Financial Performance - Revenue for the six months ended June 30, 2024, increased by 4.2% to RMB 11.243 billion compared to RMB 10.794 billion for the same period in 2023[2]. - Net profit for the period was RMB 282.3 million, a significant recovery from a net loss of RMB 740.2 million in the same period last year[4]. - Basic earnings per share for the period were RMB 0.29, compared to a loss per share of RMB 0.81 in the previous year[3]. - Operating profit for the period was RMB 610.5 million, a turnaround from an operating loss of RMB 445.1 million in the prior year[3]. - The company reported a total comprehensive income of RMB 296.1 million for the period, compared to a loss of RMB 667.8 million in the previous year[4]. - The consolidated gross profit margin improved from approximately 2.4% in the previous year to about 13.2% in the review period[39]. - The overall gross margin improved significantly from approximately 2.4% to 13.2% due to increased capacity utilization and inventory clearance[49]. - Yarn sales revenue reached approximately RMB 8.8123 billion, representing an increase of about 8.9% year-on-year[41]. - The average gross margin for yarn significantly improved to 12.5%, up from 0.7% in the same period last year[42]. Assets and Liabilities - Total assets as of June 30, 2024, were RMB 21.572 billion, down from RMB 22.811 billion at the end of 2023[5]. - Total liabilities decreased to RMB 11.651 billion from RMB 13.056 billion at the end of 2023[7]. - The company’s equity attributable to owners increased to RMB 9.921 billion from RMB 9.755 billion at the end of 2023[6]. - The company's asset-liability ratio decreased to 54% as of June 30, 2024, down from 57% at the end of the previous year[39]. - The current ratio improved to 1.38 as of June 30, 2024, compared to 1.28 as of December 31, 2023[56]. - The debt-to-equity ratio decreased to 0.81 as of June 30, 2024, from 0.84 as of December 31, 2023[56]. Cash Flow and Investments - Cash and cash equivalents increased to RMB 2.675 billion from RMB 2.162 billion at the end of 2023[5]. - The group’s bank and cash balance was approximately RMB 2.71 billion, an increase from RMB 2.23 billion as of December 31, 2023, primarily due to increased cash inflow from operating activities[55]. - The group’s capital expenditure for the six months ended June 30, 2024, was approximately RMB 290 million, down from RMB 572.6 million for the same period in 2023[58]. - No significant investments, acquisitions, or disposals were made by the company during the review period[59]. Inventory and Receivables - Total inventory as of June 30, 2024, was RMB 5,070,113,000, a decrease from RMB 5,244,583,000 as of December 31, 2023[28]. - Trade receivables amounted to RMB 1,713,033,000 as of June 30, 2024, compared to RMB 1,571,477,000 as of December 31, 2023, indicating an increase in receivables[29]. - The fair value of trade and notes receivables is close to their carrying value, indicating stable financial health in receivables management[33]. - The group’s inventory decreased by approximately RMB 174.5 million to about RMB 5.07 billion as of June 30, 2024, compared to RMB 5.25 billion as of December 31, 2023[55]. Operational Efficiency - The company maintained strict operational capital control, resulting in a reduction in working capital compared to the same period last year[39]. - The company actively adjusted its product structure and focused on differentiated markets, which enhanced profitability compared to the previous year[38]. - The company plans to continue optimizing its product mix and enhancing vertical integration across business segments to improve financial performance[51]. - The company is focusing on enhancing or divesting low-efficiency assets to concentrate on its core business and increase R&D investment in green and environmentally friendly products[53]. - The company aims to improve production efficiency and reduce costs through technological upgrades of existing equipment[52]. Tax and Compliance - The company is currently assessing risks associated with the implementation of the OECD Pillar Two legislation, which may affect its tax obligations in Vietnam[25]. - The company has engaged tax experts to assist in applying the new legislation due to its complexity and potential impacts on tax liabilities[25]. - The average effective tax rate for entities operating in Vietnam was 12.20% as of June 30, 2024, which is below the 15% minimum tax rate stipulated by the OECD Pillar Two model rules[25]. Employee and Governance - The total employee cost incurred by the company during the review period was approximately RMB 1.2 billion, compared to RMB 1.3 billion for the six months ended June 30, 2023[61]. - As of June 30, 2024, the company employed 27,011 staff, a decrease from 27,655 as of December 31, 2023, with 47% being female employees[61]. - The company has established an audit committee composed of three independent non-executive directors to oversee financial reporting and internal control systems[68]. - The remuneration committee is responsible for formulating the remuneration policies for the board and senior management, consisting of three independent non-executive directors[69]. - The nomination committee is tasked with reviewing the board's structure and assessing the independence of non-executive directors[70]. - The ESG committee is responsible for monitoring compliance with environmental, social, and governance regulations[71]. Market and Sales - Revenue from external customers accounted for 92.4% from Asia and 7.2% from the Americas, compared to 91.3% and 8.0% respectively in the previous year[10]. - The proportion of sales from the Chinese market slightly decreased from approximately 67.4% to 66.3%, with the top ten customers accounting for about 12.9% of total revenue[51]. - The textile industry in China saw a revenue increase of approximately 4.5% year-on-year, with net profit growth of about 19.3% in the first half of 2024[40]. - The sales volume of grey fabric reached approximately 21.9 million meters, a decrease of about 14.8% compared to the same period last year, with revenue dropping to approximately RMB 189 million[43]. - The sales volume of woven fabrics slightly decreased by 1.6% to approximately 43.6 million meters, while the gross margin improved from 12.1% to 18.8% due to favorable cotton yarn cost trends and a stronger USD against RMB[44]. - The sales volume of knitted fabrics fell significantly from approximately 7,700 tons to about 5,800 tons, resulting in a revenue decline of 25.5% to approximately RMB 298.7 million, although the gross margin increased from 9.2% to 11.4%[45]. - Trade business revenue decreased to approximately RMB 630 million, down 35.7% year-on-year, with a gross margin improvement from 5.7% to 12.3%[46]. - Non-woven fabric sales revenue increased slightly to approximately RMB 35.3 million, compared to RMB 34.1 million in the same period last year[47].
天虹国际集团(02678) - 2024 - 中期业绩