Financial Performance - For the year ended December 31, 2024, the company reported revenue of RMB 1,063,244,000, a slight decrease from RMB 1,076,789,000 in 2023[12] - The gross profit for 2024 was RMB 314,440,000, with a gross profit margin of 29.6%, up from 29.0% in 2023[12] - The company recorded a loss before income tax of RMB 15,402,000 and a loss for the year of RMB 19,968,000, marking the first loss since being listed[13] - For FY2024, the Group's total revenue was approximately RMB1,063,244,000, a decrease of approximately 1.3% from RMB1,076,789,000 in FY2023[35] - The Group recorded a loss attributable to owners of the Company of approximately RMB19,925,000 for FY2024, a decrease of approximately 420.6% compared to a profit of approximately RMB6,214,000 in FY2023[29] - The Group's gross profit for FY2024 was approximately RMB314,440,000, an increase of approximately 0.8% from RMB311,937,000 in FY2023, with a gross profit margin rising from approximately 29.0% to approximately 29.6%[36] Assets and Liabilities - Total assets increased to RMB 875,454,000 in 2024, compared to RMB 773,334,000 in 2023[12] - Total liabilities rose to RMB 661,173,000, up from RMB 541,501,000 in the previous year[12] - As of December 31, 2024, the Group recorded net current liabilities of approximately RMB 317,507,000, up from RMB 158,136,000 in 2023, with a current ratio of approximately 0.51 compared to 0.63 in 2023[55] - The gearing ratio increased to approximately 1.20 as of December 31, 2024, compared to 0.95 in 2023, indicating a higher level of debt relative to equity[60] - Cash and bank deposits, including pledged bank deposits, increased to approximately RMB 134,536,000 as of December 31, 2024, from RMB 93,028,000 in 2023[61] Expenses and Costs - Employee benefit expenses for FY2024 totaled approximately RMB170,479,000, an increase from RMB164,108,000 in FY2023[25] - Selling and distribution expenses increased from approximately RMB150,542,000 in FY2023 to approximately RMB169,197,000 in FY2024, primarily due to higher advertising, freight charges, and salaries[41] - Administrative expenses increased from approximately RMB 143,140,000 in FY2023 to approximately RMB 148,937,000 in FY2024, primarily due to increased depreciation and employee costs[48] - Finance costs decreased from approximately RMB8,835,000 in FY2023 to approximately RMB7,284,000 in FY2024 due to increased interest capitalized into property, plant, and equipment[43] - Income tax expenses decreased from approximately RMB 5,273,000 in FY2023 to approximately RMB 4,566,000 in FY2024 due to a reduction in taxable profits[50] Strategic Focus and Initiatives - The company is focusing on high-value and high-margin products to optimize development and production costs[15] - Strategic promotional initiatives include promoting overseas e-commerce platforms and engaging in domestic live commerce to secure market share[14] - The company aims to stimulate demand from distributors and develop international partnerships to boost exports[15] - The company is focusing on strategic planning and mergers and acquisitions as part of its growth strategy[95] - The company is actively involved in the development of new technologies and products in the chemical and technology sectors[104] Governance and Management - The chairman expressed gratitude to shareholders, customers, employees, and suppliers for their support during challenging times[17] - The board includes members with extensive backgrounds in technology, management, and chemistry, enhancing the company's expertise[98][104] - The appointment of new directors reflects the company's commitment to strengthening its governance and strategic direction[93][95] - The Group's commitment to governance is reflected in the composition of its committees, ensuring independent oversight and strategic direction[109] - The Group's financial management has been strengthened with the appointment of experienced professionals in key positions[121] Customer and Supplier Relationships - The Group's largest customer accounted for approximately 4.6% of total turnover for FY2024, down from 5.1% in FY2023[153] - The five largest customers represented 12.6% of total turnover for FY2024, compared to 13.1% in FY2023[153] - The Group's largest supplier accounted for approximately 5.7% of total purchases for FY2024, down from 6.4% in FY2023[155] - The five largest suppliers accounted for 21.9% of total purchases for FY2024, compared to 24.8% in FY2023[155] - The Group has established relationships with its five largest customers for an average of more than eight years[152] Environmental and Social Responsibility - The Group is committed to minimizing environmental impact and promoting sustainability in its operations[145] - The Group emphasizes the importance of employee relationships, ensuring reasonable remuneration and a safe workplace[156] - Charitable donations made by the Group in FY2024 amounted to RMB 121,200, significantly up from RMB 22,000 in FY2023[176][182] Other Notable Information - The Board did not recommend the payment of any final dividend for FY2024, maintaining a sustainable dividend policy[52] - The Group did not have any significant investments, material acquisitions, or disposals of subsidiaries or associated companies during FY2024[79] - There were no significant events after the reporting period up to the date of the annual report[162][168] - The Company maintained a sufficient public float as required under the Listing Rules during FY2024[179]

Financial Performance - For the year ended December 31, 2024, the company reported revenue of RMB 1,063,244, a decrease of 1.3% from RMB 1,076,789 in 2023[13]. - The gross profit for the year was RMB 314,440, with a gross profit margin of 29.6%, an increase from 29.0% in the previous year[13]. - The company recorded a loss for the year of RMB 19,968, compared to a profit of RMB 6,257 in 2023, marking the first loss since being listed[14]. - For FY2024, the Group recorded a loss attributable to owners of approximately RMB19,925,000, a decrease of approximately 420.6% compared to a profit of RMB6,214,000 in FY2023[30]. - The total revenue for FY2024 was approximately RMB1,063,244,000, representing a decrease of approximately 1.3% from RMB1,076,789,000 in FY2023[36]. - The Group's gross profit for FY2024 was approximately RMB314,440,000, an increase of approximately 0.8% from RMB311,937,000 in FY2023, with a gross profit margin rising from 29.0% to 29.6%[37]. Assets and Liabilities - Total assets increased to RMB 875,454, up from RMB 773,334 in 2023, while total liabilities rose to RMB 661,173 from RMB 541,501[13]. - As of December 31, 2024, the Group recorded net current liabilities of approximately RMB 317,507,000, with a current ratio of approximately 0.51, down from 0.63 in 2023[56]. - The gearing ratio increased to approximately 1.20 as of December 31, 2024, compared to 0.95 in 2023[61]. - Cash and bank deposits amounted to approximately RMB 134,536,000 as of December 31, 2024, up from RMB 93,028,000 in 2023[62]. - As of December 31, 2024, the Group's total bank borrowings and other borrowings amounted to approximately RMB257,875,000, an increase from approximately RMB220,188,000 in 2023[74]. Operational Highlights - The Group's total production output for FY2024 was approximately 67,625 tonnes, compared to 66,416 tonnes in FY2023[25]. - Aerosol-related products accounted for approximately 64.9% of the Group's total revenue in FY2024, slightly down from 65.2% in FY2023[25]. - OEM export orders increased by approximately 12.6% from RMB33,125,000 in FY2023 to RMB37,286,000 in FY2024[31]. - The Group successfully acquired land use rights in Puyang City, Henan Province, aiming to expand market reach to Central China[32]. Expenses and Costs - Employee benefit expenses for FY2024 were approximately RMB170,479,000, an increase from RMB164,108,000 in FY2023[26]. - Selling and distribution expenses rose from approximately RMB 150,542,000 in FY2023 to approximately RMB 169,197,000 in FY2024, driven by higher advertising, freight charges, and sales team salaries[42]. - Administrative expenses increased from approximately RMB 143,140,000 in FY2023 to approximately RMB 148,937,000 in FY2024, mainly due to higher depreciation and staff costs[43]. - Finance costs decreased from approximately RMB 8,835,000 in FY2023 to approximately RMB 7,284,000 in FY2024, attributed to increased interest capitalized into property, plant, and equipment[44]. - Income tax expense decreased from approximately RMB 5,273,000 in FY2023 to approximately RMB 4,566,000 in FY2024 due to a reduction in taxable profit[45]. Management and Governance - The company has a strong emphasis on environmental, social, and governance (ESG) matters, with dedicated committees overseeing these areas[91]. - The management team includes professionals with diverse backgrounds in finance, technology, and human resources, enhancing the company's strategic capabilities[96]. - The Group's leadership team has extensive experience in their respective fields, enhancing the Group's strategic direction and operational capabilities[118][121][124][129]. - There was no material breach of or non-compliance with applicable laws and regulations during FY2024, indicating strong governance[147]. Strategic Initiatives - The company is focusing on globalisation efforts, including promoting overseas e-commerce platforms and engaging in domestic live commerce initiatives[15]. - Strategic promotional initiatives are expected to stimulate demand from distributors and facilitate international partnerships to boost exports[16]. - The company aims to optimize development and production costs by focusing on high-value and high-margin products[16]. - Despite the challenging operating environment, sales revenue remained consistent with the previous year, indicating resilience in performance[17]. - The chairman expressed confidence that strategic initiatives will yield significant advantages and greater returns for shareholders in the coming years[17]. Shareholder Information - The Group maintained a sufficient public float as required under the Listing Rules during FY2024[180]. - The Board did not recommend the payment of any final dividend for FY2024, consistent with FY2023[165]. - Profit available for distribution as of December 31, 2024, was approximately RMB38,017,000, down from RMB45,238,000 as of December 31, 2023[175]. - Charitable donations made by the Group during FY2024 amounted to RMB121,200, an increase from RMB22,000 in FY2023[177]. Risks and Challenges - The Group faces risks related to raw material price fluctuations, which could adversely affect gross margins if not reflected in product pricing[71]. - The competitive landscape is expected to intensify, with potential impacts on market share and pricing strategies due to increased competition from both existing and new entrants[72]. - Compliance risks exist due to the need for various licenses and permits, with potential penalties for non-compliance that could affect operations[73]. Future Outlook - The Group's strategic focus on R&D and quality management is expected to drive future growth and market expansion[130][131]. - The Group's future developments and business reviews for FY2024 are detailed in the Chairman's Statement and Management Discussion and Analysis sections of the annual report[145][150].

SANOS和 - 275-55 Interim Report 中期報告 股份代號 Stock Code:0301 all to 三和精化集團有限公司 SANVO Fine Chemicals Group Limited (於開曼群島註冊成立之有限公司) {Incorporated in the Cayman islands with limited liability} ® SANVO FINE CHEMICALS CONSTRUCTION SUPPLEMENTARY MATERIALS AND RELATED PRODUCTS CAR CARE AND AUTOMOTIVE MAINTENANCE PRODUCTS 01 中期報告 Interim Report 2024 CONTENTS 目錄 | --- | --- | --- | |-----------------------------------------------------------|----------------------|-------| | | | | | CORPORATE INFORMATION | 公司資料 | 2 | | ...

Financial Performance - For the six months ended June 30, 2024, total revenue decreased by approximately 2.4% to approximately RMB 507.9 million compared to RMB 520.2 million for the same period in 2023[7]. - Gross profit decreased by approximately 0.7% to approximately RMB 155.0 million, down from RMB 156.2 million in the previous year[7]. - Profit attributable to owners of the Company decreased by approximately 95.8% to approximately RMB 0.83 million, compared to RMB 19.7 million for the same period in 2023[7]. - Basic earnings per share for the six months ended June 30, 2024 was approximately RMB0.2 cents, down from RMB4.2 cents for the same period in 2023[10][12]. - The Group's profit for the six months ended June 30, 2024, was approximately RMB 0.83 million, representing a decrease of approximately 95.8% compared to RMB 19.7 million for the same period in 2023[31][36]. - The profit for the period attributable to equity holders of the company was RMB 823,000, a drastic decline from RMB 19,704,000 in the same period last year[120]. - Total comprehensive income for the period attributable to the owners of the company was RMB 241,000, compared to RMB 19,098,000 in the previous year[120]. - The Group's profit before income tax for the six months ended June 30, 2024, was RMB 2,708,000, a significant decrease from RMB 22,547,000 in 2023[166]. Revenue and Segments - The Group recorded revenue of approximately RMB507.9 million for the six months ended 30 June 2024, representing a decrease of approximately 2.4% compared to RMB520.2 million for the same period in 2023[9][17][20]. - Revenue from the PRC was RMB 491,065,000, down 2.8% from RMB 505,154,000 in 2023[170]. - Revenue from external customers in the Aerosols segment was RMB 326,199,000, while the Organic silicone adhesives segment generated RMB 81,492,000 for the six months ended June 30, 2024[164]. - Total reportable segment revenue decreased to RMB 437,103,000 in 2024 from RMB 452,217,000 in 2023[165]. Expenses and Costs - Employee benefit expenses increased to approximately RMB81.9 million from RMB77.8 million in the corresponding period of 2023, reflecting a rise in salaries and welfare expenses[12][13][14]. - Selling and distribution expenses rose from approximately RMB71.6 million to approximately RMB83.3 million, attributed to increased marketing activities and higher staff costs in the sales department[25]. - Administrative expenses rose from approximately RMB61.7 million for the six months ended June 30, 2023, to approximately RMB70.1 million for the six months ended June 30, 2024, primarily due to increased share-based payment expenses and research and development costs[27]. - The total cost of inventories recognized as expenses decreased to RMB 352,926,000 for the six months ended June 30, 2024, from RMB 364,090,000 in 2023, indicating improved inventory management[179]. Cash Flow and Liquidity - Net cash generated from operating activities for the six months ended June 30, 2024, was RMB 16,933,000, a significant improvement compared to a net cash used of RMB (26,995,000) in the same period of 2023[129]. - The Group reported a net increase in cash and cash equivalents of RMB 27,740,000 for the first half of 2024, contrasting with a net decrease of RMB (51,441,000) in the same period of 2023[129]. - As of June 30, 2024, the Group had net current liabilities of approximately RMB 72,515,000, indicating potential liquidity challenges[146]. - The Group had unutilized banking facilities of approximately RMB 25,457,000 and a letter of intent for a line of credit of approximately RMB 229,000,000 as of June 30, 2024, to support liquidity[146]. Assets and Liabilities - The Group recorded net current liabilities of approximately RMB 72.5 million as of June 30, 2024, down from approximately RMB 158.1 million as of December 31, 2023[34][39]. - The current ratio improved to approximately 0.82 as of June 30, 2024, compared to approximately 0.63 as of December 31, 2023, due to an increase in cash and cash equivalents[34][39]. - Total assets as of June 30, 2024, increased to RMB 528,743,000 from RMB 503,856,000 as of December 31, 2023, representing a growth of approximately 4.0%[123]. - Net assets increased to RMB 235,696,000 as of June 30, 2024, compared to RMB 231,833,000 at the end of 2023, reflecting a growth of about 1.6%[123]. Corporate Governance and Compliance - The Company has complied with the Corporate Governance Code throughout the six months ended June 30, 2024, with one deviation regarding the roles of chairman and chief executive officer being held by the same individual[73]. - All Directors confirmed compliance with the Model Code for Securities Transactions during the six months ended June 30, 2024[77]. - As of June 30, 2024, the Group was not aware of any non-compliance with relevant laws and regulations that had a significant impact on it[71]. Strategic Initiatives - The Group successfully acquired land use rights in Puyang City, Henan Province, aiming to expand its market reach to Central China[15][19]. - A new ERP system has been implemented to enhance management processes and big data analysis, focusing on customer relationship management and product lifecycle management[16][19]. - The Group plans to continue investing in development projects and acquiring suitable plant and machinery, funded by internal resources, external equity financing, and/or borrowings[72]. Environmental and Social Responsibility - The Group is committed to reducing environmental impacts and complying with related laws and regulations, as detailed in its Environmental, Social and Governance Report[67]. - The Group is committed to reducing environmental pollution and effectively utilizing resources to minimize the impact of factories and offices on the environment[68].

Share Options and Awards - As of December 31, 2023, the number of share options available for grant under the revised 2019 share option scheme was 42,750,000[2] - The total number of shares available for future grants under the share option and share award plans was 40,565,754, representing approximately 8.63% of the 470,250,000 issued ordinary shares as of the report date[2] - The total number of share options and awards granted during the year was 21,648,000 and 2,184,246 shares respectively, with a vesting period of no less than 12 months[3] - No share options or award shares were cancelled during the year ended December 31, 2023[2] - The weighted average number of shares issued during the year was approximately 5.33% of the total shares available for grant under all share plans[2] Equity-Settled Transactions - The cumulative expense recognized for equity-settled transactions reflects the best estimate of the number of equity instruments that will ultimately vest[1] - Any unvested awards will automatically lapse under specific conditions, including termination of employment without notice or serious misconduct[5] Incentives and Governance - The share option plan aims to incentivize eligible participants to enhance their performance efficiency for the long-term benefit of the group[4] - The company’s compensation committee reviewed the share plans, ensuring that all granted options and awards align with the group's long-term success[4] Company Leadership - The company’s chairman and CEO is Mr. Chan Ping Keung, with other executive directors including Mr. Ng Cheuk Lun[5]

Dividend and Share Issuance - The Group did not recommend any final dividend for FY2023, consistent with FY2022[28] - The Company issued 42,750,000 new ordinary shares as a bonus issue on July 11, 2023, at a ratio of one bonus share for every ten shares[28] - The Board did not recommend the payment of any final dividend for FY2023, maintaining a sustainable dividend policy[127] Financial Performance - Revenue for the fiscal year 2023 reached RMB 1,076,789,000, an increase of 13.6% compared to RMB 947,850,000 in 2022[86] - Gross profit for 2023 was RMB 311,937,000, with a gross profit margin of 29.0%, up from 27.5% in 2022[86] - Profit for the year increased to RMB 6,257,000, representing a 39.3% rise from RMB 4,492,000 in the previous year[86] - The profit attributable to owners of the Company for FY2023 was approximately RMB6,257,000, an increase of approximately RMB1,765,000 or 39.3% compared to RMB4,492,000 for FY2022[120] - Gross profit for FY2023 was approximately RMB311,937,000, representing an increase of approximately 19.5% from RMB260,989,000 for FY2022[123] - The gross profit margin increased from approximately 27.5% in FY2022 to approximately 29.0% in FY2023[123] Production and Sales - The Group's total production output for FY2023 was approximately 66,416 tonnes, up from approximately 55,282 tonnes in FY2022[106] - Aerosols-related products accounted for approximately 65.2% of the Group's total revenue in FY2023, compared to 59.4% in FY2022[106] - The company produced approximately 66,416 tons of fine chemical products in 2023, up from 55,282 tons in 2022[94] - The Group's OEM export orders increased by approximately 20.7% from approximately RMB27,438,000 in FY2022 to approximately RMB33,125,000 in FY2023[120] Expenses and Liabilities - Employee welfare expenses totaled approximately RMB 164,108,000 in 2023, an increase from RMB 131,921,000 in 2022[95] - Selling and distribution expenses rose from approximately RMB131,810,000 for FY2022 to approximately RMB150,542,000 for FY2023, attributed to higher advertising, freight charges, and sales team salaries[125] - Administrative expenses increased from approximately RMB119,035,000 for FY2022 to approximately RMB143,140,000 for FY2023, primarily due to higher staff costs and research and development expenses[125] - Finance costs rose from approximately RMB7,993,000 for FY2022 to approximately RMB8,835,000 for FY2023, due to decreased interest capitalized into property, plant, and equipment[125] - Income tax expense increased from approximately RMB4,575,000 for FY2022 to approximately RMB5,273,000 for FY2023, resulting from an increase in taxable profit[125] - The Group recorded net current liabilities of approximately RMB158,136,000 as at 31 December 2023, with a current ratio of approximately 0.63[126] - The gearing ratio was approximately 0.95 as at 31 December 2023, down from 1.02 in 2022[129] Share Options and Governance - The Company adopted a share option scheme on December 13, 2019, and amended its terms on June 30, 2023, to align with the Listing Rules[45] - The Amended 2019 Share Option Scheme aims to motivate Eligible Participants to optimize their performance efficiency for the benefit of the Group[45] - The maximum number of shares that may be allotted and issued under the Amended 2019 Share Option Scheme is capped at 42,750,000 shares, which represents 10% of the shares in issue as of the Adoption Date[70] - The board has the discretion to grant share options to eligible participants, including full-time or part-time employees and executives[70] - The company’s governance structure includes an Audit Committee, Remuneration Committee, Nomination Committee, and ESG Committee, ensuring comprehensive oversight[75] Management and Directors - Each executive Director has a service contract for three years, renewable automatically for one-year terms thereafter[45] - The Directors' biographical details remained unchanged during FY2023[36] - Mr. Chen Bingyao resigned as Executive Director on July 21, 2023[35] - The Company has arranged for appropriate insurance cover for Directors' liabilities in respect of legal actions[45] - There were no significant transactions or contracts involving Directors with material interests during FY2023, except for related party transactions disclosed[42] Market and Strategic Outlook - The company provided a positive outlook for the next fiscal year, projecting a revenue growth of 10% to 12%[199] - New product launches are expected to contribute an additional $50 million in revenue over the next year[199] - The company is investing $10 million in research and development for new technologies in the upcoming year[192] - Market expansion plans include entering three new international markets by the end of the fiscal year[199] - The company is considering strategic acquisitions to enhance its market position, with a budget of $30 million allocated for potential mergers[196] Risks and Challenges - The Group faces risks related to raw material price fluctuations, with expectations of potential price increases for key raw materials in the future[143] - The competitive landscape is described as highly fragmented, with numerous manufacturers offering similar products at lower prices, which may intensify competition in the future[144] - The Group has not entered into any derivative contracts to hedge against foreign exchange rate risks for FY2023 and FY2022, as most transactions are settled in RMB[148] - The board believes that the group's foreign exchange risk is not significant, as most transactions are settled in RMB, and no derivative contracts have been established to hedge against foreign exchange risks for the fiscal years 2023 and 2022[168] Assets and Investments - Total assets as of December 31, 2023, were RMB 773,334,000, a decrease from RMB 789,362,000 in 2022[92] - Total liabilities decreased to RMB 541,501,000 in 2023 from RMB 567,714,000 in 2022[92] - The Group did not have any significant investments, material acquisitions, or disposals of subsidiaries or associated companies during FY2023[150] - The Group has no future plans for material investments or capital assets beyond those disclosed in the Prospectus[151] - As of December 31, 2023, the group's capital commitments for property, plant, and equipment amounted to approximately RMB 152,068,000, an increase from RMB 69,399,000 in 2022[167][169]

Financial Performance - For the year ended December 31, 2023, the revenue increased by 13.6% to RMB 1,076,789,000 compared to RMB 947,850,000 in 2022[15] - Gross profit for the year was RMB 311,937,000, representing a gross profit margin of 29.0%, up from 27.5% in the previous year[15] - Profit for the year rose by 39.3% to RMB 6,257,000, compared to RMB 4,492,000 in 2022[15] - The Group's total revenue for FY2023 was approximately RMB1,076,789,000, representing an increase of approximately 13.6% from RMB947,850,000 in FY2022[50] - Profit attributable to owners of the Company for FY2023 was approximately RMB6,257,000, an increase of approximately RMB1,765,000 or 39.3% compared to RMB4,492,000 in FY2022[45] - Gross profit for FY2023 amounted to approximately RMB311,937,000, representing an increase of approximately 19.5% from RMB260,989,000 in FY2022[50] - The Group's profit for FY2023 attributable to owners was approximately RMB6,257,000, representing an increase of approximately 39.3% compared to RMB4,492,000 for FY2022[51] Operational Efficiency - The company has focused on enhancing employee productivity and expanding sales channels, including live streaming sales[17] - The company has implemented a multi-functional policy for employees to improve operational efficiency[17] - The increase in sales and distribution expenses was noted, but the results are beginning to show positive outcomes[17] - The Group's total production output for FY2023 was approximately 66,416 tonnes, compared to 55,282 tonnes in FY2022[40] - Selling and distribution expenses rose from approximately RMB131,810,000 for FY2022 to approximately RMB150,542,000 for FY2023, attributed to higher advertising, freight charges, and sales team salaries[51] - Administrative expenses increased from approximately RMB119,035,000 for FY2022 to approximately RMB143,140,000 for FY2023, primarily due to higher staff costs and research and development expenses[51] Market Strategy - The company continues to prioritize the development of innovative technologies and products to provide high-quality services to customers[17] - The Group intends to expand its market reach to Central China through the acquisition of Sanvo New Materials Group Limited[48] - Aerosol-related products accounted for approximately 65.2% of the Group's total revenue in FY2023, up from 59.4% in FY2022[40] - OEM export orders increased by approximately 20.7% from RMB27,438,000 in FY2022 to RMB33,125,000 in FY2023[45] - The company expresses confidence in its continued growth in the coming years[17] Financial Position - Cash and bank deposits decreased to approximately RMB93,028,000 as of December 31, 2023, down from RMB121,849,000 in 2022[54] - As of December 31, 2023, the Group recorded net current liabilities of approximately RMB158,136,000, compared to RMB153,547,000 in 2022, with a current ratio of approximately 0.63[79] - The gearing ratio improved to approximately 0.95 as of December 31, 2023, from 1.02 in 2022[54] - The Group's total bank borrowings and other borrowings amounted to approximately RMB220,188,000, a slight decrease from RMB226,072,000 in 2022[113] - The interest rates for the borrowings ranged from 3.7% to 5.5% per annum for FY2023, compared to 3.80% to 6.45% per annum for FY2022[113] Governance and Management - The Group's overall management is led by experienced directors with extensive backgrounds in finance and engineering[125][130] - The board includes independent non-executive directors who provide independent advice and judgement, enhancing corporate governance[140] - The company emphasizes the importance of independent directors, with Mr. Xu providing independent opinions and judgments to the board since December 2019[163] - The Group's management team has extensive experience in their respective fields, contributing to effective governance and strategic direction[196] Research and Development - The company has a strong focus on research and development, with Mr. Leo Chen managing four major research institutes within the group[150] - The Group aims to enhance its market position through ongoing research and development initiatives in various product categories[200] - The Group's commitment to corporate and social responsibility aims to promote sustainable development and reduce environmental impact[192] Compliance and Risks - The Group faces risks related to compliance with PRC laws and regulations, which could affect operations if licenses are not renewed[87] - The Group has complied with relevant laws and regulations during FY2023, with no material breaches reported[190] - The Group has not entered into any derivative contracts to hedge against foreign exchange rate risks for FY2023 and FY2022[92] Future Outlook - The management believes that the efforts made in the past year will yield significant business advantages in the coming years[17] - The Board will review the dividend policy as appropriate based on various factors including financial performance and capital requirements[79] - The Group's future plans for material investments or capital assets are limited, as disclosed in the Prospectus[119]

Financial Performance - Total revenue increased by approximately 12.8% to approximately RMB520.2 million for the six months ended 30 June 2023, compared to approximately RMB461.3 million for the same period in 2022[12] - Gross profit rose by approximately 20.4% to approximately RMB156.2 million, up from approximately RMB129.7 million in the prior year[16] - Gross profit margin improved by approximately 1.9 percentage points to approximately 30.0% from approximately 28.1% in the previous year[12] - Profit attributable to owners of the Company surged by approximately 103.4% to approximately RMB19.7 million, compared to approximately RMB9.7 million for the same period in 2022[17] - Total comprehensive income attributable to owners increased by approximately 213.6% to approximately RMB19.1 million, up from approximately RMB6.1 million in the prior year[17] - Basic earnings per share for the six months ended 30 June 2023 was approximately RMB4.2 cents, compared to approximately RMB2.1 cents for the same period in 2022[18] Operational Highlights - The Group's product portfolio includes aerosols, organic silicone adhesives, synthetic adhesives, and other miscellaneous products[13] - The Company operates under the brands "SANVO" and "FullTeam," and also provides OEM services[14] - The Group's operations are primarily based in the People's Republic of China, focusing on fine industrial chemical products[13] Employee and Expense Management - Employee benefit expenses increased to approximately RMB 77.8 million for the six months ended June 30, 2023, up from approximately RMB 60.2 million in the prior year[22] - The total number of employees rose from 1,252 as of December 31, 2022, to 1,345 as of June 30, 2023, with 70% being university graduates[24] - Selling and distribution expenses increased from approximately RMB 60.2 million for the six months ended June 30, 2022, to approximately RMB 71.6 million for the same period in 2023[38] - Administrative expenses increased from approximately RMB 55.2 million for the six months ended June 30, 2022, to approximately RMB 61.7 million for the same period in 2023, primarily due to increased employee salaries and benefits[45] Financial Position and Liquidity - The Group recorded net current liabilities of approximately RMB 163.2 million as of June 30, 2023, compared to RMB 153.5 million as of December 31, 2022, with a current ratio of approximately 0.64[51] - The gearing ratio decreased to approximately 0.92 as of June 30, 2023, from approximately 1.02 as of December 31, 2022, due to a decrease in overall borrowings and an increase in total equity[52] - As of June 30, 2023, the Group had unutilized banking facilities of approximately RMB 66,110,000 and a letter of intent for a credit line of HK$250,000,000 (approximately RMB 230,000,000)[171] - Cash and cash equivalents at the end of the period were RMB 38,453,000, down from RMB 62,360,000 at the end of the same period in 2022[154] Legal and Compliance Matters - A civil litigation claim was filed against the Group's subsidiary for RMB20,087,816 related to a construction project, with a counter-lawsuit amounting to RMB28,128,984 filed by the subsidiary[83] - An independent third-party quality appraisal confirmed serious quality issues in the construction project, but the Board believes no provision is necessary at this stage[85] - The Group is committed to reducing environmental impacts and complying with relevant environmental laws, as detailed in the Environmental, Social and Governance Report for the year ended December 31, 2022[91] - Throughout the six months ended June 30, 2023, the Group was not aware of any non-compliance with relevant laws and regulations that had a significant impact[97] Shareholder and Corporate Governance - The Company did not recommend the payment of an interim dividend for the six months ended 30 June 2023, consistent with the previous year[12] - The Company completed a bonus issue of 42,750,000 shares on July 18, 2023, on the basis of one bonus share for every ten existing shares held[50] - The Board believes that the current management structure, with the chairman also serving as the CEO, is effective for the Group's operations[105] - The Company is committed to high standards of corporate governance to enhance management effectiveness and safeguard shareholder interests[99] Market and Competitive Landscape - The Group faces risks related to raw material price fluctuations, which could adversely affect gross profit margins if price increases cannot be reflected in selling prices[59] - The competitive landscape in the fine industrial chemicals industry is expected to intensify, potentially impacting market share and pricing strategies[61] Segment Performance - The Group has three reportable segments: Aerosols, Organic Silicone Adhesives, and Synthetic Adhesives, each requiring different technology and marketing strategies[186] - Revenue from reportable segments totaled RMB 452,217,000 for the first half of 2023, up 10.6% from RMB 408,852,000 in the prior year[194] - The reportable segment profit for the six months ended June 30, 2023, was RMB 139,599,000, representing a 18.4% increase from RMB 117,905,000 in 2022[194]

Management Appointments - Mr. Yang Shanjie appointed as head of quality control centre on January 1, 2023, responsible for daily quality management[11] - Ms. Wen Guihong has been head of finance since January 1, 2021, managing financial and accounting matters[3] - Mr. Liang Haitao appointed as director of sales centre on January 1, 2023, overseeing daily sales department management[17] - Mr. Han Wanyu has over 23 years of experience in logistics and operational management, currently serving as head of logistics and operations since January 2017[23] - Ms. Zhong Ruiqin has been head of administration since March 1, 2016, managing administrative and human resources matters[16] - Mr. Ju Xuezhi appointed as director of production centre on January 1, 2022, responsible for managing production bases[13] - Ms. Zhong has over 24 years of experience, joined Guangdong Sanvo in March 2013, and has been head of administration since March 1, 2016[6] - Mr. Han has held various positions in logistics management since 1997, joining Guangdong Sanvo in March 2014[4] - The company has a strong management team with extensive experience across various sectors, enhancing operational efficiency[24] Financial Performance - The company reported a revenue of approximately RMB 947,850,000 for FY2022, representing a decrease of approximately 3.6% compared to FY2021[53] - Gross profit for FY2022 was RMB 260,989,000, with a gross profit margin of 27.5%, an increase from 26.6% in FY2021[40] - Profit for the year decreased to RMB 4,492,000 in FY2022 from RMB 14,015,000 in FY2021[40] - The total employee benefit expenses for FY2022 were approximately RMB 131,921,000, up from RMB 117,813,000 in FY2021[48] - The Group's total output for FY2022 was approximately 55,282 tons, a decrease from 57,400 tons in FY2021[50] - Aerosol-related products accounted for approximately 59.4% of total revenue in FY2022, down from 61.1% in FY2021[50] - OEM export orders decreased by approximately 26.1% from RMB 37,113,000 in FY2021 to RMB 27,438,000 in FY2022[53] - The Group's total revenue for FY2022 was approximately RMB947,850,000, a decrease of about 3.6% from RMB983,107,000 in FY2021[98] - The Group's gross profit for FY2022 was approximately RMB260,989,000, representing a decrease of approximately 0.4% from RMB261,923,000 in FY2021, while the gross profit margin increased from 26.6% to 27.5%[99] - Other income and gains increased from approximately RMB3,979,000 in FY2021 to approximately RMB6,079,000 in FY2022, mainly due to increased government subsidies[103] Employee and Operational Metrics - The Group had 1,252 employees as of December 31, 2022, compared to 1,078 employees in the previous year[48] - The Group maintains a gender balance among its employees, with female employees constituting 41% of the workforce[70] - Employee benefits expenses for FY2022 totaled approximately RMB131,921,000, an increase from RMB117,813,000 in FY2021, reflecting a rise in staff numbers and salaries[70] Strategic Focus and Future Plans - The company is focused on improving quality control and operational management to drive future growth[12] - The company has focused on enhancing market competitiveness and developing production technology to improve efficiency and reduce costs[43] - The Chairman expressed confidence in the company's sustainable growth and future business development despite increased sales and administrative expenses[45] - The Group intends to expand its market reach to Central China through the acquisition of Dechem Chemicals Holdings Limited, enhancing its geographical advantage in logistics[72] - The Group plans to continue focusing on the development of its domestic sales network and overseas OEM customers, alongside expanding its MV Production Site[76] - The Group anticipates an increase in the prices of key raw materials in the future, which may adversely affect gross profit margins if not reflected in product pricing[152] - The competitive landscape is expected to intensify, with potential impacts on market share and pricing strategies[154] Financial Position and Ratios - The total assets as of December 31, 2022, were RMB789,362,000, an increase from RMB717,963,000 in 2021, while total liabilities rose to RMB567,714,000 from RMB485,499,000[61] - The current ratio as of December 31, 2022, was approximately 0.67, down from 0.73 in 2021, indicating an increase in net current liabilities to approximately RMB153,547,000[112] - The gearing ratio as of December 31, 2022, was approximately 1.02, up from 0.74 in 2021, reflecting increased borrowings[133] - Cash and bank deposits as of December 31, 2022, amounted to approximately RMB121,849,000, an increase from RMB79,543,000 in 2021[116] - As of December 31, 2022, the Group's interest-bearing bank borrowings and other borrowings totaled approximately RMB226,072,000, an increase from RMB173,022,000 in 2021[159] - The interest rate for the borrowings ranged from 3.80% to 6.45% per annum for FY2022, consistent with FY2021[159] Management and Governance - The Group's strategic planning and business development are managed by Mr. Ng Cheuk Lun, who has been with the Group since August 2018[192] - The Group's executive directors are involved in various committees, including the ESG committee, which focuses on environmental, social, and governance matters[192] - The Group's management team has a strong background in the chemicals industry, with qualifications and experience in technical and managerial roles[180][181] - The Group's executive directors have been recognized for their contributions to patent research and development in the chemicals sector[181] Other Financial Information - Selling and distribution expenses increased significantly, contributing to the overall rise in administrative expenses from approximately RMB111,762,000 in FY2021 to RMB119,035,000 in FY2022[85] - Finance costs rose from approximately RMB6,170,000 in FY2021 to approximately RMB7,993,000 in FY2022 due to increased interest-bearing bank borrowings[83] - The gross profit margin for the Group's products has been impacted by rising production costs and increased marketing expenses[77] - The Group's capital commitments for property, plant, and equipment amounted to approximately RMB69,399,000 as of December 31, 2022, compared to RMB65,085,000 in 2021[162] - The Group's property, plant, and equipment decreased to RMB33,664,000 in 2022 from RMB40,310,000 in 2021[167] - The Group's right-of-use assets were valued at RMB81,733,000 as of December 31, 2022, down from RMB84,096,000 in 2021[167] - The total pledged bank deposits of the Group were approximately RMB31,349,000 as of December 31, 2022, down from RMB61,616,000 in 2021[159] - The Group has not entered into any derivative contracts to hedge against foreign exchange rate risks for FY2022 and FY2021[168] - The Group did not have any significant investments, acquisitions, or disposals of subsidiaries or associates during the fiscal year 2022[172]

Financial Performance - Total revenue for the six months ended June 30, 2022, decreased by approximately 0.4% to approximately RMB 461.3 million compared to RMB 463.1 million for the same period in 2021[12]. - Gross profit increased by approximately 1.3% to approximately RMB 129.7 million for the six months ended June 30, 2022, compared to RMB 128.0 million for the same period in 2021[12]. - Profit attributable to owners of the Company decreased by approximately 49.8% to approximately RMB 9.7 million for the six months ended June 30, 2022, compared to RMB 19.3 million for the same period in 2021[12]. - Basic earnings per share for the six months ended June 30, 2022 was approximately RMB 2.3 cents, down from RMB 4.5 cents in the same period of 2021[20]. - Total comprehensive income for the period attributable to the owners of the Company was RMB 6,089, down 69.8% from RMB 20,186 in the prior year[158]. Profitability and Margins - Gross profit margin increased by approximately 0.5 percentage points to approximately 28.1% for the six months ended June 30, 2022, compared to 27.6% for the same period in 2021[12]. - The increase in gross profit indicates improved operational efficiency and cost management strategies[12]. - The Group's gross profit margin for the six months ended June 30, 2022 ranged from 26.6% to 28.1%, negatively affected by rising raw material costs[24]. Expenses and Costs - Employee benefit expenses for the six months ended June 30, 2022 totaled approximately RMB 60.2 million, an increase from RMB 52.3 million in the same period of 2021[22]. - Selling and distribution expenses increased from approximately RMB 57.4 million for the six months ended June 30, 2021, to approximately RMB 60.2 million for the same period in 2022, attributed to more marketing activities and increased staff costs[41]. - Administrative expenses rose from approximately RMB 46.8 million for the six months ended June 30, 2021, to approximately RMB 55.2 million for the same period in 2022, primarily due to increased salaries and allowances[42]. - Finance costs increased from approximately RMB 3.9 million for the six months ended June 30, 2021, to approximately RMB 5.1 million for the same period in 2022, mainly due to a decrease in interest capitalized[43]. - Income tax expense increased from approximately RMB 2.5 million for the six months ended June 30, 2021, to approximately RMB 4.4 million for the same period in 2022, due to fewer tax-deductible expenses[44]. Liquidity and Financial Position - As of June 30, 2022, the Group recorded net current liabilities of approximately RMB 101.3 million, with a current ratio of approximately 0.77, an increase from 0.73 as of December 31, 2021[53]. - The gearing ratio increased to approximately 0.90 as of June 30, 2022, from approximately 0.74 as of December 31, 2021, due to increased borrowings and decreased total equity[54]. - As of June 30, 2022, the Group's interest-bearing bank borrowings and other borrowings amounted to approximately RMB 205.5 million, an increase from approximately RMB 173.0 million as of December 31, 2021[76]. - The Group aims to maintain liquidity by regularly monitoring cash flow positions and keeping committed credit lines available[74]. - The Group's management is implementing stringent cost controls to improve working capital and cash flow position[188]. Market and Operational Challenges - The impact of COVID-19 has posed significant challenges to the Group's operations, affecting logistics, consumption, and production[23]. - The Group faces significant market competition, particularly from manufacturers in China offering similar products at lower prices, which may impact market share and pricing[65]. - Compliance with PRC laws and regulations is critical, as failure to maintain necessary licenses and permits could adversely affect operations and financial condition[66]. Corporate Governance and Shareholder Information - Throughout the six months ended June 30, 2022, the Company complied with the Corporate Governance Code, except for the deviation regarding the roles of chairman and chief executive officer being held by the same individual[95]. - The Group aims to enhance management effectiveness, increase transparency, and improve risk management and internal control through high corporate governance standards[94]. - As of June 30, 2022, Mr. Chen Bingqiang holds 314,000,000 shares in Sanvo Fine Chemicals Limited, representing 73.45% of the total issued share capital of the Company[107]. - The Group did not hold any significant investment and had no material acquisition or disposal of its subsidiaries and associated companies during the six months ended June 30, 2022[148]. Future Plans and Investments - The Group plans to focus on developing its domestic sales network and expanding its market in Central China through the acquisition of Dechem Group[30]. - The Group will continue to invest in development projects and acquire suitable plant and machinery, funded by internal resources, external equity financing, and/or borrowings[93]. - The Company has no future plans for material investments beyond those disclosed in the prospectus dated December 27, 2019[93].