长龄液压(605389) - 2024 Q2 - 季度财报

Company Profile and Key Financial Indicators Company Overview Jiangsu Changling Hydraulic Co., Ltd. (stock code: 605389) is a hydraulic component and precision casting manufacturer headquartered in Jiangyin, Jiangsu, with its legal representative being Xia Zemin and its shares listed on the Shanghai Stock Exchange - The company's full name is Jiangsu Changling Hydraulic Co., Ltd., with stock abbreviation Changling Hydraulic and code 605389, listed on the Shanghai Stock Exchange[10][14] Key Accounting Data and Financial Indicators In the first half of 2024, the company achieved operating revenue of RMB 471 million, a year-on-year increase of 17.33%, and net profit attributable to the parent company of RMB 65.76 million, a year-on-year increase of 19.29%, primarily due to the consolidation of Jiangyin Shangchi, a controlled subsidiary acquired last year, while net cash flow from operating activities significantly decreased by 58.50% due to increased tax payments, employee compensation, and M&A-related expenses Key Accounting Data and Financial Indicators | Item | Current Period (Jan-Jun) | Prior Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 470,955,062.83 RMB | 401,400,513.85 RMB | 17.33 | | Net Profit Attributable to Shareholders of the Listed Company | 65,762,814.31 RMB | 55,128,246.69 RMB | 19.29 | | Net Profit Attributable to Shareholders of the Listed Company After Deducting Non-recurring Gains and Losses | 64,378,975.91 RMB | 51,385,531.61 RMB | 25.29 | | Net Cash Flow from Operating Activities | 32,481,626.63 RMB | 78,276,220.15 RMB | -58.50 | | Key Financial Indicators | Current Period (Jan-Jun) | Prior Period | YoY Change (%) | | Basic EPS (RMB/share) | 0.46 | 0.40 | 15.00 | | Weighted Average ROE (%) | 3.08 | 2.94 | Increased by 0.14 percentage points | - Analysis of Performance Changes: - Revenue and Net Profit Growth: Primarily due to the consolidation of Jiangyin Shangchi, a 70% owned subsidiary acquired last year, effective from August 2023, which increased business volume and net profit attributable to the parent company[17] - Decline in Operating Cash Flow: Mainly due to increased tax payments and employee compensation after the acquisition of Jiangyin Shangchi, as well as M&A-related expenses paid in the current period[17] Non-recurring Gains and Losses and Amounts During the reporting period, the company's total non-recurring gains and losses amounted to RMB 1.3838 million, primarily from gains and losses on entrusted investments or asset management, fair value changes of financial assets, and disposal of non-current assets Non-recurring Gains and Losses | Non-recurring Gains and Losses Item | Amount (RMB) | | :--- | :--- | | Gains and Losses from Disposal of Non-current Assets | 217,053.90 | | Gains and Losses from Changes in Fair Value of Financial Assets and Liabilities | 594,000.00 | | Gains and Losses from Entrusted Investments or Asset Management | 802,024.81 | | Other Non-operating Income and Expenses | 120,620.19 | | Total | 1,383,838.40 | Management Discussion and Analysis Main Business and Industry Overview The company's main business is divided into three segments: construction machinery, precision casting, and photovoltaic, with construction machinery providing central rotary joints and tensioning devices to clients like Sany, XCMG, and Caterpillar, precision casting supplying castings for various industries, and the photovoltaic segment producing slewing reducers for solar trackers through its controlled subsidiary Jiangyin Shangchi, operating primarily on a "production-to-order" direct sales model, while the domestic high-end hydraulic components market still offers significant import substitution opportunities supported by national strategies - The company's business is divided into three major segments: - Construction Machinery: Produces central rotary joints, tensioning devices, etc., with clients including well-known domestic and international enterprises such as Sany, XCMG, and Caterpillar[19][20] - Precision Casting: Subsidiary Changling Precision engages in precision casting production, with clients including Copeland, Daikin, and ZF[19][20] - Photovoltaic Segment: Controlled subsidiary Jiangyin Shangchi, acquired in 2023, primarily produces slewing reducers for solar trackers, with clients such as Trina Solar and Arctech Solar[19][20] - The company primarily adopts a "production-to-order" manufacturing model and a direct sales model targeting well-known domestic and international enterprises[21] - As a fundamental mechanical component industry, construction machinery represents the largest demand area for hydraulics. Although China is a major hydraulic manufacturing country, high-end products still rely on imports, indicating vast potential for domestic substitution. National "14th Five-Year Plan" and manufacturing powerhouse strategies present development opportunities for the high-end hydraulic components industry[21] Analysis of Core Competencies The company's core competencies are reflected in five aspects: stringent quality control and high brand reputation, evidenced by awards like Caterpillar's SQEP Platinum Award; a strong base of high-quality domestic and international clients including Sany, XCMG, and Trina Solar; deep technological expertise as a national "Little Giant" enterprise that led the drafting of national standards; a significant geographical advantage in the Yangtze River Delta enabling timely client response; and accelerated global expansion through its subsidiary Jiangyin Shangchi, including a factory project initiated in Thailand - Leveraging leading manufacturing technology and product quality, the company has established a good reputation in the industry, consistently recognized as an excellent supplier by Sany, XCMG, Caterpillar, and others for many years[22] - The company is a national-level "Little Giant" enterprise specializing in niche sectors, and its controlled subsidiary Jiangyin Shangchi is a provincial-level specialized and innovative SME. The company led the drafting of the national standard "GB/T25629-2021 Central Rotary Joints for Hydraulic Excavators" and holds over a hundred patents[23] - The company and its subsidiaries are located in the Yangtze River Delta economic zone, benefiting from a complete industrial chain and proximity to the production bases of major clients such as Sany, XCMG, Arctech Solar, and Trina Solar, thus possessing a significant geographical advantage[23] - A global sales network has been established through subsidiary Jiangyin Shangchi, and the construction of the Thailand project will further expand overseas business, enabling global sales of photovoltaic slewing reducers and hydraulic products[23] Discussion and Analysis of Operations In the first half of 2024, despite a weak macroeconomic environment for the construction machinery industry, the company achieved year-on-year growth in revenue and profit by strengthening market expansion, accelerating global presence (Thailand factory construction), adhering to technological innovation, and improving corporate governance, actively expanding into new clients and application areas such as AGV transport vehicles and concentrated solar power tracking, and establishing subsidiaries in Singapore and Thailand to increase overseas market share Operating Performance | Item | Current Period (RMB) | Prior Period (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 470,955,062.83 | 401,400,513.85 | 17.33 | | Operating Cost | 341,165,498.10 | 303,098,534.85 | 12.56 | | Net Cash Flow from Operating Activities | 32,481,626.63 | 78,276,220.15 | -58.50 | | Net Cash Flow from Investing Activities | -91,782,913.63 | 110,143,456.49 | -183.33 | - The company is actively expanding into new clients and application areas, with its solar photovoltaic reducer business already supplying small batches to well-known enterprises in the AGV sector and exploring applications in concentrated solar power tracking[25] - To increase overseas market share, the company established a wholly-owned subsidiary in Singapore and, together with its controlled subsidiary Jiangyin Shangchi, established a controlled grandchild company in Thailand to engage in the production, R&D, and sales of slewing reducers and hydraulic products, with a total project investment of approximately USD 18 million[25][32] - During the reporting period, the company and its subsidiaries added 6 new patents, accumulating a total of 178 valid patents, including 22 invention patents[25] Analysis of Assets and Liabilities As of the end of the reporting period, the company's total assets were RMB 2.378 billion, a 5.79% decrease from the end of the previous year, with the main asset-side change being a 72.65% significant decrease in receivables financing due to reduced collection of acceptance bills, while on the liability side, short-term borrowings were fully repaid, and notes payable and other payables significantly decreased due to M&A payments and bill settlements Key Changes in Assets and Liabilities | Item Name | Current Period End (RMB) | Prior Period End (RMB) | Change (%) | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Receivables Financing | 29,154,225.87 | 106,608,922.54 | -72.65 | Reduced collection of acceptance bills in current period | | Other Receivables | 5,175,683.37 | 1,074,603.54 | 381.64 | Interest paid on large-denomination certificates of deposit in current period | | Short-term Borrowings | 0 | 9,010,713.30 | -100.00 | Repayment of bank borrowings in current period | | Notes Payable | 10,900,000.00 | 29,029,055.38 | -62.45 | Decrease in bank acceptance bills at period-end | | Other Payables | 2,584,458.58 | 74,005,249.24 | -96.51 | Payment of prior year's subsidiary M&A funds in current period | Potential Risks The company faces multiple risks, including macroeconomic cyclical fluctuations impacting the downstream construction machinery industry, raw material price volatility, intensified domestic and international market competition, technology R&D and core talent loss, uncertainties in the photovoltaic tracker market and overseas trade policies, and exchange rate fluctuations from expanding overseas operations - The company faces multiple risks including macroeconomic cycles, raw material price fluctuations, market competition, loss of technical talent, uncertainties in the photovoltaic market, and exchange rate volatility[38][39] Corporate Governance Profit Distribution Plan The company's board of directors proposed a 2024 semi-annual profit distribution plan to distribute a cash dividend of RMB 3.50 (tax inclusive) for every 10 shares to all shareholders, with no bonus shares or capital reserve capitalization, expecting a total cash dividend of RMB 50.43 million (tax inclusive) based on the total share capital as of June 30, 2024 - The company's 2024 semi-annual profit distribution plan is to distribute a cash dividend of RMB 3.50 (tax inclusive) for every 10 shares, with no bonus shares or capitalization from capital reserves. The estimated total cash dividend is RMB 50,430,474.50 (tax inclusive)[43][44] Environmental and Social Responsibility Environmental Information The company and its subsidiaries are not classified as key pollutant-discharging entities by environmental authorities and received no environmental administrative penalties during the reporting period, actively fulfilling environmental responsibilities by using self-owned factory rooftop photovoltaic power generation, refined canteen management, water conservation, and waste sorting to reduce carbon emissions and resource waste, promoting green development - The company and its subsidiaries are not classified as key pollutant-discharging entities and received no administrative penalties from environmental authorities during the reporting period[44] - To reduce carbon emissions, the company and its subsidiaries utilize self-owned factory rooftop photovoltaic power generation and implement energy-saving and emission-reduction measures such as food conservation, water saving, waste sorting, and optimized transportation[47] Significant Matters Fulfillment of Commitments During the reporting period, all commitments made by the company's actual controllers, shareholders, and management, including share lock-ups, profit forecast compensation, avoidance of horizontal competition, and related party transactions, related to major asset restructuring and initial public offering, were timely and strictly fulfilled - Commitments related to major asset restructuring (acquisition of Jiangyin Shangchi), including share lock-ups, profit forecasts and compensation, resolution of horizontal competition, and related party transactions, are all being fulfilled as planned[49] - Commitments related to the initial public offering, such as share lock-ups, share price stabilization, and share reduction intentions, are also being fulfilled as planned[49][50] Significant Related Party Transactions During the reporting period, the company proceeded with significant related party transactions involving the establishment of a wholly-owned subsidiary in Singapore and a controlled grandchild company in Thailand jointly with its controlled subsidiary Jiangyin Shangchi, both of which have completed registration and purchased land in Thailand for factory construction, and the company also decided to cancel the fundraising for supporting funds from the original restructuring plan - The company decided to cancel the fundraising for supporting funds from the major restructuring plan for the acquisition of 70% equity in Jiangyin Shangchi, with other terms remaining unchanged[60] - The company, together with its controlled subsidiary Jiangyin Shangchi, jointly invested in establishing a grandchild company in Thailand to engage in the production and sales of slewing reducers and hydraulic products. As of the end of the reporting period, both the Singapore subsidiary and the Thailand grandchild company have completed establishment and signed land purchase agreements[61] Explanation of Progress in Use of Raised Funds As of the end of the reporting period, the company has cumulatively invested RMB 822 million from its initial public offering, accounting for 91.80% of the net raised funds, with several projects such as the "Hydraulic Rotary Joint Expansion Project" and "Annual Processing 40,000 Tons of Automotive and Home Appliance General Castings Project" completed and closed, and the company is currently managing idle raised funds not exceeding RMB 70 million in cash Raised Funds Utilization | Source of Raised Funds | Net Raised Funds (RMB 10k) | Total Accumulated Investment (RMB 10k) | Accumulated Investment Progress (%) | Total Amount of Changed Use (RMB 10k) | | :--- | :--- | :--- | :--- | :--- | | Initial Public Offering (IPO) | 89,498.98 | 82,162.56 | 91.80 | 36,750.03 | - Among the raised fund investment projects, the "High-end Hydraulic Component Capacity Expansion and Intelligent Upgrade Project" is still under construction, expected to reach its intended usable state by November 2025, while other major projects have been completed and closed[68][69] - The company's board of directors approved the use of temporarily idle raised funds not exceeding RMB 70 million for cash management, valid until April 23, 2025[71] Changes in Share Capital and Shareholder Information Changes in Share Capital On March 22, 2024, 102.2 million shares of the company's initial public offering restricted shares, accounting for 70.93% of the company's total share capital, became tradable, involving controlling shareholders Xia Jifa, Xia Zemin, and Jiangyin Lanhaohaolong, with no changes in the company's total share capital during the reporting period - On March 22, 2024, 102,200,000 shares of the company's initial public offering restricted shares became tradable, accounting for 70.93% of the total share capital, involving shareholders Xia Jifa, Xia Zemin, and Jiangyin Lanhaohaolong[73][74] Shareholder Information As of June 30, 2024, the company had 12,958 common shareholders, with the top two shareholders, Xia Jifa and Xia Zemin, holding 40.81% and 27.21% respectively as parties acting in concert, while Xu Jianhu and Jiangyin Shangtuo Enterprise Management Partnership (Limited Partnership), who became shareholders due to the acquisition of Jiangyin Shangchi, are the third and fifth largest shareholders with their shares currently under lock-up - As of the end of the reporting period, the company had a total of 12,958 shareholders[75] Top Shareholders | Shareholder Name | Shares Held at Period-End (shares) | Percentage (%) | Number of Restricted Shares Held (shares) | | :--- | :--- | :--- | :--- | | Xia Jifa | 58,800,000 | 40.81 | 0 | | Xia Zemin | 39,200,000 | 27.21 | 0 | | Xu Jianhu | 5,793,411 | 4.02 | 5,793,411 | | Jiangyin Lanhaohaolong Enterprise Management Partnership | 4,200,000 | 2.91 | 0 | | Jiangyin Shangtuo Enterprise Management Partnership | 2,148,999 | 1.49 | 2,026,899 | Financial Report Financial Statements This section includes the company's unaudited 2024 semi-annual consolidated and parent company financial statements, comprising the balance sheet, income statement, cash flow statement, and statement of changes in owners' equity Consolidated Balance Sheet As of June 30, 2024, the company's total assets were RMB 2.378 billion, a 5.79% decrease from the beginning of the year; total liabilities were RMB 201 million, a significant 44.16% decrease from the beginning of the year; and equity attributable to owners of the parent company was RMB 2.118 billion, a slight 0.39% increase from the beginning of the year, indicating a stable asset-liability structure Consolidated Balance Sheet Data | Item | June 30, 2024 (RMB) | December 31, 2023 (RMB) | | :--- | :--- | :--- | | Total Assets | 2,377,973,345.60 | 2,524,084,002.06 | | Monetary Capital | 670,159,323.08 | 798,755,620.04 | | Accounts Receivable | 403,402,231.48 | 314,996,780.57 | | Inventories | 169,767,478.95 | 191,880,260.29 | | Fixed Assets | 408,956,678.24 | 428,029,047.51 | | Total Liabilities | 201,103,841.10 | 360,155,009.96 | | Short-term Borrowings | 0.00 | 9,010,713.30 | | Accounts Payable | 112,432,988.63 | 158,682,598.03 | | Equity Attributable to Owners of the Parent Company | 2,118,291,813.93 | 2,110,155,020.35 | Consolidated Income Statement In the first half of 2024, the company achieved total operating revenue of RMB 471 million, a 17.33% year-on-year increase, and total operating costs of RMB 388 million, a 12.95% year-on-year increase, ultimately realizing a net profit attributable to shareholders of the parent company of RMB 65.76 million, a 19.29% year-on-year increase, with basic earnings per share of RMB 0.46 Consolidated Income Statement Data | Item | H1 2024 (RMB) | H1 2023 (RMB) | | :--- | :--- | :--- | | I. Total Operating Revenue | 470,955,062.83 | 401,400,513.85 | | II. Total Operating Costs | 387,771,304.32 | 343,328,087.81 | | Including: Operating Cost | 341,165,498.10 | 303,098,534.85 | | R&D Expenses | 18,839,255.87 | 16,956,495.52 | | IV. Total Profit | 84,235,972.13 | 62,657,479.61 | | V. Net Profit | 73,566,533.13 | 55,128,246.69 | | Net Profit Attributable to Shareholders of the Parent Company | 65,762,814.31 | 55,128,246.69 | Consolidated Cash Flow Statement During the reporting period, net cash flow from operating activities was RMB 32.48 million, a 58.50% year-on-year decrease; net cash outflow from investing activities was RMB 91.78 million, primarily for M&A payments for Jiangyin Shangchi and wealth management investments; net cash outflow from financing activities was RMB 69.71 million, mainly for dividend distribution and repayment of bank borrowings; and cash and cash equivalents at period-end amounted to RMB 670 million Consolidated Cash Flow Statement Data | Item | H1 2024 (RMB) | H1 2023 (RMB) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 32,481,626.63 | 78,276,220.15 | | Net Cash Flow from Investing Activities | -91,782,913.63 | 110,143,456.49 | | Net Cash Flow from Financing Activities | -69,714,815.50 | -47,693,366.00 | | Net Increase in Cash and Cash Equivalents | -128,596,296.96 | 141,902,334.95 | | Cash and Cash Equivalents at Period-End | 670,141,723.08 | 815,543,712.75 | Notes to Consolidated Financial Statements This section provides detailed explanations and data breakdowns for key items in the consolidated financial statements, including a significant increase in accounts receivable at period-end with the top five customers accounting for 61.74%, a substantial decrease in receivables financing, a breakdown of operating revenue by product type, an 11.10% year-on-year increase in R&D expenses, and related party transactions - Accounts receivable at period-end amounted to RMB 403 million, a significant increase from RMB 315 million at the beginning of the period. The top five customers, grouped by debtor, accounted for 61.74% of the total accounts receivable[175][176][179] - Receivables financing (primarily bank acceptance bills) at period-end amounted to RMB 29.15 million, a significant decrease from RMB 107 million at the beginning of the period, mainly due to the collection of matured bills[180] Breakdown of Main Business Revenue | Item | Revenue (RMB) | Cost (RMB) | | :--- | :--- | :--- | | Tensioning Devices | 147,832,596.57 | 108,115,806.29 | | Central Rotary Joints | 91,509,580.48 | 69,218,311.42 | | Precision Castings | 99,460,395.22 | 79,517,597.36 | | Slewing Reducers | 109,400,233.87 | 69,480,175.91 | - R&D expenses incurred in the current period amounted to RMB 18.84 million, a 11.10% year-on-year increase, primarily allocated to employee compensation and materials[246]