UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER
PURSUANT
TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES
EXCHANGE ACT OF 1934
For
the month of September 2024
Commission
File Number: 333-274448
FENBO
HOLDINGS LIMITED
(Translation
of registrant’s name into English)
Unit
J, 19/F, World Tech Centre
95
How Ming Street
Kwun
Tong
Kowloon,
Hong Kong
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F ☒ Form
40-F ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Overview
The
Company’s operating history began in 1993 when Fenbo Industries Limited was founded in Hong Kong by Mr. Li Kin Shing as a toy manufacturer
and distributor. As the toy market deteriorated, he founded Able Industries Limited in 2005 in Hong Kong and shifted the operations to
the manufacturing and sales of personal care electric appliances. The manufacturing subsidiary, Fenbo Plastic Products Factory (Shenzhen)
Ltd., located in Guangdong, PRC, was formed in the PRC in 2010 and is capable of producing over three million units per year. The Company
currently act as both an original equipment manufacturer and historically have also served as an original design manufacturer. For more
information, please visit the Company’s website at http://www.fenbo.com.
On November 30, 2023, the Company commenced
the listing of its ordinary shares on the Nasdaq Capital Market under the ticker symbol “FEBO”. On December 1, 2023, the
Company closed its initial public offering of 1 million ordinary shares at a public offering price of US$5 per share for total gross
proceeds of US$5 million.
Financial
Highlights - Fiscal Year 2024 First Half Financial Results Compared to Fiscal Year 2023 First Half Financial Results
| ● | Revenues
were HK$66.9 million for the six months ended June 30, 2024, a 14.2% increase from HK$58.6
million for the six months ended June 30, 2023; |
| | | |
| ● | Gross
profit was HK$14.9 million for the six months ended June 30, 2024, or 22.3% of revenues compared
to HK$10.5 million, or 17.9% of revenues for the six months ended June 30, 2023; |
| | | |
| ● | Net
loss was HK$1.9 million for the six months ended June 30, 2024, compared to net income of
HK$0.2 million for the six months ended June 30, 2023; |
| | | |
| ● | Basic
and diluted (loss) per share (“EPS”) was (HK$0.17) per share for the six
months ended June 30, 2024 compared to income per share of HK$0.02 for the six months
ended June 30, 2023; and |
| | | |
| ● | Cash
and cash equivalents were HK$25.9 million as of June 30, 2024, a 44.1% decrease from HK$46.3
million as of December 31, 2023 |
The
following table shows our Statement of Operations data for the six-month periods ended June 30, 2024 in HK$ and US$, and 2023 in HK$.
For further information regarding the results of our operations, see our unaudited interim condensed consolidated financial statements
appearing elsewhere in this Report.
Unaudited
Financial Results for the Six Months Ended June 30, 2024 and 2023
| | |
For
the six months ended June 30, | |
| | |
2023 | | |
2024 | | |
2024 | |
| | |
HK$’000 | | |
HK$’000 | | |
US$’000 | |
| | |
| | |
| | |
| |
| Revenues | |
| 58,567 | | |
| 66,887 | | |
| 8,566 | |
| Cost of sales | |
| (48,088 | ) | |
| (51,948 | ) | |
| (6,653 | ) |
| Gross profit | |
| 10,479 | | |
| 14,939 | | |
| 1,913 | |
| | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | |
| Selling and marketing expenses | |
| (949 | ) | |
| (1,106 | ) | |
| (142 | ) |
| General and administrative expenses | |
| (8,660 | ) | |
| (16,050 | ) | |
| (2,056 | ) |
| Total operating expenses | |
| (9,609 | ) | |
| (17,156 | ) | |
| (2,198 | ) |
| | |
| | | |
| | | |
| | |
| Income (loss) from operations | |
| 870 | | |
| (2,217 | ) | |
| (285 | ) |
| | |
| | | |
| | | |
| | |
| Other (expense) income: | |
| | | |
| | | |
| | |
| Exchange gain, net | |
| 521 | | |
| 216 | | |
| 28 | |
| Loss on disposal of property, plant, and equipment | |
| (1 | ) | |
| - | | |
| - | |
| Interest income | |
| 10 | | |
| 253 | | |
| 32 | |
| Interest expense | |
| (936 | ) | |
| (304 | ) | |
| (39 | ) |
| Government grant | |
| - | | |
| 140 | | |
| 18 | |
| Other income, net | |
| 59 | | |
| 87 | | |
| 11 | |
| Total other (expense) income | |
| (347 | ) | |
| 392 | | |
| 50 | |
| | |
| | | |
| | | |
| | |
| Income (expense) before tax expense | |
| 523 | | |
| (1,825 | ) | |
| (235 | ) |
| Income tax expense | |
| (285 | ) | |
| (76 | ) | |
| (10 | ) |
| Net income (loss) | |
| 238 | | |
| (1,901 | ) | |
| (245 | ) |
| | |
| | | |
| | | |
| | |
| Other comprehensive income | |
| | | |
| | | |
| | |
| Foreign currency translation loss, net of taxes | |
| (1,246 | ) | |
| (600 | ) | |
| (77 | ) |
| | |
| | | |
| | | |
| | |
| Total comprehensive loss | |
| (1,008 | ) | |
| (2,501 | ) | |
| (322 | ) |
| | |
| | | |
| | | |
| | |
| Net income (loss) per share
attributable to ordinary shareholders | |
| | | |
| | | |
| | |
| Basic and diluted (cents) | |
| 2.38 | | |
| (17.19 | ) | |
| (2.20 | ) |
| Weighted average number
of ordinary shares used in computing net income (loss) per share | |
| | | |
| | | |
| | |
| Basic and diluted | |
| 10,000,000 | | |
| 11,057,005 | | |
| 11,057,005 | |
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The
following discussion and analysis of the results of operations of the Company for the six-month period ended June 30, 2024 and for the
comparable period ended June 30, 2023, and its financial condition as of June 30, 2024, should be read in conjunction with the Company’s
unaudited Consolidated Statements of Income and Comprehensive Income for the six-month periods ended June 30, 2024 and 2023, and its
unaudited Consolidated Balance Sheet as of June, 30 2024 and the notes thereto that are included elsewhere in this Report on Form 6-K.
Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties, such as our
plans, objectives, expectations, and intentions. Actual results and the timing of events could differ materially from those anticipated
in these forward-looking statements. We use words such as “anticipate,” “estimate,” “plan,” “project,”
“continuing,” “ongoing,” “expect,” “believe,” “intend,” “may,”
“will,” “should,” “could,” and similar expressions to identify forward-looking statements.
Revenues
Revenue
increased by HK$8.3 million, or 14.2%, to HK$66.9 million (US$8.6 million) for the six months ended June 30, 2024 compared to HK$58.6
million for the same period in 2023 primarily because of the increase in revenue for our flat irons and hair straighteners products.
During
our six months ended June 30, 2024, the negative impact of the COVID-19 pandemic had greatly subsided, and industries, including consumer
confidence, returned to normalcy as compared to the continued negative impact of the COVID-19 pandemic on businesses during the first
half of 2023. Despite the COVID-19 pandemic has come to an end, geopolitical conflicts such as the Russia-Ukraine conflict and the Israeli-Palestinian
conflict persisted. The consequent disruption of the global supply chain affected the recovery of economic activity and drove inflation
up significantly. Moreover, major central banks’ aggressive interest rate hikes significantly increased the complexity and uncertainty
of the economic development environment. Against the backdrop of challenging macroeconomic conditions, the consumer goods and manufacturing
businesses have been affected and the recovery in consumer demand has been slow. Despite the Company is affected by the weak consumer
sentiment and pressure from retails sales, it would continue to put efforts on improving the competitiveness of its high quality products
together with bolstering its research and development capabilities with an aim to enhancing its market share in its existing business
and achieving a long-term relationship with its customers.
Cost
of sales
Cost
of sales included cost of raw materials (such as costs of electrical components, packaging materials, metal materials, plastic particles,
and painting materials), direct labor (including wages and social security contributions), manufacturing overhead (such as consumables,
depreciation, direct rental expense and utilities) and other taxes. We currently do not hedge our raw materials position, and we monitor
raw material price trends closely to manage our production needs.
For
the six months ended June 30, 2024, cost of sales increased to HK$51.9 million (US$6.7 million), representing an increase by HK$3.9 million
from HK$48.1 million in the same period in 2023. The fluctuation of cost of sales was in line with the increase in our revenue during
the same period.
Gross
profit
As
a result of the foregoing, gross profit for the six months ended June 30, 2024, was HK$14.9 million (US$1.9 million), an increase of
HK$4.5 million from HK$10.5 million for the same period in 2023.
Selling
and marketing expenses
Major
components of selling and marketing expenses are packaging expenses, transportation costs and custom declarations. For the six months
ended June 30, 2024, selling and marketing expenses was HK$1.1 million (US$0.1 million), which increased by HK$0.2 million from HK$0.9
million in the same period in 2023. The increase during the six months ended June 30, 2024 from the same period in 2023 was due mainly
to an increase in overall level of shipping of products.
General
and administrative expenses
General
and administrative expenses consist primarily of staff costs for our accounting and administrative support personnel and executives,
depreciation, office and insurance expenses, motor vehicles and travelling expenses, stamp duty and other taxes, utility expenses, office
rental and management fee, legal and professional fee and auditor’s remuneration and others. General and administrative expenses
increased by HK$7.4 million from HK$8.7 million for the six months ended June 30, 2023 to HK$16.1 million (US$2.1 million) for the six
months ended June 30, 2024. This increase was due mainly to the increase in (i) staff costs and insurance expenses to provide
support for the business expansion and (ii) listing annual fee and legal and professional fees for post-listing administrative support
during the six months ended June 30, 2024.
Income
(loss) from operations
The
income from operations decreased by HK$3.1 million from the income from operations of HK$0.9 million for the six months ended June 30,
2023 to the loss from operations of HK$2.2 million for the six months ended June 30, 2024. The deterioration in the financial performance
from operations during the six months ended June 30, 2024 were primarily due to the combined effects of the increase of gross profit
of HK$4.5 million and the increase of general and administrative expenses of HK$7.4 million during the six months ended June 30, 2024.
Other
income (expenses), net
Major
components of other income (expense) are exchange gain and loss, gain/loss on disposal of property, plant and equipment, sundry income,
government grant and bank interest income. For the six months ended June 30, 2024, net income was HK$0.4 million (US$0.1 million), which
increased by HK$0.7 million from net expenses of HK$0.3 million in the same period in 2023. The increase was due mainly to the decrease
in interest expenses recognized during the six months ended June 30, 2024.
Net
income (loss)
The
net income decreased by HK$2.1 million from a net income of HK$0.2 million for the six months ended June 30, 2023 to a net loss of HK$1.9
million (US$0.2 million) for the six months ended June 30, 2024. The decrease in the net income during the six months ended June 30,
2024 was mainly attributable to the cumulative effect of the reasons set out above.
Earnings
per Share - Basic and Diluted
Loss
per basic and diluted share for the six months ended June 30, 2024 was HK$0.17, compared to earnings per basic and diluted share
of HK$0.02 for the comparable period of 2023.
Liquidity
and Capital Resources
The
Company financed its daily operations and business development through cash generated from the operations of the Company’s wholly
owned subsidiaries consisting of Able Industries Limited, Fenbo Industries Limited and Fenbo Plastic Products Factory (Shenzhen) Limited.
As of June 30, 2024 and 2023, its cash balance was HK$25.9 million (US$3.3 million) and HK$21.3 million, respectively.
The
following table sets forth a summary of its cash flows for the periods indicated:
| | |
For
the six months ended June 30, | |
| | |
2023 | | |
2024 | | |
2024 | |
| | |
HK$’000 | | |
HK$’000 | | |
US$’000 | |
| Net cash provided by (used in)
operating activities | |
| 7,232 | | |
| (23,299 | ) | |
| (2,985 | ) |
| Net cash used in investing activities | |
| (50 | ) | |
| (37 | ) | |
| (5 | ) |
| Net cash provided by financing activities | |
| 376 | | |
| 2,769 | | |
| 355 | |
Cash
Flows
The
following summarizes the key components of our cash flows for the six months ended June 30, 2024 and 2023:
Cash
provided by (used in) operating activities
For
the six months ended June 30, 2024, net cash used in operating activities of HK$23.3 million (US$3.0 million) was primarily the result
of the net loss of HK$1.9 million (US$0.2 million) as adjusted for non-cash items and change in operating activities. Adjustments for
non-cash items consisted of depreciation of property and equipment of HK$0.3 million (US$33,000), amortization of right to use assets
of HK$2.7 million (US$0.3 million) and interest on lease liabilities of HK$60,000 (US$8,000). Change in operating activities mainly included
increase in account payables of HK$2.8 million (US$0.4 million) and offset by an increase in accounts receivable of HK$14.6 million (US$1.9
million) and payment on lease of HK$3.2 million (US$0.4 million), decrease in other payables and accrued liabilities of HK$4.2 million
(US$0.5 million), increase in inventories of HK$1.0 million (US$0.1 million), increase in prepaid expenses and other current assets of
HK$4.3 million (US$0.5 million).
For
the six months ended June 30, 2023, net cash provided by operating activities of HK$7.2 million was primarily the result of the net income
of HK$0.2 million as adjusted for non-cash items and change in operating activities. Adjustments for non-cash items consisted of depreciation
of property and equipment of HK$0.2 million, amortization of right to use assets of HK$2.7 million, interest on lease liabilities of
HK$0.2 million and loss on disposal of property, plant, and equipment of HK$1,000. Change in operating activities mainly included decrease
in accounts receivable of HK$1.5 million, decrease in inventories of HK$2.4 million, increase in account payables of HK$4.7 million,
and partially offset by an increase in prepaid expenses and other current assets of HK$0.8 million, decrease in other payables and accrued
liabilities of HK$1.0 million, and payment on lease of HK$3.0 million.
Cash
used in investing activities
For
the six months ended June 30, 2024, net cash used in investing activities was HK$37,000 (US$5,000) for the purchase of property, plant,
and equipment.
For
the six months ended June 30, 2023, net cash used in investing activities was HK$50,000 for the purchase of property, plant, and equipment.
Cash
provided by financing activities
For
the six months ended June 30, 2024, net cash from financing activities of HK$2.8 million (US$0.4 million) was mainly due to the proceeds
from issuance of ordinary shares of HK$2.1 million (US$0.3 million) and the advances from related parties of HK$0.7 million (US$0.1 million).
For
the six months ended June 30, 2023, net cash from financing activities of HK$0.4 million represented the advance from related parties.
Capital
Expenditures
The
Company had capital expenditures of HK$37,000 and HK$50,000 for the six months ended June 30, 2024 and 2023, respectively. Our
capital expenditures were mainly for office equipment. Management intends to fund future capital expenditures from working capital, bank
borrowings, lease financing and other financings. The Company will continue to make capital expenditures as appropriate to support its
business growth.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
| Dated:
October 3, 2024 |
FENBO
HOLDINGS LIMITED |
| |
|
| |
/s/
Li Siu Lun Allan |
| |
Li
Siu Lun Allan |
| |
Chief
Executive Officer, Chairman and Director |
Exhibit
99.1
FENBO
HOLDINGS LIMITED ANNOUNCES FISCAL YEAR 2024 FIRST HALF FINANCIAL RESULTS
Hong
Kong, October 3, 2024 — Fenbo Holdings Limited (Nasdaq: FEBO) (the “Company”, “we”, “our”,
“us” or “FEBO”), an established original equipment manufacturer (OEM) for a global home essential company, producing
electrical hair styling products under the “Remington” brand which are sold to overseas markets, today announced its unaudited
financial results for the six months ended June 30, 2024.
Fiscal
Year 2024 First Half Financial Results Compared to Fiscal Year 2023 First Half Financial Results
| ● | Revenues
were HK$66.9 million for the six months ended June 30, 2024, a 14.2% increase from HK$58.6
million for the six months ended June 30, 2023; |
| | | |
| ● | Gross
profit was HK$14.9 million for the six months ended June 30, 2024, or 22.3% of revenues compared
to HK$10.5 million, or 17.9% of revenues for the six months ended June 30, 2023; |
| | | |
| ● | Net
loss was HK$1.9 million for the six months ended June 30, 2024, compared to net income of
HK$0.2 million for the six months ended June 30, 2023; |
| | | |
| ● | Basic
and diluted (loss) per share (“EPS”) was (HK$0.17) per share for the six
months ended June 30, 2024 compared to income per share of HK$0.02 for the six months
ended June 30, 2023; and |
| | | |
| ● | Cash
and cash equivalents were HK$25.9 million as of June 30, 2024, a 44.1% decrease from HK$46.3
million as of December 31, 2023. |
“I’m
pleased to report our operating and financial performance of the Company for the six months ended June 30, 2024” said Mr.
Siu Lun Allan Li, Chairman of FEBO, “The performance during the period was satisfactory as we were able to increase the revenue
and gross profit by substantial amounts which was not sufficient to cover the significant increase in the administrative expenses. However,
we have taken a number of actions to reduce costs, enhance efficiency and increase the diversity of customer base as we navigate market
uncertainty. Our innovative products and diversified value-added services, strong cash flow and balance sheet as well as dedicated management
are enabling us to navigate the market challenges”
“Our
proven track record of operating history positions us to improve profitability and remain flexible in responding to the market. Our recently
completed initial public Offering and listing on Nasdaq is a milestone for us that accelerates our efforts to expand our operation geographically
and drive future growth. Looking ahead, as we anticipate challenges in the broader environment to persist during the second half fiscal
2024, we remain committed to providing cost effective packaging solutions to our customers. We are confident in our long-term strategy
believe that we have the right team in place to generate sustainable long-term returns for our stakeholders,” Mr. Li concluded.
Unaudited
Financial Results for the Six Months Ended June 30, 2024 and 2023
| | |
For
the six months ended June 30, | |
| | |
2023 | | |
2024 | | |
2024 | |
| | |
HK$’000 | | |
HK$’000 | | |
US$’000 | |
| | |
| | |
| | |
| |
| Revenues | |
| 58,567 | | |
| 66,887 | | |
| 8,566 | |
| Cost of sales | |
| (48,088 | ) | |
| (51,948 | ) | |
| (6,653 | ) |
| Gross profit | |
| 10,479 | | |
| 14,939 | | |
| 1,913 | |
| | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | |
| Selling and marketing expenses | |
| (949 | ) | |
| (1,106 | ) | |
| (142 | ) |
| General and administrative
expenses | |
| (8,660 | ) | |
| (16,050 | ) | |
| (2,056 | ) |
| Total operating expenses | |
| (9,609 | ) | |
| (17,156 | ) | |
| (2,198 | ) |
| | |
| | | |
| | | |
| | |
| Income (loss) from operations | |
| 870 | | |
| (2,217 | ) | |
| (285 | ) |
| | |
| | | |
| | | |
| | |
| Other (expense) income: | |
| | | |
| | | |
| | |
| Exchange gain, net | |
| 521 | | |
| 216 | | |
| 28 | |
| Loss on disposal of property, plant and equipment | |
| (1 | ) | |
| - | | |
| - | |
| Interest income | |
| 10 | | |
| 253 | | |
| 32 | |
| Interest expense | |
| (936 | ) | |
| (304 | ) | |
| (39 | ) |
| Government grant | |
| - | | |
| 140 | | |
| 18 | |
| Other income, net | |
| 59 | | |
| 87 | | |
| 11 | |
| Total other (expense)
income | |
| (347 | ) | |
| 392 | | |
| 50 | |
| | |
| | | |
| | | |
| | |
| Income (expense) before tax expense | |
| 523 | | |
| (1,825 | ) | |
| (235 | ) |
| Income tax expense | |
| (285 | ) | |
| (76 | ) | |
| (10 | ) |
| Net income (loss) | |
| 238 | | |
| (1,901 | ) | |
| (245 | ) |
| | |
| | | |
| | | |
| | |
| Other comprehensive income | |
| | | |
| | | |
| | |
| Foreign currency translation
loss, net of taxes | |
| (1,246 | ) | |
| (600 | ) | |
| (77 | ) |
| | |
| | | |
| | | |
| | |
| Total
comprehensive loss | |
| (1,008 | ) | |
| (2,501 | ) | |
| (322 | ) |
| | |
| | | |
| | | |
| | |
| Net income (loss) per share
attributable to ordinary shareholders | |
| | | |
| | | |
| | |
| Basic and diluted (cents) | |
| 2.38 | | |
| (17.19 | ) | |
| (2.20 | ) |
| Weighted average number
of ordinary shares used in computing net income (loss) per share | |
| | | |
| | | |
| | |
| Basic and diluted | |
| 10,000,000 | | |
| 11,057,005 | | |
| 11,057,005 | |
Revenues
Revenue
increased by HK$8.3 million, or 14.2%, to HK$66.9 million (US$8.6 million) for the six months ended June 30, 2024 compared to HK$58.6
million for the same period in 2023 primarily because of the increase in revenue for our flat irons and hair straighteners products.
During
our six months ended June 30, 2024, the negative impact of the COVID-19 pandemic had greatly subsided, and industries, including consumer
confidence, returned to normalcy as compared to the continued negative impact of the COVID-19 pandemic on businesses during the first
half of 2023. Despite the COVID-19 pandemic has come to an end, geopolitical conflicts such as the Russia-Ukraine conflict and the Israeli-Palestinian
conflict persisted. The consequent disruption of the global supply chain affected the recovery of economic activity and drove inflation
up significantly. Moreover, major central banks’ aggressive interest rate hikes significantly increased the complexity and uncertainty
of the economic development environment. Against the backdrop of challenging macroeconomic conditions, the consumer goods and manufacturing
businesses have been affected and the recovery in consumer demand has been slow. Despite the Company is affected by the weak consumer
sentiment and pressure from retails sales, it would continue to put efforts on improving the competitiveness of its high quality products
together with bolstering its research and development capabilities with an aim to enhancing its market share in its existing business
and achieving a long-term relationship with its customers.
Cost
of sales
Cost
of sales included cost of raw materials (such as costs of electrical components, packaging materials, metal materials, plastic particles,
and painting materials), direct labor (including wages and social security contributions), manufacturing overhead (such as consumables,
depreciation, direct rental expense and utilities) and other taxes. We currently do not hedge our raw materials position, and we monitor
raw material price trends closely to manage our production needs.
For
the six months ended June 30, 2024, cost of sales increased to HK$51.9 million (US$6.7 million), representing an increase by HK$3.9 million
from HK$48.1 million in the same period in 2023. The fluctuation of cost of sales was in line with the increase in our revenue during
the same period.
Gross
profit
As
a result of the foregoing, gross profit for the six months ended June 30, 2024, was HK$14.9 million (US$1.9 million), an increase of
HK$4.5 million from HK$10.5 million for the same period in 2023.
Selling
and marketing expenses
Major
components of selling and marketing expenses are packaging expenses, transportation costs and custom declarations. For the six months
ended June 30, 2024, selling and marketing expenses was HK$1.1 million (US$0.1 million), which increased by HK$0.2 million from HK$0.9
million in the same period in 2023. The increase during the six months ended June 30, 2024 from the same period in 2023 was due mainly
to an increase in overall level of shipping of products.
General
and administrative expenses
General
and administrative expenses consist primarily of staff costs for our accounting and administrative support personnel and executives,
depreciation, office and insurance expenses, motor vehicles and travelling expenses, stamp duty and other taxes, utility expenses, office
rental and management fee, legal and professional fee and auditor’s remuneration and others. General and administrative expenses
increased by HK$7.4 million from HK$8.7 million for the six months ended June 30, 2023 to HK$16.1 million (US$2.1 million) for the six
months ended June 30, 2024. This increase was due mainly to the increase in (i) staff costs and insurance expenses to provide
support for the business expansion and (ii) listing annual fee and legal and professional fees for post-listing administrative support
during the six months ended June 30, 2024.
Income
(loss) from operations
The
income from operations decreased by HK$3.1 million from the income from operations of HK$0.9 million for the six months ended June 30,
2023 to the loss from operations of HK$2.2 million for the six months ended June 30, 2024. The deterioration in the financial performance
from operations during the six months ended June 30, 2024 were primarily due to the combined effects of the increase of gross profit
of HK$4.5 million and the increase of general and administrative expenses of HK$7.4 million during the six months ended June 30, 2024.
Other
income (expenses), net
Major
components of other income (expense) are exchange gain and loss, gain/loss on disposal of property, plant and equipment, sundry income,
government grant and bank interest income. For the six months ended June 30, 2024, net income was HK$0.4 million (US$0.1 million), which
increased by HK$0.7 million from net expenses of HK$0.3 million in the same period in 2023. The increase was due mainly to the decrease
in interest expenses recognized during the six months ended June 30, 2024.
Net
income (loss)
The
net income decreased by HK$2.1 million from a net income of HK$0.2 million for the six months ended June 30, 2023 to a net loss of HK$1.9
million (US$0.2 million) for the six months ended June 30, 2024. The decrease in the net income during the six months ended June 30,
2024 was mainly attributable to the cumulative effect of the reasons set out above.
Earnings
per Share - Basic and Diluted
Loss
per basic and diluted share for the six months ended June 30, 2024 was HK$0.17, compared to earnings per basic and diluted share
of HK$0.02 for the comparable period of 2023.
Liquidity
and Capital Resources
The
Company financed its daily operations and business development through cash generated from the operations of the Company’s wholly
owned subsidiaries, consisting of Able Industries Limited, Fenbo Industries Limited and Fenbo Plastic Products Factory (Shenzhen) Limited.
As of June 30, 2024 and 2023, its cash balance was HK$25.9 million (US$3.3 million) and HK$21.3 million, respectively.
The
following table sets forth a summary of its cash flows for the periods indicated:
| | |
For
the six months ended June 30, | |
| | |
2023 | | |
2024 | | |
2024 | |
| | |
HK$’000 | | |
HK$’000 | | |
US$’000 | |
| Net cash provided by (used in)
operating activities | |
| 7,232 | | |
| (23,299 | ) | |
| (2,985 | ) |
| Net cash used in investing activities | |
| (50 | ) | |
| (37 | ) | |
| (5 | ) |
| Net cash provided by financing
activities | |
| 376 | | |
| 2,769 | | |
| 355 | |
Capital
Expenditures
The
Company had capital expenditures of HK$37,000 and HK$50,000 for the six months ended June 30, 2024 and 2023, respectively. Our
capital expenditures were mainly for office equipment. Management intends to fund future capital expenditures from working capital, bank
borrowings, lease financing and other financings. The Company will continue to make capital expenditures as appropriate to support its
business growth.
About
Fenbo Holdings Limited
The
Company’s operating history began in 1993 when Fenbo Industries Limited was founded in Hong Kong by Mr. Li Kin Shing as a toy manufacturer
and distributor. As the toy market deteriorated, he founded Able Industries Limited in 2005 in Hong Kong and shifted the operations to
the manufacturing and sales of personal care electric appliances. The manufacturing subsidiary, Fenbo Plastic Products Factory (Shenzhen)
Ltd., located in Guangdong, PRC, was formed in the PRC in 2010 and is capable of producing over three million units per year. The Company
currently act as both an original equipment manufacturer and historically have also served as an original design manufacturer. For more
information, please visit the Company’s website at http://www.fenbo.com.
Forward-Looking
Statements
This
press release contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S.
Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company’s
beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a
number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases,
forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,”
“anticipate,” “target,” “aim,” “estimate,” “intend,” “plan,”
“believe,” “potential,” “continue,” “is/are likely to” or other similar expressions.
The Company may also make written or oral forward-looking statements in its reports filed with, or furnished to, the U.S. Securities
and Exchange Commission, in its annual reports to shareholders, in press releases and other written materials and in oral statements
made by its officers, directors or employees to third parties. These statements are subject to uncertainties and risks including, but
not limited to, the following: the Company’s goals and strategies; the Company’s future business development; financial condition
and results of operations; product and service demand and acceptance; reputation and brand; the impact of competition and pricing; changes
in technology; government regulations; fluctuations in general economic and business conditions in U.S., Hong Kong and China and assumptions
underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the SEC. For these reasons,
among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional
factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov. The Company undertakes
no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
For
more information, please contact:
Fenbo
Holdings Limited
Li
Siu Lun Allan
Chief
Executive Officer and Chairman of the Board of Directors
Telephone:
+(852) 2343-3328
Email:
allanli@fenbo.com
EXHIBIT
99.2
INDEX
TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FENBO
HOLDINGS LIMITED
UNAUDITED
INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS
(Amount
in thousands, except for share and per share data, or otherwise noted)
| | |
As of | |
| | |
December 31 | | |
June 30 | |
| | |
2023 | | |
2024 | | |
2024 | |
| | |
HK$’000 | | |
HK$’000 | | |
US$’000 | |
| | |
| | |
| | |
| |
| Assets | |
| | | |
| | | |
| | |
| Current assets: | |
| | | |
| | | |
| | |
| Cash | |
| 46,342 | | |
| 25,900 | | |
| 3,317 | |
| Accounts receivable, net | |
| 31,486 | | |
| 45,301 | | |
| 5,802 | |
| Deferred initial public offering cost | |
| - | | |
| - | | |
| - | |
| Inventories | |
| 14,088 | | |
| 14,802 | | |
| 1,896 | |
| Prepaid expenses and other current assets | |
| 6,017 | | |
| 10,116 | | |
| 1,296 | |
| Total current assets | |
| 97,933 | | |
| 96,119 | | |
| 12,311 | |
| | |
| | | |
| | | |
| | |
| Property, plant and equipment, net | |
| 1,244 | | |
| 1,013 | | |
| 130 | |
| Right-of-use assets | |
| 3,801 | | |
| 1,101 | | |
| 141 | |
| Total non-current assets | |
| 5,045 | | |
| 2,114 | | |
| 271 | |
| TOTAL ASSETS | |
| 102,978 | | |
| 98,233 | | |
| 12,582 | |
| | |
| | | |
| | | |
| | |
| Liabilities | |
| | | |
| | | |
| | |
| Current liabilities | |
| | | |
| | | |
| | |
| Bank loan – current | |
| 11,000 | | |
| 11,000 | | |
| 1,409 | |
| Accounts payable | |
| 18,482 | | |
| 20,963 | | |
| 2,685 | |
| Other payables and accrued liabilities | |
| 7,049 | | |
| 2,770 | | |
| 355 | |
| Lease liabilities – current | |
| 4,060 | | |
| 1,043 | | |
| 134 | |
| Amounts due to related parties | |
| 2,413 | | |
| 3,106 | | |
| 398 | |
| Total current liabilities | |
| 43,004 | | |
| 38,882 | | |
| 4,981 | |
| | |
| | | |
| | | |
| | |
| Non-current liabilities | |
| | | |
| | | |
| | |
| Lease liabilities – non-current | |
| 198 | | |
| - | | |
| - | |
| TOTAL LIABILITIES | |
| 43,202 | | |
| 38,882 | | |
| 4,981 | |
| | |
| | | |
| | | |
| | |
| Commitments and contingencies | |
| - | | |
| - | | |
| - | |
| | |
| | | |
| | | |
| | |
| Shareholders’ equity | |
| | | |
| | | |
| | |
| Preference shares US$0.0001 par value per share; 3,000,000 authorized capital; nil shares issued and outstanding | |
| - | | |
| - | | |
| - | |
| Ordinary shares US$0.0001 par value per share; 300,000,000 authorized capital; 11,062,500 shares issued and outstanding (2023: 11,000,000 shares issued and outstanding) | |
| 9 | | |
| 9 | | |
| 1 | |
| Additional paid-in capital | |
| 28,494 | | |
| 30,570 | | |
| 3,915 | |
| Statutory reserve | |
| 2,806 | | |
| 2,806 | | |
| 359 | |
| Retained earnings | |
| 28,721 | | |
| 26,820 | | |
| 3,435 | |
| Accumulated other comprehensive income | |
| (254 | ) | |
| (854 | ) | |
| (109 | ) |
| Total shareholders’ equity | |
| 59,776 | | |
| 59,351 | | |
| 7,601 | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| 102,978 | | |
| 98,233 | | |
| 12,582 | |
FENBO
HOLDINGS LIMITED
UNAUDITED
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Amount
in thousands, except for share and per share data, or otherwise noted)
| | |
For the six months ended June 30, | |
| | |
2023 | | |
2024 | | |
2024 | |
| | |
HK$’000 | | |
HK$’000 | | |
US$’000 | |
| | |
| | |
| | |
| |
| Revenues | |
| 58,567 | | |
| 66,887 | | |
| 8,566 | |
| Cost of sales | |
| (48,088 | ) | |
| (51,948 | ) | |
| (6,653 | ) |
| Gross profit | |
| 10,479 | | |
| 14,939 | | |
| 1,913 | |
| | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | |
| Selling and marketing expenses | |
| (949 | ) | |
| (1,106 | ) | |
| (142 | ) |
| General and administrative expenses | |
| (8,660 | ) | |
| (16,050 | ) | |
| (2,056 | ) |
| Total operating expenses | |
| (9,609 | ) | |
| (17,156 | ) | |
| (2,198 | ) |
| | |
| | | |
| | | |
| | |
| Income (loss) from operations | |
| 870 | | |
| (2,217 | ) | |
| (285 | ) |
| | |
| | | |
| | | |
| | |
| Other (expense) income: | |
| | | |
| | | |
| | |
| Exchange gain, net | |
| 521 | | |
| 216 | | |
| 28 | |
| Loss on disposal of property, plant and equipment | |
| (1 | ) | |
| - | | |
| - | |
| Interest income | |
| 10 | | |
| 253 | | |
| 32 | |
| Interest expense | |
| (936 | ) | |
| (304 | ) | |
| (39 | ) |
| Government grant | |
| - | | |
| 140 | | |
| 18 | |
| Other income, net | |
| 59 | | |
| 87 | | |
| 11 | |
| Total other (expense) income | |
| (347 | ) | |
| 392 | | |
| 50 | |
| | |
| | | |
| | | |
| | |
| Income (expense) before tax expense | |
| 523 | | |
| (1,825 | ) | |
| (235 | ) |
| Income tax expense | |
| (285 | ) | |
| (76 | ) | |
| (10 | ) |
| Net income (loss) | |
| 238 | | |
| (1,901 | ) | |
| (245 | ) |
| | |
| | | |
| | | |
| | |
| Other comprehensive income | |
| | | |
| | | |
| | |
| Foreign currency translation loss, net of taxes | |
| (1,246 | ) | |
| (600 | ) | |
| (77 | ) |
| | |
| | | |
| | | |
| | |
| Total comprehensive loss | |
| (1,008 | ) | |
| (2,501 | ) | |
| (322 | ) |
| | |
| | | |
| | | |
| | |
| Net income (loss) per share attributable to ordinary shareholders | |
| | | |
| | | |
| | |
| Basic and diluted (cents) | |
| 2.38 | | |
| (17.19 | ) | |
| (2.20 | ) |
| Weighted average number of ordinary shares used in computing net income (loss) per share | |
| | | |
| | | |
| | |
| Basic and diluted | |
| 10,000,000 | | |
| 11,057,005 | | |
| 11,057,005 | |
FENBO
HOLDINGS LIMITED
UNAUTIED
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
(Amount
in thousands, except for share and per share data, or otherwise noted)
| | |
Shares* | | |
Amount | | |
Additional paid-in capital | | |
Statutory reserve | | |
Accumulated other comprehensive income | | |
Retained earnings | | |
Total equity | |
| | |
| | |
HK$’000 | | |
HK$’000 | | |
HK$’000 | | |
HK$’000 | | |
HK$’000 | | |
HK$’000 | |
| As of January 1, 2023 | |
| 10,000,000 | | |
| 8 | | |
| 2,492 | | |
| 2,806 | | |
| 555 | | |
| 30,183 | | |
| 36,044 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Net income for the period | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 238 | | |
| 238 | |
| Dividend declared | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Foreign currency translation | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,246 | ) | |
| - | | |
| (1,246 | ) |
| Reorganization | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| As of June 30, 2023 | |
| 10,000,000 | | |
| 8 | | |
| 2,492 | | |
| 2,806 | | |
| (691 | ) | |
| 30,421 | | |
| 35,036 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| As of January, 2024 | |
| 11,000,000 | | |
| 9 | | |
| 28,494 | | |
| 2,806 | | |
| (254 | ) | |
| 28,721 | | |
| 59,776 | |
| Net loss for the period | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| (1,901 | ) | |
| (1,901 | ) |
| Dividend declared | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Foreign currency translation | |
| - | | |
| - | | |
| - | | |
| - | | |
| (600 | ) | |
| - | | |
| (600 | ) |
Issuance of ordinary
Shares, net of issuance costs | |
| 62,500 | | |
| - | | |
| 2,076 | | |
| - | | |
| - | | |
| - | | |
| 2,076 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| As of June 30, 2024 | |
| 11,062,500 | | |
| 9 | | |
| 30,570 | | |
| 2,806 | | |
| (854 | ) | |
| 26,820 | | |
| 59,351 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| | |
| | |
US$’000 | | |
US$’000 | | |
US$’000 | | |
US$’000 | | |
US$’000 | | |
US$’000 | |
| As of June 30, 2024 | |
| 11,062,500 | | |
| 1 | | |
| 3,915 | | |
| 359 | | |
| (109 | ) | |
| 3,435 | | |
| 7,601 | |
| * | In
connection with the undertaking of a public offering of the Company’s ordinary shares,
the Company has performed a series of re-organizing transactions resulting in 10,000,000
shares of ordinary shares outstanding effected on November 18, 2022 that have been retroactively
restated to the beginning of the first period presented. On December 1, 2023 the Company
closed the IPO. The offering was conducted pursuant to the Company’s registration statement
and 1,000,000 shares of ordinary shares were issued at the IPO price of $5.00 per share after
the offering. The Shares were approved for listing on The Nasdaq Capital Market and commenced
trading under the ticker symbol “FEBO.” On January 11, 2024, the representative
of the underwriters partially exercised the over-allotment option and on January 16, 2024
purchased 62,500 ordinary shares at the IPO price of $5.00 per share. |
FENBO
HOLDINGS LIMITED
UNAUTIED
INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amount
in thousands, except for share and per share data, or otherwise noted)
| | |
For the six months ended June 30, | |
| | |
2023 | | |
2024 | | |
2024 | |
| | |
HK$’000 | | |
HK$’000 | | |
US$’000 | |
| | |
| | |
| | |
| |
| Operating activities | |
| | | |
| | | |
| | |
| Net income (loss) | |
| 238 | | |
| (1,901 | ) | |
| (245 | ) |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |
| | | |
| | | |
| | |
| Depreciation | |
| 241 | | |
| 255 | | |
| 33 | |
| Amortization of right to use assets | |
| 2,654 | | |
| 2,721 | | |
| 348 | |
| Interest on lease liabilities | |
| 182 | | |
| 60 | | |
| 8 | |
| Loss on disposal of property, plant and equipment | |
| 1 | | |
| - | | |
| - | |
| Change in operating assets and liabilities: | |
| | | |
| | | |
| | |
| Change in accounts receivable | |
| 1,539 | | |
| (14,573 | ) | |
| (1,866 | ) |
| Change in inventories | |
| 2,427 | | |
| (962 | ) | |
| (123 | ) |
| Change in prepaid expenses and other current assets | |
| (809 | ) | |
| (4,269 | ) | |
| (547 | ) |
| Change in accounts payable | |
| 4,792 | | |
| 2,832 | | |
| 363 | |
| Change in other payables and accrued liabilities | |
| (1,043 | ) | |
| (4,233 | ) | |
| (542 | ) |
| Payments on lease | |
| (2,990 | ) | |
| (3,229 | ) | |
| (414 | ) |
| Net cash provided by (used in) operating activities | |
| 7,232 | | |
| (23,299 | ) | |
| (2,985 | ) |
| | |
| | | |
| | | |
| | |
| Investing activities | |
| | | |
| | | |
| | |
| Purchase of property, plant and equipment | |
| (50 | ) | |
| (37 | ) | |
| (5 | ) |
| Net cash used in investing activities | |
| (50 | ) | |
| (37 | ) | |
| (5 | ) |
| | |
| | | |
| | | |
| | |
| Financing activities | |
| | | |
| | | |
| | |
| Proceeds from issuance of ordinary shares | |
| - | | |
| 2,076 | | |
| 266 | |
| Advances from related parties | |
| 376 | | |
| 693 | | |
| 89 | |
| Net cash provided by financing activities | |
| 376 | | |
| 2,769 | | |
| 355 | |
| | |
| | | |
| | | |
| | |
| Net increase (decrease) in cash | |
| 7,558 | | |
| (20,567 | ) | |
| (2,635 | ) |
| Effect on exchange rate change on cash | |
| (114 | ) | |
| 125 | | |
| 19 | |
| | |
| | | |
| | | |
| | |
| Cash as of beginning of the period | |
| 13,853 | | |
| 46,342 | | |
| 5,933 | |
| | |
| | | |
| | | |
| | |
| Cash as of the end of the period | |
| 21,297 | | |
| 25,900 | | |
| 3,317 | |
| | |
| | | |
| | | |
| | |
| Supplementary Cash Flows Information | |
| | | |
| | | |
| | |
| Cash paid for interest | |
| 936 | | |
| 304 | | |
| 39 | |
| Cash paid for taxes | |
| 565 | | |
| 62 | | |
| 8 | |
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