WANT WANT CHINA(HK:00151)2019-12-02 09:11Financial Performance - Revenue for the six months ended September 30, 2019, was RMB 9,304,071, representing a 0.6% increase from RMB 9,248,125 in 2018[16]. - Gross profit increased by 10.5% to RMB 4,550,046, with a gross profit margin of 48.9%, up from 44.5%[16]. - Operating profit rose by 15.9% to RMB 2,053,767, resulting in an operating profit margin of 22.1%, compared to 19.2% in the previous year[16]. - Profit attributable to equity holders of the Company increased by 18.4% to RMB 1,614,913, with a margin of 17.4%, up from 14.8%[16]. - The Company reported a significant improvement in key financial ratios, with gross profit margin increasing by 4.4 percentage points and operating profit margin increasing by 2.9 percentage points[16]. - Total revenue for the first half of FY2019 reached RMB 9,304.1 million, a 0.6% increase compared to the same period in FY2018[20]. - Core products contributed approximately 85% of total revenue, achieving a mid-single-digit revenue growth rate[20]. - Operating profit rose by 21.2% to RMB 1,894.5 million compared to the same period last year[20]. - Profit attributable to equity holders increased by 18.4% to RMB 1,614.9 million, with a profit margin of 17.4%, up 2.6 percentage points[21]. - The Group achieved mid-to-high single-digit revenue growth in overseas markets, driven by strong brand recognition and diverse product offerings[26]. Market Strategy and Outlook - The Company is focused on expanding its market presence and enhancing product offerings through new product development and technology advancements[16]. - Future outlook includes strategic initiatives aimed at increasing operational efficiency and market share in the competitive landscape[16]. - The Company is exploring potential mergers and acquisitions to bolster growth and diversify its product portfolio[16]. - Continued investment in research and development is planned to drive innovation and meet evolving consumer demands[16]. - The management remains optimistic about achieving sustainable growth and improving profitability in the upcoming periods[16]. - The Group's digital marketing initiatives enhanced interaction with young consumers, creating a fan ecosystem beneficial for customer base expansion[31]. - New product launches, including brown-sugar coated crackers and innovative packaging, have become significant revenue sources for the Group[28]. - The Group plans to launch specialized festival gift packs for rice cracker products in the second half of FY2019 to capitalize on the Chinese New Year sales peak[39][40]. - Emerging channels such as vending machines and official online malls have shown rapid growth, contributing to the overall revenue increase in core-brand rice crackers[36][38]. - The Group aims to leverage e-commerce platforms for marketing during the "Double 11" event and promote festive products for the upcoming Spring Festival[59]. Cost and Expenses - The Group's operating expenses as a percentage of revenue increased by 4.0% year-on-year to 28.5%, totaling RMB 2,655.6 million[20]. - Distribution costs for the first half of FY2019 were RMB 1,369.9 million, a decrease of RMB 69.2 million or 4.8% compared to the first half of FY2018, with distribution costs as a percentage of revenue decreasing to 14.7%[66][69]. - Administrative expenses for the first half of FY2019 amounted to RMB 1,285.7 million, an increase of RMB 170.6 million or 15.3% compared to the first half of FY2018, with administrative expenses as a percentage of revenue rising to 13.8%[67][70]. - The cost of sales decreased by 7.4% to RMB 4.754 billion in the first half of FY2019, mainly due to lower prices of key raw materials[50]. Inventory and Receivables - The Group's inventory turnover days increased to 94 days, while trade receivables and payables turnover days remained at 19 and 43 days respectively[18]. - As of September 30, 2019, the inventory balance was RMB 2,576.6 million, up from RMB 2,387.7 million as of March 31, 2019[85]. - Trade receivables turnover days remained stable at 19 days for both the six months ended September 30, 2019, and the year ended March 31, 2019[89]. - Trade payables relate mainly to raw material purchases with credit terms generally between 30 to 60 days[90]. Cash Flow and Financing - Cash generated from operations for the six months ended 30 September 2019 was RMB 2,585,259,000, resulting in net cash from operating activities of RMB 1,934,506,000[123]. - Dividends paid to equity holders for the six months ended 30 September 2019 amounted to RMB 2,543,364,000, compared to RMB 1,842,996,000 in the same period of 2018[123]. - Cash flows from financing activities included borrowings of RMB 3,801,633,000, with repayments of RMB 3,450,773,000 during the same period[123]. - The Group's cash and deposits as of September 30, 2019, amounted to RMB 16,636.2 million, a decrease of RMB 524.2 million compared to March 31, 2019, primarily due to dividend payments[74][77]. Assets and Liabilities - Total assets as of September 30, 2019, were RMB 29,353,781, a decrease from RMB 29,874,405 as of March 31, 2019[110]. - Total liabilities increased to RMB 15,396,272 from RMB 14,414,578, indicating a rise of about 6.8%[110]. - Total equity attributable to equity holders of the Company was RMB 13,957,509, down from RMB 15,459,827[110]. - The total borrowings were RMB 10,366,803,000, with RMB 1,637,941,000 due within one year[173]. Employee and Training - The average number of employees for the first half of FY2019 was approximately 42,140, a decrease of 3,960 employees compared to the average for the year ended March 31, 2019[92]. - Total remuneration expenses for the first half of FY2019 amounted to RMB 1,876.0 million, representing a decrease of 1.6% compared to the first half of FY2018[92]. - The Group has invested significant resources in continuing education and training programs for employees to improve their professional knowledge and skills[93]. Accounting and Compliance - The Group's financial statements are prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[103]. - The review of the condensed consolidated interim financial information did not reveal any significant matters that would affect the financial statements[103]. - The Group's financial information is presented in Renminbi (RMB) unless otherwise stated[126]. - The Group adopted HK (IFRIC) 23 to address uncertainty over income tax treatments, requiring separate consideration of each uncertain tax treatment[155].