Financial Performance - Revenue for the six months ended 30 September 2023 was RMB 1,494,386,000, a decrease of 32.1% compared to the same period in 2022[9] - Gross profit for the period was RMB 414,077,000, down 22.5% year-over-year[9] - Net profit attributable to shareholders was RMB 221,258,000, a 26.4% decrease compared to the previous year[9] - Basic earnings per share decreased by 26.6% to RMB 0.58[9] - Gross profit margin improved to 27.7%, up 3.4 percentage points from the previous year[9] - Net profit margin increased to 14.8%, up 1.1 percentage points year-over-year[9] - Group's sales revenue decreased by 32.1% year-on-year to approximately RMB1,494,386,000, and net profit decreased by 26.4% to approximately RMB221,258,000[14] - Gross profit margin increased by 3.4 percentage points to 27.7%, and net profit margin increased by 1.1 percentage points to 14.8%[14] - Basic earnings per share decreased by 26.6% to approximately RMB0.58 compared to the same period last year[14] - Total revenue for the six months ended 30 September 2023 was RMB1,494,386,000, a year-on-year decrease of 32.1% compared to RMB2,200,360,000 in the same period last year[22] - Gross profit for the period was RMB414,077,000, a 22.5% decrease year-on-year, but gross profit margin increased by 3.4 percentage points to 27.7%[24][27] - Profit for the period decreased by 26.4% to approximately RMB221,258,000 compared to the same period last year[31] - Revenue for the six months ended 30 September 2023 was RMB 1,494,386 thousand, a decrease from RMB 2,200,360 thousand in the same period in 2022[77] - Gross profit for the six months ended 30 September 2023 was RMB 414,077 thousand, down from RMB 534,098 thousand in 2022[77] - Profit before tax for the six months ended 30 September 2023 was RMB 326,039 thousand, compared to RMB 442,776 thousand in 2022[77] - Net profit for the six months ended 30 September 2023 was RMB 221,258 thousand, a decrease from RMB 300,693 thousand in 2022[77] - Basic and diluted earnings per share for the six months ended 30 September 2023 were RMB 0.58, down from RMB 0.79 in 2022[77] - Profit before tax for the six months ended 30 September 2023 was RMB 326,039 thousand, a decrease from RMB 442,776 thousand in the same period last year[85] - Profit before tax from continuing operations for the six months ended 30 September 2023 was RMB 221,258 thousand, compared to RMB 300,693 thousand in the same period in 2022[111] Market and Industry Trends - The company is the largest foreign-branded CNC machine tool manufacturer in China's machine tools market[4] - Products are primarily sold in China, with additional sales to Japan, Europe, the US, and Southeast Asia[5] - The company manufactures high-end CNC machine tools including precision lathes, machining centers, and grinding machines[5] - Key industries served include automotive parts, IT communications, electronics, and industrial automation[5] - Sales of precision lathes decreased by 32.8% to approximately RMB616,164,000, significantly impacting the company's revenue[19] - Sales of precision machining centers decreased by 51.4% due to the downturn in the 3C and automobile industries[19] - Precision grinding machines recorded revenue similar to the same period last year[19] - The demand for CNC machine tools in Mainland China is still lower than the same period last year, but may bottom out in Q3 2023 and start to pick up within the year or the first half of next year[35] - The new energy automobile industry experienced a contraction in capital expenditure demand this year, while industrial automation, healthcare, and mold industries outperformed year-on-year[35] - The domestic market for medium and high-end CNC machine tools is still in the expansion stage, with strong potential demand driven by China's transformation to high value-added, technology-intensive manufacturing[36] Operational and Strategic Initiatives - The company continued to invest in expanding production capacity, with the new Pinghu factory expected to be completed and operational by July 2024[17] - The company actively participated in local trade fairs to strengthen connections with end customers and explore potential market segments[16] - The Group plans to launch new products and optimize its product portfolio to meet customer needs and maintain competitive edge by reducing costs and enhancing cost-effectiveness[36] - The Group will continue to optimize manufacturing processes and implement energy-saving and emission-reduction measures to enhance resource utilization efficiency and promote sustainable development[37] - The Board approved a share award scheme on 10 November 2023 to recognize contributions, retain talents, and attract suitable personnel for further development[40] - The company adopted a share incentive plan on November 10, 2023, to retain and attract talent by purchasing shares from the secondary market[44] - New company Precision Nakatsu (China) Corporation has a planned production capacity of 4,000-4,500 units of CNC precision machine tools with an annual production value of RMB1,000,000,000[32] - Construction of a new plant building with an investment of approximately RMB130,000,000 began during the period, with RMB46,071,000 already utilized[32] Financial Position and Cash Flow - Net operating cash inflows increased to approximately RMB277,677,000 from RMB163,679,000 in the same period last year[31] - Total cash and bank balances increased to approximately RMB1,071,934,000 as of 30 September 2023[31] - Current ratio improved to 4.1 times from 3.3 times as of 31 March 2023[31] - Capital expenditures for the period amounted to approximately RMB54,704,000, primarily for factory buildings and mechanical equipment[31] - Gearing ratio increased slightly to 0.18% from 0.12% as of 31 March 2023[31] - Capital commitments contracted but not provided for amounted to approximately RMB56,272,000 as of 30 September 2023[32] - Investment in fixed assets during the period included approximately RMB50,218,000 in buildings and RMB3,418,000 in machinery and equipment[32] - Total non-current assets as of 30 September 2023 were RMB 670,530 thousand, an increase from RMB 638,955 thousand as of 31 March 2023[79] - Total current assets as of 30 September 2023 were RMB 2,713,100 thousand, a decrease from RMB 2,870,410 thousand as of 31 March 2023[79] - Total current liabilities as of 30 September 2023 were RMB 657,585 thousand, down from RMB 872,409 thousand as of 31 March 2023[79] - Net current assets as of 30 September 2023 were RMB 2,055,515 thousand, an increase from RMB 1,998,001 thousand as of 31 March 2023[79] - Total equity as of 30 September 2023 was RMB 2,610,029 thousand, up from RMB 2,528,893 thousand as of 31 March 2023[79] - Total comprehensive income for the period was RMB 221,258 thousand, compared to RMB 300,693 thousand in the same period last year[81][82] - Dividend distribution for the period was RMB 140,122 thousand, compared to RMB 131,633 thousand in the same period last year[81][82] - Cash generated from operations for the six months ended 30 September 2023 was RMB 378,663 thousand, an increase from RMB 286,233 thousand in the same period last year[85] - Income taxes paid for the six months ended 30 September 2023 were RMB 100,986 thousand, a decrease from RMB 122,554 thousand in the same period last year[85] - Decrease in trade and notes receivables was RMB 81,110 thousand, compared to RMB 66,447 thousand in the same period last year[85] - Decrease in inventories was RMB 171,969 thousand, compared to an increase of RMB 35,204 thousand in the same period last year[85] - Increase in other payables and accruals was RMB 12,903 thousand, compared to a decrease of RMB 6,434 thousand in the same period last year[85] - Increase in contract liabilities was RMB 8,262 thousand, compared to a decrease of RMB 91,654 thousand in the same period last year[85] - Decrease in deferred income was RMB 424 thousand, consistent with the same period last year[85] - Net cash flows from operating activities increased to RMB 277,677 thousand in 2023, up from RMB 163,679 thousand in 2022[87] - Interest received rose significantly to RMB 15,841 thousand in 2023, compared to RMB 5,875 thousand in 2022[87] - Purchases of property, plant, and equipment increased to RMB 54,704 thousand in 2023, up from RMB 16,798 thousand in 2022[87] - Net cash flows used in investing activities increased to RMB 122,920 thousand in 2023, compared to RMB 13,418 thousand in 2022[87] - Dividends paid decreased to RMB 140,122 thousand in 2023, down from RMB 131,633 thousand in 2022[87] - Net cash flows used in financing activities decreased to RMB 142,895 thousand in 2023, compared to RMB 155,118 thousand in 2022[87] - Cash and cash equivalents at the end of the period increased to RMB 650,434 thousand in 2023, up from RMB 550,576 thousand in 2022[87] Expenses and Costs - Selling and distribution expenses increased by 0.5% to RMB76,062,000, accounting for 5.1% of total revenue[26][29] - Administrative expenses remained stable at RMB54,207,000 compared to RMB54,660,000 in the same period last year[30] - Other expenses increased by RMB3,239,000 to RMB7,545,000, mainly due to a RMB1,719,000 increase in exchange losses and RMB2,048,000 in compensation expenses[30] - Impairment gains on financial assets increased to RMB1,326,000 from RMB571,000 due to the reversal of impairment provision[30] - Finance costs increased to RMB606,000 from RMB70,000 due to higher interest from bank bill discounting[30] - Income tax expenses decreased by 26.3% to RMB104,781,000 due to lower revenue and pre-tax profit[30] - Cost of inventories sold decreased to RMB 1,079,349 thousand in 2023 from RMB 1,665,155 thousand in 2022[102] - Research and development costs decreased to RMB 16,848 thousand in 2023 from RMB 18,224 thousand in 2022[102] - Employee benefit expenses, including wages and salaries, decreased to RMB 147,732 thousand in 2023 from RMB 157,042 thousand in 2022[102] - Government grants received decreased to RMB 32,381 thousand in 2023 from RMB 36,792 thousand in 2022[102] - Total tax charge for the period decreased to RMB 104,781 thousand in 2023 from RMB 142,083 thousand in 2022[107] - Depreciation of property, plant, and equipment decreased to RMB 26,909 thousand in 2023 from RMB 28,867 thousand in 2022[102] - Bank interest income increased to RMB (15,841) thousand in 2023 from RMB (5,875) thousand in 2022[102] - Reversal of impairment loss on inventories was RMB (304) thousand in 2023 compared to RMB (216) thousand in 2022[102] Dividends and Shareholder Information - The Board declared an interim dividend of HK$0.4 per share for the six months ended 30 September 2023, payable on 12 January 2024[43] - The company announced an interim dividend of HKD 0.4 per share for the six months ended September 30, 2023, unchanged from the previous year[46] - The company declared an interim dividend of HK$0.4 per share, totaling HK$152,321,600, for the six months ended 30 September 2023[108] - The register of members will be closed from December 8, 2023, to December 12, 2023, for the interim dividend eligibility[47][49] - Dr. Tang Donglei, Chairman and CEO, holds 150,000 shares, representing 0.039% of the issued shares[54] - Tang Donglei holds 13,000 shares, representing 0.026% of the associated corporation's shareholding[57] - Takao Nishijima holds 414,000 shares, representing 0.828% of the associated corporation's shareholding[57] - Mami Matsushita holds 18,200 shares, representing 0.0364% of the associated corporation's shareholding[57] - Kenji Yoneyama holds 14,700 shares, representing 0.0294% of the associated corporation's shareholding[57] - Tsugami Japan holds 270,000,000 shares, representing 70.90% of the issued shares[60] - FIL Limited holds 23,399,000 shares, representing 6.14% of the issued shares[60] - FMR LLC holds 19,049,425 shares, representing 5.00% of the issued shares[60] - Pandanus Associates Inc. and Pandanus Partners L.P. each hold 23,399,000 shares, representing 6.14% of the issued shares[60] - FIAM LLC directly holds 4,295,972 shares and Fidelity Management & Research Company LLC directly holds 14,753,453 shares, totaling 19,049,425 shares[61] Corporate Governance and Compliance - The company's public float requirement is maintained at not less than 25% as per the Hong Kong Stock Exchange Listing Rules[51][53] - No significant changes in the company's financial or business conditions were reported for the six months ended September 30, 2023[45] - The company did not purchase, sell, or redeem any of its listed securities during the review period[48][50] - No subsisting share option scheme during the review period[63] - Dr. Tang Donglei ceased roles as president and legal representative of Precision Tsugami (China) Corporation and related entities from October 1, 2023[63] - Mr. Kenji Yoneyama appointed as representative director and chairman of Tsugami General Service Co., Ltd and director of Precision Tsugami (China) Corporation in 2023[63] - Company deviated from Corporate Governance Code provisions C.1.8 and C.2.1 due to reasonable grounds[65] - Dr. Tang Donglei serves as both Chairman and CEO since April 1, 2022, deviating from Corporate Governance Code provision C.2.1[65] - All Directors complied with the Model Code for Securities Transactions during the review period[66] - Audit committee reviewed unaudited condensed consolidated interim financial results for six months ended September 30, 2023[67] - External auditor Ernst & Young reviewed interim financial results in accordance with Hong Kong Standard on Review Engagement 2410[67] - Interim financial information prepared in compliance with IAS 34 and Hong Kong Listing Rules[70] - Review conducted in accordance with Hong Kong Standard on Review Engagements 2410[71] Revenue and Sales Breakdown - Revenue from the sale of high precision CNC machine tools decreased to RMB 1,491,153 thousand in 2023 from RMB 2,197,130 thousand in 2022[98] - Total revenue from contracts with customers dropped to RMB 1,494,386 thousand in 2023 compared to RMB 2,200,360 thousand in 2022[98] - Revenue from Mainland China decreased to RMB 1,248,770 thousand in 2023 from RMB 1,650,339 thousand in 2022[99] - Overseas revenue declined to RMB 245,616 thousand in 2023 from RMB 550,021 thousand in 2022[99] - Revenue from rendering of services remained stable at RMB 3,233 thousand in 2023 compared to RMB 3,230 thousand in 2022[98] - Sales of goods to Tsugami Corporation amounted to RMB 226,372 thousand, a decrease of 56.4% compared to RMB 519,843 thousand in the same period last year[132] - Purchases of materials from Tsugami Corporation totaled RMB 61,861 thousand, down 51.9% from RMB 128,581 thousand in the previous year[132] - Licence fee paid to Tsugami Corporation was RMB 67,965 thousand, a decrease of 32.8% from RMB 101,150 thousand in the same period last year[132] Assets and Liabilities - Trade and notes receivables decreased to RMB738,106,000 as of 30 September 2023 from RMB817,892,000 as of 31 March 2023, with trade receivables dropping to RMB131,228,000 from RMB219,414,000[117] - Trade and notes payables decreased to RMB393,577,000 as of 30 September 2023 from RMB626,673,000 as of 31 March 2023, with trade payables dropping to RMB342,354,000 from RMB545,268,000[122] - The Group's capital commitments decreased to RMB56,272,000 as of 30 September 2023 from RMB112,602,000 as of 31 March 2023, primarily due to a reduction in machinery commitments[128] - The credit period for trade receivables is generally one to six months, with the majority (RMB126,445,000) being within 3 months as of 30 September 2023[121] - The Group maintains strict control over outstanding receivables, with senior management actively monitoring overdue balances, and does not hold any collateral for trade receivables[118] - Trade payables are non-interest-bearing and are typically settled within 90 days, with the majority (RMB342,
津上机床中国(01651) - 2024 - 中期财报