The Group's results were mainly driven by its market leading leveraged foreign exchange trading activities which continued to register strong growth in the first half. Bullion trading business also grew significantly and accounted for 11% of the Group's total revenue and more than 36% of the Group's profit before taxation and share of associates' profit in the first half.

As part of the Group's ongoing initiative to expand geographically, a Hantec Super FX Fund ("FX Fund") was launched to give an alternative investment product to overseas clients. During the period, a representative office was opened in Wenzhou, and the Group has increased its shareholding in the asset management subsidiary in Taiwan to 100%.

Leveraged forex and bullion trading profits grew 68% and 220% respectively
The high level of volatility in foreign currencies during the first half attracted both retail investors and high-net-worth individuals into the market. As a result, leveraged forex trading profit increased by 68% year on year to nearly HK$44 million in the period; and the increase in business volume resulted in commission income doubling to HK$19.5 million. In the second half the Group will continue to expand abroad. A wholly owned subsidiary has been established in Switzerland and commenced leveraged forex trading operations in July 2005. The subsidiary will serve the existing customers in France and is well positioned to explore the foreign exchange market in Europe. Meanwhile, a more powerful internet trading platform will be launched in the second half to further grow business volume in overseas markets.

The volatile fluctuations of bullion prices also induced speculative trading and as a result, bullion trading volume increased significantly and led to outstanding performance of the Group's bullion trading business in the first half of 2005. Commission income was 5 times and trading profits were 2.2 times of last period. The net profit was HK$4.53 million which was 2.17 times that of the last period. Hantec anticipates the bullion prices to continue to be volatile in the second half and more resources be deployed to expand its scale of bullion operations.

To capture the thriving investment consultancy and wealth management market, Hantec operates two separate brands for the provision of traditional personal financial planning and insurance linked consultancy services. During the first half, commission income from both subsidiaries dropped by about 35% due to fierce competition from real estate agents and other new entrants in the market. Despite the cut-throat competition the financial planning and wealth management team was able to deliver a modest net profit for the period. In future the team will structure value-added services for clients under the asset management licence in order to procure more recurring income.

The slowdown of the brokerage business, due to the tight trading range in the period, interest rate hikes and cooling market sentiment, was partly offset by the increase of interest earned from margin financing and commission income from underwriting and placing activities. As a result, gross profit generated from securities dealing decreased slightly by about HK$0.84 million, and net loss of the business amounted to HK$1.58 million. In view of the growing interest of investors in stock related derivative products, more facilities will be introduced to clients in future.

Turnover generated from trading of local futures contracts, mainly Hang Seng Index futures, remained stable, but due to great fluctuations in global commodities prices turnover from overseas commodities futures trading increased by about 50%, leading to an increase in gross profit by about the same extent. A marginal net loss of HK$0.31 million was recorded due to an exchange loss arising from exposure from foreign currency deposits. It is expected that the foreign currency exposure will be fully hedged in the second half in order to accurately reflect the performance of the commodities trading business. To expand further in Mainland China which has witnessed further liberalization in the securities and futures sectors, Hantec plans to rebuild a more powerful internet trading platform.

The corporate finance team completed two GEM IPO sponsorship mandates during the period, boosting turnover to HK$5.6 million, or more than 70% increase year on year. The team also executed 23 transactions during the period and will focus on more sizeable IPO projects in the second half.

In addition to managing an equity fund on major Asia stock markets, the asset management team launched the FX Fund with investments mainly in the forex market to capitalize on the Group's strong expertise in forex trading. It provides an alternative investment for overseas clients who expect high return and are also ready to afford higher than normal risks associated with margin trading activities and derivative product investments.

The Group continues to maintain a strong liquidity position with receivables from brokers and financial institutions, and cash and bank balance standing at HK$217 million.

Mr Tang Yu Lap, Chairman, Hantec Investment Holdings, said: "Following the introduction of the second phase of CEPA and further liberalisation of the services sector in Mainland China, we will continue to pursue overseas network expansion particularly in the Mainland market by way of setting up representative offices and building up sales and marketing relationship with consultancy services providers in the Mainland. We also plan to launch an updated model of our foreign exchange internet trading platform in the second half of the year."

About Hantec Group
Founded in 1990 by Chairman Tang Yu Lap together with a number of financial experts and banking professionals, Hantec Group offers integrated comprehensive financial and investment services including leveraged forex trading, securities trading, financial advisory services, fund management, commodities and futures trading, asset management, corporate finance, personal financial services and affinity credit card. The Group is headed by its listed vehicle in Hong Kong, Hantec Investment Holdings Limited (HKEx: 111). It now operates 3 branches and 4 personal financial services centers locally as well as 4 subsidiaries and associated companies in New Zealand, Japan, Switzerland and Taiwan, and 5 representative offices in Beijing, Shanghai, Wenzhou, Taipei and Paris.

Six months ended June 30,
	2005	2004
	HK$ '000	HK$ '000
Turnover	111,209	79,572
Leveraged forex trading	66,209	40,696
Bullion trading	12,675	4,657
Commodities futures trading	6,457	4,944
Securities brokerage	11,045	11,898
Corporate finance	5,554	3,215
Personal financial planning & wealth management	9,044	13,557
Asset management	194	569
Others	31	36
Operating profit	15,744	5,834
Net profit attributable to shareholders	12,663	9,510

Issued by :
Hantec Investment Holdings Limited

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