中国淀粉(03838) - 2024 - 中期业绩

Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income In the first half of 2024, the Group's performance significantly improved, turning losses into profits, with revenue slightly decreasing year-on-year but gross profit increasing by 189.4% due to cost control, resulting in a profit of RMB 267 million for the period compared to a loss of RMB 28.96 million in the prior year period | Indicator | Six Months Ended June 30, 2024 (RMB '000) | Six Months Ended June 30, 2023 (RMB '000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 5,645,514 | 5,814,323 | -2.9% | | Gross Profit | 507,180 | 175,247 | +189.4% | | Operating Profit/(Loss) | 342,483 | (45,735) | Turned Loss to Profit | | Profit/(Loss) for the Period | 267,482 | (28,959) | Turned Loss to Profit | | Profit/(Loss) Attributable to Owners of the Company | 214,659 | (37,754) | Turned Loss to Profit | | Basic Earnings/(Loss) Per Share (RMB) | 0.0360 | (0.0063) | Turned Loss to Profit | Consolidated Statement of Financial Position As of June 30, 2024, the company's total assets were RMB 5.44 billion, a slight increase from the end of 2023, with total equity growing by 5.4% to RMB 4.15 billion and total liabilities decreasing by 8.9% to RMB 1.29 billion, indicating a more stable financial structure and enhanced solvency | Indicator | June 30, 2024 (RMB '000) | December 31, 2023 (RMB '000) | Period Change | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 2,549,859 | 2,655,002 | -4.0% | | Total Current Assets | 2,889,845 | 2,697,624 | +7.1% | | Total Assets | 5,439,704 | 5,352,626 | +1.6% | | Total Equity | 4,149,048 | 3,936,553 | +5.4% | | Total Non-current Liabilities | 267,907 | 223,699 | +19.8% | | Total Current Liabilities | 1,022,749 | 1,192,374 | -14.2% | | Total Liabilities | 1,290,656 | 1,416,073 | -8.9% | 8. Dividends The Board decided not to declare an interim dividend for the first half of 2024, consistent with the prior year's policy, while the final dividend for 2023 was approved in May 2024 - The Board did not recommend the payment of an interim dividend for the six months ended June 30, 2024 (2023: nil)[11][32] - On May 21, 2024, shareholders approved the declaration of a final dividend of HKD 0.0069 per share for 2023[11] Management Discussion and Analysis Industry Overview and Company Development In the first half of 2024, the business environment for corn starch and lysine improved as the market gradually absorbed oversupply, with the company focusing on enhancing production efficiency and expanding capacity to achieve competitive low unit production costs through measures like improved wastewater treatment, strict labor cost control, and optimized equipment energy consumption - Lysine production significantly increased due to the completion of the Shouguang production facility expansion project in 2023, with management confident that lysine sales volume in 2024 will set a new record[15] - The company implemented multiple measures to enhance production efficiency, including: - Improving wastewater treatment capacity and reducing treatment costs - Strictly controlling employee numbers and wages through job restructuring - Optimizing equipment operating efficiency and replacing high-energy-consuming equipment to reduce utility costs[15] Business Review The Upstream Products segment significantly improved gross margin due to lower raw material costs, while the Fermentation and Downstream Products segment saw substantial revenue growth driven by a near doubling of lysine export volume through successful overseas market expansion, offsetting domestic market weakness Upstream Products Despite lower market prices for corn starch and its by-products during the review period compared to the prior year, the segment's gross margin significantly increased due to a substantial drop in the price of the main raw material, corn kernels, with lower product prices regaining attractiveness to end-users and market share from substitutes - The gross margin of the Upstream business segment increased due to a significant decrease in corn kernel prices[16] - Management believes that in the short term, the performance of this business segment will primarily be affected by raw material costs[16] Fermentation and Downstream Products Despite the domestic lysine market remaining oversupplied, the company achieved substantial revenue growth by vigorously expanding overseas markets, with lysine export volume increasing from 23,000 tons in the prior year period to approximately 46,000 tons, while profitability and sales volume for starch sugar and modified starch businesses also improved - Through overseas market expansion, lysine product revenue recorded substantial growth, with export volume approximately 45,708 tons, compared to 23,204 tons in the first half of 2023[17] - The starch sugar business saw a slight improvement in profitability due to rising market prices[17] - Sales volume and selling prices for the modified starch business both increased, primarily benefiting from improved wastewater treatment capacity[17] Financial Performance Analysis The Group's overall financial performance was strong, with total revenue slightly decreasing due to lower average selling prices, but a greater decline in the cost of the main raw material, corn kernels, drove a significant increase in gross profit and gross margin, ultimately turning losses into profits Overall Financial Performance In the first half of 2024, revenue was RMB 5.646 billion, a slight decrease of 2.9% year-on-year; however, due to a greater decline in raw material costs than product selling prices, gross profit significantly increased by 189.4% to RMB 507 million, and the Group achieved a post-tax profit of RMB 267 million, compared to a loss of RMB 28.96 million in the prior year period | Indicator | Six Months Ended June 30, 2024 (RMB '000) | Six Months Ended June 30, 2023 (RMB '000) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 5,645,514 | 5,814,323 | -2.9% | | Gross Profit | 507,180 | 175,247 | +189.4% | | Profit/(Loss) Before Tax | 355,294 | (38,300) | Turned Loss to Profit | | Profit/(Loss) After Tax | 267,482 | (28,959) | Turned Loss to Profit | Segment Performance The Upstream Products segment's gross margin significantly improved from 0.4% to 5.6%, while the Fermentation and Downstream Products segment performed exceptionally well, with revenue increasing by 44.8% year-on-year and gross margin rising from 10.9% to 14.6%, primarily driven by a substantial increase in lysine sales volume Upstream Products Segment Performance | Indicator | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Revenue (RMB '000) | 3,524,090 | 4,349,545 | | Gross Profit (RMB '000) | 198,370 | 16,051 | | Gross Margin | 5.6% | 0.4% | Fermentation and Downstream Products Segment Performance | Indicator | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Total Revenue (RMB '000) | 2,121,424 | 1,464,778 | | Gross Profit (RMB '000) | 308,810 | 159,196 | | Gross Margin | 14.6% | 10.9% | - Total lysine product sales volume was approximately 273,256 tons, a year-on-year increase of 71.1% (2023 corresponding period: 159,682 tons), with export sales significantly increasing by 163% to RMB 471 million[20] Cost of Sales and Expenses The core driver of the significant gross profit increase was a substantial drop in the market price of the main raw material, corn kernels, with average costs decreasing by 16.4% year-on-year, while the company effectively controlled expenses, leading to a 53.5% year-on-year decrease in research expenses due to fewer projects - The average cost of the main raw material, corn kernels, was approximately RMB 2,135 per ton, a significant decrease from RMB 2,554 per ton in the prior year period[21] - Research expenses significantly decreased from RMB 94.056 million to RMB 43.689 million due to a reduction in the number of projects[24] Liquidity and Financial Resources The Group's financial position is healthy with ample working capital, and key financial ratios show strong performance, particularly the leverage ratio which significantly decreased from 10.5% to 1.3%, indicating reduced financial risk and enhanced solvency, while current and quick ratios also improved to 2.8 times and 1.9 times respectively | Key Financial Performance Indicators | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Accounts Receivable Turnover Days | 15 | 12 | | Inventory Turnover Days | 29 | 26 | | Current Ratio | 2.8 times | 2.3 times | | Quick Ratio | 1.9 times | 1.6 times | | Leverage Ratio (Borrowings/Total Assets) | 1.3% | 10.5% | Other Disclosures Purchase, Sale or Redemption of the Company's Listed Securities To protect shareholder value, the company actively repurchased shares during the reporting period, buying back a total of 4.075 million of its own shares on the Stock Exchange in March and April 2024 for a total consideration of approximately HKD 0.607 million, with all repurchased shares subsequently cancelled | Repurchase Month (2024) | Number of Shares | Price Paid Per Share (HKD) | Total Paid (HKD '000) | | :--- | :--- | :--- | :--- | | March | 2,000,000 | 0.146 - 0.150 | 296 | | April | 2,075,000 | 0.145 - 0.150 | 311 | | Total | 4,075,000 | | 607 | Corporate Governance The company complied with the Corporate Governance Code in the Hong Kong Stock Exchange Listing Rules during the reporting period, and the Audit Committee, comprising all independent non-executive directors, reviewed the unaudited condensed consolidated interim financial statements for this period - The company complied with the applicable code provisions of the Listing Rules during the reporting period, except for the Chairman's absence from the Annual General Meeting due to other commitments[34] - The Audit Committee reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2024[35]