SIM Technology : UNAUDITED RESULTS FOR THE SIX MONTHS ENDED 30 JUNE 2019

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SIM TECHNOLOGY GROUP LIMITED

晨 訊 科 技 集 團 有 限 公 司 *

(Incorporated in Bermuda with limited liability)

(Stock code: 2000)

UNAUDITED RESULTS

FOR THE SIX MONTHS ENDED 30 JUNE 2019

The board ("Board") of directors ("Directors") of SIM Technology Group Limited ("Company") hereby announces the unaudited consolidated results of the Company and its subsidiaries ("Group") for the six months ended 30 June 2019 ("1H-2019") together with the comparative figures for the six months ended

30 June 2018 ("1H-2018") as follows:

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS (UNAUDITED)

		Six months ended 30 June
		2019		2018
	Notes	HK$'000	HK$'000
Revenue	3	517,177		1,528,556
Cost of sales and services		(463,875)	(1,401,903)
Gross profit		53,302		126,653
Other income	5	14,679			15,929
Other expenses		-	(90,499)
Other gains and losses	5	(23,679)	512,164
Research and development expenses		(48,836)	(29,910)
Selling and distribution costs		(36,836)	(71,173)
Administrative expenses		(49,971)	(62,225)
Share of results of an associate		(1,039)	(335)
Finance costs		(640)	(2,041)
(Loss) profit before taxation		(93,020)	398,563
Taxation	6	3,192		(81,479)
(Loss) profit for the period	7	(89,828)	317,084
(Loss) profit for the period attributable to:
	(92,789)
Owners of the Company		330,047
Non-controlling interests		2,961		(12,963)
		(89,828)	317,084
(Loss) earnings per share (HK cents)	9
(3.7)
Basic		12.9
Diluted		(3.7)	12.9

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CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME (UNAUDITED)

	Six months ended 30 June
	2019		2018
	HK$'000	HK$'000
(Loss) profit for the period	(89,828)	317,084
Other comprehensive expense for the period:
Items that will not be subsequently reclassified to
profit or loss for the period:
Surplus on transfer of land use rights and property,
plant and equipment to investment properties
at fair value	23,146		6,757
Fair value gain (loss) on investment in equity instrument at
fair value through other comprehensive income	3,607		(18,355)
Deferred tax relating to items that will not be reclassified
to profit or loss	(6,689)	2,900
Exchange difference arising on translation to
presentation currency	4,070		(6,776)
Other comprehensive income (expense) for the period	24,134		(15,474)
Total comprehensive (expense) income for the period	(65,694)	301,610
Total comprehensive (expense) income attributable to:
Owners of the Company	(68,242)	316,540
Non-controlling interests	2,548		(14,930)
	(65,694)	301,610

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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

		30 June		31 December
		2019	2018
	Notes	HK$'000		HK$'000
		(unaudited)		(audited)
Non-current assets
Investment properties		511,100	479,282
Property, plant and equipment		297,392	306,179
Right-of-use assets		68,716		-
Land use rights		-	68,104
Intangible assets		129,927	147,950
Goodwill		3,831		-
Deferred tax assets		49,685	44,606
Finance lease receivables		-	328
Interest in associates		33,248	3,044
Equity instruments at fair value through other
comprehensive income ("FVTOCI")		15,717	39,149
Other receivables		8,549	8,793
Consideration receivables		4,805	4,796
		1,122,970	1,102,231
Current assets
Inventories		376,359	372,846
Finance lease receivables		413	432
Properties held for sale		32,250	41,683
Trade and notes receivables	10	229,024	231,499
Contract assets		3,660	36,353
Other receivables, deposits and prepayments		349,806	423,913
Amount due from an associate		2,200	4,400
Amounts due from non-controlling
shareholders of subsidiaries		4,496	4,496
Consideration receivables		3,497	4,601
Entrusted loan receivables		-	25,946
Financial assets at fair value through profit
or loss ("FVTPL")		21,232	18,278
Pledged bank deposits		21,050	57,557
Bank balances and cash		705,846	647,776
		1,749,833	1,869,780

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		30 June		31 December
		2019	2018
	Notes	HK$'000		HK$'000
		(unaudited)		(audited)
Current liabilities
Trade and notes payables	11	168,916	184,822
Contract liabilities		258,047	219,345
Other payables, deposits received and accruals		68,490	50,498
Other liabilities		-	29,692
Bank borrowings		107,064	83,887
Lease liabilities		9,208		-
Tax payable		44,499	43,931
		656,224	612,175
Net current assets		1,093,609	1,257,605
Total assets less current liabilities		2,216,579	2,359,836
Capital and reserves
Share capital		245,832	252,025
Reserves		1,800,101	1,907,009
Equity attributable to owners of the Company		2,045,933	2,159,034
Non-controlling interests		20,457	63,405
Total equity		2,066,390	2,222,439
Non-current liabilities
Lease liabilities		4,881		-
Deferred tax liabilities		107,916	98,200
Deferred income		37,392	39,197
		150,189	137,397
		2,216,579	2,359,836

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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2019

1. GENERAL INFORMATION AND BASIS OF PREPARATION
   The Company was incorporated in Bermuda as an exempted company under the Companies Act 1981 of Bermuda (as amended) with limited liability.
   The Company is an investment holding company. The principal activities of its subsidiaries are carrying out handsets and internet of things ("IOT") terminals business, electronic manufacturing services ("EMS") business, IOT system and online-to-offline ("O2O") business, intelligent manufacturing business, property development and property management in the People's Republic of China ("PRC").
   The functional currency of the Company is Renminbi ("RMB"). The condensed consolidated financial statements are presented in Hong Kong dollars ("HK$"), as the Directors of the Company consider that it is a more appropriate presentation for a company listed on The Stock Exchange of Hong Kong Limited ("Stock Exchange") and for the convenience of the shareholders.
   The condensed consolidated financial statements of the Group have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" issued by the International Accounting Standards Board ("IASB") as well as the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on 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 that are measured at fair values at the end of each reporting period.
   Other than the change in accounting policies resulting from application of new and amendments to International Financial Reporting Standards ("IFRSs") accounting policies and methods of computation used in the condensed consolidated financial statements for the six months ended 30 June 2019 are the same as those followed in the preparation of the Group's annual financial statements for the year ended 31 December 2018.
   Application of new and amendments to IFRS Standards
   In the current interim period, the Group has applied, for the first time, the following new and amendments to IFRSs issued by the International Accounting Standards Board ("IASB") which are mandatory effective for the annual period beginning on or after 1 January 2019 for the preparation of the Group's condensed consolidated financial statements.

IFRS 16

IFRIC 23 Amendments to IFRS 9 Amendments to IAS 19 Amendments to IAS 28 Amendments to IFRSs

Leases

Uncertainty over Income Tax Treatments Prepayment Features with Negative Compensation Plan Amendment, Curtailment or Settlement Long-term Interests in Associates and Joint Ventures Annual Improvements to IFRS Standards 2015-2017 Cycle

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

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