中加国信(00899) - 2025 - 中期财报

Corporate Information Corporate Governance and Key Personnel This section details the company's corporate governance structure, key personnel, and financial partnerships - The Board of Directors includes Executive, Non-executive, and Independent Non-executive Directors, with key leadership roles held by Ms. Ouyang Yanling (Chairman) and Mr. Liu Yan Chee James (Chief Executive Officer)[3] - Key governance committees such as the Audit, Remuneration, and Nomination Committees are primarily composed of and chaired by Independent Non-executive Directors[3][5] - The company's key financial partners include Reanda HK CPA Limited as auditors and major banks like China Construction Bank (Asia), Bank of Communications, and The Hongkong and Shanghai Banking Corporation Limited[5] Management Discussion and Analysis Financial Review For the six months ended September 30, 2024, the Group reported increased revenue but a significant decline in gross profit, leading to a widened net loss Key Financial Performance (Six months ended Sep 30, HK$'000) | Metric | 2024 (HK$) | 2023 (HK$) | Key Reason for Change | | :--- | :--- | :--- | :--- | | Revenue | 9,582 | 7,584 | New water business in Hunan and leasing income from Beijing properties | | Gross Profit | 1,107 | 5,416 | Gross loss from the water business due to fixed costs like amortization and depreciation | | Other Gains | 161 | 6,259 | Absence of interest income from a deposit refund that occurred in the prior period | | Loss for the period | (18,209) | (13,349) | Increased fixed production costs from the Hunan water business | - Administrative expenses decreased to HK$13.7 million from HK$14.8 million, mainly due to reduced depreciation of assets and lower legal and professional fees[24] - Finance costs more than doubled to HK$610,000 from HK$291,000, representing interest on secured bank loans, lease liabilities, and other payables[24] Business Review The Group's water, property, and new mining businesses exhibited mixed performance, with losses in water and mining, and stable profit in property - The Group expanded its core businesses to include mining in December 2023 through the acquisition of two companies in Yunnan, PRC[28] Water Business The water business segment recorded an increased loss of HK$7.4 million, primarily due to fixed production costs, despite new revenue from Hunan operations Water Business Performance (Six months ended Sep 30, HK$'000) | Metric | 2024 (HK$) | 2023 (HK$) | | :--- | :--- | :--- | | Segment Loss | (7,443) | (1,627) | | Revenue from Hunan Sales | 2,437 | Nil | - The increase in segment loss was mainly due to fixed production costs, including amortization of water mining rights and depreciation of plant and machinery[29] - The Group's share of losses from its associate, Guangxi Spring Water Ding Dong, was approximately HK$5.9 million, consistent with the prior year's HK$5.7 million[31] Mining Business The newly acquired mining business reported an initial loss of HK$283,000, with its mines progressing towards anticipated production in 2025 - The mining business segment, acquired in December 2023, recorded an inaugural loss of HK$283,000, representing operating expenses incurred post-acquisition[39] - Jiuyuan Mine is undergoing improvement and upgrade works, with commercial production anticipated in the first half of 2025 following further government inspections[41] - Jinhao Mine is currently applying for its mining license and expects to commence production in the second half of 2025[43] Property Development and Property Investment Business The property segment generated stable profit despite challenges in Dalian property development and ongoing issues with a defaulted vendor for Beijing properties Property Segment Performance (Six months ended Sep 30, HK$'000) | Metric | 2024 (HK$) | 2023 (HK$) | | :--- | :--- | :--- | | Revenue | 7,145 | 7,584 | | Profit | 1,975 | 1,889 | - Revenue from sales of Dalian properties decreased to HK$628,000 (2023: HK$1,792,000) due to the downturn in the PRC property market[46] - The land for Phase II of the Dalian development was determined to be in an "idle condition," creating a risk of repossession by PRC government authorities without compensation[51] - Due to a vendor's inability to complete the Beijing Properties, the Group negotiated a refund package, receiving RMB 8 million in cash and 4 of 10 properties, with legal action initiated to secure the remaining assets[58][65][68] Prospects and Dividends The Group remains optimistic about PRC economic development, planning to strengthen core businesses, integrate mining, explore energy diversification, and has not declared an interim dividend - The Group will continue to focus on its core businesses (water, property development, property investment) and expects contributions from its new mining business[91] - To diversify risks, the Group is actively studying the feasibility of expanding into energy-related businesses[91] - The Board has resolved not to declare an interim dividend for the six months ended September 30, 2024[91] Fund Raising Activities The Group utilized proceeds from two share placements, with HK$20.9 million remaining from the 2018 placement for Hunan Xintian capital expenditure, and the May 2024 placement fully used for working capital Use of Proceeds from August 2018 Placing (as of Sep 30, 2024, HK$M) | Intended Use | Original Allocation (HK$M) | Utilized (HK$M) | Remaining (HK$M) | | :--- | :--- | :--- | :--- | | Capital expenditure on Hunan Xintian | 56.0 | 35.1 | 20.9 | | Potential acquisition of business | 213.0 | 213.0 | – | | Working capital of the Group | 47.5 | 47.5 | – | | Total | 316.5 | 295.6 | 20.9 | - The remaining HK$20.9 million from the 2018 placing is expected to be utilized by the first quarter of 2031, subject to market conditions[98] - A share placement on May 20, 2024 raised net proceeds of approximately HK$19.0 million, which has been fully utilized for the Group's working capital[103][106] Capital Structure, Liquidity and Financial Resources As of September 30, 2024, total equity increased to HK$1.40 billion due to share placements, with total borrowings at HK$16.8 million and improved liquidity reflected by a current ratio of 1.30 - Total equity attributable to owners of the Company increased to approximately HK$1,396.6 million as of September 30, 2024, from HK$1,343.8 million at March 31, 2024, primarily due to the placing of new shares[107] Key Financial Ratios | Ratio | Sep 30, 2024 | Mar 31, 2024 | | :--- | :--- | :--- | | Current Ratio | 1.30 | 1.03 | | Gearing Ratio | 0.012 | 0.009 | - As of September 30, 2024, total borrowings comprised approximately HK$8.0 million from independent third parties and HK$8.9 million in secured bank borrowings[111] Other Disclosures The Group reported no material acquisitions or disposals, managed RMB foreign currency exposure without hedging, employed 72 staff with HK$7.3 million in costs, and disclosed capital commitments - The Group is mainly exposed to fluctuations in the exchange rate of RMB but does not currently have a foreign currency hedging policy[112] - As of September 30, 2024, the Group had approximately 72 employees, an increase from 55 in the prior year, with total staff costs for the period amounting to HK$7.3 million[112] Other Information Shareholder Interests and Corporate Governance This section details director and substantial shareholder interests, confirms Corporate Governance Code compliance with a deviation on directors' liability insurance, and notes the Audit Committee's review Directors' and Substantial Shareholders' Interests (as of Sep 30, 2024) | Shareholder | Capacity | Number of Shares | Approx. % of Issued Capital | | :--- | :--- | :--- | :--- | | Liu Yan Chee James (Director) | Beneficial owner | 13,650,000 | 1.04% | | Yao Jigen | Beneficial owner & controlled corp. | 252,973,800 | 19.26% | | Chen Huaijun | Interest in controlled corporation | 187,680,000 | 14.29% | | Lam Pik Lam | Interest in controlled corporation | 133,921,000 | 10.19% | - The company has deviated from Corporate Governance Code provision C.1.8, as the directors' and officers' liability insurance has not been in place since May 21, 2018, with the company working to arrange appropriate cover[136] - The Audit Committee has reviewed the unaudited interim financial statements and is of the opinion that they comply with applicable accounting standards and include adequate disclosures[141] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended September 30, 2024, the Group reported HK$9.6 million in revenue, HK$1.1 million gross profit, and a HK$18.2 million loss, with total comprehensive loss significantly improving to HK$11.6 million Profit & Loss Summary (Six months ended Sep 30, HK$'000) | Metric | 2024 (unaudited) | 2023 (unaudited) | | :--- | :--- | :--- | | Revenue | 9,582 | 7,584 | | Gross Profit | 1,107 | 5,416 | | Loss for the period | (18,209) | (13,349) | | Total comprehensive income for the period | (11,619) (11,619) | (59,251) | | Basic and diluted loss per share (HK$) | (0.013) | (0.014) | Condensed Consolidated Statement of Financial Position As of September 30, 2024, the Group's total assets were HK$1.95 billion, with total equity increasing to HK$1.40 billion and net current assets significantly improving to HK$64.0 million Financial Position Summary (HK$'000) | Metric | Sep 30, 2024 (unaudited) | Mar 31, 2024 (audited) | | :--- | :--- | :--- | | Non-current assets | 1,669,597 | 1,674,588 | | Current assets | 279,899 | 280,045 | | Total Assets | 1,949,496 | 1,954,633 | | Current liabilities | 215,917 | 271,104 | | Non-current liabilities | 221,713 | 222,325 | | Total Equity (Owners) | 1,396,609 | 1,343,790 | Condensed Consolidated Statement of Changes in Equity Total equity attributable to owners increased from HK$1.34 billion to HK$1.40 billion, driven by new share issuances from a placement and acquisition consideration, partially offset by the comprehensive loss - Equity increased due to a HK$19.7 million placement of new shares and a HK$43.2 million issuance of consideration shares[151] - The increase in equity from share issues was partially offset by a loss for the period of HK$15.7 million attributable to owners[151] Condensed Consolidated Statement of Cash Flows For the six months ended September 30, 2024, the Group experienced a net cash outflow of HK$17.8 million from operations, largely offset by HK$17.4 million from financing, resulting in a net decrease of HK$1.5 million in cash Cash Flow Summary (Six months ended Sep 30, HK$'000) | Metric | 2024 (unaudited) | 2023 (unaudited) | | :--- | :--- | :--- | | Net cash used in operating activities | (17,823) | (11,235) | | Net cash used in investing activities | (1,018) | (533) | | Net cash generated from financing activities | 17,356 | 7,179 | | Net decrease in cash and cash equivalents | (1,485) | (4,589) | | Cash and cash equivalents at end of period | 12,636 | 28,905 | Notes to the Interim Financial Report Segment Information The Group's continuing segments (Water, Property, Mining) and a discontinued operation exhibited mixed financial results, with Property being the primary revenue and profit contributor Segment Results (Six months ended Sep 30, 2024, HK$'000) | Segment | Revenue | Segment Result (Loss) | | :--- | :--- | :--- | | Water business | 2,437 | (7,443) | | Property development and investment | 7,145 | 1,975 | | Mining business | - | (283) | | Investment in Yantian (Discontinued) | - | 2 | Segment Assets (as of Sep 30, 2024, HK$'000) | Segment | Assets | | :--- | :--- | | Water business | 269,957 | | Property development and investment | 976,235 | | Mining business | 441,715 | | Investment in Yantian (Discontinued) | 166,336 | Discontinued Operations and Assets Held for Sale The Yantian properties disposal group is classified as a discontinued operation following a RMB150 million sale agreement, expected to complete by early 2025, with assets held for sale totaling HK$166.3 million - On April 27, 2023, the Company agreed to sell the Disposal Group (Yantian Properties) for a consideration of RMB 150,000,000, with completion expected by early 2025[183] - Assets of the Disposal Group classified as held for sale totaled HK$166,336,000 as of September 30, 2024[192] Share Capital The Company's issued share capital increased from 938.4 million to 1,313.8 million shares due to a May 2024 placement and a June 2024 issuance of consideration shares - On May 20, 2024, the Company completed a placing of 187,680,560 new shares at HK$0.105 per share, raising gross proceeds of approximately HK$19.7 million[258] - On June 13, 2024, the Company issued 187,680,000 consideration shares at an issue price of HK$0.23 per share as part of the consideration for acquisitions[259] Material Related Party Transactions Material related party transactions included interest income from a non-controlling interest and, in the prior year, significant interest income from an executive director, with key management personnel remuneration totaling HK$2.47 million - In the prior year period, the Group recognized HK$5,827,000 in interest income from executive director Mr. Li Yuguo related to the terminated acquisition of Shenyang Properties[279] - Remuneration for key management personnel during the six-month period totaled HK$2,468,000[283]