华帝股份(002035) - 2024 Q2 - 季度财报

Important Notes, Table of Contents, and Definitions This section provides important disclaimers, outlines the report's structure, and defines key terms used throughout the document Important Notes The Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report, noting that forward-looking statements do not constitute substantive commitments - The Board of Directors, Supervisory Board, and senior management guarantee the truthfulness, accuracy, and completeness of the semi-annual report[2] - The report contains forward-looking statements regarding future plans, which do not constitute substantive commitments to investors[2] - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital[2] Table of Contents This section lists the overall structure of the report, including major chapters such as important notes, company profile, management discussion and analysis, corporate governance, environmental and social responsibility, significant matters, share changes and shareholder information, preferred shares, bonds, and financial reports Definitions This section defines common terms used in the report, including "Company," "Vatti," and "Parent Company" referring to Vatti Co., Ltd., as well as related parties and the reporting period - "Company," "This Company," "Vatti," "Vatti Stock," and "Parent Company" all refer to Vatti Co., Ltd[5] - "Fenjin Investment" refers to Shihezi Fenjin Equity Investment General Partnership, the company's controlling shareholder[5] - "Reporting Period," "This Reporting Period," and "This Period" refer to January 1, 2024, to June 30, 2024[5] Company Profile and Key Financial Indicators This section introduces the company's basic information, contact details, and presents key accounting data and financial indicators for the reporting period Company Profile Vatti Co., Ltd., with stock ticker "Vatti Stock" and code 002035, is listed on the Shenzhen Stock Exchange, with Pan Yejiang as its legal representative Company Basic Information | Indicator | Content | | :--- | :--- | | Stock Abbreviation | Vatti Stock | | Stock Code | 002035 | | Listing Exchange | Shenzhen Stock Exchange | | Legal Representative | Pan Yejiang | Contact Persons and Information The company's Board Secretary is Pan Chuxin and Securities Affairs Representative is Luo Sha, both located at No. 1 Huayuan Road, Industrial Avenue South, Xiaolan Town, Zhongshan City, Guangdong Province, with provided contact details Company Contact Information | Position | Name | Contact Address | Phone | Fax | Email | | :--- | :--- | :--- | :--- | :--- | :--- | | Board Secretary | Pan Chuxin | No. 1 Huayuan Road, Industrial Avenue South, Xiaolan Town, Zhongshan City, Guangdong Province | 0760-22839992 | 0760-22839256 | pancx@vatti.com.cn | | Securities Affairs Representative | Luo Sha | No. 1 Huayuan Road, Industrial Avenue South, Xiaolan Town, Zhongshan City, Guangdong Province | 0760-22244225 | 0760-22839256 | luos@vatti.com.cn | Other Information The company's registered address, office address, website, email, and information disclosure and storage locations remained unchanged during the reporting period - The company's registered address, office address, website, and email remained unchanged during the reporting period[8] - Information disclosure and storage locations remained unchanged during the reporting period, details can be found in the 2023 Annual Report[9] Key Accounting Data and Financial Indicators In the first half of 2024, the company's operating revenue increased by 7.68% to 3.10 billion Yuan, and net profit attributable to shareholders increased by 14.77% to 300 million Yuan, while net cash flow from operating activities decreased by 41.16% Key Accounting Data and Financial Indicators for H1 2024 | Indicator | Current Reporting Period (Yuan) | Prior Period (Yuan) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 3,100,864,172.86 | 2,879,590,698.21 | 7.68% | | Net Profit Attributable to Shareholders of Listed Company | 299,587,271.15 | 261,022,781.54 | 14.77% | | Net Profit Attributable to Shareholders of Listed Company After Deducting Non-recurring Gains and Losses | 292,052,553.69 | 245,278,220.40 | 19.07% | | Net Cash Flow from Operating Activities | 226,500,144.28 | 384,924,590.70 | -41.16% | | Basic Earnings Per Share (Yuan/share) | 0.3593 | 0.3079 | 16.69% | | Diluted Earnings Per Share (Yuan/share) | 0.3593 | 0.3079 | 16.69% | | Weighted Average Return on Net Assets | 7.98% | 7.61% | 0.37% | | End of Current Reporting Period | | End of Prior Year | Change from End of Prior Year | | Total Assets | 6,777,788,963.14 | 7,198,730,829.19 | -5.85% | | Net Assets Attributable to Shareholders of Listed Company | 3,594,309,844.80 | 3,644,092,141.20 | -1.37% | Differences in Accounting Data Under Domestic and International Accounting Standards The company reported no differences in net profit and net assets between financial reports prepared under international or overseas accounting standards and Chinese accounting standards during the reporting period - The company reported no differences in net profit and net assets between financial reports disclosed under International Accounting Standards and Chinese Accounting Standards during the reporting period[12] - The company reported no differences in net profit and net assets between financial reports disclosed under overseas accounting standards and Chinese Accounting Standards during the reporting period[12] Non-recurring Gains and Losses and Amounts During the reporting period, the company's total non-recurring gains and losses amounted to 7.53 million Yuan, primarily comprising government subsidies, gains/losses from disposal of non-current assets, and fair value changes Non-recurring Gains and Losses for H1 2024 | Item | Amount (Yuan) | | :--- | :--- | | Gains/Losses from Disposal of Non-current Assets | -298,031.11 | | Government Subsidies Included in Current Period's Gains and Losses | 9,027,507.28 | | Gains/Losses from Fair Value Changes of Financial Assets and Liabilities Held by Non-financial Enterprises and from Disposal of Financial Assets and Liabilities | -2,775,957.00 | | Other Non-operating Income and Expenses Apart from the Above | 1,889,548.32 | | Less: Income Tax Impact | 307,934.67 | | Impact on Minority Interests (After Tax) | 415.36 | | Total | 7,534,717.46 | - The company has no other profit and loss items that meet the definition of non-recurring gains and losses, nor does it classify non-recurring gains and losses as recurring gains and losses[13][14] Management Discussion and Analysis This section analyzes the company's main business operations, core competencies, financial performance, investment activities, and risk factors during the reporting period Principal Business Activities During the Reporting Period The company primarily engages in the R&D, production, and sales of kitchen appliances, covering traditional and emerging categories, and expanding into home customization, achieving growth through innovation, marketing, and digital transformation Principal Business and Products Vatti Stock specializes in kitchen appliances, offering a range from traditional cooktops and water heaters to integrated cooking centers and dishwashers, extending into customized home furnishings, with several new products launched in the first half of the year - The company primarily engages in the R&D, production, and sales of kitchen appliances, with a product line covering range hoods, cooktops, water heaters, integrated cooking centers, integrated stoves, dishwashers, and steam-oven combos[15] - Products also include customized home furnishings such as cabinets, wardrobes, and bathroom cabinets[15] - In the first half of 2024, new products were launched, including the Vatti JWB19-B8 Super Wash Dishwasher, Vatti D3000 Twin Star Dishwasher, and Vatti S36 Ultra-thin Flying Saucer Range Hood[15] Industry Development and Company Position The kitchen appliance market faces slowed growth due to real estate downturns despite economic recovery and "trade-in" policies, leading to intensified competition and price-for-volume strategies, while the company maintains a leading position with over 30 years of technical expertise and 4,758 national patents - From January to June 2024, China's GDP grew by 5.0% year-on-year, with "trade-in" policies for home appliances stimulating kitchen appliance consumption[16] - The real estate market is sluggish, with new housing starts decreasing by 23.7% year-on-year, and the kitchen appliance market retail sales declining by 2.3% year-on-year, showing a "price-for-volume" situation[16] - The company holds 4,758 national patents, including 605 invention patents, ranking among the industry leaders[21] - The company is the lead drafting unit for two national standards: range hoods and household gas stoves, and was designated as the drafting unit for the "Dishwasher Dry Storage Test Methods and Technical Requirements"[21] Business Model The company's business model remains stable, operating three independent brands ("Vatti," "Best," "Vatti Home"), focusing on independent R&D, adopting "production-based procurement" and "sales-based production" models, and utilizing a multi-channel sales and service network - The company owns "Vatti" (high-end market), "Best" (tier 3-4 cities and overseas markets), and "Vatti Home" (smart home) three independent brands[24] - The R&D model is "develop one generation, reserve one generation, explore one generation," adhering to independent R&D[25] - The procurement model combines "procurement based on production" with appropriate inventory, and the production model is "production based on sales"[26][27] - Sales channels include offline agency, online direct sales combined with distribution (e-commerce platforms and emerging channels), and engineering channels[28] Key Performance Drivers The company's performance growth is primarily driven by focusing on user needs, building a clean kitchen experience, increasing marketing efforts, continuous product innovation, and the gradual implementation of its digital intelligence strategy - The company returns to a "people-centric" product philosophy, building a clean kitchen lifestyle in China with its "easy-to-clean" strategy[29] - Over 3,000 new retail stores were added, e-commerce sales in high-price segments significantly increased, and systematic brand visual management reinforced the brand slogan "Vatti Kitchen Appliances, Naturally Clean"[30] - Adhering to the "three good" product philosophy, new products like the ultra-thin Flying Saucer series range hoods were launched, next-generation concentrated flame stove technology was mastered, and the industry's first high-temperature surf-wash technology for integrated stoves was released[31] - The digital intelligence strategic plan is gradually being implemented, accelerating the construction of smart manufacturing, smart warehousing, marketing digitalization, and integrated service projects, and launching the digital process system TCM[32] Overview of Operations In the first half of 2024, Vatti Stock achieved 3.05 billion Yuan in main business revenue, a 7.12% increase, and 300 million Yuan in net profit attributable to shareholders, a 14.77% increase, by focusing on "white technology" and "clean fashion," diversifying channels, innovating products, optimizing the digital supply chain, enhancing brand awareness, and maintaining a multi-brand strategy Operating Performance for H1 2024 | Indicator | Amount (100 Million Yuan) | YoY Growth | | :--- | :--- | :--- | | Main Business Revenue | 30.54 | 7.12% | | Net Profit Attributable to Parent Company Shareholders | 3.00 | 14.77% | - Established "white technology" and "clean fashion" as two core value propositions, building a clean kitchen system around "product cleanliness," "space cleanliness," and "sensory cleanliness"[34] - Offline channels achieved operating revenue of 1.585 billion Yuan, a 20.80% year-on-year increase; lower-tier channels achieved operating revenue of 574 million Yuan, a 41.35% year-on-year increase[35][41] - The company holds 4,758 national patents, including 605 invention patents, and has launched second-generation surf-wash technology, easy-to-clean enamel technology, and integrated water softening technology[43] - Best Kitchen & Bath achieved operating revenue of 765 million Yuan in the first half, a 8.69% year-on-year increase; overseas channel operating revenue was 379 million Yuan, a 35.29% year-on-year increase[50] Analysis of Core Competencies The company's core competencies remain unchanged, driven by its commitment to stylish and scientific kitchen appliance strategy, increased R&D investment for energy efficiency, a multi-channel integration system, a comprehensive product structure, and an experienced professional team - The company adheres to the "three good" kitchen appliance standards of "good to use, good-looking, and easy to clean," strengthening the "clean kitchen" brand image and enhancing brand recognition[53] - Continuous investment in performance optimization, new product R&D, and energy-saving and emission-reduction technologies, with 372 "easy-to-clean" technologies developed, and nearly all gas stoves and range hoods meeting national Level 1 energy efficiency standards[54] - Established a multi-channel integrated co-existence management system, covering offline agency, online direct sales/distribution, and engineering channels, and utilizing emerging marketing channels to expand sales growth opportunities[55] - Formed a "golden triangle" of three proprietary brands: "Vatti," "Vatti Home," and "Best Kitchen & Bath," with a rich product portfolio covering various levels of kitchen appliances and whole-house customization needs[56] - Possesses a professional and mature team of excellent talents, with experienced management, marketing, and R&D teams, achieving mutual development for both talent and the enterprise[57][58] Analysis of Main Business Operations In the first half of 2024, the company's main business revenue increased by 7.68% to 3.10 billion Yuan, with electrical machinery and equipment manufacturing accounting for 98.50%. Revenue from range hoods and water heaters grew significantly, and overseas market revenue increased by 35.29%, while selling expenses rose and financial expenses decreased substantially YoY Changes in Key Financial Data for H1 2024 | Indicator | Current Reporting Period (Yuan) | Prior Period (Yuan) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 3,100,864,172.86 | 2,879,590,698.21 | 7.68% | | | Operating Cost | 1,839,470,157.70 | 1,711,323,416.53 | 7.49% | | | Selling Expenses | 726,043,932.64 | 647,803,313.75 | 12.08% | Primarily due to increased sales service fees and advertising expenses | | Financial Expenses | -11,178,488.25 | -4,807,814.44 | -132.51% | Primarily due to increased interest income and exchange gains/losses from Best during the period | | R&D Investment | 126,737,440.48 | 120,237,669.65 | 5.41% | | | Net Cash Flow from Operating Activities | 226,500,144.28 | 384,924,590.70 | -41.16% | Primarily due to a 5.83% increase in operating cash inflows but a 12.49% increase in outflows | Composition of Operating Revenue for H1 2024 | Category | Item | Amount for Current Reporting Period (Yuan) | Proportion of Operating Revenue | Amount for Prior Period (Yuan) | Proportion of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | By Industry | Electrical Machinery and Equipment Manufacturing | 3,054,403,731.80 | 98.50% | 2,851,330,180.50 | 99.02% | 7.12% | | By Product | Range Hoods | 1,298,697,691.02 | 41.88% | 1,133,183,672.72 | 39.35% | 14.61% | | | Cooktops | 719,373,638.89 | 23.20% | 697,095,430.89 | 24.21% | 3.20% | | | Water Heaters | 655,593,338.46 | 21.14% | 525,847,566.78 | 18.26% | 24.67% | | | Cabinets | 61,324,682.04 | 1.98% | 173,867,957.26 | 6.04% | -64.73% | | By Region | Domestic | 2,675,474,698.83 | 86.28% | 2,571,250,742.84 | 89.29% | 4.05% | | | Overseas | 378,929,032.97 | 12.22% | 280,079,437.66 | 9.73% | 35.29% | Analysis of Non-Main Business Operations During the reporting period, there were no significant analytical matters related to non-main business operations Analysis of Assets and Liabilities At the end of the reporting period, the company's total assets were 6.78 billion Yuan, a 5.85% decrease from the end of the previous year. Monetary funds, notes receivable, inventory, and contract liabilities decreased, while accounts receivable, fixed assets, and construction in progress increased, with certain assets restricted primarily for bank acceptance bill deposits and guarantees Changes in Asset Composition for H1 2024 | Item | Amount at End of Current Reporting Period (Yuan) | Proportion of Total Assets | Amount at End of Prior Year (Yuan) | Proportion of Total Assets | Change in Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 1,228,492,626.87 | 18.13% | 1,544,572,467.42 | 21.46% | -3.33% | | Accounts Receivable | 943,101,327.08 | 13.91% | 750,672,954.26 | 10.43% | 3.48% | | Inventory | 696,360,135.70 | 10.27% | 801,046,849.49 | 11.13% | -0.86% | | Fixed Assets | 1,299,339,405.55 | 19.17% | 1,294,296,035.48 | 17.98% | 1.19% | | Construction in Progress | 160,357,494.83 | 2.37% | 142,278,949.38 | 1.98% | 0.39% | | Notes Payable | 1,212,582,101.92 | 17.89% | 1,633,065,803.64 | 22.69% | -4.80% | | Contract Liabilities | 172,817,667.80 | 2.55% | 218,867,480.64 | 3.04% | -0.49% | Asset Restriction Status for H1 2024 | Item | Book Value at Period End (Yuan) | Reason for Restriction | | :--- | :--- | :--- | | Monetary Funds | 242,745,679.70 | Bank acceptance bill deposits, guarantee deposits, special funds for project supervision | | Notes Receivable | 107,947,081.22 | Pledged bank acceptance bills | | Accounts Receivable | 16,323,674.67 | Accounts receivable factoring not derecognized | | Total | 367,016,435.59 | | Analysis of Investment Activities During the reporting period, the company's total investment was 94.69 million Yuan, a 53.45% decrease year-on-year. The primary non-equity investment project, "Vatti Kitchen Appliance Digital and Intelligent Industrial Park Project (Civil Works)," received 51.38 million Yuan in current period investment and is 35.57% complete, currently in the fixed asset deployment phase and not yet in production Overall Investment Status for H1 2024 | Indicator | Investment Amount for Current Reporting Period (Yuan) | Investment Amount for Prior Period (Yuan) | Change Rate | | :--- | :--- | :--- | :--- | | Total Investment | 94,693,810.51 | 203,430,643.11 | -53.45% | Significant Non-Equity Investment Status for H1 2024 | Project Name | Investment Method | Industry Involved in Investment Project | Amount Invested in Current Reporting Period (Yuan) | Cumulative Actual Investment Amount as of End of Reporting Period (Yuan) | Source of Funds | Project Progress | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Vatti Kitchen Appliance Digital and Intelligent Industrial Park Project (Civil Works) | Other | Kitchen Appliance Industry | 51,375,000.09 | 157,451,560.42 | Own Funds | 35.57% | - The project is in the fixed asset deployment phase and has not yet commenced production[68] Significant Asset and Equity Disposals During the reporting period, the company did not engage in any significant asset or equity disposal transactions - The company did not dispose of any significant assets during the reporting period[71] - The company did not dispose of any significant equity during the reporting period[71] Analysis of Major Holding and Participating Companies Zhongshan Best Kitchen & Bath Co., Ltd., a major subsidiary, achieved 765 million Yuan in operating revenue and 55.40 million Yuan in net profit during the reporting period, significantly impacting the company's net profit Financial Performance of Major Subsidiary Zhongshan Best Kitchen & Bath Co., Ltd. | Company Type | Main Business | Registered Capital (Yuan) | Total Assets (Yuan) | Net Assets (Yuan) | Operating Revenue (Yuan) | Operating Profit (Yuan) | Net Profit (Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Subsidiary | R&D, production, and sales of kitchen and bathroom appliance products | 80,000,000.00 | 1,525,871,203.08 | 895,076,408.86 | 764,688,863.31 | 65,360,752.90 | 55,397,953.09 | - The company did not acquire or dispose of any subsidiaries during the reporting period[71] Structured Entities Controlled by the Company During the reporting period, the company did not control any structured entities - The company did not control any structured entities during the reporting period[72] Risks Faced by the Company and Countermeasures The company faces risks from macroeconomic conditions, raw material price fluctuations, market competition, exchange rate changes, and core talent loss, which it addresses through strategic adjustments, cost control, innovation, diversified channels, and talent development - Macroeconomic risk: Consumer confidence is insufficient due to the continuous impact of the real estate market[72] Countermeasures: Timely adjust business management strategies, optimize marketing strategies and channel development, and improve product quality[72] - Raw material price fluctuation risk: Major raw material costs account for a significant proportion[73] Countermeasures: Increase efforts in procurement cost control, improve the supply chain system, develop strategic cooperative suppliers, and enhance production automation levels[73] - Market competition risk: Intense industry competition and increasing cross-industry competitors[74] Countermeasures: Adhere to technological innovation, improve diversified channel layout, formulate differentiated marketing strategies, and deepen brand connotations[74] - Exchange rate fluctuation risk: Stable export revenue from overseas business, but exchange rate fluctuations affect financial costs[75] Countermeasures: Mitigate risks through various measures such as forward foreign exchange settlement and options[75] - Core talent loss risk: Professional talent is a crucial resource for the company's development[76] Countermeasures: Improve talent cultivation mechanisms, establish a scientific and reasonable human resource management system, and employee training and incentive programs[76] Implementation of "Quality and Return Dual Enhancement" Action Plan The company did not disclose an announcement regarding the "Quality and Return Dual Enhancement" action plan during the reporting period - The company did not disclose an announcement regarding the "Quality and Return Dual Enhancement" action plan during the reporting period[77] Corporate Governance This section details the company's corporate governance structure, including shareholder meetings, changes in directors, supervisors, and senior management, profit distribution, and employee incentive plans Information on Annual and Extraordinary General Meetings Held During the Reporting Period The company held its 2023 Annual General Meeting on May 16, 2024, with a 35.60% investor participation rate, and no requests for extraordinary general meetings from preferred shareholders with restored voting rights 2023 Annual General Meeting Information | Session | Meeting Type | Investor Participation Rate | Date Held | Disclosure Date | | :--- | :--- | :--- | :--- | :--- | | 2023 Annual General Meeting | Annual General Meeting | 35.60% | 2024年05月16日 | 2024年05月17日 | - There were no instances of preferred shareholders with restored voting rights requesting an extraordinary general meeting during the reporting period[78] Changes in Directors, Supervisors, and Senior Management There were no changes in the company's directors, supervisors, and senior management during the reporting period, with details available in the 2023 Annual Report - There were no changes in the company's directors, supervisors, and senior management during the reporting period, details can be found in the 2023 Annual Report[78] Profit Distribution and Capital Reserve Conversion to Share Capital for the Current Reporting Period The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the semi-annual period - The company plans not to distribute cash dividends, bonus shares, or convert capital reserves into share capital for the semi-annual period[78] Implementation of Equity Incentive Plans, Employee Stock Ownership Plans, or Other Employee Incentive Measures During the reporting period, the company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures in place or implemented - The company had no equity incentive plans, employee stock ownership plans, or other employee incentive measures and their implementation during the reporting period[79] Environmental and Social Responsibility This section outlines the company's environmental protection efforts, including compliance with regulations and implementation of environmental management systems, as well as its social responsibility initiatives, such as promoting green manufacturing and participating in charitable activities Significant Environmental Issues The company is not classified as a key polluting unit and received no environmental administrative penalties during the reporting period, actively implementing ISO14001 environmental management, conducting regular waste monitoring, and legally transferring hazardous waste - The company and its subsidiaries are not classified as key polluting units by environmental protection authorities[80] - No administrative penalties were received due to environmental issues during the reporting period[80] - The company implements the ISO14001 environmental management system and has obtained certification, with all "three wastes" (waste gas, waste water, solid waste) testing compliant, hazardous waste legally transferred, and no environmental violations occurring during the reporting period[80] Social Responsibility The company actively responds to "dual carbon" goals by implementing smart and green manufacturing, innovating technology and products for eco-friendly kitchens, preparing for photovoltaic power generation, and engaging in philanthropy, including a 60,000 Yuan donation to the Red Top Public Welfare Project in June 2024 - The company actively responds to "dual carbon" goals, deeply implementing smart and green manufacturing, and promoting industry development towards high-end, intelligent, and green directions[81] - The company is actively preparing to implement green energy measures such as photovoltaic power generation, striving to achieve zero carbon emissions as soon as possible[81] - In June 2024, the company donated 60,000 Yuan to participate in the Red Top Public Welfare Project, visiting Yuelianghu Township Hope Primary School in Ningxia to provide material donations and care[81] Significant Matters This section covers significant commitments, related party transactions, guarantees, litigation, penalties, and other material events affecting the company during the reporting period Commitments Fulfilled or Overdue by Controlling Shareholder, Shareholders, Related Parties, Acquirers, and the Company During and as of the End of the Reporting Period During the reporting period, there were no commitments fulfilled or overdue by the company's controlling shareholder, shareholders, related parties, acquirers, or the company itself - During the reporting period, there were no commitments fulfilled or overdue by the company's controlling shareholder, shareholders, related parties, acquirers, or the company itself[82] Non-Operating Funds Occupied by Controlling Shareholder and Other Related Parties from the Listed Company During the reporting period, there were no instances of non-operating funds being occupied by the controlling shareholder or other related parties from the listed company - During the reporting period, there were no instances of non-operating funds being occupied by the controlling shareholder or other related parties from the listed company[82] Irregular External Guarantees During the reporting period, the company had no irregular external guarantees - The company had no irregular external guarantees during the reporting period[82] Appointment and Dismissal of Accounting Firms The company's semi-annual financial report was not audited - The company's semi-annual financial report was not audited[82] Board of Directors' and Supervisory Board's Explanation on "Non-Standard Audit Report" for the Current Period As there was no non-standard audit report for the current reporting period, the Board of Directors and Supervisory Board did not need to provide an explanation - There was no non-standard audit report for the company during the reporting period[82] Board of Directors' Explanation on "Non-Standard Audit Report" for the Prior Year As there was no non-standard audit report for the prior year, the Board of Directors did not need to provide an explanation - There was no non-standard audit report for the prior year during the company's reporting period[82] Bankruptcy and Reorganization Matters During the reporting period, the company did not experience any bankruptcy and reorganization matters - The company did not experience any bankruptcy and reorganization matters during the reporting period[82] Litigation Matters The company had no significant litigation or arbitration matters during the reporting period, but a summary of other litigation cases, cumulatively not reaching the disclosure threshold over 12 months, involved 89.58 million Yuan, with some cases still pending or in enforcement, creating uncertainty regarding their impact on current or future profits - The company had no significant litigation or arbitration matters during the current reporting period[82] Summary of Other Litigation Matters | Basic Information on Litigation (Arbitration) | Amount Involved (10,000 Yuan) | Whether a Provision for Liabilities Has Been Formed | Progress of Litigation (Arbitration) | Outcome and Impact of Litigation (Arbitration) | | :--- | :--- | :--- | :--- | :--- | | Summary of Litigation Matters Cumulatively Not Reaching the Significant Litigation Disclosure Standard Over 12 Months | 8,957.9 | No | Some are yet to be heard, some are in the trial stage, some are in enforcement, and some have been concluded | Given that some cases have not yet been heard or concluded, their impact on the company's current or future profits is uncertain | Penalties and Rectification Status During the reporting period, the company had no penalties or rectification situations - The company had no penalties or rectification situations during the reporting period[84] Integrity Status of the Company, its Controlling Shareholder, and Actual Controller During the reporting period, there were no integrity issues concerning the company, its controlling shareholder, or actual controller - The company had no integrity issues during the reporting period[84] Significant Related Party Transactions During the reporting period, the company did not engage in related party transactions concerning daily operations, asset/equity acquisitions or disposals, joint external investments, related party creditor-debtor relationships, or dealings with affiliated financial companies - The company did not engage in related party transactions related to daily operations during the reporting period[84] - The company did not engage in related party transactions involving asset or equity acquisitions or disposals during the reporting period[84] - There were no related party creditor-debtor relationships during the company's reporting period[86] - There were no deposits, loans, credit lines, or other financial transactions between the company and affiliated financial companies or related parties[87] Significant Contracts and Their Performance During the reporting period, the company had no entrustment, contracting, leasing matters, or significant guarantees. It engaged in wealth management with an outstanding balance of 138.29 million Yuan at period-end, with no overdue unrecovered amounts, and no other significant contracts - The company had no entrustment, contracting, or leasing situations during the reporting period[91] - The company had no significant guarantees during the reporting period[92] Wealth Management Status for H1 2024 | Specific Type | Source of Wealth Management Funds | Amount of Wealth Management Transactions (10,000 Yuan) | Outstanding Balance (10,000 Yuan) | Overdue Unrecovered Amount (10,000 Yuan) | | :--- | :--- | :--- | :--- | :--- | | Bank Wealth Management Products | Own Funds | 148,726.36 | 127,935 | 0 | | Brokerage Wealth Management Products | Own Funds | 10,000 | 10,000 | 0 | | Other Categories | Own Funds | 0 | 359.58 | 0 | | Total | | 158,726.36 | 138,294.58 | 0 | - The company had no other significant contracts during the reporting period[94] Explanation of Other Significant Matters During the reporting period, the company had no other significant matters requiring explanation - The company had no other significant matters requiring explanation during the reporting period[95] Significant Matters of Company Subsidiaries During the reporting period, the company's subsidiaries had no significant matters - The company's subsidiaries had no significant matters during the reporting period[96] Share Changes and Shareholder Information This section details changes in the company's share capital, securities issuance, shareholder structure, and holdings of directors, supervisors, and senior management, as well as any changes in controlling shareholder or actual controller Share Fluctuation Status The company's total share capital remained unchanged at 847,653,618 shares during the reporting period, with a share repurchase plan ongoing, having cumulatively repurchased 16,589,882 shares (1.96% of total capital) for 100,000,358.25 Yuan as of July 31, 2024 Share Fluctuation Status for H1 2024 | Share Category | Number Before This Change (shares) | Proportion | Increase/Decrease in This Change (+, -) | Number After This Change (shares) | Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | I. Restricted Shares | 67,130,576 | 7.92% | 0 | 67,130,576 | 7.92% | | II. Unrestricted Shares | 780,523,042 | 92.08% | 0 | 780,523,042 | 92.08% | | III. Total Shares | 847,653,618 | 100.00% | 0 | 847,653,618 | 100.00% | - The company approved a share repurchase plan on December 5, 2023, intending to repurchase shares with a total fund of no less than 100 million Yuan and no more than 200 million Yuan, at a price not exceeding 8.67 Yuan/share[97] - As of July 31, 2024, the company had cumulatively repurchased 16,589,882 shares, accounting for 1.96% of the total share capital, with a transaction amount of 100,000,358.25 Yuan[98] Securities Issuance and Listing Status During the reporting period, the company had no securities issuance and listing activities - The company had no securities issuance and listing activities during the reporting period[101] Number of Shareholders and Shareholding Status At the end of the reporting period, the total number of common shareholders was 37,258. Among the top ten shareholders, Shihezi Fenjin Equity Investment General Partnership was the controlling shareholder with 14.27% stake, Pan Yejiang held 10.25%, and Hong Kong Securities Clearing Company Limited held 10.06%. Pan Yejiang is the company's Chairman, President, and actual controller, also holding property shares in Fenjin Investment - The total number of common shareholders at the end of the reporting period was 37,258[101] Shareholding Status of Top Ten Common Shareholders at Period End | Shareholder Name | Shareholder Nature | Shareholding Proportion | Number of Common Shares Held at Period End (shares) | Number of Restricted Common Shares Held (shares) | Number of Unrestricted Common Shares Held (shares) | Share Status | Pledged, Marked, or Frozen Quantity (shares) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shihezi Fenjin Equity Investment General Partnership | Domestic Non-State-Owned Legal Person | 14.27% | 120,960,000 | 0 | 120,960,000 | Pledged | 23,550,000 | | Pan Yejiang | Domestic Natural Person | 10.25% | 86,922,235 | 65,191,676 | 21,730,559 | Pledged | 13,000,000 | | Hong Kong Securities Clearing Company Limited | Overseas Legal Person | 10.06% | 85,274,876 | 0 | 85,274,876 | Not Applicable | 0 | - Mr. Pan Yejiang is the company's Chairman, President, and actual controller, holding property shares in Fenjin Investment and serving as its executive partner[100] - Among the company's top 10 shareholders, there is a dedicated securities account for company share repurchases, which had cumulatively repurchased 16,589,882 shares, accounting for 1.96% of the total share capital, as of the end of the reporting period[101] Changes in Shareholdings of Directors, Supervisors, and Senior Management During the reporting period, there were no changes in the shareholdings of the company's directors, supervisors, and senior management, with details available in the 2023 Annual Report - There were no changes in the shareholdings of the company's directors, supervisors, and senior management during the reporting period, details can be found in the 2023 Annual Report[104] Changes in Controlling Shareholder or Actual Controller During the reporting period, there were no changes in the company's controlling shareholder or actual controller - The company's controlling shareholder did not change during the reporting period[105] - The company's actual controller did not change during the reporting period[105] Preferred Share Information This section confirms that the company had no preferred shares during the reporting period No Preferred Shares During the Reporting Period During the reporting period, the company had no preferred shares - The company had no preferred shares during the reporting period[106] Bond Information This section confirms that the company had no bonds during the reporting period No Bonds During the Reporting Period During the reporting period, the company had no bonds - The company had no bonds during the reporting period[107] Financial Report This section presents the company's unaudited semi-annual financial statements, including balance sheets, income statements, cash flow statements, and statements of changes in owners' equity, along with notes on accounting policies, taxes, and other financial details Audit Report The company's semi-annual financial report was not audited - The company's semi-annual financial report was not audited[108] Financial Statements This section provides the company's consolidated and parent company balance sheets, income statements, cash flow statements, and statements of changes in owners' equity for the first half of 2024, comprehensively presenting its financial position, operating results, and cash flow Consolidated Balance Sheet As of June 30, 2024, the company's consolidated total assets were 6.78 billion Yuan, with current assets of 4.60 billion Yuan and non-current assets of 2.18 billion Yuan, while total liabilities were 3.14 billion Yuan and total owners' equity was 3.64 billion Yuan Key Data from Consolidated Balance Sheet (Period-End Balance) | Item | Amount (Yuan) | | :--- | :--- | | Total Assets | 6,777,788,963.14 | | Total Current Assets | 4,601,188,319.92 | | Total Non-current Assets | 2,176,600,643.22 | | Total Liabilities | 3,138,616,354.70 | | Total Current Liabilities | 3,103,769,772.83 | | Total Non-current Liabilities | 34,846,581.87 | | Total Owners' Equity | 3,639,172,608.44 | | Total Owners' Equity Attributable to Parent Company | 3,594,309,844.80 | Parent Company Balance Sheet As of June 30, 2024, the parent company's total assets were 5.25 billion Yuan, with current assets of 3.31 billion Yuan and non-current assets of 1.94 billion Yuan, while total liabilities were 2.45 billion Yuan and total owners' equity was 2.80 billion Yuan Key Data from Parent Company Balance Sheet (Period-End Balance) | Item | Amount (Yuan) | | :--- | :--- | | Total Assets | 5,252,679,633.60 | | Total Current Assets | 3,312,568,275.52 | | Total Non-current Assets | 1,940,111,358.08 | | Total Liabilities | 2,449,189,256.42 | | Total Current Liabilities | 2,424,509,576.23 | | Total Non-current Liabilities | 24,679,680.19 | | Total Owners' Equity | 2,803,490,377.18 | Consolidated Income Statement In the first half of 2024, the company achieved total operating revenue of 3.10 billion Yuan, a 7.68% increase year-on-year, with net profit of 299 million Yuan and net profit attributable to parent company shareholders of 299 million Yuan, a 14.77% increase, resulting in basic earnings per share of 0.3593 Yuan Key Data from Consolidated Income Statement (H1 2024) | Item | Amount (Yuan) | | :--- | :--- | | Total Operating Revenue | 3,100,864,172.86 | | Total Operating Costs | 2,824,845,292.34 | | Operating Profit | 335,795,369.51 | | Total Profit | 337,182,262.17 | | Net Profit | 298,564,559.80 | | Net Profit Attributable to Parent Company Shareholders | 299,587,271.15 | | Basic Earnings Per Share (Yuan/share) | 0.3593 | | Diluted Earnings Per Share (Yuan/share) | 0.3593 | Parent Company Income Statement In the first half of 2024, the parent company achieved total operating revenue of 2.32 billion Yuan and net profit of 243 million Yuan, a decrease compared to the prior period Key Data from Parent Company Income Statement (H1 2024) | Item | Amount (Yuan) | | :--- | :--- | | Total Operating Revenue | 2,319,813,779.27 | | Operating Profit | 272,014,093.10 | | Total Profit | 273,035,938.74 | | Net Profit | 243,203,022.35 | Consolidated Cash Flow Statement In the first half of 2024, the company's net cash flow from operating activities was 227 million Yuan, a 41.16% decrease year-on-year, with net cash flow from investing activities at -136 million Yuan and from financing activities at -337 million Yuan, resulting in a net decrease in cash and cash equivalents of -242 million Yuan Key Data from Consolidated Cash Flow Statement (H1 2024) | Item | Amount (Yuan) | | :--- | :--- | | Net Cash Flow from Operating Activities | 226,500,144.28 | | Net Cash Flow from Investing Activities | -136,439,984.03 | | Net Cash Flow from Financing Activities | -336,927,462.77 | | Net Increase in Cash and Cash Equivalents | -242,050,608.14 | Parent Company Cash Flow Statement In the first half of 2024, the parent company's net cash flow from operating activities was 152 million Yuan, from investing activities was 67 million Yuan, and from financing activities was -339 million Yuan, leading to a net decrease in cash and cash equivalents of -120 million Yuan Key Data from Parent Company Cash Flow Statement (H1 2024) | Item | Amount (Yuan) | | :--- | :--- | | Net Cash Flow from Operating Activities | 152,377,181.50 | | Net Cash Flow from Investing Activities | 67,485,930.72 | | Net Cash Flow from Financing Activities | -339,439,368.77 | | Net Increase in Cash and Cash Equivalents | -119,576,256.55 | Consolidated Statement of Changes in Owners' Equity As of June 30, 2024, the company's consolidated total owners' equity was 3.64 billion Yuan, a decrease from the beginning of the period's 3.69 billion Yuan, primarily due to treasury stock repurchases and profit distribution Consolidated Changes in Owners' Equity (H1 2024) | Item | Balance at Beginning of Period (Yuan) | Amount of Increase/Decrease in Current Period (Yuan) | Balance at End of Period (Yuan) | | :--- | :--- | :--- | :--- | | Share Capital | 847,653,618.00 | 0 | 847,653,618.00 | | Capital Reserve | 22,532,146.71 | 0 | 22,532,146.71 | | Less: Treasury Stock | 0 | 100,050,446.75 | 100,050,446.75 | | Surplus Reserve | 310,719,338.46 | 0 | 310,719,338.46 | | Retained Earnings | 2,463,187,038.03 | 50,268,150.35 | 2,513,455,188.38 | | Total Owners' Equity Attributable to Parent Company | 3,644,092,141.20 | -49,782,296.40 | 3,594,309,844.80 | | Minority Interests | 45,885,474.99 | -1,022,711.35 | 44,862,763.64 | | Total Owners' Equity | 3,689,977,616.19 | -50,805,007.75 | 3,639,172,608.44 | Parent Company Statement of Changes in Owners' Equity As of June 30, 2024, the parent company's total owners' equity was 2.80 billion Yuan, a decrease from the beginning of the period's 2.91 billion Yuan, primarily due to treasury stock repurchases and profit distribution Parent Company Changes in Owners' Equity (H1 2024) | Item | Balance at Beginning of Period (Yuan) | Amount of Increase/Decrease in Current Period (Yuan) | Balance at End of Period (Yuan) | | :--- | :--- | :--- | :--- | | Share Capital | 847,653,618.00 | 0 | 847,653,618.00 | | Capital Reserve | 40,787,289.74 | 0 | 40,787,289.74 | | Less: Treasury Stock | 0 | 100,050,446.75 | 100,050,446.75 | | Surplus Reserve | 285,505,589.75 | 0 | 285,505,589.75 | | Retained Earnings | 1,735,710,424.89 | -6,116,098.45 | 1,729,594,326.44 | | Total Owners' Equity | 2,909,656,922.38 | -106,166,545.20 | 2,803,490,377.18 | Company Basic Information This section details Vatti Co., Ltd.'s registration, industry, business scope, main products, historical evolution, financial report approval, and consolidated financial statement scope, identifying it as an electrical machinery and equipment manufacturer focused on kitchen appliances and home customization, listing its key subsidiaries - Company Name: Vatti Co., Ltd., Registered Address: No. 1 Huayuan Road, Industrial Avenue South, Xiaolan Town, Zhongshan City, Guangdong Province[135] - Company Industry Nature: Electrical machinery and equipment manufacturing, primarily engaged in R&D, production, and sales of kitchen appliance products, home customization, and other businesses[135] - The company's historical evolution includes multiple share capital changes, share split reform, restricted stock incentive plans, and repurchase and cancellation[136][137][138][139][140][141][142] - The company's financial report was approved for issuance by its Board of Directors on August 28, 2024[143] - The scope of consolidated financial statements includes Zhongshan Vatti Smart Home Co., Ltd., Zhongshan Best Kitchen & Bath Co., Ltd., and 12 other subsidiaries, totaling 14 subsidiaries[145] Basis of Financial Statement Preparation The company's financial statements are prepared on a going concern basis, adhering to the Accounting Standards for Business Enterprises issued by the Ministry of Finance of the People's Republic of China and information disclosure requirements from the China Securities Regulatory Commission, with a demonstrated ability to continue operations for at least 12 months - The company's financial statements are prepared on a going concern basis, in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance of the People's Republic of China[146] - The financial statements also comply with the "No. 15 Rules for Information Disclosure by Companies Issuing Securities to the Public – General Provisions on Financial Reports" revised by the China Securities Regulatory Commission in 2023[146] - The company has the ability to continue as a going concern for at least 12 months from the end of the reporting period, with no significant matters affecting its going concern ability[147] Significant Accounting Policies and Estimates This section details the significant accounting policies and estimates used in preparing the financial statements, covering compliance with accounting standards and changes, ensuring the truthfulness and completeness of financial reporting. During the reporting period, the company implemented "Interpretation No. 17 of Accounting Standards for Business Enterprises" and "Interim Provisions on Accounting Treatment of Enterprise Data Resources," and reclassified warranty expenses - The financial statements prepared by the company comply with the requirements of Accounting Standards for Business Enterprises, truly and completely reflecting the company's financial position, operating results, and cash flows for the reporting period[150] - The company implemented "Interpretation No. 17 of Accounting Standards for Business Enterprises" and "Interim Provisions on Accounting Treatment of Enterprise Data Resources," which do not involve retrospective adjustments to prior years and will not have a significant impact on the company's financial position, operating results, and cash flows[241][242] - The company reclassified warranty expenses, effective from January 1, 2024, applying retrospective adjustment to the financial statement data for comparable periods[242] Impact of Accounting Policy Changes on Income Statement (H1 2024) | Item | Group Increase/Decrease Amount (Yuan) | Parent Company Increase/Decrease Amount (Yuan) | | :--- | :--- | :--- | | Operating Cost | 32,875,046.48 | 29,907,555.11 | | Selling Expenses | -32,875,046.48 | -29,907,555.11 | Taxation The company's main taxes include VAT, urban maintenance and construction tax, corporate income tax, education surcharge, and local education surcharge. The company and several subsidiaries enjoy a 15% corporate income tax rate as high-tech enterprises, some subsidiaries qualify for a 20% small and micro-enterprise tax reduction, and the company benefits from a VAT immediate refund policy for self-developed software products Main Tax Categories and Rates | Tax Category | Tax Basis | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax (VAT) | Balance after deducting current period deductible input VAT from current period output VAT | 6%、9%、13% | | Urban Maintenance and Construction Tax | Calculated and paid based on payable VAT | 5% | | Corporate Income Tax | Calculated and paid based on taxable income | 25%、20%、15% | | Education Surcharge | Calculated and paid based on payable VAT | 3% | | Local Education Surcharge | Calculated and paid based on payable VAT | 2% | - Vatti Co., Ltd., Zhongshan Best Kitchen & Bath Co., Ltd., Zhongshan Vatti Smart Home Co., Ltd., Zhongshan Vatti Electronic Technology Co., Ltd., and Zhongshan Vatti Environmental Technology Co., Ltd. are all approved as high-tech enterprises, enjoying a 15% corporate income tax rate[247][248] - Zhongshan Zhengmeng Kitchen & Bath Appliance Co., Ltd., Zhongshan Vatti Integrated Kitchen Co., Ltd., and Zhongshan Best E-commerce Co., Ltd. qualify as small and micro-enterprises, enjoying a 20% corporate income tax rate[248] - The company sells self-developed software products and implements an immediate refund policy for the portion of VAT actual tax burden exceeding 3%[248] Notes to Consolidated Financial Statement Items This section provides detailed disclosures for each item in the consolidated financial statements, including monetary funds, financial assets, accounts receivable, inventory, fixed assets, intangible assets, liabilities, owners' equity, and various income and expenses, offer