the required standard as set out in the Model Code during the period.
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AUDIT COMMITTEE
The audit committee of the Company has reviewed the Group's interim results including the accounting principles and practices adopted by the Group, and discussed auditing, internal control and financial reporting matters as well as the condensed consolidated financial statements for the six months ended 30 June 2020 with the management.
APPRECIATION
I would like to take this opportunity to thank the Group's shareholders and business partners for their support and encouragement to the Group during the past six months. I would also like to thank our Directors and all staff member of the Group for their hard work and contribution to the Group.
By Order of the Board of
Plover Bay Technologies Limited
Chan Wing Hong Alex
Chairman and executive Director
Hong Kong, 10 August 2020
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Plover Bay Technologies Ltd. published this content on 07 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 August 2020 08:38:19 UTC