YADEA(01585)2024-09-26 08:45Revenue and Sales Performance - Revenue for the first half of 2024 was RMB 14,413.8 million, a decrease of 15.4% compared to the same period in 2023, primarily due to macroeconomic uncertainties and temporary weak market demand[8] - Total sales of electric two-wheelers decreased from 8,210,700 units in the first half of 2023 to 6,382,600 units in the first half of 2024, with a gradual recovery in sales observed in May and June 2024[8] - Sales of electric bicycles accounted for 43.3% of total revenue, generating RMB 6,239.4 million, while electric scooters contributed 24.6% with RMB 3,546.6 million in revenue[10] - Battery and charger sales contributed 28.2% of total revenue, amounting to RMB 4,065.3 million, with battery sales alone reaching RMB 6,714.6 million[10] - Total segment revenue for electric two-wheelers and related accessories decreased from RMB 17,041.1 million in H1 2023 to RMB 14,413.8 million in H1 2024, a decline of 15.4%[12] - Revenue for the first half of 2024 was RMB 14,413.8 million, a decrease of 15.4% compared to RMB 17,041.1 million in the same period of 2023[53] - Revenue from electric bicycles decreased to RMB 6,239,374 thousand in H1 2024 from RMB 7,639,514 thousand in H1 2023, a decline of 18.3%[71] - Revenue from electric scooters decreased to RMB 3,546,576 thousand in H1 2024 from RMB 4,577,196 thousand in H1 2023, a decline of 22.5%[71] - Revenue from batteries and chargers decreased to RMB 4,065,296 thousand in H1 2024 from RMB 4,498,171 thousand in H1 2023, a decline of 9.6%[71] - Revenue from electric two-wheeler parts increased to RMB 562,556 thousand in H1 2024 from RMB 326,211 thousand in H1 2023, an increase of 72.5%[71] - Total segment revenue for electric two-wheelers and related accessories was RMB 14,205,169 thousand in H1 2024, down from RMB 16,988,740 thousand in H1 2023[74] - Total segment revenue for batteries and electric drives was RMB 2,526,456 thousand in H1 2024, up from RMB 1,928,281 thousand in H1 2023[74] Gross Profit and Margin - Gross margin improved from 16.9% in the first half of 2023 to 18.0% in the first half of 2024, driven by an optimized product mix and premium pricing for battery and electric drive products[8] - Gross profit decreased by 9.8% from RMB 2,874.1 million in H1 2023 to RMB 2,593.8 million in H1 2024, with gross margin improving slightly from 16.9% to 18.0% due to product mix optimization and price increases for batteries and electric drive products[14] - Gross profit for the first half of 2024 was RMB 2,593.8 million, down 9.8% from RMB 2,874.1 million in the first half of 2023[53] - Gross profit for electric two-wheelers and related accessories was RMB 2,264,028 thousand in H1 2024, down from RMB 2,687,793 thousand in H1 2023[74] - Gross profit for batteries and electric drives was RMB 374,470 thousand in H1 2024, up from RMB 192,883 thousand in H1 2023[74] Net Profit and Earnings - Net profit decreased by 12.9% from RMB 1,186.8 million in H1 2023 to RMB 1,033.9 million in H1 2024[16] - Net profit attributable to the company's owners for the first half of 2024 was RMB 1,033.9 million, a decrease of 12.9% compared to RMB 1,187.6 million in the same period of 2023[53] - Basic earnings per share for the first half of 2024 were RMB 34.5 cents, down from RMB 39.9 cents in the first half of 2023[53] - Net profit attributable to owners of the company was RMB 1,033,866 thousand in H1 2024, down from RMB 1,187,643 thousand in H1 2023[82] - Basic earnings per share decreased to RMB 34.5 cents in H1 2024 from RMB 39.9 cents in H1 2023[82] - Net profit attributable to the company's owners decreased to RMB 1,033,866 thousand in 2024 from RMB 1,187,643 thousand in 2023, representing a decline[85] - Diluted earnings per share decreased to 34.4 RMB cents per share in 2024 from 39.5 RMB cents per share in 2023[85] Cash Flow and Financial Position - Cash and cash equivalents decreased by 10.7% from RMB 7,913.8 million as of December 31, 2023, to RMB 7,067.6 million as of June 30, 2024, primarily due to net cash outflows from operating and investing activities[17] - Operating cash flow for the six months ended June 30, 2024, was a net outflow of RMB 696.503 million, compared to a net inflow of RMB 2.5728 billion in the same period in 2023[64] - Net cash used in investing activities for the six months ended June 30, 2024, was RMB 1.0867 billion, primarily due to the purchase of property, plant, and equipment amounting to RMB 815.315 million[64] - Net cash from financing activities for the six months ended June 30, 2024, was RMB 925.445 million, driven by proceeds from borrowings of RMB 1.3095 billion[64] - Cash and cash equivalents decreased by RMB 857.78 million during the six months ended June 30, 2024, ending at RMB 7.0676 billion[64] - The company paid dividends of RMB 1.3161 billion during the six months ended June 30, 2024[61] - The company repurchased shares worth RMB 13.329 million under the share award plan during the six months ended June 30, 2024[61] - The company acquired a subsidiary, resulting in a payment of RMB 209.482 million, net of cash acquired, during the six months ended June 30, 2024[64] - Interest income from bank deposits for the six months ended June 30, 2024, was RMB 117.531 million[64] - The company repaid borrowings of RMB 268.095 million during the six months ended June 30, 2024[64] - The company's cash and cash equivalents decreased to RMB 7,067,644 thousand as of June 30, 2024, from RMB 7,913,807 thousand as of December 31, 2023[105] Inventory and Asset Management - Inventory increased by 73.0% from RMB 955.4 million as of December 31, 2023, to RMB 1,652.6 million as of June 30, 2024, driven by increased battery inventory reserves and rising lead prices[20] - Total inventory as of June 30, 2024, was RMB 1,652,566 thousand, with raw materials accounting for RMB 950,156 thousand[87] - Accounts receivable increased to RMB 798,553 thousand in 2024 from RMB 545,941 thousand in 2023, with 94.2% of receivables aged within six months[88][89] - Total accounts payable and notes payable decreased to RMB 11,951,945 thousand in 2024 from RMB 13,672,198 thousand in 2023[90] - The company's trade and other receivables increased to RMB 798,553 thousand as of June 30, 2024, from RMB 545,941 thousand as of December 31, 2023[106] - The company's trade and other payables decreased to RMB 11,951,945 thousand as of June 30, 2024, from RMB 13,672,198 thousand as of December 31, 2023[108] Shareholder Equity and Share-Based Compensation - The company's total issued shares as of June 30, 2024, are 3,063,800,000 shares[26][28] - Dong Jingui holds 1,399,398,084 shares through Dawei Investment Limited, representing a significant portion of the company's equity[26] - Qian Jinghong holds 515,370,859 shares through Fangyuan Investment Limited, contributing to the company's equity structure[26] - The company granted 33,550,000 share options to 263 employees on January 17, 2023, under the 2016 Share Option Plan[35] - The share options granted have a vesting schedule tied to the company's financial performance, with 30% vesting after the 2023 annual results, 30% after the 2024 annual results, and 40% after the 2025 annual results[35] - The performance targets for the share options require a 20% growth in consolidated revenue and net profit for 2023, 44% for 2024, and 73% for 2025, compared to the 2022 baseline[35] - The company's five highest-paid individuals (excluding directors and senior management) each earned RMB 1,020,000 in 2023[31] - The company's share price at the time of the option grant on January 17, 2023, was HKD 16.14 per share[35] - The company's 2016 Share Option Plan was approved by the Hong Kong Stock Exchange on May 18, 2016, allowing the issuance of shares upon the exercise of options[35] - The company has established a performance evaluation system for employees to determine the vesting of share options based on individual performance targets[36] - The maximum number of shares available for grant under the 2016 Share Option Plan was 266,450,000 shares as of January 1, 2024[37] - The 2016 Share Option Plan terminated on June 17, 2024, and no further options can be granted under this plan after termination[37] - The 2024 Share Option Plan was conditionally approved by shareholders on June 17, 2024, with a maximum of 153,190,000 shares available for grant, representing 5% of the total issued shares as of the approval date[37] - No options were granted, exercised, canceled, lapsed, or forfeited under the 2024 Share Option Plan from its adoption date to June 30, 2024[39] - The total number of options available for grant under the 2024 Share Option Plan as of June 30, 2024, was 153,190,000[39] - The First Share Award Plan was terminated on June 17, 2024, and no further awards can be granted under this plan after termination[40] - The second and third share incentive plans were adopted on June 6, 2019, and will terminate on June 17, 2024, after which no further awards can be granted under these plans[41] - The fourth share incentive plan was adopted on July 23, 2019, and was amended on June 17, 2024, to allow the purchase of existing shares at market price for employee awards[42] - As of January 1, 2024, 70,678,139 shares were available for issuance under the share incentive plans, with 4,764,539 shares under the first plan (0.16% of issued share capital) and 65,913,600 shares under the fourth plan (2.15% of issued share capital)[43] - As of June 30, 2024, 59,642,339 shares were available for issuance under the share incentive plans, with 3,614,539 shares under the first plan (0.12% of issued share capital) and 56,027,800 shares under the fourth plan (1.83% of issued share capital)[44] - The company repurchased 1,112,000 shares under the share award plan in 2024, compared to none in 2023[94] - Outstanding restricted share units decreased to 17,338,000 in 2024 from 31,863,000 in 2023, with a weighted average fair value of RMB 5.68 per unit[96] - The company's share-based payment expenses for the six months ended June 30, 2024, amounted to RMB -46,847 thousand, compared to RMB 92,448 thousand in the same period in 2023, primarily due to the reversal of RMB 62,638 thousand in share-based compensation expenses as the performance conditions for the awards were not expected to be met[100] Regulatory and Market Challenges - The company remains the market leader in the electric two-wheeler industry by market share, despite regulatory changes and market challenges[8] - New regulations introduced in May 2024 focused on battery design and manufacturing, including aspects like overcharging, over-discharging, and thermal runaway, which temporarily disrupted product development[8] Research and Development and Overseas Expansion - The company plans to continue investing in R&D for new technologies in core components and expand its overseas market presence to promote the "Yadea" brand globally[8] - The net proceeds from the share placement in 2022 amounted to approximately HKD 857.6 million (equivalent to RMB 727.8 million), intended for overseas business expansion through R&D centers, factories, distribution networks, and potential acquisitions[47][48] - The company expects to fully utilize the net proceeds from the 2022 share placement by December 31, 2025[49] Subsidiary Acquisitions and Investments - The company's subsidiary acquired 100% equity of Wuxi Lingbo Electronic Technology Co., Ltd. for a total cash consideration of approximately RMB 351.5 million on April 17, 2024[47] - The company's subsidiary, Zhejiang Huayu Sodium Battery New Energy Technology Co., Ltd., acquired 100% equity of Wuxi Lingbo Electronic Technology Co., Ltd. for a total cash consideration of RMB 351,500 thousand on April 17, 2024[102] - The identifiable net assets acquired from Lingbo amounted to RMB 304,394 thousand, including intangible assets of RMB 114,833 thousand, primarily consisting of customer relationships valued at RMB 92,900 thousand and patents valued at RMB 20,820 thousand[103] Financial Assets and Liabilities - The fair value of financial assets at fair value through profit or loss decreased by 6.3% from RMB 2,789.8 million as of December 31, 2023, to RMB 2,613.9 million as of June 30, 2024, due to redemptions of wealth management products and structured deposits[18] - The company's financial assets measured at fair value through profit or loss decreased to RMB 2,613,941 thousand as of June 30, 2024, from RMB 2,789,800 thousand as of December 31, 2023[104] - The company's financial liabilities measured at amortized cost increased to RMB 16,672,418 thousand as of June 30, 2024, from RMB 16,202,059 thousand as of December 31, 2023, primarily due to an increase in borrowings to RMB 1,274,770 thousand from RMB 267,257 thousand[108] - The company's total financial assets measured at fair value as of June 30, 2024, amounted to RMB 2,626,927 thousand, including RMB 2,439,273 thousand in wealth management products and structured deposits and RMB 82,248 thousand in unlisted equity investments[110][111] Capital Expenditures and Commitments - The company acquired property, plant, and equipment worth RMB 679,077 thousand in 2024, a significant increase from RMB 363,763 thousand in 2023[86] - The company's capital commitments for property, plant, and equipment as of June 30, 2024, amounted to RMB 758,645 thousand, a decrease from RMB 815,006 thousand as of December 31, 2023[101] Employee Costs and Compensation - Total employee costs decreased from RMB 1,426.0 million in H1 2023 to RMB 1,074.8 million in H1 2024, with the number of employees decreasing from 12,338 to 12,008[22] - Employee share-based compensation expenses amounted to RMB 92.448 million for the six months ended June 30, 2024[61] Related Party Transactions - No significant related party transactions or balances were reported for the six months ended June 30, 2024, and June 30, 2023, as well as for the periods ended June 30, 2024, and December 31, 2023[117] Asset and Liability Overview - Total assets as of June 30, 2024, were RMB 25,707.6 million, a slight increase from RMB 25,660.1 million as of December 31, 2023[58] - Total liabilities as of June 30, 2024, were RMB 17,572.7 million, compared to RMB 17,258.9 million as of December 31, 2023[60] - The company's equity attributable to owners as of June 30, 2024, was RMB 8,134.7 million, down from RMB 8,401.0 million as of December 31, 2023[60] - The asset-liability ratio increased from 9.9% as of December 31, 2023, to 22.3% as of June 30, 2024, mainly due to increased borrowings[21] - The company's assets at the beginning of the period were RMB 80,924 thousand, an increase from RMB 66,444 thousand in the same period last year[116] - Additions to assets during the period amounted to RMB 1,677 thousand, slightly lower than the RMB 1,786 thousand added in the previous year[116] - The company's assets at the end of the