中国金典集团(08281) - 2024 - 中期财报

Company Information Company Overview This report outlines the corporate structure of China Golden Classic Group Limited, including key information such as board members, committee compositions, principal offices, legal advisors, and share registrars - The company's Board of Directors comprises three executive directors and three independent non-executive directors, with Ms. Li Qiuyan, an executive director, serving as Chairperson[3] - The chairpersons of the company's Audit Committee, Remuneration Committee, and Nomination Committee are Mr. Tang Wai Yu, Mr. Yip King Chung, and Ms. Li Qiuyan, respectively[3] Interim Results Consolidated Statement of Profit or Loss For the six months ended June 30, 2024, the Group's revenue decreased by 14.0% year-on-year to RMB 110.46 million, with gross profit declining by 19.3% to RMB 38.28 million, while loss for the period expanded to RMB 6.16 million from RMB 0.94 million in the prior period, resulting in a basic loss per share of RMB 0.62 cents Consolidated Statement of Profit or Loss Summary (For the six months ended June 30) | Metric | 2024 (RMB thousands) | 2023 (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 110,456 | 128,412 | -14.0% | | Gross Profit | 38,276 | 47,442 | -19.3% | | Loss Before Tax | (6,155) | (170) | -3520.6% | | Loss for the Period | (6,155) | (940) | -554.8% | | Basic Loss Per Share (RMB cents) | (0.62) | (0.09) | -588.9% | Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets were RMB 304.50 million, a 12.6% decrease from the end of 2023, with total liabilities reducing to RMB 51.27 million and net assets at RMB 253.23 million, while net current assets remained relatively stable at RMB 90.91 million Consolidated Statement of Financial Position Summary | Metric | As of June 30, 2024 (RMB thousands) | As of December 31, 2023 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 162,323 | 169,821 | -4.4% | | Current Assets | 142,179 | 178,742 | -20.5% | | Total Assets | 304,502 | 348,563 | -12.6% | | Current Liabilities | 51,268 | 84,881 | -39.6% | | Total Liabilities | 51,268 | 84,881 | -39.6% | | Net Assets | 253,234 | 263,682 | -4.0% | Consolidated Statement of Changes in Equity For the six months ended June 30, 2024, total shareholders' equity decreased from RMB 263.7 million at the beginning of the period to RMB 253.2 million at the end, primarily due to a loss for the period of RMB 6.16 million and dividends recognized as distribution of RMB 3.80 million - Total shareholders' equity decreased from RMB 263.7 million as of January 1, 2024, to RMB 253.2 million as of June 30, 2024[8] - The primary factors contributing to the decrease in equity were a loss for the period of RMB 6.16 million and dividend distributions of RMB 3.80 million[8] Consolidated Statement of Cash Flows During the period, net cash outflow from operating activities was RMB 13.10 million, from investing activities was RMB 4.33 million, and from financing activities was RMB 4.48 million, resulting in a net decrease in cash and cash equivalents of RMB 21.91 million, with an ending balance of RMB 55.67 million Cash Flow Statement Summary (For the six months ended June 30) | Activity Type | 2024 (RMB thousands) | 2023 (RMB thousands) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (13,100) | (28,171) | | Net Cash Used in Investing Activities | (4,329) | (4,192) | | Net Cash Used in Financing Activities | (4,478) | (1,698) | | Net Decrease in Cash and Cash Equivalents | (21,907) | (34,061) | | Cash and Cash Equivalents at Beginning of Period | 77,932 | 73,011 | | Cash and Cash Equivalents at End of Period | 55,665 | 39,297 | Notes to Financial Information The financial notes detail the basis of preparation, accounting policies, segment information, and specifics of various items for the financial statements, with the Group primarily engaged in the manufacturing and sale of oral care, leather care, and household hygiene products, and the first-time application of several HKFRS amendments during the period had no significant impact on financial position - The Group is primarily engaged in the manufacturing and trading of oral care, leather care, and household hygiene products[11] - During this interim period, the Group first applied several amendments to Hong Kong Financial Reporting Standards, which did not have a significant impact on financial performance or position[13] Revenue and Segment Information The Group's revenue primarily derives from three segments: oral care, leather care, and household hygiene products, with household hygiene products being the largest revenue source, accounting for 64.9% of total revenue, while oral care product revenue significantly decreased by 31.8% year-on-year, being the main reason for the overall revenue decline Segment Revenue (For the six months ended June 30) | Segment | 2024 (RMB thousands) | 2023 (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Oral Care Products | 33,116 | 48,546 | -31.8% | | Leather Care Products | 5,641 | 6,506 | -13.3% | | Household Hygiene Products | 71,699 | 73,360 | -2.3% | | Total | 110,456 | 128,412 | -14.0% | Dividends Approved by the Annual General Meeting, the company will pay a final dividend of HK 0.38 cents per ordinary share for the year ended December 31, 2024, compared to HK 0.559 cents per share paid in the prior period - Approval was granted for the payment of a final dividend of HK 0.38 cents per ordinary share for the year ended December 31, 2024[25] Related Party Transactions During the period, the Group's related party transactions primarily included an office lease agreement with a company controlled by a close family member of Executive Director Ms. Li, and a bank facility of RMB 80 million personally guaranteed by Ms. Li - The Group entered into a two-year office lease agreement with an associated company controlled by a close family member of Executive Director Ms. Li[38] - Executive Director Ms. Li provided a personal guarantee for the Group's bank facility of RMB 80 million[38] Business Review and Prospects Business Review For the six months ended June 30, 2024, the Group's turnover decreased by 14.0% year-on-year to RMB 110.5 million, primarily due to a significant 31.8% sales reduction in oral care products caused by new packaging, while net loss expanded from RMB 0.9 million in the prior period to RMB 6.2 million, an increase of 554.8%, and overall gross profit margin declined by 2.2 percentage points to 34.7% due to promotional pricing strategies H1 2024 Performance Overview | Metric | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Turnover | Approx. RMB 110.5 million | Approx. RMB 128.4 million | -14.0% | | Net Loss | Approx. RMB 6.2 million | Approx. RMB 0.9 million | +554.8% | | Gross Profit Margin | Approx. 34.7% | Approx. 36.9% | -2.2pp | - Oral care product turnover decreased by 31.8%, being the primary reason for the overall revenue decline, attributed to updated product labels for regulatory compliance impacting consumer purchasing decisions[40] - Turnover for household hygiene products and leather care products also decreased by 2.3% and 13.3%, respectively[40] Prospects and Outlook Looking ahead, the Group faces uncertainties and opportunities, planning to strengthen R&D investment to validate the efficacy of bio-enzyme toothpaste, launch new products like high-efficiency toilet bowl cleaner to consolidate market position, and actively expand online sales channels to adapt to changing consumer shopping habits, while also addressing the challenge of counterfeit products - Enhanced R&D: Professionals, including a Fudan University PhD, have been hired to strengthen R&D efforts and provide more experimental data supporting the efficacy of bio-enzyme toothpaste[41] - Product Innovation: Plans to launch a high-efficiency toilet bowl cleaner in the third quarter to consolidate its position in the household hygiene products market[41] - Channel Transformation: Recognizing the trend of consumers shifting to online purchases, the company plans to leverage e-commerce technologies like live streaming to increase online sales share[41] Management Discussion and Analysis Operating Results Analysis During the period, turnover decreased by 14.0% to RMB 110.5 million, primarily due to declining sales of oral care products, while cost of sales decreased by 10.9% with reduced sales volume; however, gross profit declined by 19.3% and gross profit margin fell to 34.7% due to promotional pricing strategies, and net loss expanded to RMB 6.2 million despite slight decreases in selling and administrative expenses and significantly lower finance costs due to reduced borrowings - Turnover decreased by 14.0% primarily due to reduced sales of oral care products caused by new packaging issues and the failure to launch competitive new household hygiene products in the first half[43] - Gross profit margin decreased from 36.9% to 34.7%, mainly due to the implementation of promotional pricing strategies during the period[45] - Selling and distribution costs and administrative expenses decreased by 9.4% and 2.5%, respectively, primarily benefiting from reduced promotion and R&D expenses[46][47] Liquidity, Financial Resources and Capital Structure As of June 30, 2024, the Group's financial position remained robust, with total shareholders' equity of approximately RMB 253 million and a current ratio of 2.77 indicating strong short-term solvency, while bank balances and cash were approximately RMB 55.7 million and the gearing ratio was 20.2%, with the Group believing it possesses sufficient cash and bank facilities to meet operational needs Financial Position Indicators | Metric | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | Total Shareholders' Equity | Approx. RMB 253.2 million | Approx. RMB 263.7 million | | Current Ratio | 2.77 | 2.11 | | Bank Balances and Cash | Approx. RMB 55.7 million | Approx. RMB 77.9 million | | Gearing Ratio | 20.2% | 32.2% | - The Group typically funds its operations with internally generated cash flows and possesses sufficient cash and bank facilities[52] Employees and Remuneration Policy As of June 30, 2024, the Group had 257 full-time employees, with staff costs of approximately RMB 13.9 million, a slight decrease from the prior period, and the company implements a competitive remuneration and benefits policy, determining compensation based on employee performance, responsibilities, and market conditions - As of June 30, 2024, the Group had 257 full-time employees[56] - Staff costs for the period were approximately RMB 13.9 million, a decrease from RMB 14.4 million in the prior period[56] Other Information Directors' and Chief Executives' Interests Disclosures indicate that Executive Directors Ms. Li Qiuyan and Mr. Tong Xing hold 59.36% and 10.69% of the company's shares, respectively, through corporations they control, with major shareholders Zhongbao Mali and Tongxing Holdings holding the same proportions of shares Directors' Long Positions in the Company's Ordinary Shares | Name of Director | Capacity/Nature of Interest | Number of Shares | Approximate Percentage of the Company's Interest | | :--- | :--- | :--- | :--- | | Ms. Li Qiuyan | Interest in Controlled Corporation | 593,625,000 | 59.36% | | Mr. Tong Xing | Interest in Controlled Corporation | 106,875,000 | 10.69% | - Major shareholders Zhongbao Mali Investment Limited and Tongxing Holdings Group Limited are wholly-owned companies of Ms. Li Qiuyan and Mr. Tong Xing, respectively[59] Corporate Governance The company has adopted and complied with the Corporate Governance Code set out in the GEM Listing Rules during the reporting period, with the Audit Committee, comprising three independent non-executive directors, having reviewed these interim results, and the company has maintained sufficient public float since its listing date - The company has adopted and complied with the principles and provisions of the Corporate Governance Code[69] - The Audit Committee, comprising three independent non-executive directors, has reviewed the unaudited condensed consolidated results for the period with management[68] - The company has maintained a sufficient public float from its listing date up to the date of this report[70]