Doyen International : 2019 Interim Report

INTERIM REPORT

2019

CONTENTS

	Pages
Corporate Information	2
Management Discussion and Analysis of the Operations	3
Other Information	12
Condensed Consolidated Statement of Profit or Loss	17
Condensed Consolidated Statement of Profit or Loss
and Other Comprehensive Income	18
Condensed Consolidated Statement of Financial Position	19
Condensed Consolidated Statement of Changes in Equity	20
Condensed Consolidated Statement of Cash Flows	21
Notes to the Condensed Consolidated Interim Financial Statements	22

DOYEN INTERNATIONAL HOLDINGS LIMITED Interim Report 2019 1

CORPORATE INFORMATION

Board of Directors

Executive directors

Mr. Lo Siu Yu, Chairman

Mr. Tai Xing, Chief Executive Officer

Mr. Cho Chun Wai

Non-executive directors

Ms. Luo Shaoying, Vice Chairman

Mr. Pan Chuan

Mr. Qin Hong

Independent non-executive directors

Mr. Chan Ying Kay

Mr. Leung Kin Hong

  (appointed on 5 July 2019)

Dr. Zhu Wenhui (resigned on 5 July 2019) Mr. Wang Jin Ling

Audit Committee

Mr. Chan Ying Kay,

• Committee Chairman Mr. Leung Kin Hong
• (appointed on 5 July 2019)

Dr. Zhu Wenhui (resigned on 5 July 2019) Mr. Wang Jin Ling

Remuneration Committee

Mr. Leung Kin Hong,

• Committee Chairman
• (appointed on 5 July 2019) Dr. Zhu Wenhui,
• Committee Chairman
• (resigned on 5 July 2019) Mr. Chan Ying Kay
  Mr. Wang Jin Ling

Nomination Committee

Mr. Lo Siu Yu,

• Committee Chairman Mr. Chan Ying Kay Mr. Leung Kin Hong
• (appointed on 5 July 2019)

Dr. Zhu Wenhui (resigned on 5 July 2019)

Company Secretary

Mr. Cho Chun Wai

Authorised Representatives

Mr. Lo Siu Yu

Mr. Cho Chun Wai

Registered Office

Suite 2206, 22/F., Harbour Centre,

25 Harbour Road, Wanchai, Hong Kong Tel: [phone]

Fax: [phone]

E-mail: [e-mail]

Share Registrar

Computershare Hong Kong Investor

• Services Limited 46/F., Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong

Share Transfer Office

Computershare Hong Kong Investor

  Services Limited

Shops 1712-16, 17/F., Hopewell Centre,

183 Queen's Road East,

Wanchai, Hong Kong.

Principal Bankers

The Hongkong and Shanghai Banking

  Corporation Limited

Bank of Communications Co., Limited

China Everbright Bank

Solicitors

Mason Ching & Associates

Auditor

RSM Hong Kong

Certified Public Accountants

Stock Code

668

Website

http://www.doyenintl.com

2 DOYEN INTERNATIONAL HOLDINGS LIMITED Interim Report 2019

MANAGEMENT DISCUSSION AND ANALYSIS OF THE OPERATIONS

BUSINESS REVIEW

For six months ended 30 June 2019, Doyen International Holdings Limited (the "Company", together with its subsidiaries, collectively the "Group") recorded revenue of approximately HK$16.5 million (six months ended 30 June 2018: revenue of approximately HK$16.8 million), representing a decrease of 1.41% as compared with that of the same period in prior year. The profit attributable to owners of the Company for the six months ended 30 June 2019 was approximately HK$23.7 million (six months ended 30 June 2018: approximately HK$13.2 million), representing an increase of 80.51%, which was primarily attributed to the loss of approximately HK$3.22 million on financial assets at fair value through profit and loss recorded during the first half of 2018, compared to a gain of approximately of HK$2.23 million on financial assets at fair value through profit and loss was recorded during the first half of 2019, and that there were no substantial exchange loss during the first of 2019, compared to an exchange loss of approximately HK$4.48 million the corresponding period last year.

Loan Financing Business

東葵融資租賃（上海）有限公司 (Dongkui Financial Leasing (Shanghai) Co., Ltd.*) ("Shanghai Dongkui"), a subsidiary of which 77.58% equity interest is owned by the Company, is mainly engaged in provision of secured loan financing, which is referred to as leaseback in China, but as almost all of the buy-back options for the pledged equipment and fixed assets will be exercised, and that the right of usage of the related assets have not been transferred, therefore, such transactions do not qualified as finance lease under the Hong Kong Accounting Standard. Shanghai Dongkui will continue to select projects with relatively reliable grading, sufficient security and controllable risks through assessment of profit, financial and credit status of enterprises. The registered capital of Shanghai Dongkui amounted to US$51.3 million (equivalent to approximately HK$400.1 million).

On 25 January 2019, the Shanghai Dongkui entered into the loan financing agreement with the Lessee (the "Lessee"), an independent third party, pursuant to which Shanghai Dongkui agreed to purchase the machinery and equipment from the Lessee at a total consideration of Renminbi ("RMB") 40 million (equivalent to approximately HK$45.5 million). At the same time, Shanghai Dongkui entered into the finance lease agreement and entered into the consultancy agreement with the Lessee, pursuant to which the machinery and equipment would be leased back to the Lessee for a term of three years. The obligation of the Lessee under the finance lease agreement is secured by the guarantee provided by the guarantor. And Shanghai Dongkui provides the consultancy service to the Lessee, the Lessee has agreed to pay a fee of RMB 1.8 million (equivalent to approximately HK$2.0 million).

*  For identification purpose only

DOYEN INTERNATIONAL HOLDINGS LIMITED Interim Report 2019 3

MANAGEMENT DISCUSSION AND ANALYSIS OF THE

OPERATIONS (continued)

BUSINESS REVIEW (continued)

Loan Financing Business (continued)

Shanghai Dongkui is now providing loan financing to six hospitals, namely 桃江縣人民 醫院 (for identification purpose, Taojiang County People's Hospital) with project amount of RMB40 million (equivalent to approximately HK$45.5 million); 射洪縣人民醫院 (for identification purpose, Shehong People's Hospital) with project amount of RMB35 million (equivalent to approximately HK$39.8 million); 祿豐縣人民醫院 (for identification purpose, Lufeng People's Hospital) with project amount of RMB12 million (equivalent to approximately HK$13.7 million); 泗縣人民醫院 (for identification purpose, Sixian People's Hospital) with project amount of RMB30 million (equivalent to approximately HK$34.1 million); 鳳慶縣人民醫院 (for identification purpose, The People's Hospital of Fengqing) with project amount of RMB20 million (equivalent to approximately HK$22.8 million) and 淮安市洪澤區人民醫院 (for identification purpose, Hongze Huaian District People's Hospital) with project amount of RMB30 million (equivalent to approximately HK$34.1 million). And Shanghai Dongkui agreed to grant a loan financing to 陝西太白山 投資集團有限公司 (for identification purpose, Shaanxi Taibai Mountain Investment Group Company Ltd.) in the amount of RMB40 million (equivalent to approximately HK$45.5 million) for a term of three years.

The effective interest rate of Shanghai Dongkui's loan financing ranged from 11.3% to 13.9% (2018: same). Among the loan financing of the above hospitals, one will expire in 2019, two will expire in 2020 and three will expire in 2021. During the year, all the customers have excellent repayment records and each project amount and interest are collected on time. Decrease in loan financing income was mainly attributable to increasingly severe regulatory environment in the People's Republic of China ("PRC") financial market which resulted in difficulties of the Group in securing bank factoring finance for potential loan financing project. As such, the number of completed sizeable loan financing project reduced this year. Strict regulatory policy also led to temporary insufficient liquidity so the Group reduced its reliance on bank factoring and raised the overall market interest cost.

Short-term Loan Business

Shanghai Dongkui is now providing a short term loan to 大興燁揚（上海）資產管理有限公

• (for identification purpose, Daxing Ye Yang (Shanghai) Asset Management Co., Ltd.) in the amount of RMB35 million (equivalent to approximately HK$39.8 million) for a term of 12 months at the interest rate of 11% per annum.

For the six months ended 30 June 2019, the loan financing segment contributed revenue of approximately HK$9.7 million (six months ended 30 June 2018: approximately HK$9.5 million) and recorded profit after tax of approximately HK$15.7 million (six months ended 30 June 2018: approximately HK$15.9 million).

4 DOYEN INTERNATIONAL HOLDINGS LIMITED Interim Report 2019