Corporate Information Directors and Committees This section details the composition of the company's board and committees, highlighting significant management changes including the retirement of the chairman and new appointments - The company experienced significant personnel changes on May 10, 2024: Mr. Zhang Xin retired as Chairman and Executive Director, Mr. Zhang Ye was appointed as the new Chairman, and Mr. Qu Hongliang was appointed as Executive Director and General Manager589 Financial Highlights Financial Highlights Summary For the six months ended June 30, 2024, revenue grew by 4.8% year-on-year, while net profit and earnings per share attributable to shareholders both declined by 2.3% Key Financial Metrics | Metric | H1 2024 (Unaudited) | H1 2023 (Unaudited) | YoY Change (Approx.) | | :--- | :--- | :--- | :--- | | Revenue | RMB 5,547,547 Thousand | RMB 5,293,583 Thousand | +4.8% | | Profit Attributable to Equity Holders of the Company | RMB 266,930 Thousand | RMB 273,269 Thousand | -2.3% | | Earnings Per Share (Basic) | RMB 0.240 | RMB 0.245 | -2.3% | Independent Review Report Independent Review Report Summary The external auditor, Tianzhi Hong Kong Certified Public Accountants Limited, reviewed the condensed consolidated financial statements for the six months ended June 30, 2024, finding no material non-compliance with HKAS 34 - The auditor's conclusion is that the condensed consolidated financial statements are prepared in all material respects in accordance with Hong Kong Accounting Standard 3422 Unaudited Interim Financial Information Condensed Consolidated Statement of Profit or Loss In H1 2024, revenue grew 4.8% to RMB 5.548 billion and gross profit rose 12.3% to RMB 892 million, but increased finance costs led to a flat profit before tax of RMB 334 million and a 2.3% decline in net profit attributable to equity holders to RMB 267 million Condensed Consolidated Statement of Profit or Loss | Item (RMB Thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 5,547,547 | 5,293,583 | | Gross Profit | 892,081 | 794,281 | | Finance Costs | (140,952) | (101,356) | | Profit Before Income Tax | 334,347 | 335,456 | | Profit for the Period | 274,743 | 271,568 | | Profit Attributable to Equity Holders of the Company | 266,930 | 273,269 | Condensed Consolidated Statement of Financial Position As of June 30, 2024, total assets were RMB 14.384 billion, total liabilities RMB 8.221 billion, and net assets RMB 6.163 billion, a 4.0% increase from 2023 year-end, with net current liabilities significantly narrowed to RMB 179 million Condensed Consolidated Statement of Financial Position | Item (RMB Thousand) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | 14,384,345 | 14,242,759 | | Total Liabilities | 8,220,912 | 8,314,867 | | Net Current Liabilities | (178,771) | (524,532) | | Net Assets | 6,163,433 | 5,927,892 | - Despite net current liabilities, the Group has sufficient unutilized borrowing facilities of not less than RMB 2 billion and the ability to refinance short-term borrowings, supporting the preparation of financial statements on a going concern basis69 Condensed Consolidated Statement of Cash Flows In H1 2024, net cash from operating activities significantly improved to RMB 251 million, while net cash used in investing and financing activities was RMB 187 million and RMB 219 million respectively, resulting in a period-end cash balance of RMB 2.233 billion Condensed Consolidated Statement of Cash Flows | Item (RMB Thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 251,346 | 51,798 | | Net Cash Used in Investing Activities | (186,522) | (362,712) | | Net Cash Used in Financing Activities | (218,708) | (144,822) | | Net Decrease in Cash and Cash Equivalents | (153,884) | (455,736) | | Cash and Cash Equivalents at End of Period | 2,232,579 | 1,938,933 | Notes to the Condensed Consolidated Financial Statements These notes detail accounting policies, account breakdowns, and key matters, including revenue by product, increased finance costs, tax incentives, related party transactions with COFCO and ORG Technology, and financial instrument fair value measurements Note 4 Revenue and Operating Segment Company revenue primarily stems from aluminum, tinplate, and plastic packaging, with aluminum packaging remaining the largest contributor at 52.4% of total revenue in H1 2024, alongside 9.6% growth in tinplate and 13.1% in plastic packaging Revenue by Business Segment | Revenue by Business Segment (RMB Thousand) | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Tinplate Packaging | 2,279,739 | 2,080,934 | +9.6% | | Aluminum Packaging | 2,904,612 | 2,891,628 | +0.5% | | Plastic Packaging | 363,196 | 321,021 | +13.1% | | Total | 5,547,547 | 5,293,583 | +4.8% | Note 7 Finance Costs In H1 2024, total finance costs significantly increased by 39.1% to RMB 141 million, primarily driven by higher bank loan interest - Finance costs increased from RMB 101 million to RMB 141 million, primarily due to bank loan interest rising from RMB 120 million to RMB 150 million87 Note 8 Income Tax Expense In H1 2024, income tax expense was RMB 59.6 million, with an effective tax rate of 17.8% due to preferential rates of 15% or 5% for certain subsidiaries in development zones, high-tech, or small low-profit enterprise classifications - Certain Group subsidiaries benefit from preferential tax policies, with 4 subsidiaries at a 15% rate (specific development zones), 1 subsidiary at 15% (high-tech enterprise), and 4 subsidiaries at 5% (small low-profit enterprises)9293 Note 19 Related Party Transactions The company engages in ongoing transactions with major shareholders COFCO (Hong Kong) Group and ORG Technology Group, including H1 2024 sales of RMB 295 million to COFCO and purchases of RMB 157 million from joint ventures, alongside RMB 890 million in deposits with COFCO Finance Major Related Party Transactions | Major Related Party Transactions (RMB Thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Sales to COFCO (Hong Kong) Group | 294,636 | 292,473 | | Purchases from ORG Technology Group | 8,666 | 8,513 | | Purchases from Joint Ventures | 157,025 | 143,007 | | Interest Income from COFCO Finance | 6,526 | 6,938 | - As of June 30, 2024, the company held a deposit balance of RMB 890 million with COFCO Finance Co., Ltd., a related party142 Management Discussion and Analysis Business Review In H1 2024, business segments showed varied performance, with stable aluminum packaging revenue and improved margins, strong growth in tinplate packaging, record-high steel drum sales, and double-digit revenue and margin growth in plastic packaging, alongside ongoing overseas expansion and innovation efforts Aluminum Packaging Aluminum packaging, a core business, generated approximately RMB 2.905 billion in H1 revenue, maintaining 52.4% of total sales, with gross profit margin improving from 14.0% to 15.0% due to sales strategies and overseas expansion, while the Belgian subsidiary improved profitability and the Hungary project commenced construction Aluminum Packaging Business Performance | Aluminum Packaging Business | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Sales Revenue | Approx. RMB 2.905 Billion | Approx. RMB 2.892 Billion | | Gross Profit Margin | Approx. 15.0% | Approx. 14.0% | - The company is actively expanding its overseas presence, with improved profitability at its Belgian subsidiary and the Hungary project commencing construction at the beginning of the year, expected to begin production by year-end171 Tinplate Packaging Tinplate packaging revenue reached RMB 2.280 billion in H1, up 9.6% year-on-year, with gross profit margin improving from 16.6% to 17.4%, driven by strong steel drum business growth of 24.7% to a new high and 5.7% growth in milk powder cans Tinplate Packaging Business Performance | Tinplate Packaging Business | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Sales Revenue | Approx. RMB 2.280 Billion | Approx. RMB 2.081 Billion | | Gross Profit Margin | Approx. 17.4% | Approx. 16.6% | - The steel drum business demonstrated strong performance, achieving record-high sales revenue, sales volume, and operating profit, with revenue growing 24.7% year-on-year to RMB 919 million181183 Plastic Packaging Plastic packaging revenue reached approximately RMB 363 million in H1, up 13.1% year-on-year, with gross profit margin significantly improving from 13.8% to 16.0% due to intelligent manufacturing and automation Plastic Packaging Business Performance | Plastic Packaging Business | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Sales Revenue | Approx. RMB 363 Million | Approx. RMB 321 Million | | Gross Profit Margin | Approx. 16.0% | Approx. 13.8% | Financial Review In H1 2024, overall sales revenue grew 4.8% to RMB 5.548 billion, and gross profit margin improved from 15.0% to 16.1% due to scale and cost efficiency, while net profit slightly increased by 1.2% to RMB 275 million despite a 39.1% rise in finance costs Key Financial Metrics | Financial Metric | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Sales Revenue | Approx. RMB 5.548 Billion | Approx. RMB 5.294 Billion | | Gross Profit Margin | Approx. 16.1% | Approx. 15.0% | | Net Profit | Approx. RMB 275 Million | Approx. RMB 272 Million | | Finance Costs | Approx. RMB 141 Million | Approx. RMB 101 Million | Outlook for 2024 Despite global economic uncertainties, the company sees opportunities in "green, low-carbon, and environmentally friendly" trends, planning proactive sales strategies, leveraging its product portfolio, driving innovation through the "3+N technology innovation system" for industrial upgrading, and advancing overseas projects to enhance returns - Facing external challenges, the company believes the "green, low-carbon, and environmentally friendly" market trend provides continuous development momentum for the metal packaging industry201202 - The company's strategic priorities include adopting more proactive sales strategies to consolidate market position, adhering to innovation leadership through the "3+N technology innovation system" to create differentiated products, accelerating internal replication of informatization, digitalization, and intelligent manufacturing, and strengthening domestic business while advancing overseas project operations202203204205 Liquidity, Financial Resources and Gearing Ratio As of June 30, 2024, net assets increased to RMB 6.163 billion, gearing ratio decreased from 52.0% to 49.4% due to reduced bank borrowings, and the current ratio slightly improved from 0.93 to 0.98, with funding primarily from operating cash and bank loans Liquidity and Gearing Ratios | Financial Position | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Net Assets | RMB 6.163 Billion | RMB 5.928 Billion | | Total Borrowings | RMB 5.090 Billion | RMB 5.281 Billion | | Current Ratio | 0.98 | 0.93 | | Gearing Ratio* | 49.4% | 52.0% | - The gearing ratio decreased by 2.6 percentage points, primarily due to a reduction in bank borrowings210211 Capital Expenditure, Commitments and Contingent Liabilities In H1 2024, total capital expenditure was approximately RMB 215 million, with 62.8% allocated to two-piece can projects, and as of June 30, 2024, contracted but unprovided capital commitments for property, plant, and equipment totaled RMB 208 million H1 2024 Capital Expenditure Breakdown | H1 2024 Capital Expenditure (RMB Million) | Amount | Percentage | | :--- | :--- | :--- | | Two-Piece Can Projects | 135 | 62.8% | | Tinplate Projects | 37 | 17.2% | | Plastic Projects | 21 | 9.8% | | Steel Drum Projects | 14 | 6.5% | | Other Equipment Purchases | 8 | 3.7% | | Total | 215 | 100.0% | Human Resources As of June 30, 2024, the Group had 6,163 full-time employees, a slight decrease year-on-year, with total employee costs at approximately RMB 445 million, and production and quality control staff comprising 71.3% of the workforce Human Resources Overview | Metric | June 30, 2024 | Same Period 2023 | | :--- | :--- | :--- | | Number of Full-time Employees | 6,163 | 6,292 | | Total Employee Costs (First Half) | Approx. RMB 445 Million | Approx. RMB 427 Million | Corporate Governance and Other Information Substantial Shareholders As of June 30, 2024, the company's substantial shareholders were COFCO (Hong Kong) Group and ORG Technology Co., Ltd., holding approximately 29.70% and 24.40% of shares respectively Substantial Shareholders' Holdings | Substantial Shareholder | Shareholding Percentage (Approx.) | | :--- | :--- | | COFCO Group | 29.70% | | ORG Technology | 24.40% | Sufficiency of Public Float As of the report date, the company's public float was approximately 23.02%, below the 25% minimum required by Hong Kong Listing Rules, and the company plans to take measures to restore it - The company's public float is approximately 23.02%, which is below the minimum 25% required by the Listing Rules, and the company is taking measures to address this issue236240 Interim Dividends Due to a potential offer acquisition, the board decided not to recommend a 2024 interim dividend, contrasting with the RMB 0.122 per share interim dividend distributed in the prior year - Due to an ongoing offer acquisition, the board does not recommend a 2024 interim dividend; an interim dividend of RMB 0.122 per ordinary share was distributed in the same period of 2023251252 Updates on Directors' and Committees' Information During the reporting period, significant personnel changes occurred within the board and committees, including Mr. Zhang Xin's retirement, Mr. Zhang Ye's appointment as Chairman, and Mr. Qu Hongliang's appointment as Executive Director and General Manager, with detailed committee responsibilities and member compositions provided - On May 10, 2024, significant changes occurred in the company's board of directors: Mr. Zhang Xin retired as Chairman, Mr. Zhang Ye was appointed as the new Chairman, and Mr. Qu Hongliang was appointed as Executive Director and General Manager245249
中粮包装(00906) - 2024 - 中期财报