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华众车载(06830) - 2021 - 中期财报
2021-09-20 08:06
[Company Information](index=3&type=section&id=Company%20Information) This section provides fundamental company information for Huazhong In-Vehicle Holdings Co., Ltd., including board members, committee structures, registered office, and listing details - The Board comprises executive directors (including Chairman and CEO Mr. Zhou Minfeng, Vice Chairman Mr. Wu Bichao), non-executive, and independent non-executive directors, ensuring diverse and independent management[3](index=3&type=chunk) - The company has an Audit Committee, Remuneration Committee, and Nomination Committee to enhance corporate governance, with Mr. Yu Shuli, an independent non-executive director, chairing the Audit and Remuneration Committees[3](index=3&type=chunk) - The company's shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited under stock code **6830**[3](index=3&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=Management%20Discussion%20and%20Analysis) This section details Huazhong In-Vehicle Holdings Co., Ltd.'s business, market performance, financial position, liquidity, capital commitments, foreign exchange risk, share capital structure, contingent liabilities, asset pledges, gearing ratio, material investments, employee and remuneration policies, post-reporting events, and future prospects for the six months ended June 30, 2021, highlighting significant growth in revenue and profit driven by automotive market recovery [Business and Market Review](index=4&type=section&id=Business%20and%20Market%20Review) The Group primarily manufactures and sells automotive interior and exterior structural and decorative parts, molds and tools, air conditioner or heater casings, liquid reservoirs, and other non-automotive products, achieving a 17.6% year-on-year revenue growth and a 56.9% increase in profit attributable to owners of the parent for the six months ended June 30, 2021, driven by automotive market recovery - The Group's core business involves the manufacturing and sale of automotive interior and exterior structural and decorative parts, molds and tools, air conditioner or heater casings and liquid reservoirs, and other non-automotive products[4](index=4&type=chunk) 2021 First Half Key Financial Performance | Indicator | Six Months Ended June 30, 2021 (RMB thousands) | Six Months Ended June 30, 2020 (RMB thousands) | Year-on-Year Growth (%) | | :--- | :------------------------------------- | :------------------------------------- | :----------- | | Revenue | 892,299 | 758,941 | 17.6 | | Profit attributable to owners of the parent | 34,170 | 21,781 | 56.9 | [Financial Review](index=4&type=section&id=Financial%20Review) This section analyzes the Group's revenue composition, gross profit margin, other income and expenses, share of profit of joint ventures, finance income and costs, and income tax, noting that automotive interior and exterior structural and decorative parts remain the primary revenue source, with significant growth in non-automotive product revenue and gross profit margin, leading to an overall improved gross profit margin [Revenue](index=4&type=section&id=Revenue) The Group's revenue primarily derives from five product categories, with total revenue of **RMB 892,299,000** for the six months ended June 30, 2021, where automotive interior and exterior structural and decorative parts contributed the most, and non-automotive products showed the most significant growth in revenue and gross profit margin 2021 First Half Revenue and Gross Profit Margin by Product Category | Product Category | 2021 First Half Revenue (RMB thousands) | 2021 First Half Gross Profit Margin (%) | 2020 First Half Revenue (RMB thousands) | 2020 First Half Gross Profit Margin (%) | | :--- | :---------------------------- | :--------------------- | :---------------------------- | :--------------------- | | Automotive interior and exterior structural and decorative parts | 758,775 | 25.9 | 585,523 | 24.5 | | Molds and tools | 36,487 | 22.8 | 78,870 | 29.5 | | Air conditioner and heater casings and liquid reservoirs | 53,858 | 24.0 | 29,871 | 15.5 | | Non-automotive products | 25,056 | 52.1 | 9,480 | 19.6 | | Sale of raw materials | 18,123 | 1.6 | 55,197 | 15.5 | | **Total** | **892,299** | **25.9** | **758,941** | **24.0** | - Revenue from automotive interior and exterior structural and decorative parts increased to **RMB 758,775,000**, accounting for **85.0%** of total revenue, with a slight increase in gross profit margin to **25.9%**, primarily due to increased sales orders from the automotive market recovery[7](index=7&type=chunk) - Revenue from non-automotive products significantly increased to **RMB 25,056,000**, with its gross profit margin rising sharply from **19.6%** to **52.1%**[7](index=7&type=chunk) [Other Income and Gains](index=5&type=section&id=Other%20Income%20and%20Gains) For the six months ended June 30, 2021, the Group's other income and gains amounted to approximately **RMB 15,575,000**, representing a decrease of approximately **8.7%** compared to the same period last year - Other income and gains amounted to **RMB 15,575,000**, a decrease of approximately **8.7%** from **RMB 17,066,000** in the same period last year[8](index=8&type=chunk) [Selling and Distribution Expenses](index=5&type=section&id=Selling%20and%20Distribution%20Expenses) For the six months ended June 30, 2021, selling and distribution expenses increased by approximately **24.7%** to **RMB 68,899,000**, mainly due to higher packaging and transportation costs resulting from increased sales volume - Selling and distribution expenses increased by approximately **24.7%** to **RMB 68,899,000**, primarily due to increased packaging and transportation expenses from higher sales volume[9](index=9&type=chunk) [Administrative Expenses](index=5&type=section&id=Administrative%20Expenses) For the six months ended June 30, 2021, administrative expenses increased by approximately **32.0%** to **RMB 129,638,000**, mainly due to higher staff costs, research and development expenses, and professional service fees - Administrative expenses increased by approximately **32.0%** to **RMB 129,638,000**, mainly due to increases in staff costs, research and development expenses, and professional service fees[10](index=10&type=chunk) [Share of Profit of Joint Ventures](index=6&type=section&id=Share%20of%20Profit%20of%20Joint%20Ventures) For the six months ended June 30, 2021, the Group recorded a share of profit of joint ventures of **RMB 18,291,000**, a significant increase from **RMB 8,639,000** in the same period last year - Share of profit of joint ventures increased to **RMB 18,291,000**, compared to **RMB 8,639,000** in the same period last year[11](index=11&type=chunk) [Finance Income](index=6&type=section&id=Finance%20Income) The Group's finance income significantly increased by approximately **170.7%** to **RMB 6,120,000**, primarily due to higher interest income from cash and bank balances and loans to suppliers - Finance income significantly increased by approximately **170.7%** to **RMB 6,120,000**, mainly from interest income on cash and bank balances and loans to suppliers[12](index=12&type=chunk) [Finance Costs](index=6&type=section&id=Finance%20Costs) The Group's finance costs decreased by approximately **7.4%** to **RMB 17,895,000**, primarily due to an overall reduction in financing costs - Finance costs decreased by approximately **7.4%** to **RMB 17,895,000**, mainly due to a decrease in overall financing costs[13](index=13&type=chunk) [Income Tax Expense](index=6&type=section&id=Income%20Tax%20Expense) The Group's income tax expense increased by approximately **6.9%** to **RMB 8,721,000**, primarily due to an increase in taxable profit - Income tax expense increased by approximately **6.9%** to **RMB 8,721,000**, primarily due to an increase in taxable profit[14](index=14&type=chunk) [Liquidity and Financial Resources](index=6&type=section&id=Liquidity%20and%20Financial%20Resources) The Group achieved a net cash inflow of **RMB 26,468,000** in the first half of 2021, a significant improvement from a net cash outflow in the prior year, driven by a substantial reduction in net cash used in operating activities, increased net cash from financing activities, and decreased net cash used in investing activities 2021 First Half Cash Flow Overview | Activity Category | Six Months Ended June 30, 2021 (RMB thousands) | Six Months Ended June 30, 2020 (RMB thousands) | | :--- | :------------------------------------- | :------------------------------------- | | Net cash used in operating activities | (15,168) | (86,732) | | Net cash used in investing activities | (41,583) | (66,821) | | Net cash generated from financing activities | 83,219 | 42,404 | | **Net cash inflow/(outflow)** | **26,468** | **(111,149)** | - As of June 30, 2021, cash and cash equivalents amounted to approximately **RMB 120,897,000**, an increase from **RMB 94,429,000** at the end of 2020[15](index=15&type=chunk) - Total interest-bearing bank borrowings were approximately **RMB 820,311,000**, of which approximately **RMB 635,990,000** are due within one year, and the Board expects to repay or renew these with internal funds[15](index=15&type=chunk) [Capital Commitments](index=7&type=section&id=Capital%20Commitments) As of June 30, 2021, the Group's capital commitments amounted to approximately **RMB 130,472,000**, primarily for the purchase of property, plant, and equipment, a slight decrease from the end of 2020 - Capital commitments amounted to approximately **RMB 130,472,000** (December 31, 2020: **RMB 137,364,000**), mainly for the purchase of property, plant, and equipment[16](index=16&type=chunk) [Foreign Exchange Risk](index=7&type=section&id=Foreign%20Exchange%20Risk) The Group's sales, purchases, cash, and borrowings are primarily denominated in RMB, resulting in minimal foreign exchange fluctuation risk; currently, no foreign currency hedging policy is in place, but management will monitor and consider hedging if necessary - The Group's sales and purchases are primarily denominated in RMB, while cash and cash equivalents are mainly denominated in RMB and HKD, and borrowings are denominated in RMB[17](index=17&type=chunk) - Due to minimal foreign exchange fluctuation risk, the Group currently does not employ any foreign currency hedging policy, but management will closely monitor and consider hedging if significant impacts arise[17](index=17&type=chunk) [Share Capital Structure](index=7&type=section&id=Share%20Capital%20Structure) As of June 30, 2021, the total number of issued and fully paid ordinary shares of the Company was **1,769,193,800** - As of June 30, 2021, the total number of issued and fully paid ordinary shares of the Company was **1,769,193,800**[18](index=18&type=chunk) [Contingent Liabilities](index=7&type=section&id=Contingent%20Liabilities) As of June 30, 2021, the Group had no material contingent liabilities - As of June 30, 2021, the Group had no material contingent liabilities (December 31, 2020: nil)[18](index=18&type=chunk) [Pledge of Assets](index=7&type=section&id=Pledge%20of%20Assets) As of June 30, 2021, certain of the Group's interest-bearing bank and other borrowings were secured by assets totaling approximately **RMB 149,221,000**, a decrease in total pledged assets compared to the end of 2020 Carrying Value of Pledged Assets | Asset Category | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :------------------------- | :--------------------------- | | Property, plant and equipment | 7,527 | 18,694 | | Investment properties | 1,321 | 929 | | Right-of-use assets — prepaid land lease payments | 31,373 | 35,937 | | Pledged deposits | 109,000 | 109,000 | | **Total** | **149,221** | **164,560** | [Gearing Ratio](index=7&type=section&id=Gearing%20Ratio) As of June 30, 2021, the Group's gearing ratio was approximately **62.3%**, consistent with the end of 2020 - As of June 30, 2021, the Group's gearing ratio was approximately **62.3%** (December 31, 2020: **62.3%**)[21](index=21&type=chunk) [Material Investments, Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures, and Future Plans for Material Investments or Capital Assets](index=8&type=section&id=Material%20Investments,%20Acquisitions%20and%20Disposals%20of%20Subsidiaries,%20Associates%20and%20Joint%20Ventures,%20and%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) For the six months ended June 30, 2021, the Group held no material investments, nor did it undertake any material acquisitions or disposals of subsidiaries, associates, or joint ventures, and the Board currently has no authorized plans for any material investments or additions to capital assets - For the six months ended June 30, 2021, the Group held no material investments or undertook any material acquisitions or disposals of subsidiaries, associates, and joint ventures[22](index=22&type=chunk) - As of the date of this report, the Board has not authorized any plans for material investments or additions to capital assets[22](index=22&type=chunk) [Employees and Remuneration Policy](index=8&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2021, the Group employed **2,790** staff, with total staff costs of approximately **RMB 125,054,000**; the Group's remuneration policy aligns with relevant laws, market conditions, and employee performance, and grants share options to outstanding performers - As of June 30, 2021, the Group had **2,790** employees (June 30, 2020: **2,778** employees)[23](index=23&type=chunk) - For the six months ended June 30, 2021, the Group's total staff costs were approximately **RMB 125,054,000** (first half of 2020: **RMB 95,946,000**)[23](index=23&type=chunk) - The remuneration policy complies with relevant laws, market conditions, and employee performance, and grants share options to eligible individuals for outstanding performance and contributions[23](index=23&type=chunk) [Events After Reporting Period](index=8&type=section&id=Events%20After%20Reporting%20Period) From June 30, 2021, to the date of this report, the Group has not undertaken any material post-reporting period events - From June 30, 2021, to the date of this report, the Group has not undertaken any material post-reporting period events[24](index=24&type=chunk) [Prospects](index=8&type=section&id=Prospects) The Group anticipates continued revenue and profit growth for the full year 2021, benefiting from the sustained recovery of China's automotive market and rapid development of new energy vehicles, focusing on its "plastic-for-steel" technological advantage, expanding new energy vehicle clientele, and enhancing business scale and enterprise value through automation, increased R&D, and M&A opportunities - China's automotive market continued to recover in the first half of 2021, with significant year-on-year growth in production and sales, projecting full-year automotive sales to reach **27 million** units and new energy vehicle sales to increase by approximately **76%**[24](index=24&type=chunk) - The Group will leverage its "plastic-for-steel" technological advantage, strategically develop new energy vehicles, expand its client base and orders in this sector, and maintain its strategy of serving mid-to-high-end passenger vehicle brands[24](index=24&type=chunk) - Future plans include enhancing automation, expanding new plant production capacity, increasing internal optimization and R&D efforts, developing high-value-added fabric panels and one-stop component solutions, and exploring upstream and downstream industry chain expansion and potential M&A opportunities[25](index=25&type=chunk) [Forward-Looking Statements](index=9&type=section&id=Forward-Looking%20Statements) This section cautions readers that forward-looking statements in the management discussion and analysis involve known and unknown risks and uncertainties, and actual results may differ materially from expectations - Forward-looking statements represent only the Company's expectations or beliefs regarding future events and involve known and unknown risks and uncertainties[26](index=26&type=chunk) - Actual results, performance, or events may differ materially from those expressed or implied in such statements[26](index=26&type=chunk) [Corporate Governance and Other Information](index=9&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section outlines Huazhong In-Vehicle Holdings Co., Ltd.'s corporate governance practices, including compliance with the Corporate Governance Code, updates on directors' information, equity interests of directors and chief executives, share option schemes, substantial shareholders' interests, and the responsibilities of the Audit Committee; the company generally complies with the Corporate Governance Code, with a deviation where the Chairman and Chief Executive Officer roles are held by the same individual [Corporate Governance Code](index=10&type=section&id=Corporate%20Governance%20Code) The Company has adopted the Corporate Governance Code set out in Appendix 14 to the Hong Kong Listing Rules and has complied with all applicable code provisions for the six months ended June 30, 2021, with one exception where the roles of Chairman and Chief Executive Officer are held by the same person - The Company has adopted and complied with all applicable code provisions of the Corporate Governance Code for the entire six months ended June 30, 2021, with one deviation[28](index=28&type=chunk) - Deviation from Code Provision A.2.1: Mr. Zhou Minfeng concurrently holds the positions of Chairman and Chief Executive Officer, a structure the Board believes allows for effective execution of business strategies and operations[29](index=29&type=chunk) [Standard Code for Securities Transactions by Directors of Listed Issuers](index=10&type=section&id=Standard%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) The Company has adopted the Standard Code set out in Appendix 10 to the Listing Rules, and all directors confirmed compliance with this code for the six months ended June 30, 2021 - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers, and all directors confirmed compliance with this code for the six months ended June 30, 2021[30](index=30&type=chunk) [Update on Directors' Information](index=10&type=section&id=Update%20on%20Directors'%20Information) This section updates changes in the Board of Directors, including Mr. Wu Bichao's appointment as Vice Chairman and re-designation as an executive director, and the renewal of engagement letters for several directors - Independent non-executive director Mr. Wu Bichao was appointed Vice Chairman of the Board (effective January 27, 2021) and re-designated as an executive director (effective March 1, 2021)[31](index=31&type=chunk) - The engagement letters for executive director Mr. Wu Bichao, non-executive director Ms. Lai Caiyong, and independent non-executive director Mr. Wang Lianzhang were all renewed for a three-year term[31](index=31&type=chunk) [Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures](index=11&type=section&id=Directors'%20and%20Chief%20Executive's%20Interests%20and%20Short%20Positions%20in%20Shares,%20Underlying%20Shares%20and%20Debentures) As of June 30, 2021, directors and the chief executive held long positions in the Company's shares, with Mr. Zhou Minfeng holding the vast majority of interests through his wholly-owned Huayou Holdings Limited, and additional shares through spousal interests Directors' Long Positions in the Company (as of June 30, 2021) | Director's Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Zhou Minfeng | Interest in controlled corporation (Huayou Holdings Limited) | 1,320,000,000 | 74.61% | | Mr. Zhou Minfeng | Spouse's interest (Ms. Chen Chun'er) | 1,100,000 | 0.06% | | Mr. Wang Lianzhang | Beneficial owner | 1,000,000 | 0.06% | [Share Option Schemes](index=12&type=section&id=Share%20Option%20Schemes) The Company terminated the 2011 Share Option Scheme on June 2, 2021, though unexercised options granted thereunder remain valid; concurrently, shareholders approved the adoption of a new 2021 Share Option Scheme to incentivize participants, with no options granted, exercised, lapsed, or cancelled under either scheme as of the report date - The 2011 Share Option Scheme was terminated on June 2, 2021, but unexercised share options granted before termination remain valid[35](index=35&type=chunk) - The 2021 Share Option Scheme was adopted with shareholder approval on June 2, 2021, for a ten-year term, aiming to encourage or reward participants for their contributions to the Group[36](index=36&type=chunk) - As of the six months ended June 30, 2021, and the date of this report, no unexercised share options existed, and no share options were granted, exercised, lapsed, or cancelled under either scheme[35](index=35&type=chunk)[36](index=36&type=chunk) [Arrangement to Purchase Shares or Debentures by Directors](index=12&type=section&id=Arrangement%20to%20Purchase%20Shares%20or%20Debentures%20by%20Directors) For the six months ended June 30, 2021, no rights to acquire benefits by means of the acquisition of shares or debentures of the Company were granted to or exercised by the directors or their respective spouses or minor children - For the six months ended June 30, 2021, no rights to acquire benefits by means of the acquisition of shares or debentures of the Company were granted to or exercised by the directors or their respective spouses or minor children[37](index=37&type=chunk) [Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares](index=12&type=section&id=Substantial%20Shareholders'%20Interests%20and%20Short%20Positions%20in%20Shares%20and%20Underlying%20Shares) As of June 30, 2021, Huayou Holdings Limited, wholly-owned by Mr. Zhou Minfeng, was the Company's substantial shareholder, holding **74.61%** of the shares; Mr. Zhou Minfeng's spouse, Ms. Chen Chun'er, also held some shares and was deemed to hold interests in Huayou Holdings Substantial Shareholders' Long Positions in the Company (as of June 30, 2021) | Name | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Huayou Holdings Limited | Beneficial owner | 1,320,000,000 | 74.61% | | Ms. Chen Chun'er | Beneficial owner | 1,100,000 | 0.06% | | Ms. Chen Chun'er | Spouse's interest (through Mr. Zhou Minfeng's interest in Huayou Holdings) | 1,320,000,000 | 74.61% | Equity Interests in Group Companies (10% or more) | Name | Shareholder | Approximate Percentage of Equity Interest | | :--- | :--- | :--- | | Shanghai Huaxin | Shanghai Automotive Air Conditioner Factory | 30% | | Shanghai Huaxin | Shanghai Beicai Industrial Co., Ltd. | 19% | | Changxing Huaxin Automotive Rubber and Plastic Products Co., Ltd. | Shanghai Automotive Air Conditioner Factory | 30% | | Changxing Huaxin Automotive Rubber and Plastic Products Co., Ltd. | Shanghai Beicai Industrial Co., Ltd. | 19% | [Audit Committee](index=14&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, is responsible for reviewing and overseeing the Group's financial reporting process, risk management, and internal control systems; the committee has reviewed the Group's interim results for the six months ended June 30, 2021, and deemed them prepared in accordance with applicable accounting standards, rules, and regulations with proper disclosure - The Audit Committee comprises three independent non-executive directors, with Mr. Yu Shuli as Chairman[42](index=42&type=chunk) - The Committee has reviewed the Group's interim results for the six months ended June 30, 2021, and is of the opinion that they were prepared in accordance with applicable accounting standards, rules, and regulations and properly disclosed[42](index=42&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=14&type=section&id=Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) For the six months ended June 30, 2021, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - For the six months ended June 30, 2021, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[43](index=43&type=chunk) [Interim Dividend](index=14&type=section&id=Interim%20Dividend) The Board has resolved not to declare an interim dividend for the six months ended June 30, 2021 - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2021 (six months ended June 30, 2020: nil)[43](index=43&type=chunk) [Acknowledgement](index=14&type=section&id=Acknowledgement) The Chairman of the Board takes this opportunity to express gratitude for the valuable advice and guidance from the directors, and the diligent work and loyal service of all Group employees - The Chairman of the Board expresses gratitude for the valuable advice and guidance from the directors, and the diligent work and loyal service of all Group employees[44](index=44&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=15&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This statement presents the Group's consolidated profit or loss for the six months ended June 30, 2021, showing significant growth in revenue, gross profit, profit before tax, and profit for the period, alongside a substantial increase in earnings per share attributable to owners of the parent Interim Condensed Consolidated Statement of Profit or Loss Summary (Six Months Ended June 30) | Indicator | 2021 (RMB thousands) | 2020 (RMB thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 892,299 | 758,941 | 17.6 | | Cost of sales | (661,462) | (577,037) | 14.6 | | Gross profit | 230,837 | 181,904 | 26.9 | | Other income and gains | 15,575 | 17,066 | (8.7) | | Selling and distribution expenses | (68,899) | (55,248) | 24.7 | | Administrative expenses | (129,638) | (98,176) | 32.0 | | Share of profit of joint ventures | 18,291 | 8,639 | 111.7 | | Finance income | 6,120 | 2,261 | 170.7 | | Finance costs | (17,895) | (19,317) | (7.4) | | Profit before tax | 45,156 | 31,336 | 44.1 | | Income tax expense | (8,721) | (8,158) | 6.9 | | Profit for the period | 36,435 | 23,178 | 57.2 | | Profit attributable to owners of the parent | 34,170 | 21,781 | 56.9 | | Earnings per share attributable to ordinary equity holders of the parent (RMB) | 0.0193 | 0.0123 | 56.9 | [Interim Condensed Consolidated Statement of Comprehensive Income](index=16&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) This statement presents the Group's consolidated comprehensive income for the six months ended June 30, 2021, with total comprehensive income for the period amounting to **RMB 36,435,000**, primarily contributed by profit for the period, and no other comprehensive loss or income compared to the prior year Interim Condensed Consolidated Statement of Comprehensive Income Summary (Six Months Ended June 30) | Indicator | 2021 (RMB thousands) | 2020 (RMB thousands) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 36,435 | 23,178 | 57.2 | | Other comprehensive loss, net of tax, that may be reclassified to profit or loss in subsequent periods | — | — | N/A | | Other comprehensive (loss)/income, net of tax, that will not be reclassified to profit or loss in subsequent periods | — | (8,520) | N/A | | Other comprehensive (loss)/income for the period, net of tax | — | (8,520) | N/A | | **Total comprehensive income for the period** | **36,435** | **14,658** | **148.6** | | Attributable to: Owners of the parent | 34,170 | 13,261 | 157.7 | | Non-controlling interests | 2,265 | 1,397 | 62.1 | [Interim Condensed Consolidated Statement of Financial Position](index=17&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This statement presents the Group's financial position as of June 30, 2021, showing growth in total assets and total equity, and an improvement in net current liabilities; despite net current liabilities, the Board prepared this financial information on a going concern basis, supported by unutilized credit facilities and cost control measures Interim Condensed Consolidated Statement of Financial Position Summary (as of June 30) | Indicator | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Total non-current assets | 1,517,696 | 1,513,285 | 0.3 | | Total current assets | 1,820,934 | 1,733,493 | 5.0 | | Total current liabilities | 1,909,809 | 1,852,914 | 3.1 | | Net current liabilities | (88,875) | (119,421) | (25.6) | | Total assets less current liabilities | 1,428,821 | 1,393,864 | 2.5 | | Total non-current liabilities | 218,927 | 209,648 | 4.4 | | Net assets | 1,209,894 | 1,184,216 | 2.2 | | Total equity | 1,209,894 | 1,184,216 | 2.2 | - As of June 30, 2021, the Group recorded consolidated net current liabilities of **RMB 88,875,000**, but the Board prepared the financial information on a going concern basis, citing unutilized credit facilities (approximately **RMB 813,105,000**) and ongoing cost control measures[57](index=57&type=chunk) [Interim Condensed Consolidated Statement of Changes in Equity](index=19&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Changes%20in%20Equity) This statement presents the Group's equity changes for the six months ended June 30, 2021, with the increase in total equity primarily reflecting profit for the period, while also accounting for the final dividend declared for 2020 Interim Condensed Consolidated Statement of Changes in Equity Summary (Six Months Ended June 30) | Equity Component | January 1, 2021 (Audited) (RMB thousands) | Profit for the Period (RMB thousands) | 2020 Final Dividend (RMB thousands) | June 30, 2021 (Unaudited) (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Share capital | 142,956 | — | — | 142,956 | | Reserves | 1,000,514 | 34,170 | (10,757) | 1,023,927 | | **Equity attributable to owners of the parent** | **1,143,470** | **34,170** | **(10,757)** | **1,166,883** | | Non-controlling interests | 40,746 | 2,265 | — | 43,011 | | **Total equity** | **1,184,216** | **36,435** | **(10,757)** | **1,209,894** | - The Group declared a 2020 final dividend of **RMB 10,757,000** during the period[51](index=51&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=20&type=section&id=Interim%20Condensed%20Consolidated%20Statement%20of%20Cash%20Flows) This statement presents the Group's cash flows for the six months ended June 30, 2021, recording a net cash inflow of **RMB 26,468,000**, a significant improvement from the net cash outflow of **RMB 111,149,000** in the prior year, primarily due to improved operating cash flow and net inflows from financing activities Interim Condensed Consolidated Statement of Cash Flows Summary (Six Months Ended June 30) | Activity Category | 2021 (RMB thousands) | 2020 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | Net cash used in operating activities | (15,168) | (86,732) | 71,564 | | Net cash used in investing activities | (41,583) | (66,821) | 25,238 | | Net cash generated from financing activities | 83,219 | 42,404 | 40,815 | | **Net increase/(decrease) in cash and cash equivalents** | **26,468** | **(111,149)** | **137,617** | | Cash and cash equivalents at beginning of period | 94,429 | 188,250 | (93,821) | | **Cash and cash equivalents at end of period** | **120,897** | **77,101** | **43,796** | - Net cash used in operating activities significantly decreased from **RMB 86,732,000** in the first half of 2020 to **RMB 15,168,000** in the first half of 2021[52](index=52&type=chunk) - Net cash generated from financing activities significantly increased, primarily from bank loans[53](index=53&type=chunk) [Notes to the Interim Condensed Consolidated Financial Information](index=22&type=section&id=Notes%20to%20the%20Interim%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes to the interim condensed consolidated financial information, covering company information, basis of preparation, changes in accounting policies, operating segment information, revenue and other income, various expenses, income tax, dividends, earnings per share, property, plant and equipment, receivables, payables, commitments, related party transactions, and fair value information of financial instruments, offering deeper explanations and disclosures for the financial statements [1. Company Information](index=22&type=section&id=1.%20Company%20Information) This note reiterates Huazhong In-Vehicle Holdings Co., Ltd.'s incorporation details, listing status, and primary business activities, which involve the manufacturing and sale of automotive and non-automotive products - The Company was incorporated in the Cayman Islands on December 3, 2010, and listed on the Main Board of the Stock Exchange of Hong Kong on January 12, 2012[55](index=55&type=chunk) - The Group primarily engages in the manufacturing and sale of automotive interior and exterior structural and decorative parts, molds and tools, air conditioner or heater casings and liquid reservoirs, and other non-automotive products[55](index=55&type=chunk) [2.1 Basis of Preparation](index=22&type=section&id=2.1%20Basis%20of%20Preparation) The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 and should be read in conjunction with the annual consolidated financial statements; despite net current liabilities, the Board prepared this financial information on a going concern basis, supported by unutilized credit facilities and cost control measures - The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard 34 Interim Financial Reporting[56](index=56&type=chunk) - Despite recording consolidated net current liabilities of **RMB 88,875,000** as of June 30, 2021, the Board prepared the financial information on a going concern basis, citing unutilized credit facilities (approximately **RMB 813,105,000**) and ongoing cost control measures[57](index=57&type=chunk) [2.2 Changes in Accounting Policies and Disclosures](index=23&type=section&id=2.2%20Changes%20in%20Accounting%20Policies%20and%20Disclosures) The accounting policies adopted in preparing the interim condensed consolidated financial information are consistent with those of the prior year, and the newly adopted revised International Financial Reporting Standards had no impact on the Group's financial position or performance - The accounting policies adopted in preparing the interim condensed consolidated financial information are consistent with those applied in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2020[58](index=58&type=chunk) - The newly adopted revised International Financial Reporting Standards (such as Interest Rate Benchmark Reform, COVID-19-Related Rent Concessions) had no impact on the Group's interim financial position or performance[59](index=59&type=chunk) [3. Operating Segment Information](index=23&type=section&id=3.%20Operating%20Segment%20Information) The Group operates as a single business unit, thus no segment analysis is presented, and non-current assets are primarily located in mainland China - The Group is organized as a single business unit, primarily engaged in the production and sale of automotive interior and exterior decorative and structural parts, molds and tools, air conditioner or heater casings and liquid reservoirs, and other non-automotive products, hence no segment analysis is presented[60](index=60&type=chunk) - As of June 30, 2021, the Group's non-current assets (excluding financial instruments and deferred tax assets) were primarily located in mainland China, amounting to **RMB 1,434,199,000**[61](index=61&type=chunk) [4. Revenue, Other Income and Gains](index=24&type=section&id=4.%20Revenue,%20Other%20Income%20and%20Gains) This note provides a breakdown of revenue by type of goods or services, geographical market, and point in time of revenue recognition, along with an analysis of other income and gains; sales of plastic parts and automotive parts are the main revenue sources, with mainland China contributing the vast majority of revenue Revenue by Type of Goods or Services (Six Months Ended June 30) | Classification of Goods or Services | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Sale of plastic parts and automotive parts | 855,812 | 680,071 | | Sale of molds and tools | 36,487 | 78,870 | | Management services | 1,960 | 1,823 | | **Total revenue from contracts with customers** | **894,259** | **760,764** | Revenue by Geographical Market (Six Months Ended June 30) | Geographical Market | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Mainland China | 860,130 | 739,644 | | Overseas | 34,129 | 21,120 | | **Total revenue from contracts with customers** | **894,259** | **760,764** | Other Income and Gains Analysis (Six Months Ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Rental income | 7,368 | 7,025 | | Government grants | 3,966 | 6,073 | | Management fees | 1,960 | 1,823 | | Gain on disposal of items of property, plant and equipment | 638 | 25 | | Others | 1,643 | 309 | | **Total** | **15,575** | **17,066** | [5. Finance Income](index=25&type=section&id=5.%20Finance%20Income) This note details the sources of finance income, primarily comprising interest income from bank deposits and interest income from loans and receivables, with a significant increase in total amount Finance Income Details (Six Months Ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Interest income from bank deposits | 3,131 | 2,261 | | Interest income from loans and receivables | 2,989 | — | | **Total** | **6,120** | **2,261** | [6. Finance Costs](index=25&type=section&id=6.%20Finance%20Costs) This note outlines the composition of finance costs, mainly interest expenses on interest-bearing bank borrowings and lease liabilities, with a decrease in the total amount Finance Costs Details (Six Months Ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Interest expense on interest-bearing bank borrowings | 17,721 | 19,140 | | Interest expense on lease liabilities | 174 | 177 | | **Total** | **17,895** | **19,317** | [7. Profit Before Tax](index=26&type=section&id=7.%20Profit%20Before%20Tax) This note details the major expenses and income items affecting profit before tax, including cost of inventories recognized, depreciation, amortization, employee benefit expenses, net rental income, net exchange differences, and impairment of trade receivables Major Components of Profit Before Tax (Six Months Ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Cost of inventories recognized | 661,462 | 577,037 | | Depreciation of property, plant and equipment | 53,448 | 44,298 | | Employee benefit expenses (excluding directors' and chief executive's emoluments) | 125,054 | 95,946 | | Net rental income | (7,368) | (7,025) | | Net exchange differences | 8,115 | 3,037 | | Impairment of trade receivables | 347 | 1,300 | | Gain on disposal of items of property, plant and equipment | (638) | (25) | [8. Income Tax](index=27&type=section&id=8.%20Income%20Tax) This note presents the main components of the Group's income tax expense for the period, including current income tax and deferred income tax, with an increase in the total amount Income Tax Expense Components (Six Months Ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Current income tax — expense for the period | 12,719 | 27,182 | | Deferred income tax | (3,998) | (19,024) | | **Total income tax expense for the period** | **8,721** | **8,158** | [9. Dividends](index=27&type=section&id=9.%20Dividends) This note discloses the final dividend declared for 2020 and confirms the Board's decision not to declare an interim dividend for the first half of 2021 - A final dividend of **0.6080 HK cents** per ordinary share for 2020 was declared, totaling **RMB 10,757,000**[69](index=69&type=chunk) - The Board has resolved not to declare an interim dividend for the six months ended June 30, 2021[69](index=69&type=chunk) [10. Earnings Per Share Attributable to Ordinary Equity Holders of the Parent](index=28&type=section&id=10.%20Earnings%20Per%20Share%20Attributable%20to%20Ordinary%20Equity%20Holders%20of%20the%20Parent) This note explains the calculation method for basic and diluted earnings per share and presents the profit attributable to owners of the parent and the weighted average number of ordinary shares used in the calculation - Basic earnings per share for the period are calculated based on the consolidated net profit attributable to owners of the parent and the weighted average number of **1,769,193,800** ordinary shares outstanding for the six months ended June 30, 2021[70](index=70&type=chunk) Basis for Basic and Diluted Earnings Per Share Calculation (Six Months Ended June 30) | Indicator | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Profit attributable to owners of the parent for basic and diluted earnings per share calculation | 34,170 | 21,781 | | Weighted average number of ordinary shares outstanding during the period for basic earnings per share calculation (number of shares) | 1,769,193,800 | 1,769,193,800 | [11. Property, Plant and Equipment](index=28&type=section&id=11.%20Property,%20Plant%20and%20Equipment) This note discloses the Group's investments and disposals in property, plant, and equipment, showing a significant decrease in total purchase cost during the period and an increase in net gain from asset disposals - For the six months ended June 30, 2021, the Group's total cost for purchasing property, plant and equipment was **RMB 51,032,000** (first half of 2020: **RMB 116,016,000**)[73](index=73&type=chunk) - The disposal of assets with a net book value of **RMB 3,215,000** resulted in a net gain on disposal of **RMB 638,000** (first half of 2020: **RMB 25,000**)[73](index=73&type=chunk) [12. Trade Receivables and Bills Receivable](index=29&type=section&id=12.%20Trade%20Receivables%20and%20Bills%20Receivable) This note provides an aging analysis of trade receivables and bills receivable, indicating a decrease in the total amount as of June 30, 2021, with a notable reduction in receivables aged six months to one year Aging Analysis of Trade Receivables and Bills Receivable (as of June 30) | Aging | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 569,760 | 626,037 | | 3 to 6 months | 84,534 | 70,703 | | 6 months to 1 year | 46,152 | 89,171 | | Over 1 year | 36,140 | 33,767 | | **Total** | **736,586** | **819,678** | [13. Trade Payables and Bills Payable](index=29&type=section&id=13.%20Trade%20Payables%20and%20Bills%20Payable) This note provides an aging analysis of trade payables and bills payable, indicating a decrease in the total amount as of June 30, 2021, with a significant reduction in payables aged one to two years Aging Analysis of Trade Payables and Bills Payable (as of June 30) | Aging | June 30, 2021 (RMB thousands) | December 31, 2020 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 646,517 | 669,463 | | 3 to 12 months | 219,613 | 259,743 | | 1 to 2 years | 10,610 | 34,682 | | 2 to 3 years | 10,584 | — | | Over 3 years | 1,645 | 1,653 | | **Total** | **888,969** | **965,541** | [14. Commitments](index=29&type=section&id=14.%20Commitments) This note discloses the Group's capital commitments as of the reporting period end, primarily for contracted but unprovided acquisitions of property, plant, and equipment, with a slight decrease in the total amount - As of June 30, 2021, the Group's capital commitments for the acquisition of property, plant and equipment amounted to approximately **RMB 130,472,000** (December 31, 2020: **RMB 137,364,000**)[77](index=77&type=chunk) [15. Related Party Transactions](index=30&type=section&id=15.%20Related%20Party%20Transactions) This note details significant transactions between the Group and its related parties, including sales of goods, purchases of goods, rental income, and management fee collection, all conducted at agreed prices and terms; it also discloses key management personnel's emoluments Summary of Related Party Transactions (Six Months Ended June 30) | Transaction Category | Related Party | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | :--- | | Sales of goods to | Joint ventures | 42,071 | 35,307 | | | Entities significantly influenced by Mr. Zhou's brother | 799 | 828 | | Purchases of goods from | Joint ventures | 32,294 | 27,157 | | | Entities significantly influenced by Mr. Zhou's brother | 4,069 | 5,230 | | | Entities significantly influenced by key management personnel | 2,611 | — | | Total rental income received from | Joint ventures | 4,950 | 5,397 | | | Subsidiaries of joint ventures | 3,267 | 3,238 | | Management fees received from | Joint ventures | 1,960 | 1,823 | Key Management Personnel's Emoluments (Six Months Ended June 30) | Item | 2021 (RMB thousands) | 2020 (RMB thousands) | | :--- | :--- | :--- | | Wages, salaries and other benefits | 2,938 | 1,324 | | Pension scheme contributions | 18 | 16 | | **Total emoluments paid to key management personnel** | **2,956** | **1,340** | [16. Fair Value and Fair Value Hierarchy of Financial Instruments](index=31&type=section&id=16.%20Fair%20Value%20and%20Fair%20Value%20Hierarchy%20of%20Financial%20Instruments) This note explains the Group's fair value measurement methods and hierarchy for financial instruments, noting that the carrying amounts of most financial instruments approximate their fair values due to short maturities; unlisted equity investments are valued using market valuation techniques, and bills receivable are measured at fair value through other comprehensive income; the note also provides sensitivity analysis for significant unobservable inputs and fair value hierarchy classifications - Except for equity investments designated at fair value through other comprehensive income and non-current interest-bearing bank borrowings, the carrying amounts of the Group's financial instruments reasonably approximate their fair values due to their short maturities[81](index=81&type=chunk)[82](index=82&type=chunk) - Certain unlisted equity investments designated at fair value through other comprehensive income are valued using market valuation techniques, based on forward price-to-earnings multiples and enterprise value to EBITDA multiples of comparable companies, adjusted for a discount for lack of marketability[82](index=82&type=chunk) Assets Measured at Fair Value (as of June 30, 2021) | Asset Category | Total (RMB thousands) | Level 1 (RMB thousands) | Level 2 (RMB thousands) | Level 3 (RMB thousands) | | :--- | :--- | :--- | :--- | :--- | | Equity investments designated at fair value through other comprehensive income | 69,797 | — | — | 69,797 | | Bills receivable at fair value through other comprehensive income | 124,515 | — | 124,515 | — | [17. Events After Reporting Period](index=35&type=section&id=17.%20Events%20After%20Reporting%20Period) This note confirms that the Group had no material events after June 30, 2021 - The Group had no material events after June 30, 2021[89](index=89&type=chunk) [18. Approval of Interim Condensed Consolidated Financial Information](index=35&type=section&id=18.%20Approval%20of%20Interim%20Condensed%20Consolidated%20Financial%20Information) This note states that the unaudited interim condensed consolidated financial statements were approved and authorized for issue by the Board of Directors on August 26, 2021 - The unaudited interim condensed consolidated financial statements were approved and authorized for issue by the Board of Directors on August 26, 2021[89](index=89&type=chunk)
华众车载(06830) - 2020 - 中期财报
2020-09-14 08:16
[Company Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) [Company Basic Information](index=3&type=section&id=%E5%85%AC%E5%8F%B8%E5%9F%BA%E6%9C%AC%E4%BF%A1%E6%81%AF) This section provides fundamental details of Huazhong Vehicle Holdings Limited, including board members, headquarters, and listing information - The company's board of directors comprises executive, non-executive, and independent non-executive directors, with **Mr. Zhou Minfeng** serving as Chairman and CEO[4](index=4&type=chunk) - The company is registered in the Cayman Islands, with its China headquarters in Xiangshan County, Zhejiang Province, and its principal Hong Kong office in Shun Tak Centre[4](index=4&type=chunk) - The company's stock code is **6830**, listed on the Main Board of The Stock Exchange of Hong Kong Limited[4](index=4&type=chunk) [Management Discussion and Analysis](index=4&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E5%8F%8A%E5%88%86%E6%9E%90) [Business and Market Review](index=4&type=section&id=%E6%A5%AD%E5%8B%99%E5%8F%8A%E5%B8%82%E5%A0%B4%E5%9B%9E%E9%A1%A7) The Group's core business involves manufacturing automotive parts and non-automotive products, experiencing significant declines in revenue and profit in H1 2020 - The Group's principal business is the manufacturing and sales of automotive interior and exterior parts, moulds and tools, air-conditioning/heater casings/reservoirs, and non-automotive products[5](index=5&type=chunk) - In H1 **2020**, China's automobile production and sales volumes decreased by **16.8%** and **16.9%** respectively, leading to an overall market decline[5](index=5&type=chunk) **2020** H1 Key Financial Performance | Metric | **2020** H1 (RMB thousands) | **2019** H1 (RMB thousands) | Comparative Change | | --- | --- | --- | --- | | Revenue | **758,941** | **919,456** | **-17.5%** | | Profit attributable to owners of the parent | **21,781** | **48,709** | **-55.3%** | [Financial Review](index=4&type=section&id=%E8%B2%A1%E5%8B%99%E5%9B%9E%E9%A1%A7) This section reviews the Group's H1 **2020** financial performance, noting decreased revenue and gross profit, but reduced administrative expenses **2020** H1 Revenue and Gross Profit Margin Overview | Product Category | **2020** Revenue (RMB thousands) | **2020** Gross Profit Margin (%) | **2019** Revenue (RMB thousands) | **2019** Gross Profit Margin (%) | | --- | --- | --- | --- | --- | | Automotive interior and exterior parts | **585,523** | **24.5** | **656,053** | **31.8** | | Moulds and tools | **78,870** | **29.5** | **153,638** | **11.5** | | Air-conditioning/heater casings/reservoirs | **29,871** | **15.5** | **40,616** | **13.5** | | Non-automotive products | **9,480** | **19.6** | **26,475** | **45.6** | | Sales of raw materials | **55,197** | **15.5** | **42,674** | **5.1** | | Total | **758,941** | **24.0** | **919,456** | **26.8** | - Revenue from automotive interior and exterior parts decreased, with gross profit margin falling from **31.8%** to **24.5%**, primarily due to reduced orders from a sluggish automotive market[7](index=7&type=chunk) - Revenue from moulds and tools decreased, but gross profit margin significantly increased from **11.5%** to **29.5%**[8](index=8&type=chunk) - Administrative expenses decreased by approximately **21.5%** to RMB**98,176,000** thousands, mainly due to lower staff costs and benefits, research and development expenses, and professional service fees[11](index=11&type=chunk) - Share of profit of a joint venture increased by **20.9%** to RMB**8,639,000** thousands[12](index=12&type=chunk) - Tax expense decreased by **33.2%** to RMB**8,158,000** thousands, primarily due to a decrease in taxable profit[15](index=15&type=chunk) [Liquidity and Financial Resources](index=7&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) The Group saw increased net cash outflow from operations, reduced investment cash outflow, and a significant decrease in cash and cash equivalents **2020** H1 Cash Flow Overview | Cash Flow Category | **2020** H1 (RMB thousands) | **2019** H1 (RMB thousands) | | --- | --- | --- | | Net cash used in operating activities | (**86,732**) | (**52**) | | Net cash used in investing activities | (**66,821**) | (**116,323**) | | Net cash generated from financing activities | **42,404** | **127,747** | - As of June **30**, **2020**, Cash and cash equivalents were RMB**77,101,000** thousands, significantly decreased compared to RMB**188,250,000** thousands at year-end **2019**[16](index=16&type=chunk) - As of June **30**, **2020**, total interest-bearing bank borrowings were RMB**925,558,000** thousands, of which RMB**866,558,000** thousands are repayable within **one** year[16](index=16&type=chunk) [Capital Commitments](index=7&type=section&id=%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of June **30**, **2020**, the Group's capital commitments for property, plant, and equipment were approximately RMB**142.1** million, a decrease from year-end **2019** Capital Commitments | Item | **2020** June **30** (RMB thousands) | **2019** December **31** (RMB thousands) | | --- | --- | --- | | Purchase of property, plant and equipment | **142,105** | **160,011** | [Foreign Exchange Risk](index=7&type=section&id=%E5%A4%96%E5%BD%99%E9%A2%A8%E9%9A%AA) The Group's transactions are primarily in RMB, HKD, and EUR; management monitors exchange rate fluctuations but currently has no hedging policy - Group sales, purchases, cash, and borrowings are primarily denominated in RMB, HKD, and EUR[18](index=18&type=chunk) - No foreign currency hedging policy is currently adopted, as exchange rate fluctuation risk is not significant, but management will closely monitor[18](index=18&type=chunk) [Share Capital Structure](index=7&type=section&id=%E8%82%A1%E6%9C%AC%E6%9E%B6%E6%A7%8B) As of June **30**, **2020**, the company had **1,769,193,800** issued and fully paid ordinary shares - As of June **30**, **2020**, the total number of issued and fully paid ordinary shares was **1,769,193,800** shares[19](index=19&type=chunk) [Contingent Liabilities](index=7&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%81%B6) As of June **30**, **2020**, the Group had no significant contingent liabilities - As of June **30**, **2020**, the Group had no significant contingent liabilities[19](index=19&type=chunk) [Pledged Assets](index=8&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June **30**, **2020**, approximately RMB**164.8** million of the Group's assets were pledged for interest-bearing bank and other borrowings Pledged Assets Carrying Amount | Asset Category | **2020** June **30** (RMB thousands) | **2019** December **31** (RMB thousands) | | --- | --- | --- | | Property, plant and equipment | **15,989** | **16,649** | | Investment property | **1,759** | **1,884** | | Right-of-use assets | **38,034** | **46,803** | | Pledged deposits | **109,000** | **117,434** | | Total | **164,782** | **182,770** | [Gearing Ratio](index=8&type=section&id=%E8%B3%87%E6%9C%AC%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) As of June **30**, **2020**, the Group's gearing ratio slightly increased to approximately **66.5%** from **65.3%** at year-end **2019** Gearing Ratio | Metric | **2020** June **30** | **2019** December **31** | | --- | --- | --- | | Gearing ratio | **66.5%** | **65.3%** | [Significant Investments, Acquisitions, Disposals, and Future Capital Plans](index=8&type=section&id=%E6%8C%81%E6%9C%89%E7%9A%84%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE%E9%99%84%E5%B1%AC%E5%85%AC%E5%8F%B8%E3%80%81%E8%81%AF%E5%B1%AC%E5%85%AC%E5%8F%B8%E5%8F%8A%E5%90%88%E7%87%9F%E4%BC%81%E6%A5%AD%E4%BB%A5%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) The Group reported no significant investments, acquisitions, or disposals, with no future plans for major capital asset additions - The Group had no significant investments, acquisitions or disposals of subsidiaries, associates and joint ventures during the reporting period[23](index=23&type=chunk) - The Board currently has no future plans for any significant investments or additions of capital assets[23](index=23&type=chunk) [Employees and Remuneration Policy](index=8&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) As of June **30**, **2020**, the Group's employee count and total staff costs decreased, with remuneration policies aligned with market conditions Employees and Remuneration Overview | Metric | **2020** June **30** | **2019** June **30** | | --- | --- | --- | | Employee headcount | **2,778** | **3,416** | | Total staff costs (RMB thousands) | **95,946** | **129,640** | - Remuneration policy is in line with relevant laws, market conditions and employee performance, and share options may be granted to outstanding performers[24](index=24&type=chunk) [Events After Reporting Period](index=8&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E7%9A%84%E4%BA%8B%E4%BB%B6) No significant events occurred after June **30**, **2020**, up to the report date - No significant events occurred after the reporting period[25](index=25&type=chunk) [Outlook](index=9&type=section&id=%E5%89%8D%E6%99%AF) The Group anticipates a challenging industry environment but plans to enhance competitiveness through internal optimization, R&D, and cost control - The **COVID-19** pandemic severely impacted China's economy and automotive demand, but Group production bases fully resumed operations by late February[26](index=26&type=chunk) - Chinese government policies and stimulus measures, such as increasing vehicle license plate quotas and subsidizing electric vehicles, are expected to drive a moderate market rebound[26](index=26&type=chunk) - The Group will closely collaborate with high-end and joint venture automotive, and electric vehicle brand customers to capture market recovery opportunities, utilizing plastic product design and manufacturing technology to provide lightweight solutions[26](index=26&type=chunk) - The Group will continue to invest in R&D, streamline production processes, and reduce operating expenses to address challenges and maintain financial stability[26](index=26&type=chunk) [Forward-Looking Statements](index=9&type=section&id=%E5%89%8D%E7%9E%BB%E9%99%B3%E8%BF%B0%E8%81%B2%E6%98%8E) This section contains forward-looking statements about future financial and operational results, subject to risks and uncertainties - Forward-looking statements represent only the company's expectations or beliefs regarding future events, involving known and unknown risks and uncertainties[27](index=27&type=chunk) - Actual results, performance or events may differ materially from those expressed or implied[27](index=27&type=chunk) [Corporate Governance and Other Information](index=10&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B3%87%E6%96%99) [Corporate Governance Code](index=10&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%AE%88%E5%89%87) The company adopted and generally complied with the Corporate Governance Code, with a noted deviation regarding the Chairman and CEO roles - The company adopted and complied with the Corporate Governance Code, but the roles of Chairman and Chief Executive Officer are held by **Mr. Zhou Minfeng**, deviating from Code Provision A.**2.1**[28](index=28&type=chunk)[29](index=29&type=chunk) - The Board believes this structure allows for efficient execution of business strategies and operations, and will review this deviation periodically[29](index=29&type=chunk) [Standard Securities Dealing Code for Directors of Listed Issuers](index=10&type=section&id=%E4%B8%8A%E5%B8%82%E7%99%BC%E8%A1%8C%E4%BA%BA%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E7%9A%84%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) The company adopted and confirmed directors' compliance with the Standard Securities Dealing Code for listed issuers during the reporting period - The company adopted the Standard Code, and all directors confirmed compliance with the code during the reporting period[30](index=30&type=chunk) [Update on Directors' Information](index=10&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E6%9B%B4%E6%96%B0) This section updates the renewal status of engagement letters for several non-executive and independent non-executive directors - Non-executive Directors **Mr. Guan Xin** and **Mr. Yu Zhuoping's** engagement letters were renewed for terms of **three** years and **two** years respectively[31](index=31&type=chunk) - Independent Non-executive Directors **Mr. Yu Shuli**, **Mr. Tian Yushi**, and **Mr. Xu Jiali's** engagement letters were renewed, all for terms of **three** years[31](index=31&type=chunk)[32](index=32&type=chunk) - Independent Non-executive Director **Mr. Wu Bichao's** engagement letter was renewed for a term of **one** year[32](index=32&type=chunk) [Directors' and Chief Executive's Interests and Short Positions](index=11&type=section&id=%E8%91%A3%E4%BA%8B%E5%8F%8A%E4%B8%BB%E8%A6%81%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%96%BC%E8%82%A1%E4%BB%BD%E3%80%81%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E5%8F%8A%E5%82%B5%E5%88%B8%E4%B8%AD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) This section discloses directors' and chief executive's interests in the company's shares as of June **30**, **2020** Directors' Long Positions in the Company | Name | Capacity/Nature of interest | Number of shares | Approximate percentage | | --- | --- | --- | --- | | **Mr. Zhou Minfeng** | Interest in controlled corporation | **1,320,000,000** | **74.61%** | | **Mr. Zhou Minfeng** | Spouse's interest | **1,100,000** | **0.06%** | | **Mr. Chang Jingzhou** | Beneficial owner | **840,400** | **0.05%** | | **Mr. Wang Lianzhang** | Beneficial owner | **1,000,000** | **0.06%** | [Share Option Scheme](index=12&type=section&id=%E8%B3%BC%E8%82%A1%E6%AC%8A%E8%A8%88%E5%8A%83) The company's share option scheme aims to incentivize eligible individuals, with no unexercised options or related activities during the period - The share option scheme aims to provide individual equity opportunities to incentivize and reward eligible individuals contributing to the Group[35](index=35&type=chunk) - During the reporting period and up to the report date, there were no unexercised share options, and no share options were granted, exercised, lapsed or cancelled[35](index=35&type=chunk) [Arrangements for Directors to Purchase Shares or Debentures](index=12&type=section&id=%E8%91%A3%E4%BA%8B%E8%B3%BC%E8%B2%B7%E8%82%A1%E4%BB%BD%E6%88%96%E5%82%B5%E5%88%B8%E7%9A%84%E5%AE%89%E6%8E%92) During the six months ended June **30**, **2020**, no directors or their associates were granted or exercised rights to profit from purchasing company shares or debentures - During the six months ended June **30**, **2020**, Directors and their associates were not granted or exercised any rights to profit from purchasing company shares or debentures[36](index=36&type=chunk) [Substantial Shareholders' Interests and Short Positions](index=12&type=section&id=%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%96%BC%E8%82%A1%E4%BB%BD%E5%8F%8A%E7%9B%B8%E9%97%9C%E8%82%A1%E4%BB%BD%E4%B8%AD%E7%9A%84%E6%AC%8A%E7%9B%8A%E5%8F%8A%E6%B7%A1%E5%80%89) This section discloses substantial shareholders' interests in the company's shares as of June **30**, **2020** Substantial Shareholders' Long Positions in the Company | Name | Capacity/Nature of interest | Number of shares | Approximate percentage | | --- | --- | --- | --- | | **Huayou Holdings** | Beneficial owner | **1,320,000,000** | **74.61%** | | **Ms. Chen Chun'er** | Beneficial owner | **1,100,000** | **0.06%** | | **Ms. Chen Chun'er** | Spouse's interest | **1,320,000,000** | **74.61%** | - Shanghai Automotive Air-Conditioner Factory and Shanghai Beicai Industrial Co., Ltd. directly hold **30%** and **19%** interests in Shanghai Huaxin respectively, and indirectly hold **30%** and **19%** interests in Changxing Huaxin[40](index=40&type=chunk) [Audit Committee](index=13&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, composed of independent non-executive directors, reviewed and approved the interim results announcement - The Audit Committee comprises three independent non-executive directors, chaired by **Mr. Yu Shuli**[41](index=41&type=chunk) - The committee's responsibilities include reviewing and overseeing financial reporting, risk management, and internal control systems[41](index=41&type=chunk) - The Audit Committee reviewed the interim results and deemed them properly prepared and disclosed in accordance with applicable accounting standards, rules, and regulations[41](index=41&type=chunk) [Purchase, Sale or Redemption of Listed Securities](index=14&type=section&id=%E8%B3%BC%E8%B2%B7%E3%80%81%E5%87%BA%E5%94%AE%E6%88%96%E8%B4%96%E5%9B%9E%E6%9C%AC%E5%85%AC%E5%8F%B8%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8) During the six months ended June **30**, **2020**, neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities - The company or its subsidiaries did not purchase, sell, or redeem any listed securities during the reporting period[42](index=42&type=chunk) [Interim Dividend](index=14&type=section&id=%E4%B8%AD%E6%9C%9F%E8%82%A1%E6%81%AF) The Board of Directors resolved not to declare an interim dividend for the six months ended June **30**, **2020** - The Board decided not to declare an interim dividend for H**1** **2020**[42](index=42&type=chunk) [Acknowledgement](index=14&type=section&id=%E8%87%B4%E8%AC%9D) The Chairman, **Mr. Zhou Minfeng**, expressed gratitude to the directors for their guidance and to all employees for their diligent service - Chairman **Mr. Zhou Minfeng** expressed gratitude to the directors and employees[42](index=42&type=chunk) [Interim Condensed Consolidated Statement of Profit or Loss](index=15&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%90%8D%E7%9B%8A%E8%A1%A8) [Profit or Loss Statement Overview](index=15&type=section&id=%E6%90%8D%E7%9B%8A%E8%A1%A8%E6%A6%82%E8%A6%BD) This section presents the unaudited interim condensed consolidated statement of profit or loss for the six months ended June **30**, **2020** and **2019** Interim Condensed Consolidated Statement of Profit or Loss (For the six months ended June **30**) | Metric | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Revenue | **758,941** | **919,456** | | Cost of sales | (**577,037**) | (**673,255**) | | Gross profit | **181,904** | **246,201** | | Other income and gains | **17,066** | **17,186** | | Selling and distribution expenses | (**55,248**) | (**60,857**) | | Administrative expenses | (**98,176**) | (**125,093**) | | Net impairment losses on financial assets | (**1,300**) | (**201**) | | Other expenses | (**4,493**) | (**2,942**) | | Share of profit of a joint venture | **8,639** | **7,142** | | Finance income | **2,261** | **2,464** | | Finance costs | (**19,317**) | (**20,930**) | | Profit before tax | **31,336** | **62,970** | | Income tax expense | (**8,158**) | (**12,220**) | | Profit for the period | **23,178** | **50,750** | | Profit attributable to owners of the parent | **21,781** | **48,709** | | Non-controlling interests | **1,397** | **2,041** | | Basic and diluted earnings per share (RMB per share) | **0.0123** | **0.0275** | [Interim Condensed Consolidated Statement of Comprehensive Income](index=16&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) [Comprehensive Income Statement Overview](index=16&type=section&id=%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8%E6%A6%82%E8%A6%BD) This section presents the unaudited interim condensed consolidated statement of comprehensive income for the six months ended June **30**, **2020** and **2019** Interim Condensed Consolidated Statement of Comprehensive Income (For the six months ended June **30**) | Metric | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Profit for the period | **23,178** | **50,750** | | Exchange differences on translation of foreign operations | — | (**464**) | | Equity investments designated at fair value through other comprehensive income: fair value changes | (**11,360**) | **17,281** | | Income tax effect | **2,840** | (**4,321**) | | Total comprehensive income for the period | **14,658** | **63,246** | | Attributable to owners of the parent | **13,261** | **61,205** | | Non-controlling interests | **1,397** | **2,041** | [Interim Condensed Consolidated Statement of Financial Position](index=17&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) [Financial Position Statement Overview](index=17&type=section&id=%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8%E6%A6%82%E8%A6%BD) This section presents the unaudited interim condensed consolidated statement of financial position as of June **30**, **2020** and December **31**, **2019** Interim Condensed Consolidated Statement of Financial Position (As of June **30**) | Metric | **2020** June **30** (RMB thousands) | **2019** December **31** (RMB thousands) | | --- | --- | --- | | Total non-current assets | **1,447,156** | **1,419,830** | | Total current assets | **1,855,696** | **1,886,031** | | Total current liabilities | **2,129,592** | **2,145,608** | | Net current liabilities | (**273,896**) | (**259,577**) | | Total non-current liabilities | **92,082** | **85,329** | | Net assets | **1,081,178** | **1,074,924** | | Total equity | **1,081,178** | **1,074,924** | [Interim Condensed Consolidated Statement of Changes in Equity](index=19&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) [Statement of Changes in Equity Overview](index=19&type=section&id=%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8%E6%A6%82%E8%A6%BD) This section presents the unaudited interim condensed consolidated statement of changes in equity for the six months ended June **30**, **2020** and **2019** - As of June **30**, **2020**, total equity attributable to owners of the parent was RMB**1,041,922** thousands, and non-controlling interests were RMB**39,256** thousands[48](index=48&type=chunk) - Profit for the period was RMB**21,781** thousands, and fair value changes of equity investments designated at fair value through other comprehensive income resulted in a net other comprehensive loss of RMB**8,520** thousands[48](index=48&type=chunk) - Total comprehensive income for the period was RMB**14,658** thousands[48](index=48&type=chunk) [Interim Condensed Consolidated Statement of Cash Flows](index=20&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) [Cash Flow Statement Overview](index=20&type=section&id=%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8%E6%A6%82%E8%A6%BD) This section presents the unaudited interim condensed consolidated statement of cash flows for the six months ended June **30**, **2020** and **2019** Interim Condensed Consolidated Statement of Cash Flows (For the six months ended June **30**) | Cash Flow Category | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Net cash flows used in operating activities | (**86,732**) | (**52**) | | Net cash flows used in investing activities | (**66,821**) | (**116,323**) | | Net cash flows generated from financing activities | **42,404** | **127,747** | | Net decrease/increase in cash and cash equivalents | (**111,149**) | **11,372** | | Cash and cash equivalents at end of period | **77,101** | **90,124** | [Notes to the Interim Condensed Consolidated Financial Information](index=22&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E9%99%84%E8%A8%BB) [Company Information](index=22&type=section&id=%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) This note reiterates Huazhong Vehicle Holdings Limited's registration, listing, and primary business scope - The company was incorporated on December **3**, **2010**, in the Cayman Islands and listed on January **12**, **2012**, on the Main Board of The Stock Exchange of Hong Kong[53](index=53&type=chunk) - The Group is principally engaged in the manufacturing and sales of automotive interior and exterior parts, moulds and tools, air-conditioning/heater casings/reservoirs, and other non-automotive products[53](index=53&type=chunk) [Basis of Preparation](index=22&type=section&id=%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) This note explains the interim condensed consolidated financial information is prepared under IAS **34**, despite a net current liability position - The interim condensed consolidated financial information is prepared in accordance with International Accounting Standard **34** 'Interim Financial Reporting'[54](index=54&type=chunk) - As of June **30**, **2020**, the Group recorded net current liabilities of RMB**273,896,000** thousands[55](index=55&type=chunk) - The Board prepared the financial information on a going concern basis and implemented measures, including unutilized credit facilities and cost control, to improve its financial position[55](index=55&type=chunk) [Changes in Accounting Policies and Disclosures](index=23&type=section&id=%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96%E5%8F%8A%E6%8A%AB%E9%9C%B2%E8%AE%8A%E6%9B%B4) This note lists newly adopted IFRS amendments, which had no material impact on the Group's financial position or performance - Amendments to IFRS **3**, IFRS **9**, IAS **39**, IAS **7**, IAS **1**, IAS **8**, and IFRS **16** were adopted for the first time in the current period[56](index=56&type=chunk)[57](index=57&type=chunk) - These amendments had no impact on the Group's financial position or performance[57](index=57&type=chunk) [Operating Segment Information](index=23&type=section&id=%E7%B6%93%E7%87%9F%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group operates as a single business unit, thus no segment analysis is presented, with most non-current assets located in Mainland China - The Group is organized as a single business unit, primarily engaged in the production and sale of automotive parts and non-automotive products, thus no segment analysis is presented[58](index=58&type=chunk) Non-current Assets by Region | Region | **2020** June **30** (RMB thousands) | **2019** December **31** (RMB thousands) | | --- | --- | --- | | Mainland China | **1,385,533** | **1,349,127** | [Revenue, Other Income and Gains](index=24&type=section&id=%E6%94%B6%E7%9B%8A%E3%80%81%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5%E5%8F%8A%E6%94%B6%E7%9B%8A) This note details the Group's revenue sources by goods/services, geographical markets, and revenue recognition timing, along with other income and gains Revenue Classification (For the six months ended June **30**) | Classification of goods or services | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Sales of plastic parts and automotive parts | **680,071** | **765,818** | | Sales of moulds and tools | **78,870** | **153,638** | | Other income | **758,941** | **919,456** | | Management services | **1,823** | **1,971** | | Geographical market - Mainland China | **739,644** | **819,482** | | Geographical market - Overseas | **21,120** | **101,945** | Other Income and Gains Analysis (For the six months ended June **30**) | Item | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Rental income | **7,025** | **6,040** | | Government grants | **6,073** | **4,934** | | Dividend income | **1,811** | **2,014** | [Finance Income](index=25&type=section&id=%E8%9E%8D%E8%B3%87%E6%94%B6%E5%85%A5) This note discloses the Group's finance income, primarily from bank deposit interest, totaling RMB**2.26** million in H**1** **2020** Finance Income (For the six months ended June **30**) | Item | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Interest income from bank deposits | **2,261** | **2,464** | [Finance Costs](index=25&type=section&id=%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) This note details the Group's finance costs, mainly interest expenses on bank borrowings and lease liabilities, totaling RMB**19.32** million in H**1** **2020** Finance Costs (For the six months ended June **30**) | Item | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Interest expense on interest-bearing bank borrowings | **19,140** | **20,720** | | Interest expense on lease liabilities | **177** | **210** | | Total | **19,317** | **20,930** | [Profit Before Tax](index=26&type=section&id=%E9%99%A4%E7%A8%85%E5%89%8D%E6%BA%A2%E5%88%A9) This note itemizes expenses and income deducted or included in calculating profit before tax, such as inventory costs, depreciation, and staff benefits Profit Before Tax Adjustments (For the six months ended June **30**) | Item | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Cost of inventories recognized as expense | **577,037** | **673,255** | | Depreciation of property, plant and equipment | **44,298** | **44,516** | | Staff costs and benefits (excluding directors' and chief executive's emoluments) | **95,946** | **119,686** | | Net rental income | (**7,025**) | (**6,040**) | | Net foreign exchange differences | **3,037** | **1,586** | | Impairment of trade receivables | **1,300** | **201** | [Income Tax](index=27&type=section&id=%E6%89%80%E5%BE%97%E7%A8%85) This note outlines the Group's income tax expense components, including current and deferred tax, totaling RMB**8.16** million in H**1** **2020** Income Tax Expense (For the six months ended June **30**) | Item | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Current income tax - expense for the period | **27,182** | **13,875** | | Deferred income tax | (**19,024**) | (**1,655**) | | Total income tax expense for the period | **8,158** | **12,220** | [Dividends](index=27&type=section&id=%E8%82%A1%E6%81%AF) This note provides information on declared final dividends and confirms the Board's decision not to declare an interim dividend for H**1** **2020** Final Dividend Declared | Item | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Per ordinary share **0.5206** HK cents (**2019**: **0.4714** HK cents) | **8,404** | **7,130** | - The Board decided not to declare an interim dividend for H**1** **2020**[68](index=68&type=chunk) [Earnings Per Share Attributable to Owners of the Parent](index=28&type=section&id=%E6%AF%8D%E5%85%AC%E5%8F%B8%E6%99%AE%E9%80%9A%E8%82%A1%E8%82%A1%E6%AC%8A%E6%8C%81%E6%9C%89%E4%BA%BA%E6%87%89%E4%BD%B5%E6%AF%8F%E8%82%A1%E7%9B%88%E5%88%A9) This note explains the calculation of basic and diluted earnings per share, which was RMB**0.0123** in H**1** **2020** Earnings Per Share Calculation Basis (For the six months ended June **30**) | Metric | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Profit attributable to owners of the parent used in calculating basic and diluted earnings per share | **21,781** | **48,709** | Earnings Per Share Calculation Basis (For the six months ended June **30**) | Number of shares | **2020** | **2019** | | --- | --- | --- | | Weighted average number of ordinary shares in issue for basic earnings per share during the period | **1,769,193,800** | **1,769,193,800** | [Property, Plant and Equipment](index=28&type=section&id=%E7%89%A9%E6%A5%AD%E3%80%81%E5%BB%A0%E6%88%BF%E5%8F%8A%E8%A8%AD%E5%82%99) This note discloses the Group's H**1** **2020** purchases of property, plant, and equipment totaling RMB**116.02** million, and disposals generating a net gain Property, Plant and Equipment Changes (For the six months ended June **30**) | Item | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Total cost of purchases | **116,016** | **156,062** | | Net book value of assets disposed of | **7,735** | **25,765** | | Net gain on disposal | **25** | **1,178** | [Trade and Bills Receivables](index=29&type=section&id=%E8%B2%A3%E6%98%93%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E6%94%B6%E7%A5%A8%E6%93%9A) This note provides an aging analysis of trade and bills receivables based on invoice date, net of loss allowance - This note provides an aging analysis of trade and bills receivables based on invoice date and net of loss allowance[73](index=73&type=chunk)[74](index=74&type=chunk) [Trade and Bills Payables](index=29&type=section&id=%E8%B2%A3%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A) This note provides an aging analysis of trade and bills payables as of June **30**, **2020**, noting certain bills are secured by pledged deposits Trade and Bills Payables Aging Analysis (As of June **30**) | Aging | **2020** June **30** (RMB thousands) | **2019** December **31** (RMB thousands) | | --- | --- | --- | | Within **3** months | **612,580** | **697,204** | | **3** to **12** months | **261,247** | **278,891** | | **1** to **2** years | **23,546** | — | | Over **3** years | **1,429** | **1,528** | | Total | **898,802** | **977,753** | - Certain bills payables are secured by pledged deposits with a carrying amount of RMB**44,763,000** thousands[75](index=75&type=chunk) [Commitments](index=29&type=section&id=%E6%89%BF%E6%93%94) This note discloses the Group's capital commitments for property, plant, and equipment, amounting to RMB**142.11** million at the reporting date Capital Commitments (As of June **30**) | Item | **2020** June **30** (RMB thousands) | **2019** December **31** (RMB thousands) | | --- | --- | --- | | Contracted but not provided for in respect of acquisition of property, plant and equipment | **142,105** | **160,011** | [Related Party Transactions](index=30&type=section&id=%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) This note details significant related party transactions, including sales/purchases with joint ventures and key management personnel remuneration Related Party Transactions (For the six months ended June **30**) | Transaction Category | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Sales of goods to a joint venture | **35,307** | **29,625** | | Purchases of goods from a joint venture | **27,157** | **38,756** | | Gross rental income received from a joint venture | **5,397** | **4,505** | | Management fee received from a joint venture | **1,823** | **1,971** | Key Management Personnel's Emoluments (For the six months ended June **30**) | Item | **2020** (RMB thousands) | **2019** (RMB thousands) | | --- | --- | --- | | Salaries, wages and other benefits | **1,324** | **1,771** | | Pension scheme contributions | **16** | **20** | | Total emoluments paid to key management personnel | **1,340** | **1,791** | [Fair Value and Fair Value Hierarchy of Financial Instruments](index=31&type=section&id=%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E7%9A%84%E5%85%AC%E5%B9%B3%E5%80%BC%E5%8F%8A%E5%85%AC%E5%B9%B3%E5%80%BC%E5%B1%A4%E7%B4%9A) This note discusses fair value measurement of financial instruments, including valuation methods for unlisted equity investments and fair value hierarchy classification - The fair values of short-term financial instruments such as cash and cash equivalents, trade and bills receivables, and trade and bills payables approximate their carrying amounts[83](index=83&type=chunk) - Unlisted equity investments are valued using a market approach, based on multiples of comparable listed companies (e.g., EV/EBITDA, P/E ratio) with discounts for lack of marketability and size differences[83](index=83&type=chunk) - Bills receivables are managed under a business model of holding to collect contractual cash flows and endorsing to suppliers before maturity, measured at fair value through other comprehensive income[84](index=84&type=chunk) Unlisted Equity Investment Fair Value Sensitivity Analysis (**2020** June **30**) | Investment | Significant Unobservable Input | Range | Sensitivity of fair value to input (RMB thousands) | | --- | --- | --- | --- | | Investment A | Average forward P/E multiples of comparable companies | **11.04** to **37.15** | A **10%** increase/decrease in multiples would result in an increase/decrease in fair value of **3,619** | | Investment A | Discount for lack of marketability | **0.00%** to **91.30%** | A **10%** increase/decrease in multiples would result in a decrease/increase in fair value of **687** | | Investment B | Average forward P/E multiples of comparable companies | **28.15** to **50.37** | A **10%** increase/decrease in multiples would result in an increase/decrease in fair value of **1,260** | Financial Instruments Fair Value Hierarchy (**2020** June **30**) | Item | Total (RMB thousands) | Level **1** (RMB thousands) | Level **2** (RMB thousands) | Level **3** (RMB thousands) | | --- | --- | --- | --- | --- | | Equity investments designated at fair value through other comprehensive income | **48,789** | — | — | **48,789** | | Bills receivables at fair value through other comprehensive income | **98,905** | — | **98,905** | — | [Events After Reporting Period](index=35&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E5%BE%8C%E7%9A%84%E4%BA%8B%E4%BB%B6) This note confirms no significant events occurred after June **30**, **2020** - No significant events occurred after the reporting period[92](index=92&type=chunk) [Approval of Interim Condensed Consolidated Financial Information](index=35&type=section&id=%E4%B8%AD%E6%9C%9F%E7%B0%A1%E6%98%8E%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E8%B3%87%E6%96%99%E7%9A%84%E6%89%B9%E5%87%86) This note states the unaudited interim condensed consolidated financial statements were approved and authorized for issue by the Board on August **26**, **2020** - The unaudited interim condensed consolidated financial statements were approved and authorized for issue by the Board on August **26**, **2020**[92](index=92&type=chunk)
华众车载(06830) - 2019 - 中期财报
2019-09-12 08:07
[Company Information](index=2&type=section&id=Company%20Information) This section provides essential information about Huazhong In-Vehicle Holdings Company Limited, including board members, auditors, and stock exchange listing [Company Basic Information](index=2&type=section&id=Company%20Basic%20Information) This chapter provides fundamental details of Huazhong In-Vehicle Holdings Company Limited, including board members, auditors, and its listing on the HKEX Main Board (stock code 6830) Company Key Information | Item | Information | | :--- | :--- | | **Company Name** | Huazhong In-Vehicle Holdings Company Limited | | **Listed Exchange** | The Stock Exchange of Hong Kong Limited Main Board | | **Stock Code** | 6830 | | **Chairman and CEO** | Mr. Zhou Minfeng | | **Auditor** | Ernst & Young | | **Company Website** | www.cn-huazhong.com | [Management Discussion and Analysis](index=3&type=section&id=Management%20Discussion%20and%20Analysis) This section reviews the company's business performance, financial results, liquidity, and future outlook for the reporting period [Business and Market Review](index=4&type=section&id=Business%20and%20Market%20Review) In the first half of 2019, the Group's performance declined due to the overall downturn in China's automotive industry, despite maintaining market position - The company's main business involves manufacturing and selling automotive interior and exterior structural and decorative parts, molds and tools, air conditioning related components, and other non-automotive products[8](index=8&type=chunk) - In H1 2019, China's auto production and sales decreased by **13.7%** and **12.4%** year-on-year, posing market challenges[8](index=8&type=chunk) H1 2019 Key Financial Indicators | Indicator | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Revenue** | RMB 919,456,000 | RMB 975,675,000 | -5.8% | | **Profit attributable to owners of the parent** | RMB 48,709,000 | RMB 67,465,000 | -27.8% | [Financial Review](index=4&type=section&id=Financial%20Review) This chapter analyzes the Group's financial performance, highlighting revenue decline in core business, growth in molds and tools, and changes in expenses and taxation [Revenue Analysis](index=4&type=section&id=Revenue%20Analysis) Group total revenue decreased by 5.8% to RMB 919.46 million, with core automotive parts declining but molds and tools showing significant growth, leading to a slight increase in overall gross margin Revenue and Gross Margin by Product Segment (Six Months Ended June 30) | Product Segment | 2019 Revenue (RMB '000) | 2019 Gross Margin (%) | 2018 Revenue (RMB '000) | 2018 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Automotive interior and exterior structural and decorative parts | 656,053 | 31.8 | 738,055 | 30.9 | | Molds and tools | 153,638 | 11.5 | 104,005 | 11.0 | | Air conditioning/heater casings/reservoirs | 40,616 | 13.5 | 58,627 | 13.0 | | Non-automotive products | 26,475 | 45.6 | 23,882 | 38.9 | | Sales of raw materials | 42,674 | 5.1 | 51,106 | 5.2 | | **Total** | **919,456** | **26.8** | **975,675** | **26.5** | - The increase in **molds and tools revenue** was primarily driven by rising customer demand for new automotive model molds and tools[12](index=12&type=chunk) [Other Income, Expenses and Profit Analysis](index=6&type=section&id=Other%20Income%2C%20Expenses%20and%20Profit%20Analysis) Other income and gains significantly increased, while administrative expenses rose due to R&D investment, and tax expenses decreased with lower taxable profit - Other income and gains increased by **101.6%** year-on-year to **RMB 17.19 million**, mainly due to higher rental income, government subsidies, dividends, and management fee income[15](index=15&type=chunk) - Administrative expenses increased by **14.3%** year-on-year to **RMB 125 million**, primarily due to higher staff costs, R&D expenses, and professional service fees[17](index=17&type=chunk) - Tax expense decreased by **35.0%** year-on-year to **RMB 12.22 million**, mainly attributable to a reduction in taxable profit[21](index=21&type=chunk) [Liquidity and Financial Resources](index=7&type=section&id=Liquidity%20and%20Financial%20Resources) The Group's operating cash flow turned negative, total interest-bearing borrowings increased, and the gearing ratio slightly rose, with no significant contingent liabilities - Operating cash flow shifted from a net inflow of **RMB 96.93 million** in the prior period to a net outflow of **RMB 52,000**[23](index=23&type=chunk) Financial Position Summary (As at June 30, 2019) | Indicator | June 30, 2019 | December 31, 2018 | | :--- | :--- | :--- | | Cash and cash equivalents | RMB 90.12 million | RMB 78.75 million | | Interest-bearing bank and other borrowings | RMB 934 million | RMB 798 million | | Gearing ratio | 67.3% | 66.6% | | Capital commitments | RMB 198 million | RMB 157 million | - The Group's sales, purchases, and borrowings are primarily denominated in RMB, HKD, and EUR, exposing it to foreign exchange risk, for which no hedging policy is currently adopted[25](index=25&type=chunk) [Employees and Remuneration Policy](index=8&type=section&id=Employees%20and%20Remuneration%20Policy) As of June 30, 2019, the Group's employee count increased to 3,416, with total staff costs (excluding directors and senior management) rising by approximately 14.2% - As of June 30, 2019, the Group had **3,416 employees**, compared to 3,286 in the prior period[31](index=31&type=chunk) - Total staff costs (excluding directors and key management personnel) for the six months ended June 30, 2019, were approximately **RMB 129.64 million**, an increase from RMB 113.54 million in the prior period[31](index=31&type=chunk) [Prospects](index=9&type=section&id=Prospects) Management is optimistic about the H2 2019 automotive market stabilization, focusing on leveraging existing relationships, expanding into new energy vehicles, and investing in lightweight technology R&D - Management is optimistic about the stabilization of passenger vehicle sales in the coming months, particularly in the **luxury and joint venture brand markets**[34](index=34&type=chunk) - Group strategic priorities include leveraging strong relationships with luxury and joint venture automakers, entering the **new energy vehicle sector**, expanding new production bases, and continuous investment in **lightweight technology R&D**[34](index=34&type=chunk) [Corporate Governance and Other Information](index=9&type=section&id=Corporate%20Governance%20and%20Other%20Information) This section covers the company's adherence to corporate governance codes, details on directors' and shareholders' interests, loan financing covenants, and interim dividend policy [Corporate Governance Practices](index=10&type=section&id=Corporate%20Governance%20Practices) The company complied with all applicable code provisions of the Corporate Governance Code during the reporting period and confirmed directors' adherence to securities dealing codes - The company complied with all applicable code provisions of the Corporate Governance Code for the six months ended June 30, 2019[37](index=37&type=chunk) - Mr. Zhou Minfeng, Chairman and Executive Director, was appointed as the company's Chief Executive Officer, effective July 31, 2019[39](index=39&type=chunk) [Directors' and Shareholders' Interests](index=10&type=section&id=Directors%27%20and%20Shareholders%27%20Interests) This chapter discloses the shareholdings of directors, key management, and major shareholders, with Chairman Zhou Minfeng holding 74.61% indirectly as the controlling shareholder Major Directors' and Shareholders' Shareholdings (As at June 30, 2019) | Name/Entity | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Zhou Minfeng | Interest in controlled corporation | 1,320,000,000 | 74.61% | | Huayou Holdings | Beneficial owner | 1,320,000,000 | 74.61% | - No outstanding share options were granted, exercised, lapsed, or cancelled under the share option scheme during the reporting period or as of the reporting date[43](index=43&type=chunk) [Loan Facilities and Audit Committee](index=13&type=section&id=Loan%20Facilities%20and%20Audit%20Committee) The company has a HKD 136.5 million term loan facility with covenants requiring the controlling shareholder to maintain his position and control, and the Audit Committee reviewed the interim results - A **HKD 136.5 million** financing agreement requires controlling shareholder Mr. Zhou to maintain his chairman position, control over the company, and direct or indirect ownership of no less than **50%** of the share capital[51](index=51&type=chunk) - The Audit Committee reviewed the interim results for the six months ended June 30, 2019, and deemed them to be properly disclosed[52](index=52&type=chunk) [Interim Dividend](index=14&type=section&id=Interim%20Dividend) The Board resolved not to declare an interim dividend for the six months ended June 30, 2019, contrasting with a dividend paid in the prior year - The Board resolved not to declare an interim dividend for the six months ended June 30, 2019[53](index=53&type=chunk) [Interim Financial Statements](index=15&type=section&id=Interim%20Financial%20Statements) This section presents the condensed consolidated interim financial statements, including the income statement, comprehensive income statement, statement of financial position, statement of changes in equity, and cash flow statement [Condensed Consolidated Interim Income Statement](index=15&type=section&id=Condensed%20Consolidated%20Interim%20Income%20Statement) For the six months ended June 30, 2019, the company reported revenue of RMB 919.46 million, a gross profit of RMB 246.20 million, and profit attributable to owners of the parent of RMB 48.71 million Consolidated Income Statement Summary (Six Months Ended June 30) | Item (RMB '000) | 2019 (Unaudited) | 2018 (Unaudited) | | :--- | :--- | :--- | | Revenue | 919,456 | 975,675 | | Gross profit | 246,201 | 258,923 | | Profit before tax | 62,970 | 86,194 | | Profit for the period | 50,750 | 67,387 | | Profit attributable to owners of the parent | 48,709 | 67,465 | | Basic earnings per share (RMB) | 0.0275 | 0.0381 | [Condensed Consolidated Interim Statement of Comprehensive Income](index=16&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) Total comprehensive income for the period was RMB 63.25 million, including profit for the period and other comprehensive income primarily from equity revaluation gains - Total comprehensive income for the period was **RMB 63.246 million**, with **RMB 61.205 million** attributable to owners of the parent[58](index=58&type=chunk) - Other comprehensive income primarily arose from fair value changes of equity investments designated at fair value through other comprehensive income, net of tax, amounting to **RMB 12.96 million**[58](index=58&type=chunk) [Condensed Consolidated Interim Statement of Financial Position](index=17&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2019, total assets were RMB 3.283 billion, total liabilities were RMB 2.244 billion, and net assets were RMB 1.039 billion, with a net current liability of RMB 120 million Statement of Financial Position Summary (RMB '000) | Item | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | | :--- | :--- | :--- | | Total non-current assets | 1,405,988 | 1,268,045 | | Total current assets | 1,876,566 | 1,773,995 | | **Total Assets** | **3,282,554** | **3,042,040** | | Total current liabilities | 1,996,758 | 1,841,741 | | Total non-current liabilities | 247,290 | 217,909 | | **Total Liabilities** | **2,244,048** | **2,059,650** | | **Net Assets** | **1,038,506** | **982,390** | [Condensed Consolidated Interim Statement of Changes in Equity](index=19&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Changes%20in%20Equity) Total equity increased from RMB 982 million at the beginning of the period to RMB 1.039 billion, driven by total comprehensive income, partially offset by the 2018 final dividend payment - Equity attributable to owners of the parent increased from **RMB 943 million** at the beginning of the period to **RMB 997 million**[64](index=64&type=chunk) [Condensed Consolidated Interim Statement of Cash Flows](index=20&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Cash%20Flows) The Group's cash and cash equivalents increased by RMB 11.37 million, with operating cash flow turning negative, significant net cash outflow from investing activities, and net cash inflow from financing activities Cash Flow Statement Summary (Six Months Ended June 30, RMB '000) | Item | 2019 (Unaudited) | 2018 (Unaudited) | | :--- | :--- | :--- | | Net cash (used in)/generated from operating activities | (52) | 96,932 | | Net cash used in investing activities | (116,323) | (118,435) | | Net cash generated from financing activities | 127,747 | 47,400 | | **Net increase in cash and cash equivalents** | **11,372** | **25,897** | [Notes to the Condensed Consolidated Interim Financial Information](index=22&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Interim%20Financial%20Information) This section provides detailed notes to the interim financial statements, covering accounting policies, revenue breakdown, earnings per share, borrowings, and related party transactions [Note 2: Basis of Preparation and Changes in Accounting Policies](index=23&type=section&id=Note%202%3A%20Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) Financial information is prepared on a going concern basis despite net current liabilities, with the Group adopting IFRS 16 "Leases" for the first time, impacting the financial statements - Despite a consolidated net current liability of **RMB 120 million** as of June 30, 2019, directors consider the going concern basis appropriate due to unused credit facilities and ongoing cost control measures[72](index=72&type=chunk) - The Group first adopted **IFRS 16 "Leases"** on January 1, 2019, using a modified retrospective approach, resulting in a **RMB 226 million** increase in right-of-use assets and a **RMB 6.26 million** increase in interest-bearing borrowings[76](index=76&type=chunk)[79](index=79&type=chunk)[81](index=81&type=chunk) [Note 4: Revenue, Other Income and Gains](index=28&type=section&id=Note%204%3A%20Revenue%2C%20Other%20Income%20and%20Gains) This note details revenue by product type, with sales of plastic and automotive parts contributing RMB 766 million and molds and tools RMB 154 million, primarily from mainland China Revenue by Geographical Market (Six Months Ended June 30, RMB '000) | Geographical Market | 2019 (Unaudited) | 2018 (Unaudited) | | :--- | :--- | :--- | | Mainland China | 819,482 | 861,047 | | Overseas | 101,945 | 114,628 | | **Total** | **921,427** | **975,675** | [Note 10: Earnings Per Share](index=32&type=section&id=Note%2010%3A%20Earnings%20Per%20Share) Basic and diluted earnings per share for the six months ended June 30, 2019, were RMB 0.0275, calculated based on profit attributable to owners of the parent and weighted average shares Earnings Per Share Calculation | Item | Six Months Ended June 30, 2019 | Six Months Ended June 30, 2018 | | :--- | :--- | :--- | | Profit attributable to owners of the parent (RMB '000) | 48,709 | 67,465 | | Weighted average number of ordinary shares in issue | 1,769,193,800 | 1,769,193,800 | | **Basic earnings per share (RMB)** | **0.0275** | **0.0381** | [Note 18: Interest-Bearing Bank and Other Borrowings](index=38&type=section&id=Note%2018%3A%20Interest-Bearing%20Bank%20and%20Other%20Borrowings) As of June 30, 2019, total interest-bearing borrowings were RMB 934 million, with RMB 743 million due within one year, and secured bank loans of RMB 98.85 million were collateralized by assets Interest-Bearing Bank and Other Borrowings (RMB '000) | Category | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | | :--- | :--- | :--- | | Current | 743,471 | 629,664 | | Non-current | 190,624 | 168,136 | | **Total** | **934,095** | **797,800** | [Note 20: Related Party Transactions and Balances](index=39&type=section&id=Note%2020%3A%20Related%20Party%20Transactions%20and%20Balances) The Group engaged in significant related party transactions, including sales of RMB 31.12 million and purchases of RMB 41.28 million, with outstanding receivables of RMB 95.81 million and payables of RMB 50.71 million at period-end - Significant related party transactions included sales of **RMB 28.75 million** to Changchun Huazhong Yanfeng and purchases of **RMB 30.60 million** from Ningbo Hualete[127](index=127&type=chunk) Outstanding Balances with Related Parties (RMB '000) | Item | June 30, 2019 (Unaudited) | December 31, 2018 (Audited) | | :--- | :--- | :--- | | Amounts due from related parties | 95,811 | 85,017 | | Amounts due to ultimate controlling shareholder | 1,026 | 1,110 | | Amounts due to related parties | 50,712 | 67,819 |