进腾集团(02011) - 2024 - 中期财报

Company Information The report details the company's board of directors, committee members (audit, remuneration, nomination), registered office, principal place of business in Hong Kong, share registrar, auditor, and principal bankers - The report details the company's board of directors, committee members (audit, remuneration, nomination), registered office, principal place of business in Hong Kong, share registrar, auditor, and principal bankers[2][3][4] Financial Summary This section provides a concise overview of the company's financial performance and position for the period, highlighting key metrics and changes Summary of Interim Financial Performance 2024 | Metric | Six Months Ended June 30, 2024 (HKD thousands) | Six Months Ended June 30, 2023 (HKD thousands) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 160,386 | 123,386 | +30.0% | | Gross Profit | 88,910 | 42,594 | +108.7% | | Profit for the period | 10,533 | 5,910 | +78.2% | | Profit attributable to owners of the Company | 10,846 | 3,394 | +220.0% | | Basic earnings per share (HK cents) | 1.9 | 0.6 | +216.7% | | Asset Position | As of June 30, 2024 (HKD thousands) | As of December 31, 2023 (HKD thousands) | Change (%) | | Total Assets | 346,120 | 278,103 | +24.5% | | Cash and Cash Equivalents | 75,977 | 63,332 | +20.0% | | Total equity attributable to owners of the Company | 157,941 | 123,378 | +28.0% | Management Discussion and Analysis This section provides an in-depth review of the Group's operational performance, financial results, and future strategies Business Review and Outlook The Group's core business is zipper manufacturing, with property management services added in September 2023. The introduction of the new business was the primary driver of significant profit growth in the first half of 2024, contributing approximately HKD 45.27 million in revenue and HKD 30.19 million in profit. Looking ahead, due to macroeconomic uncertainties, the Group maintains a conservative stance on the zipper business, focusing on cost control and efficiency improvements, while continuing to develop asset-light businesses like property management for diversification and stable cash flow - Profit growth in the first half of 2024 was primarily attributed to the newly added property management business, which contributed approximately HKD 45.27 million in revenue and HKD 30.19 million in profit during the period[7] - Facing rising costs and weak consumer spending, the Group maintains a conservative outlook on the traditional zipper business, addressing challenges through measures such as increased automation and cost control[9] - The Group strategically introduced asset-light property management business with short cycles and stable cash flow, aiming for business diversification, reduced single-business risk, and stable returns for shareholders[11] Financial Review The financial performance for the period was strong. Total revenue increased by 30.0% year-on-year to HKD 160 million, primarily driven by the newly added property management business. Gross profit increased by 108.7% year-on-year, with gross margin significantly improving from 34.5% to 55.4%. Despite increases in distribution costs and administrative expenses, profit attributable to owners of the Company still surged by 220.0% year-on-year, reaching HKD 10.85 million Revenue Analysis The growth in total revenue was entirely contributed by the newly added property management business, which generated HKD 45.27 million in revenue, accounting for 28.2% of total revenue. Revenue from the traditional zipper business decreased by 6.7% year-on-year to HKD 115 million, primarily affected by weak domestic consumption and RMB depreciation. Geographically, zipper business revenue remains predominantly from mainland China, accounting for 94.1% Revenue by Business Segment | Business Segment | First Half 2024 (HKD thousands) | % of Total | First Half 2023 (HKD thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Zipper Business | 115,115 | 71.8 | 123,386 | 100.0 | | Property Management Business | 45,271 | 28.2 | – | – | | Total | 160,386 | 100.0 | 123,386 | 100.0 | - Zipper business revenue decreased by 6.7% year-on-year, primarily due to global economic uncertainty, RMB depreciation, and weak domestic consumption[14][15] Gross Profit and Expenses Gross profit significantly increased due to effective cost control measures. However, total expenses also rose: distribution costs increased by 21.0% year-on-year due to increased sales and advertising activities; administrative expenses increased by 46.5% year-on-year due to professional fees related to business development and increased share-based payments - Distribution costs increased by 21.0% year-on-year to approximately HKD 10.97 million, primarily due to increased sales activities and advertising[17] - Administrative expenses increased by 46.5% year-on-year to approximately HKD 47.72 million, mainly due to increased professional fees and approximately HKD 5.52 million in share-based payments[17] Profitability The Group's profitability significantly improved, with profit attributable to owners of the Company increasing from HKD 3.39 million in the same period last year to HKD 10.85 million, a 220.0% increase Comparison of Profit Attributable to Owners of the Company | Metric | First Half 2024 | First Half 2023 | | :--- | :--- | :--- | | Profit attributable to owners of the Company | Approx. HKD 10,850,000 | Approx. HKD 3,390,000 | Liquidity and Capital Resources The Group's financial position is robust. As of June 30, 2024, cash and cash equivalents increased to HKD 75.98 million. Cash flow from operating activities turned positive, recording a net inflow of HKD 10.82 million. Financing activities recorded a net inflow of HKD 20.87 million, primarily from share placement and new borrowings. The Group's gearing ratio is 6.5%, and the adjusted net debt-to-capital ratio is 1.2%, indicating a healthy capital structure Summary of Cash Flow Statement (Six Months Ended June 30) | Activity | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Net cash from operating activities | 10,820 (Inflow) | (16,550) (Outflow) | | Net cash from investing activities | (17,930) (Outflow) | (2,910) (Outflow) | | Net cash from financing activities | 20,870 (Inflow) | (12,560) (Outflow) | - As of June 30, 2024, cash and cash equivalents were approximately HKD 75.98 million, an increase of approximately HKD 12.65 million from the end of 2023, primarily due to cash inflows from property management business and share placement[25] - The Group's gearing ratio is 6.5%, and the adjusted net debt-to-capital ratio is 1.2%, remaining within the target level of below 20%, indicating a robust capital structure[27][29] Other Significant Matters During the reporting period, the Group addressed several significant matters. Related party transactions primarily involved multiple property lease agreements with associates of subsidiary directors. In business updates, the Zhejiang production base relocation received compensation, and the Guangdong subsidiary continued to enjoy a 15% tax incentive for high-tech enterprises. Subsequent to the period, the property management agreement was successfully renewed for one year. Additionally, the report detailed the share option scheme adopted in 2023, under which all allocated share options were granted to executive directors and senior management - The Group has entered into multiple lease agreements for production bases and offices with related parties, primarily Mr. Xu Xipeng and Mr. Xu Xinan, directors of a subsidiary[19][20][21] - Subsidiary Kaiyi Guangdong continues to be recognized as a high-tech enterprise, enjoying a preferential income tax rate of 15% until 2025[24] - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024[35] - On August 30, 2024, the Group extended the property management agreement for Shenzhen Jiajinlong Automobile City for one year until August 31, 2025[36] - All 55,776,480 share options under the 2023 share option scheme have been granted to executive directors Mr. Ye Zhaolin, Ms. Zhang Jiaqian, and senior management Mr. Lin Sunming[38][39] Disclosure of Interests This section details the interests of the company's directors, chief executives, and substantial shareholders in the company's shares and related securities Interests of Directors and Chief Executive Discloses the interests of directors and chief executives in the company's shares and related shares as of June 30, 2024. Ms. Lin Ping and Mr. Mai Rongbin jointly hold 4.62% of shares through their controlled company, Golden Diamond Inc. Mr. Ye Zhaolin and Ms. Zhang Jiaqian hold 5.83% and 0.97% respectively in related share interests arising from share options Directors' Interests in Shares and Related Shares of the Company | Director Name | Nature of Interest | Number of Shares/Related Shares | Approximate % of Interest | | :--- | :--- | :--- | :--- | | Lin Ping | Interest in controlled corporation | 26,556,126 | 4.62 | | Mai Rongbin | Interest in controlled corporation | 26,556,126 | 4.62 | | Ye Zhaolin | Beneficial owner (Share Options) | 33,465,888 | 5.83 | | Zhang Jiaqian | Beneficial owner (Share Options) | 5,577,648 | 0.97 | Interests of Substantial Shareholders Lists substantial shareholders holding 5% or more of the company's issued share capital. Noble Wisdom Ever Limited and its controlling company (China Huarong system) hold a 56.76% secured interest. Central Eagle Limited holds 22.78%, and China Sun holds 21.33% Substantial Shareholders' Interests in Shares of the Company | Shareholder Name | Capacity | Number of Shares | Approximate % of Interest | | :--- | :--- | :--- | :--- | | China Sun | Beneficial owner | 122,551,035 | 21.33 | | Central Eagle | Beneficial owner | 130,897,663 | 22.78 | | Noble Wisdom Ever Limited | Secured interest | 326,089,600 | 56.76 | | China Huarong Overseas Investment Holdings Co., Ltd. | Interest in controlled corporation | 326,089,600 | 56.76 | Corporate Governance and Other Information This section outlines the company's adherence to corporate governance principles and provides other relevant disclosures, including share placements and audit committee review - The company complied with most provisions of the Corporate Governance Code during the reporting period, with one deviation: certain independent non-executive directors were unable to attend the Annual General Meeting on June 21, 2024, due to personal reasons[51] - In January 2024, the company successfully placed 16,733,000 new shares at HKD 1.21 per share through a placing agent, raising net proceeds of approximately HKD 19.89 million, intended for general working capital and future investments[54][55] - For the six months ended June 30, 2024, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[53] - The Board's Audit Committee has reviewed the Group's unaudited interim financial report for the six months ended June 30, 2024[57] Condensed Consolidated Financial Statements This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, financial position, changes in equity, and cash flows Condensed Consolidated Statement of Profit or Loss This statement presents the Group's operating results for the first half of 2024. Revenue was HKD 160 million, and gross profit was HKD 88.91 million. After accounting for various expenses and taxes, profit for the period was HKD 10.53 million, with profit attributable to owners of the parent company being HKD 10.85 million. Basic earnings per share were 1.9 HK cents Key Items from Statement of Profit or Loss (Six Months Ended June 30) | Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 160,386 | 123,386 | | Gross Profit | 88,910 | 42,594 | | Profit before tax | 24,082 | 5,861 | | Profit for the period | 10,533 | 5,910 | | Profit attributable to owners of the Company | 10,846 | 3,394 | | Basic earnings per share (HK cents) | 1.9 | 0.6 | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement, building on profit for the period, includes exchange differences arising from the translation of financial statements of mainland China subsidiaries to arrive at total comprehensive income for the period. Total comprehensive income for the first half of 2024 was HKD 8.58 million, compared to a total comprehensive loss of HKD 4.46 million in the same period last year Summary of Statement of Comprehensive Income (Six Months Ended June 30) | Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Profit for the period | 10,533 | 5,910 | | Exchange differences | (1,949) | (10,371) | | Total comprehensive income for the period | 8,584 | (4,461) | Condensed Consolidated Statement of Financial Position This statement reflects the company's assets, liabilities, and equity as of June 30, 2024. Total assets were HKD 346 million, total liabilities were HKD 179 million, and net assets were HKD 167 million. Net current assets were HKD 123 million, indicating good short-term solvency Key Items from Statement of Financial Position | Item | As of June 30, 2024 (HKD thousands) | As of December 31, 2023 (HKD thousands) | | :--- | :--- | :--- | | Non-current assets | 97,727 | 83,360 | | Current assets | 248,393 | 194,743 | | Total assets | 346,120 | 278,103 | | Current liabilities | 125,084 | 87,067 | | Non-current liabilities | 53,576 | 57,577 | | Total liabilities | 178,660 | 144,644 | | Net assets | 167,460 | 133,459 | | Total equity | 167,460 | 133,459 | Condensed Consolidated Statement of Changes in Equity This statement details the changes in shareholders' equity during the reporting period. Total equity increased from HKD 133 million at the beginning of the period to HKD 167 million at the end, primarily driven by profit for the period, proceeds from new share placements, and reserves recognized from share-based payments - Total shareholders' equity increased from HKD 133 million as of January 1, 2024, to HKD 167 million as of June 30[63] - Key factors contributing to the increase in equity include total comprehensive income for the period of approximately HKD 8.58 million, proceeds from new share placements of approximately HKD 19.89 million, and share-based payments of approximately HKD 5.53 million[63] Condensed Consolidated Statement of Cash Flows This statement summarizes changes in cash and cash equivalents. Operating activities generated a net cash inflow of HKD 10.82 million, reversing the net outflow of the prior year. Investing activities resulted in a net outflow of HKD 17.93 million, primarily for the purchase of property, plant, and equipment. Financing activities generated a net inflow of HKD 20.87 million, mainly from new share placements and bank loans. Cash and cash equivalents at period-end were HKD 75.98 million Summary of Cash Flow Statement (Six Months Ended June 30) | Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Net cash from operating activities | 10,819 | (16,550) | | Net cash used in investing activities | (17,929) | (2,909) | | Net cash from financing activities | 20,873 | (12,563) | | Net increase/(decrease) in cash and cash equivalents | 13,763 | (32,022) | | Cash and cash equivalents at end of period | 75,977 | 67,457 | Notes to the Unaudited Interim Financial Report This section provides detailed notes to the financial statements, including segment reporting, material related party transactions, and equity-settled share-based transactions Segment Reporting Since September 2023, the Group has divided its operations into two reportable segments: manufacturing and sales of zippers, and provision of property management services. In the first half of 2024, the zipper segment contributed HKD 115 million in revenue and HKD 4.19 million in profit; the property management segment contributed HKD 45.27 million in revenue and HKD 43.55 million in profit, demonstrating the new business's exceptionally high profitability Segment Results for First Half 2024 | Item (HKD thousands) | Manufacturing and Sales of Zippers | Provision of Property Management Services | Total | | :--- | :--- | :--- | :--- | | Reportable segment revenue | 115,115 | 45,271 | 160,386 | | Reportable segment profit | 4,189 | 43,551 | 47,740 | Material Related Party Transactions The Group's material related party transactions primarily involve leasing production and office properties from senior management (Mr. Xu Xipeng and Mr. Xu Xinan) and their controlled companies. Additionally, the report discloses the total remuneration paid to key management personnel, including directors, totaling approximately HKD 12.03 million in the first half of 2024, which includes HKD 5.53 million in share-based payments - The Group has entered into multiple lease agreements for land and buildings with companies owned by senior management Mr. Xu Xipeng and Mr. Xu Xinan, with corresponding rents paid during the period[94] Key Management Personnel Remuneration (Six Months Ended June 30) | Item | 2024 (HKD thousands) | 2023 (HKD thousands) | | :--- | :--- | :--- | | Short-term employee benefits | 6,463 | 3,779 | | Retirement scheme contributions | 46 | 46 | | Share-based payments | 5,525 | – | | Total | 12,034 | 3,825 | Equity-settled Share-based Transactions The company adopted a share option scheme in May 2023. As of the end of the reporting period, all 55,776,480 share options under the scheme have been granted to executive directors and senior management. The vesting of these share options is linked to the company's net profit performance targets for the 2023, 2024, and 2025 financial years, vesting in three tranches Share Option Vesting Performance Targets (Before Recognition of Share-based Payments) | Performance Period | Net Profit Target | | :--- | :--- | | Financial Year Ended December 31, 2023 | Not less than HKD 15,000,000 | | Financial Year Ended December 31, 2024 | Not less than HKD 22,500,000 | | Financial Year Ended December 31, 2025 | Not less than HKD 30,000,000 | Glossary This section provides definitions for specific terms used throughout the report to ensure clarity and consistency - This section defines specific terms used in the report, such as 'Board,' 'Group,' 'Listing Rules,' and 'SFO'[104][106]