HAITIAN INT'L(01882)2024-04-19 11:31Financial Performance - Revenue for 2023 reached RMB 13,069.3 million, a 6.2% increase compared to 2022 (RMB 12,308.2 million)[4] - Gross profit margin for 2023 improved to 32.1%, up from 31.8% in 2022[12] - Net profit attributable to shareholders in 2023 was RMB 2,491.5 million, a 10.0% increase from 2022 (RMB 2,264.7 million)[12] - The company's total sales revenue for 2023 reached RMB 13,069.3 million, a 6.2% increase compared to 2022[22] - Net profit attributable to shareholders in 2023 was RMB 2,491.5 million, a 10.0% increase from 2022[22] - Gross profit margin improved to 32.1% in 2023, up from 31.8% in 2022, due to lower raw material costs[25] - Shareholders' attributable profit reached RMB 2,491.5 million in 2023, a 10.0% increase from 2022[30] - Revenue for 2023 reached RMB 13,069,307 thousand, compared to RMB 12,308,186 thousand in 2022[169] - Net profit attributable to the company's shareholders was RMB 2,491,528 thousand in 2023, up from RMB 2,264,668 thousand in 2022[169] - Gross profit for 2023 was RMB 4,200,273 thousand, compared to RMB 3,917,529 thousand in 2022[169] - Operating profit for 2023 was RMB 2,788,096 thousand, compared to RMB 2,632,358 thousand in 2022[169] - Earnings per share (basic and diluted) for 2023 was RMB 1.56, up from RMB 1.42 in 2022[169] - Other comprehensive income for 2023 was RMB 82,347 thousand, compared to RMB 45,414 thousand in 2022[170] - Net profit for 2022 was RMB 2,264,668 thousand, contributing to a total comprehensive income of RMB 2,310,032 thousand[172] - Total equity value further increased to RMB 18,842,280 thousand in 2023, with net profit for the year reaching RMB 2,491,528 thousand[173] Sales and Market Performance - Domestic sales in 2023 remained flat at RMB 7,916.8 million, accounting for 60.6% of total sales[13] - Overseas sales in 2023 increased by 17.3% to RMB 5,152.5 million, representing 39.4% of total sales[13] - Overseas sales in 2023 increased by 17.3% to RMB 5,152.5 million, accounting for 39.4% of total sales[19][24] - The company exported approximately 39.4% of its products to international markets as of December 31, 2023, with sales primarily denominated in USD or other foreign currencies[35] - The company's sales network covers over 130 countries globally, with a strong presence in China[131] - The company emphasizes maintaining long-term, stable relationships with customers and suppliers for sustained business success and growth[131] Product and Service Sales - Injection molding machine sales accounted for 95.2% of total sales in 2023, reaching RMB 12,446.8 million[15] - Components and services sales grew by 15.7% to RMB 622.5 million in 2023[15] - The company's injection molding machine sales increased by 5.7% year-on-year to RMB 12,446.8 million in 2023[16] - Components and services sales grew by 15.7% year-on-year to RMB 622.5 million in 2023[16] - The company's fifth-generation injection molding machines, launched in August 2023, achieved energy savings of 20-40%[18] - The company's fifth-generation models, launched in 2023, reduce comprehensive operating energy consumption by 20-40% compared to third-generation models[54] Cash Flow and Financial Position - Operating cash flow in 2023 was RMB 3,278.2 million, a significant increase from RMB 1,780.6 million in 2022[7] - Total equity attributable to shareholders decreased to RMB 14,777.2 million in 2023 from RMB 17,011.1 million in 2022[6] - Cash and cash equivalents, time deposits, and restricted bank deposits totaled RMB 5,445.6 million, RMB 3,939.3 million, and RMB 68.6 million, respectively, as of December 31, 2023, compared to RMB 3,590.8 million, RMB 3,100.5 million, and RMB 35.2 million in 2022[31] - The company's net cash position improved to RMB 6,706.0 million as of December 31, 2023, up from RMB 5,291.2 million in 2022, reflecting a strong financial position[32] - Capital expenditures for 2023 amounted to RMB 1,175.9 million, a decrease from RMB 1,455.8 million in 2022, primarily for property, plant, and equipment, as well as land use rights[33] - Total assets increased to RMB 29,093,858 thousand in 2023, up from RMB 25,791,201 thousand in 2022[167] - Cash and cash equivalents increased to RMB 5,445,649 thousand in 2023, up from RMB 3,590,846 thousand in 2022[167] - Total equity increased to RMB 18,842,280 thousand in 2023, up from RMB 17,040,000 thousand in 2022[167] - Total liabilities increased to RMB 10,251,578 thousand in 2023, up from RMB 8,751,201 thousand in 2022[168] - Operating cash flow for 2023 was RMB 2,012,591 thousand, compared to RMB 1,780,608 thousand in 2022[175] - Investment activities resulted in a net cash outflow of RMB 701,957 thousand in 2023, compared to a net inflow of RMB 171,307 thousand in 2022[175] - Financing activities generated a net cash inflow of RMB 544,169 thousand in 2023, a significant improvement from a net outflow of RMB 1,953,691 thousand in 2022[175] - Cash and cash equivalents increased by RMB 1,854,803 thousand in 2023, reaching RMB 5,445,649 thousand at year-end[175] - The company acquired subsidiaries for RMB 104,151 thousand in 2023, with no such acquisitions in 2022[175] - Bank borrowings increased by RMB 2,531,456 thousand in 2023, compared to RMB 1,615,936 thousand in 2022[175] - Dividends paid to shareholders amounted to RMB 768,277 thousand in 2023, down from RMB 1,233,292 thousand in 2022[175] Dividends and Shareholder Returns - The company declared a total dividend of HK0.55 per share in 2022[12] - The board declared a second interim dividend of HKD 0.66 per share for 2023, compared to HKD 0.55 per share in 2022, with the total annual dividend for 2023 also being HKD 0.66 per share[38] - The total interim dividend for 2023 was 66 HK cents per share[51] - The company declared a second interim dividend of 66 HK cents per share, totaling approximately RMB 955,355,000[104] - The total annual dividend will be 66 HK cents per share[104] Research and Development - R&D-related labor costs increased to RMB 245.9 million in 2023, up from RMB 231.5 million in 2022[26] - The company's fifth-generation injection molding machines, launched in August 2023, achieved energy savings of 20-40%[18] - The company's fifth-generation models, launched in 2023, reduce comprehensive operating energy consumption by 20-40% compared to third-generation models[54] Environmental and Sustainability Initiatives - The company's total hazardous waste decreased by 2.2% year-over-year in 2023[55] - The Tongtu Road division's rooftop photovoltaic project generated 23,262 MWh of electricity in 2023, with 17,151 MWh used by the division, accounting for 33.9% of its annual electricity consumption[55] - The South China factory's Phase I photovoltaic project, with a total installed capacity of 6,200 kW, is expected to generate 5,210 MWh annually upon completion in March 2024[55] - The company's MSCI ESG rating improved from BB to BBB in 2023[52] Corporate Governance and Board Structure - The company's Chairman and CEO roles are separated, with Mr. Zhang Jianming serving as Chairman and Mr. Zhang Bin as CEO, effective August 21, 2023[62] - The Board of Directors held a total of four meetings in 2023, with all executive directors attending all meetings[65] - The company has implemented mechanisms to ensure independent opinions and perspectives are obtained by the Board, with annual reviews of these mechanisms[66] - All directors confirmed compliance with the Model Code for Securities Transactions during the reporting period[67] - The Nomination Committee reviewed the Board's structure, size, and composition, and assessed the independence of independent non-executive directors[72] - The board consists of 9 male and 2 female members, aiming to achieve gender equality within approximately 10 years[73] - The audit committee held 3 meetings in 2023 to review financial reports and internal controls[76] - The remuneration committee reviewed and recommended compensation policies for directors and senior management[77] - The company's remuneration policy considers business requirements, individual performance, company profitability, and market conditions[78] - The remuneration committee consists of 3 independent non-executive directors and held 1 meeting in 2023[79] - Directors participated in continuous professional development programs categorized as types A and B[79] - The company provides training for new directors on regulatory responsibilities and updates on listing rules[79] - The company's internal control department reviewed major operational policies and regulatory compliance, identifying no significant areas of concern affecting business, financial processes, or data security[81] - The company adopted an anti-corruption policy and a whistleblowing policy to regulate employee and director conduct and provide guidance for reporting suspicious or actual misconduct[81] - The company's internal control department, established in 2012, assists the board in maintaining and reviewing risk management and internal control systems, reporting directly to the executive director[84] - The company's auditor, PwC, received RMB 2.49 million in audit fees and RMB 1.46 million in non-audit fees for the year ended December 31, 2023[85] - The company's company secretary, Ms. Li Jiawen, has over 18 years of experience in company secretarial and compliance roles and received at least 15 hours of professional training in 2023[86] - The company's dividend policy considers factors such as undistributed profits, long-term profitability, operating performance, cash flow, financial condition, and future prospects[87] - The company maintains an active investor relations policy through analyst briefings, roadshows, investor conferences, and regular meetings with institutional shareholders and analysts[88] - The company's 2023 Annual General Meeting was held on May 18, 2023, and an Extraordinary General Meeting was held on December 18, 2023, with directors attending both meetings[89] - The company has a shareholding policy for non-executive directors, requiring them to hold a minimum number of shares equivalent to the total granted over the past three years[92] - Non-executive directors have a three-year period to meet the shareholding requirements after their appointment, with a 12-month grace period for non-compliance[94] - The company has a clawback policy allowing the recovery of performance-based rewards from executives if financial statements are restated due to serious violations of listing rules[96] - The company maintains effective communication channels with shareholders and stakeholders, as outlined in its shareholder communication policy[91] - Shareholders holding at least one-tenth of the company's paid-up share capital can request a special general meeting, which must be held within two months of the request[90] - The company's board of directors has a designated team to monitor compliance with environmental regulations and engage experts for energy efficiency and waste reduction analysis[102] - The company's revised constitution allows for electronic or hybrid shareholder meetings, reflecting changes in corporate governance practices[97] Employee and Social Responsibility - The company employed a total of 7,382 employees as of December 31, 2023, with the majority based in China[37] - The company currently has 7,382 employees, including 836 females and 6,546 males, with a female-to-male ratio of approximately 1:7.83[74] - 87.23% of employees are from China, while 12.77% are from overseas[74] - Employee age distribution: 31.40% under 30, 32.74% between 30-40, and 35.86% over 40 years old[74] - The company invested RMB 79.88 million in the construction of the Haitian Youth Apartment project to help employees reduce living costs and improve quality of life[57] - Over the past three years, 2,036 employees have benefited from the company's talent apartments and public rental housing programs[57] - 100% of the company's employees received commercial ethics training in 2023, with 100% coverage for both employees and directors[56] - The company's charitable donations for the year amounted to RMB 9.68 million[113] Related Party Transactions - The revised annual cap for the purchase of servo systems and components from Haitian Drive and its affiliated companies in 2023 was RMB 1.36 billion, with actual purchases amounting to RMB 852.8 million[138] - The annual cap for purchasing intelligent products and services from Haitian Zhilian in 2023 was RMB 480 million, with actual purchases totaling RMB 304.5 million[139] - The company purchased CNC machine tools and machining centers from Haitian Jinggong for approximately RMB 11.0 million in 2023[141] - Haitian Drive is a connected party of the company, and the purchase agreements with Haitian Drive were renewed for three-year terms in 2014, 2018, 2021, and 2024[137] - Haitian Zhilian is a connected party of the company, and the purchase agreements with Haitian Zhilian were renewed for three-year terms in 2021 and 2023[139] - Haitian Plastic Machinery Group, a wholly-owned subsidiary, invested RMB 99.8 million in Haitian Zhisheng, with RMB 23.97 million allocated to new registered capital and RMB 75.83 million to capital reserves[143] - Other investors collectively invested RMB 243.2 million in Haitian Zhisheng, with RMB 58.41 million allocated to new registered capital and RMB 184.79 million to capital reserves[143] - The company's independent non-executive directors confirmed that the ongoing connected transactions were conducted under normal commercial terms and in the best interests of shareholders[139] - The company's auditors issued an unqualified opinion on the ongoing connected transactions disclosed in the annual report[140] - No directors held interests in businesses competing with the company or its subsidiaries as of December 31, 2023[135] - The registered capital of Haitian Zhisheng increased from RMB 398,000,000 to RMB 480,386,240 after the capital increase, with Haitian Plastics Machinery holding approximately 4.99%, other investors holding a combined 12.16%, and existing shareholders holding a combined 82.85%[144] - Haitian Management owns approximately 79.5% of Haitian Zhisheng and 44.7% of Ningbo Zhiche, with Mr. Zhang Jianming and Mr. Zhang Bin holding 40% and 60% of Haitian Management respectively[144] - The company engaged in continuous related party transactions with Ningbo Anxin CNC Technology, Ningbo Starfall Hydraulic Transmission, Ningbo Haimike Precision Machinery, and Ningbo Haitian Zhilian Technology for the purchase of servo systems, linear guides, ball screws, hydraulic components, and smart products and services[145] - The company also engaged in related party transactions with Haitian Jingong for the purchase of automated processing lines, CNC lathes, machining centers, and related equipment[145] - The company provided loans to some directors during the year, with these transactions exempt from the reporting, announcement, and independent shareholder approval requirements under the listing rules[145] Financial Statements and Auditing - The company's consolidated financial statements are prepared in accordance with Hong Kong Financial Reporting Standards and the disclosure requirements of the Hong Kong Companies Ordinance[163] - The company's directors are responsible for assessing the group's ability to continue as a going concern and disclosing related matters[163] - The audit committee oversees the financial reporting process of the company[163] - The auditors aim to obtain reasonable assurance that the consolidated financial statements are free from material misstatement, whether due to fraud or error[163] - The auditors evaluate the appropriateness of accounting policies and the reasonableness of accounting estimates and related disclosures[164] - The auditors assess the overall presentation, structure, and content of the consolidated financial statements, including disclosures[165] - The auditors communicate with the audit committee regarding planned audit scope, timing, and significant audit findings[165] - The auditors provide a statement to the audit committee regarding compliance with independence requirements[165] - The auditors identify key audit matters that are of most significance in the audit of the consolidated financial statements[165] - The independent auditor's report was issued by PricewaterhouseCoopers on March 18, 2024[166] - The consolidated financial statements were audited by PricewaterhouseCoopers, who confirmed their independence and compliance with professional ethical responsibilities[156] - The company applies the simplified method under HKFRS 9 to measure expected credit losses, using lifetime expected loss provisions for all trade receivables and notes receivable[158] - Management estimates impairment provisions for trade receivables and notes receivable based on aging patterns, customer credit and settlement records, and adjusts historical loss rates for macroeconomic factors[158] - The company's inventory is stated at the lower of cost and net realizable value, with provisions made for inventory where net realizable value is below cost[161] - Management assesses inventory impairment provisions item by item at each reporting date, identifying obsolete and slow-moving inventory, particularly items over one year old[161] - For finished