Kingboard : INTERIM RESULTS ANNOUNCEMENT

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.

KINGBOARD HOLDINGS LIMITED

建滔集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 148)

INTERIM RESULTS ANNOUNCEMENT

FINANCIAL HIGHLIGHTS
	Six months ended 30 June
	2020	2019	Change
	HK$'million HK$'million
Revenue	19,925.6	18,246.4	+9%
EBITDA	3,479.2	3,505.6	-1%
Net profit attributable to owners of
the Company	1,059.2	1,441.6	-27%
Basic earnings per share	HK$0.964	HK$1.331	-28%
Interim dividend per share	HK$0.28	HK$0.28	-
Net asset value per share	HK$44.7	HK$44.9	-
Net gearing	25%	37%

- 1 -

The board of directors (the "Board") of Kingboard Holdings Limited (the "Company") is pleased to announce the unaudited consolidated results of the Company and its subsidiaries (collectively referred to as 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

		Six months ended 30 June
		2020		2019
	Notes	HK$'000	HK$'000
		(Unaudited)	(Unaudited)
Revenue	3	19,925,648		18,246,352
Cost of sales and services rendered		(14,924,582)	(14,424,921)
Gross profit		5,001,066		3,821,431
Other income, gains and losses	5	68,664		62,423
Distribution costs		(495,619)	(539,117)
Administrative expenses		(1,037,081)	(964,019)
(Loss) Gain on fair value changes of equity
instruments at fair value through profit or loss		(1,001,730)	88,633
Gain on disposal of debt instruments at fair value
through other comprehensive income		84,557		3,912
Finance costs	6	(287,993)	(361,464)
Share of results of joint ventures		39,852	46,079
Share of result of an associate		(5,776)	34,721
Profit before taxation		2,365,940		2,192,599
Income tax expense	7	(825,380)	(408,843)
Profit for the period		1,540,560		1,783,756
Profit for the period attributable to:
Owners of the Company		1,059,192		1,441,626
Non-controlling interests		481,368		342,130
		1,540,560		1,783,756
		HK$	HK$
		(Unaudited)	(Unaudited)
Earnings per share	9
- Basic		0.964		1.331
- Diluted		0.963		1.331

- 2 -

Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income

Six months ended 30 June

2020 2019

HK$'000 HK$'000

(Unaudited) (Unaudited)

Profit for the period	1,540,560		1,783,756
Other comprehensive (expenses) income for the period:
Item that will not be reclassified to profit or loss:
Translation reserve:
Exchange differences arising from translation to
presentation currency	(476,430)	(3,533)
Items that may be reclassified subsequently to
profit or loss:
Investment revaluation reserve:
Fair value (loss) gain on debt instruments
at fair value through other comprehensive income	(32,076)	471,000
Reclassify to profit or loss upon disposal of
debt instruments at fair value through other
comprehensive income	(84,557)	(3,912)
	(116,633)	467,088
Other comprehensive (expenses) income for the period
(net of tax)	(593,063)	463,555
Total comprehensive income for the period	947,497		2,247,311
Total comprehensive income for the period attributable to:
Owners of the Company	538,933		1,871,866
Non-controlling interests	408,564		375,445
	947,497		2,247,311

- 3 -

Condensed Consolidated Statement of Financial Position
		30 June		31 December
		2020	2019
	Notes	HK$'000		HK$'000
		(Unaudited)		(Audited)
Non-current assets
Investment properties		18,876,810	19,082,748
Properties, plant and equipment	10	14,341,911	14,800,958
Right-of-use assets		1,588,249	1,692,326
Goodwill		2,670,528	2,670,528
Intangible asset		57,600	60,840
Interest in an associate		336,611	397,950
Interests in joint ventures		2,540,580	2,536,434
Equity instruments at fair value through
profit or loss		3,017,698	2,366,024
Equity instruments at fair value through
other comprehensive income		162,918	162,918
Debt instruments at fair value through
other comprehensive income		833,479	7,016,503
Loan receivable		600,000	600,000
Entrusted loans	11	432,328	465,859
Deposits paid for acquisition of properties,
plant and equipment		630,137	611,724
Deferred tax assets		3,344		2,539
		46,092,193	52,467,351
Current assets
Inventories		2,999,927	2,962,386
Properties held for development		19,145,935	21,115,592
Trade and other receivables and prepayments	11	8,198,096	8,771,416
Bills receivables	11	3,628,908	4,085,752
Equity instruments at fair value through
profit or loss		885,090	491,397
Debt instruments at fair value through
other comprehensive income		1,070,942	866,041
Taxation recoverable		10,063	18,227
Bank balances and cash		7,004,074	6,256,964
		42,943,035	44,567,775
Current liabilities
Trade and other payables	12	5,155,006	5,841,173
Bills payables	12	341,833	359,920
Contract liabilities		3,665,604	6,374,105
Taxation payable		1,377,206	1,369,201
Bank borrowings - amount due within one year		7,934,749	7,862,991
Lease liabilities		2,617		2,906
		18,477,015	21,810,296
Net current assets		24,466,020	22,757,479
Total assets less current liabilities		70,558,213	75,224,830
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	30 June		31 December
	2020	2019
	HK$'000		HK$'000
	(Unaudited)		(Audited)
Non-current liabilities
Deferred tax liabilities	693,464	697,954
Bank borrowings - amount due after one year	13,228,240	16,546,918
Lease liabilities	8,107	10,308
	13,929,811	17,255,180
	56,628,402	57,969,650
Capital and reserves
Share capital	110,375	110,576
Reserves	49,255,663	50,077,989
Equity attributable to owners of the Company	49,366,038	50,188,565
Non-controlling interests	7,262,364	7,781,085
Total equity	56,628,402	57,969,650

- 5 -

Notes:

1. Basis of preparation
   The condensed consolidated financial statements have been prepared in accordance with Hong Kong Accounting Standard ("HKAS") 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA") as well as with the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities (the "Listing rules") on The Stock Exchange of Hong Kong Limited (the "Stock Exchange").
2. Principal accounting policies
   The condensed consolidated financial statements have been prepared on the historical cost basis, except for investment properties and certain financial instruments, which are measured at fair values.
   Other than additional accounting policies resulting from application of amendments to Hong Kong Financial Reporting Standards ("HKFRS") and application of certain accounting policy which became relevant to the Group, 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 presented in the Group's annual financial statements for the year ended 31 December 2019.
   Application of amendments to HKFRS

In the current interim period, the Group has applied the Amendments to References to the Conceptual Framework in HKFRS Standards and the following amendments to HKFRSs issued by the HKICPA, for the first time, which are mandatorily effective for the annual period beginning on or after 1 January 2020 for the preparation of the Group's condensed consolidated financial statements:

Amendments to HKAS 1 and HKAS 8	Definition of Material
Amendments to HKFRS 3	Definition of a Business
Amendments to HKFRS 9, and	Interest Rate Benchmark Reform
HKAS 39 and HKFRS 7

Except as described below, the application of the Amendments to References to the Conceptual Framework in HKFRS Standards and the amendments to HKFRSs in the current period has had no material impact on the Group's financial positions and performance for the current and prior periods and/or on the disclosures set out in these condensed consolidated financial statements.

Impacts of application on Amendments to HKAS 1 and HKAS 8 "Definition of Material"

The amendments provide a new definition of material that states "information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity." The amendments also clarify that materiality depends on the nature or magnitude of information, either individually or in combination with other information, in the context of the financial statements taken as a whole.

The application of the amendments in the current period had no impact on the condensed consolidated financial statements. Changes in presentation and disclosures on the application of the amendments, if any, will be reflected on the consolidated financial statements for the year ending 31 December 2020.

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3. Segment information

HKFRS 8 "Operating Segments" requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the executive directors of the Company, who are Chief Operating Decision Maker ("CODM"), in order to allocate resources to segments and to assess their performance. Specifically, the Group's reportable segments under HKFRS 8 organised into six main operating divisions - (i) manufacture and sale of laminates, (ii) manufacture and sale of PCBs, (iii) manufacture and sale of chemicals, (iv) sales and rental of properties ("properties"), (v) investments (mainly investment income from debt instruments at fair value through other comprehensive income, equity instruments at fair value through profit or loss and equity instruments at fair value through other comprehensive income) and (vi) others (mainly including service income, manufacture and sale of magnetic products and hotel business). The management aggregated the sales of properties and rental income business into one reportable segment because the financial performance of both businesses are affected by changes in the property market. In addition, the management aggregated service income, hotel business and manufacture and sale of magnetic products into one reportable segment because the revenue, results, assets and liabilities of each business are insignificant to the Group. No other operating segment identified by the CODM have been aggregated in arriving at the reportable segments of the Group.

The accounting policies the Group used for segment reporting under HKFRS 8 are the same as those used in its HKFRS consolidated financial statements. The CODM assesses segment profit or loss using a measure of operating profit whereby certain items are not included in arriving at the segment results of the operating segments (share of result of an associate, share of results of joint ventures, finance costs and unallocated corporate income and expenses).

Segment revenues and results by reportable segments are presented below:

	Laminates		PCBs	Chemicals	Properties	Investments	Others	Eliminations	Consolidated
	HK$'000		HK$'000	HK$'000	HK$'000		HK$'000	HK$'000		HK$'000			HK$'000
	(Unaudited)		(Unaudited)	(Unaudited)	(Unaudited)		(Unaudited)	(Unaudited)		(Unaudited)			(Unaudited)
Six months ended 30 June 2020
Segment revenue
External sales	5,592,085	4,271,597	4,828,399	4,857,901		155,419		220,247			-	19,925,648
Inter-segment sales	1,093,822		-	295,562	-		-	4,688		(1,394,072)			-
Total	6,685,907	4,271,597	5,123,961	4,857,901	155,419		224,935	(1,394,072)	19,925,648
Result
Segment result	1,083,613	303,266	279,323	1,906,073	(761,752)	5,329				2,815,852
Unallocated corporate income																	35,375
Unallocated corporate expenses																	(231,370)
Finance costs																	(287,993)
Share of results of joint ventures																	39,852
Share of result of an associate																	(5,776)
Profit before taxation																	2,365,940

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3. Segment information - continued

	Laminates		PCBs	Chemicals	Properties	Investments	Others	Eliminations	Consolidated
	HK$'000		HK$'000	HK$'000	HK$'000		HK$'000	HK$'000		HK$'000			HK$'000
	(Unaudited)		(Unaudited)	(Unaudited)	(Unaudited)		(Unaudited)	(Unaudited)		(Unaudited)			(Unaudited)
Six months ended 30 June 2019
Segment revenue
External sales	6,107,758	4,337,534	6,225,181	896,590		398,680		280,609			-	18,246,352
Inter-segment sales	1,030,295		-	311,868	-		-	554		(1,342,717)			-
Total	7,138,053	4,337,534	6,537,049	896,590	398,680		281,163	(1,342,717)	18,246,352
Result
Segment result	997,442	270,772	378,282	577,012	491,226	(19,742)				2,694,992
Unallocated corporate income																	22,194
Unallocated corporate expenses																	(243,923)
Finance costs																	(361,464)
Share of result of a joint venture																	46,079
Share of results of an associate																	34,721
Profit before taxation																	2,192,599

Inter-segment sales are charged on a cost-plus basis with an arm's length margin.

1. Depreciation
   During the reporting period, depreciation of approximately HK$799,440,000 (six months ended 30 June 2019: HK$930,261,000) was charged in respect of the Group's properties, plant and equipment.
2. Other income, gains and losses

	Six months ended 30 June
	2020	2019
	HK$'000		HK$'000
	(Unaudited)		(Unaudited)
Other income, gains and losses include:
Interest income on bank balances and deposits	33,198	35,479
Interest income on entrusted loans	11,791	17,775
Interest income from loan receivable	14,383		-
Others	9,292	9,169
	68,664	62,423

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6.	Finance costs
		Six months ended 30 June
		2020		2019
		HK$'000	HK$'000
		(Unaudited)	(Unaudited)
	Interest on bank borrowings	311,656		392,993
	Imputed interest on contract liabilities	3,375		2,137
	Interest on lease liabilities	234		260
	Less: Amounts capitalised in the construction in progress	(6,059)	(6,760)
	Amounts capitalised in the properties held for development	(21,213)	(27,166)
		287,993		361,464

Bank and other borrowing costs capitalised during the reporting period include imputed interest on contract liabilities of HK$3,375,000 (six months ended 30 June 2019: HK$2,137,000) as well as, bank borrowing costs arising from the general borrowing pool which were calculated by applying a weighted average capitalisation rate of 2.4% (six months ended 30 June 2019: 2.9%) per annum to expenditure on qualifying assets.

7.	Income tax expense
		Six months ended 30 June
		2020		2019
		HK$'000	HK$'000
		(Unaudited)	(Unaudited)
	The amount comprises:
	PRC Enterprise Income Tax	540,258		362,409
	PRC Land Appreciation Tax ("LAT")	134,036		38,767
	Hong Kong Profits Tax	147,446		9,273
	Taxation arising in other jurisdictions	11,098		10,863
		832,838		421,312
	Deferred taxation	(7,458)	(12,469)
		825,380		408,843

Under the Law of the PRC on Enterprise Income Tax (the "EIT Law") and Implementation Regulation of the EIT Law, the tax rate of the PRC subsidiaries is 25% from 1 January 2008 onwards.

The provision of LAT is estimated according to the requirements set forth in the relevant PRC tax laws and regulations. LAT has been levied at progressive rates ranging from 30% to 60% on the appreciation of land value, represented by the excess of sales proceeds of properties over prescribed direct costs. Prescribed direct costs are defined to include costs of land, development and construction costs, as well as certain costs relating to the property development. According to the State Administration of Taxation's official circulars, LAT shall be payable provisionally upon sales of the properties, followed by final ascertainment of the gain at the completion of the properties development.

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7. Income tax expense - continued

On 21 March 2018, the Hong Kong Legislative Council passed The Inland Revenue (Amendment) (No.

1. Bill 2017 (the "Bill") which introduces the two-tiered profits tax rates regime. The Bill was signed into law on 28 March 2018 and was gazetted on the following day. Under the two-tiered profits tax rates regime, the first HK$2 million of profits of the qualifying group entity will be taxed at 8.25%, and profits above HK$2 million will be taxed at 16.5%. The profits of group entities not qualifying for the two-tiered profits tax rates regime will continue to be taxed at a flat rate of 16.5%.

The directors of the Company considered the amount involved upon implementation of the two-tiered profits tax rates regime as insignificant to the consolidated financial statements. Hong Kong Profits Tax is calculated at 16.5% of the estimated assessable profit for both periods.

Taxation arising in other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

1. Interim dividend
   The directors of the Company (the "Directors") have resolved to declare an interim dividend for the six months ended 30 June 2020 of HK$0.28 per share (2019: interim dividend of HK$0.28 per share) to the shareholders of the Company whose names appear on the register of members of the Company on Friday, 4 December 2020. The dividend warrants will be dispatched on or around Monday, 11 January 2021.
2. Earnings per share
   The calculations of basic and diluted earnings per share attributable to the owners of the Company are based on the following data:

	Six months ended 30 June
	2020	2019
	HK$'000		HK$'000
	(Unaudited)		(Unaudited)
Earnings for the purpose of calculating basic and
diluted earnings per share	1,059,192	1,441,626

	Number of shares
	30 June 2020	30 June 2019
	(Unaudited)	(Unaudited)
Weighted average number of ordinary shares for
the purpose of basic earnings per share	1,099,291,456		1,083,152,236
Effect of potentially dilutive ordinary shares arising
from share options	437,432		-
Weighted average number of ordinary shares for the purpose of
diluted earnings per share	1,099,728,888		1,083,152,236

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1. Additions to properties, plant and equipment
   During the reporting period, the Group spent approximately HK$939,564,000 (six months ended 30 June 2019: HK$1,197,751,000) on acquisition of properties, plant and equipment.
2. Trade and other receivables and prepayments, entrusted loans and bills receivables

	30 June	31 December
	2020		2019
	HK$'000	HK$'000
	(Unaudited)	(Audited)
Trade receivables	7,004,481		7,904,344
Less: Allowance for credit losses	(1,130,906)	(1,139,894)
Total receivables, net	5,873,575		6,764,450
Advance to suppliers	377,809		338,991
Entrusted loans (Note)	461,507		505,083
Prepayment and deposits	798,512		745,897
Value added tax recoverables	667,826		592,133
Loan receivables	150,000		-
Other receivables	301,195		290,721
	8,630,424		9,237,275
Less: Non-current portion of entrusted loans (Note)	(432,328)	(465,859)
	8,198,096		8,771,416

Note: The entrusted loans of HK$461,507,000 (31 December 2019: HK$505,083,000) are due from certain purchasers of the properties developed by the Group in the PRC through four (31 December 2019: four) commercial banks in the PRC (the "Lending Agents"). The entrusted loans carry interest at variable rates ranging from 3.92% to 5.39% (31 December 2019: 3.92% to 5.39%) per annum payable on monthly basis and the principal will be payable on or before 2034 (31 December 2019: 2034). The purchasers of the Group's properties has pledged to the Lending Agents the respective properties purchased. These properties are located at Kunshan, PRC.

- 11 -

11. Trade and other receivables and prepayments, entrusted loans and bills receivables - continued

The Group allows credit period of up to 120 days (31 December 2019: 120 days), depending on the products sold, to its trade customers. The following is an aging analysis of trade receivables net of allowance for credit losses based on invoice date at the end of the reporting period:

	30 June		31 December
	2020	2019
	HK$'000		HK$'000
	(Unaudited)		(Audited)
0 - 90 days	4,611,898	5,465,173
91 - 120 days	831,527	652,244
121 - 150 days	306,352	449,808
151 - 180 days	57,874	111,067
Over 180 days	65,924	86,158
	5,873,575	6,764,450

Bills receivables of the Group are aged within 90 days (31 December 2019: 90 days) at the end of the reporting period.

12. Trade and other payables and bills payables

The following is an aging analysis of the trade payables based on the invoice date at the end of the reporting period:

	30 June		31 December
	2020	2019
	HK$'000		HK$'000
	(Unaudited)		(Audited)
0 - 90 days	2,101,085	2,455,074
91 - 180 days	319,848	304,775
Over 180 days	311,206	375,036
	2,732,139	3,134,885

All bills payables of the Group are aged within 90 days (31 December 2019: 90 days) at the end of the reporting period.

- 12 -

13. Event after the reporting period

As disclosed in the announcement of the Company dated 3 April 2020, Elec & Eltek International Company Limited ("E&E"), a subsidiary of the Company listed on the main board of the SGX-ST and the main board of the Stock Exchange, has been in the process of proposed privatization ("Proposed Privatization") by way of voluntary conditional cash offer ("Offer"). As at the closing of the Offer which took place on 6 August 2020, the Company (through its wholly-owned subsidiaries) owned an aggregate holding of approximately 98.32% in E&E. As at the date hereof, the relevant documentation together with the prescribed notices under the Singapore Companies Act in relation to the exercise of the right of compulsory acquisition to compulsorily acquire all the shares of the shareholders of E&E who have not accepted the Offer have been despatched. An application has been made for the withdrawal of the listing of E&E from the Stock Exchange pursuant to Rule 6.15 of the Listing Rules, and an application has been made for the withdrawal of listing of E&E from SGX-ST pursuant to the SGX-ST Listing Manual, both subject to and following the completion of the compulsory acquisition. For the details and subsequent development of Proposed Privatization after the Reporting Period, please refer to the abovementioned announcement and the announcements of E&E after 30 June 2020.

- 13 -

BUSINESS REVIEW

On behalf of the board ("Board") of directors ("Directors") of Kingboard Holdings Limited, I am delighted to report a satisfactory performance for the Company and its subsidiaries (the "Group") for the six months ended 30 June 2020 (the 'Period'). During the Period, a public health crisis descended upon the world without early warning. The manufacturing industry has taken substantial knocks amid the spread of the COVID-19 pandemic. Nevertheless the Group faced up to the challenges through coordinated efforts to prevent infection while securing production, enabling the Group to drive work and production resumption at all factories in an orderly manner. As the pandemic continued to intensify with logistics channels under pressure, overseas markets were greatly affected. However, with the situation in Mainland China being gradually brought under control, the domestic market recorded a swift recovery. The Group's management also seized the opportunities presented by market revival and industrial sector rebound, in order to minimise the impacts of the pandemic. In the face of complex market challenges, the Group expanded business around its diversified portfolio. The properties segment obtained a handsome sales performance, making up for the sales drop in the manufacturing and industrial segments. The Group's revenue consequently increased 9% year on year to HK$19,925.6 million. However during the Period, fair value changes of equity instruments at fair value through profit or loss incurred a loss owing to the fluctuations of the securities market amidst the COVID-19 pandemic and the consequent development and occurrences, thus profit attributable to the owners of the Company decreased by 27% to HK$1,059.2 million. The Board has proposed an interim dividend of HK$0.28 per share.

FINANCIAL HIGHLIGHTS
	Six months ended 30 June
	2020	2019	Change
	HK$'million HK$'million
Revenue	19,925.6	18,246.4	+9%
EBITDA	3,479.2	3,505.6	-1%
Net profit attributable to owners of
the Company	1,059.2	1,441.6	-27%
Basic earnings per share	HK$0.964	HK$1.331	-28%
Interim dividend per share	HK$0.28	HK$0.28	-
Net asset value per share	HK$44.7	HK$44.9	-
Net gearing	25%	37%

- 14 -

PERFORMANCE

The Group maintained its position as the world's top laminates producer for the fifteenth consecutive year. During the Period, despite a slide in market demands, especially from overseas, as a result of the pandemic, the division took full advantage of its vertically integrated production capability to ensure adequate product supply at the time of market rejuvenation, thereby enabling it to tap into the domestic market and clearing away the hindrance created by the pandemic. Because of a fall in product unit price, segment revenue (including inter-segment sales) was down by 6% to HK$6,685.9 million, but earnings before interest, tax, depreciation and amortisation ("EBIDTA") still saw a 7% increase to HK$1,365.6 million on the back of sound cost management.

The performance of the printed circuit board ("PCB") division was generally similar to that of the laminates division. But as the demand for distant work arrangements rose abruptly, orders for such electronic products as computers and video-conferencing facilities increased markedly, demand for medical and related equipment has also increased significantly, offsetting the reduction of certain overseas orders. At the same time, the division's development towards advanced PCBs harvested fruitful results, leading to a quick enhancement of its product mix for an increased profit margin. The turnover of the PCB division fell slightly by 2% to HK$4,271.6 million, while EBIDTA grew by 7% to HK$606.2 million.

The chemicals business was dragged down by a slowdown in economic activities and a plunge in petroleum prices. The selling price of key chemical products declined compared to the same period last year. Hence the chemicals division's turnover (including inter-segment sales) dropped 22% to HK$5,124.0 million. EBIDTA also decreased by 32% to HK$476.5 million.

Regarding the property business, the partial booking of income from the Kau To project in Shatin, Hong Kong, together with the booking of completed and delivered units in Eastern China, has led to a surge in the turnover from property sales to HK$4,329.7 million. Affected by the pandemic, rental income decreased by a modest 5% to HK$528.2 million. On the whole, division turnover increased by 442% to HK$4,857.9 million, with EBIDTA up by 229% to HK$1,908.4 million.

LIQUIDITY AND CAPITAL RESOURCES

The Group's integrated financial and liquidity position remained robust. As at 30 June 2020, Group net current assets and current ratio were approximately HK$24,466.0 million (31 December 2019: HK$22,757.5 million) and 2.32 (31 December 2019: 2.04) respectively.

The net working capital cycle maintained at 54 days as at 30 June 2020 and 31 December

2019 on the following key metrics:

• Inventories, in terms of stock turnover days, were 37 days (31 December 2019: 34 days).

- 15 -

• Trade receivables, in terms of debtor turnover days, were 54 days (31 December 2019: 60 days).
• Trade and bills payable (excluding bills payable for properties, plant and equipment), in terms of creditor turnover days, were 37 days (31 December 2019: 40 days).

The Group's net gearing ratio (ratio of bank borrowings net of bank balances and cash to total equity) was 25% (31 December 2019: 31%). The proportion of short-term to long-term bank borrowings stood at 37%:63% (31 December 2019: 32%:68%). During the Period, the Group invested approximately HK$900 million on new production capacity and HK$1 billion on property construction expenses. The Group is equipped with a strong balance sheet and abundant capital reserves to cope flexibly with the challenges in the market, while allowing it to capture any opportunities that may arise.

The Group continued to adopt a prudent financial management policy. The Group did not enter into any material derivative financial instruments, nor did the Group enter into any hedging arrangements for hedging foreign currency risk during the Period. The Group's revenue, mostly denominated in Hong Kong dollars, RMB and US dollars, was fairly matched with the currency requirements of its operating expenses.

HUMAN RESOURCES

As at 30 June 2020, the Group employed a global workforce of approximately 36,000 (31 December 2019: 39,000). In addition to offering competitive salary packages, the Group grants share options and discretionary bonuses to eligible employees based on the Group's overall financial achievements and employees' individual performance.

PROSPECTS

Heading into the second half of the year, macro changes in the international climate such as the Sino-US trade dispute and the paradigm shift in the industry will mean more complex internal and external environments for the Group. Premised on a vertically integrated supply chain, the Group stays committed to pursuing a business portfolio diversification strategy. Through closely observing China's new economic strategy, which focuses on a strong 'domestic circulation' while promoting a 'dual circulation' policy that seeks mutually beneficial external development, the Group sets its sights on achieving stable performance and sustainable growth. In addition, the epidemic situation in some European countries has been controlled and economic activities have been restarted. The demand in the electronics industry chain, including the automotive industry, has increased, driving the increase in the business volume of the group's laminates and PCB segments.

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Output volume of laminates exceeded 12 million square meters both in June and July 2020. Recently, the price of some upstream materials has increased, and the copper foil was in short supply. It is expected that the prices of laminates and copper foil products have room for upward adjustment. The laminates division is planning to increase the capacities of copper foil and glass epoxy laminates ("FR4"), by 900 tonnes and 480,000 square metres per month respectively. In fully exploiting the competitive advantage of such upstream materials as copper foil, glass yarn and glass fabric, the Group will continue to strengthen its core competencies in laminates. In a further step, it will seek accreditation from customers to drive the sales of high value-added products. The division will upgrade its product portfolio according to market changes, expand customer coverage on the back of cost advantages, and further its value-adding abilities based on scale.

5G network and artificial intelligence are prime examples of the accelerating development of new technologies. The ever-expanding reach of electronic products will bring huge growth potential to the Group's PCB business. Currently, the PCB division collects solid gains from aspects such as base station infrastructure, servers, computers and home appliances. The division will focus on boosting product performance and improving operating mechanisms. With the objective of being market-oriented and efficiency-driven, the division will devise a master plan for bolstering the brands under the Group, namely Elec & Eltek, Techwise and Express Electronics, thus building up a network of Kingboard PCBs for higher market penetration. E&E, a subsidiary of the Company listed on the main board of the SGX-ST and the main board of the Stock Exchange, has been in the process of proposed privatization by way of voluntary conditional cash offer. As at the closing of the Offer which took place on 6 August 2020, the Company (through its wholly-owned subsidiaries) owned an aggregate holding of approximately 98.32% in E&E. For details, please refer to Note 13 of this announcement.

The mainland economy is displaying strong resilience and positive signs of recovery. The establishment of ecological infrastructure, and the battle to fight air, water and soil pollution, will remain as the country's priorities in 2020. The chemicals segment will spare no effort in making sure production safety and emission standards are met, and will take steps to reduce energy consumption through enhancing plant efficiency and improving resources utilisation.

The property division will continue with the scheduled sales of its residential projects in Eastern China, with the aim of speeding up capital recovery. The Group is also actively mapping out a plan to promote its residential project in Hong Kong, and is confident that the project will continue to yield considerable returns.

APPRECIATION

On behalf of the Board, I would like to take this opportunity to express my sincere gratitude to our shareholders, customers, banks, the management and employees for their unreserved support to the Group during the Period.

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CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed from Thursday, 3 December 2020 to Friday, 4 December 2020 (both days inclusive) during which period no transfers of shares will be registered. In order to qualify for receiving the interim dividend, the Company's shareholders are reminded to ensure that all transfers of shares, accompanied by the relevant share certificates and transfer forms, must be lodged with the Company's branch share registrar in Hong Kong, Tricor Secretaries Limited, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong for registration not later than 4:00 p.m. on Wednesday, 2 December 2020.

PURCHASE, SALE OR REDEMPTION OF COMPANY'S LISTED SECURITIES

During the period ended June 30, 2020, the Company purchased 1,409,500 Shares on the Stock Exchange for an aggregate consideration of HK$29,142,420 before expenses pursuant to the share buy-back mandate approved by our shareholders at the annual general meeting held on May 27, 2019 and May 25, 2020. The bought-back Shares were subsequently cancelled. The purchase was effected by the Board for the enhancement of shareholder value in the long term. Details of the shares purchases are as follows:

	Purchase consideration per
	share
	Highest	Lowest	No. of shares	Aggregate
Date of for purchase	price paid	price paid	purchased	consideration
	HK$	HK$			HK$
January 9, 2020	24.85	24.20	500,000		12,314,450
March 30, 2020	17.82	17.62	580,000		10,297,830
April 2, 2020	17.76	17.76	29,500		523,920
June 12, 2020	20.25	19.80	300,000		6,006,220
Total			1,409,500		29,142,420

Save as disclosed above, neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company's shares during period ended 30 June 2020.

AUDIT COMMITTEE

The Audit Committee has reviewed with the management the accounting principles and practices adopted by the Group and discussed auditing, internal control and financial reporting matters including the review of the unaudited interim financial statements of the Group for the six months ended 30 June 2020.

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COMPLIANCE WITH THE CORPORATE GOVERNANCE CODE

The Company has adopted and complied with the code provisions as set out in the Corporate Governance Code (the "CG Code") under Appendix 14 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") throughout the six months ended 30 June 2020, save for the deviation from paragraph A.4.1 of the CG Code since the independent non-executive Directors are not appointed for a specific term. Notwithstanding the aforesaid deviation, all the Directors (including the independent non- executive Directors) are subject to retirement by rotation and re-election at the Company's annual general meeting in accordance with the Company's articles of association. As such, the Company considers that steps have been taken with a view to ensuring that the Company's corporate governance practices are in line with the principles of the CG Code.

COMPLIANCE WITH THE MODEL CODE

The Company has adopted a code of conduct regarding securities transactions by Directors on terms no less exacting than the required standard of the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 to the Listing Rules (the "Model Code"). Having made specific enquiry of all Directors, each Director has confirmed that he or she has complied with the required standard set out in the Model Code and the code of conduct regarding Director's securities transactions adopted by the Company throughout the six months ended 30 June 2020.

By Order of the Board

Kingboard Holdings Limited

Cheung Kwok Wing

Chairman

Hong Kong, 28 August 2020

As at the date of this announcement, the Board consists of Messrs. Cheung Kwok Wing, Chang Wing Yiu, Cheung Kwong Kwan, Ho Yin Sang, Cheung Wai Lin, Stephanie, Cheung Ka Shing, and Chen Maosheng, being the executive Directors and Messrs. Cheung Ming Man, Chong Kin Ki, Leung Tai Chiu and Chan Wing Kee being the independent non-executive Directors.

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