中国智能科技(00464) - 2021 - 中期财报

Company Information This section details key company personnel and essential corporate information - The report provides detailed information on key company personnel, including executive directors, independent non-executive directors, members of various committees, company secretary, registered office, principal place of business, share registrar, auditor, and principal bankers[13] Financial Highlights Operating Results and Financial Position Revenue decreased to HKD 194 million, but gross profit rose to HKD 23.03 million with an improved 11.9% gross margin, and net loss significantly narrowed to HKD 2.12 million Financial Summary (For the six months ended September 30) | Metric | 2020 (Unaudited) | 2019 (Unaudited) | Change | | :--- | :--- | :--- | :--- | | Operating Results | | | | | Revenue (HKD Thousand) | 193,997 | 248,787 | -22.0% | | Gross Profit (HKD Thousand) | 23,027 | 19,850 | +16.0% | | Net Loss (HKD Thousand) | (2,115) | (11,381) | -81.4% | | Basic Loss Per Share (HK Cents) | (0.475) | (2.554) | -81.4% | | Financial Position | | | | | Total Assets (HKD Thousand) | 352,080 | 397,281 | -11.4% | | Net Assets (HKD Thousand) | 102,217 | 125,312 | -18.4% | | Financial Ratios | | | | | Gross Margin | 11.9% | 8.0% | +3.9pp | | Net Gearing Ratio | 13.1% | N/A | N/A | Management Discussion and Analysis Financial Performance Revenue declined by 22.0% to HKD 194 million due to COVID-19, but gross profit increased by 16.0% to HKD 23.03 million with an 11.9% gross margin, and net loss significantly narrowed to HKD 2.12 million Financial Performance Highlights (For the six months ended September 30, 2020) | Metric | Amount | YoY Change | Key Reasons | | :--- | :--- | :--- | :--- | | Revenue | HKD 194 million | -22.0% | Reduced orders in Europe, US, and Asia markets due to COVID-19 pandemic | | Gross Profit | HKD 23.03 million | +16.0% | Increased sales of high-margin new and premium products | | Gross Margin | 11.9% | +3.9 percentage points | Optimized product mix | | Net Loss | HKD 2.12 million | -81.4% | Increased gross profit and cost control | | Basic Loss Per Share | 0.475 HK Cents | -81.4% | Reduced net loss | - The Board has resolved not to declare an interim dividend for the six months ended September 30, 2020[21] Business and Operations Review The Group's ODM/OEM electronic hair care business, based in Dongguan, faced significant challenges from COVID-19 and trade tensions, responding with product optimization and cost control, while 79% of turnover came from top five customers - The Group primarily engages in the design, manufacturing, and sale of electronic hair care products (ODM/OEM), with its manufacturing base located in Dongguan, China[22] - Key challenges include the COVID-19 pandemic, US-China trade tensions, customer price pressure, and difficulties in recruiting workshop operators in mainland China[22][26] - Response strategies include optimizing product structure, focusing on high-margin products, strictly monitoring procurement costs, prudent investment, and stringent quality control to enhance efficiency and reduce costs[26] - Customer concentration is high, with the top five customers accounting for 79% of total turnover; Europe and Asia markets remain the primary sources of revenue[22] Liquidity and Financial Resources As of September 30, 2020, cash and bank balances were HKD 25.57 million, with the net gearing ratio improving from 20.6% to 13.1%, indicating sound liquidity Liquidity and Financial Resources (As at September 30, 2020) | Metric | Amount | Compared to (March 31, 2020) | | :--- | :--- | :--- | | Cash and Bank Balances (HKD Thousand) | 25,567 | 31,060 | | Net Current Assets (HKD Thousand) | 18,896 | 20,293 | | Current Ratio | 1.1 | 1.1 | | Total Bank Facilities (HKD Thousand) | 83,400 | 93,400 | | Utilized Bank Facilities (HKD Thousand) | 38,908 | 51,211 | | Net Gearing Ratio | 13.1% | 20.6% | - The Group primarily conducts transactions in HKD, USD, and RMB; as HKD is pegged to USD, there is no significant exchange rate risk, and the Group hedges RMB income and expenditure fluctuations by generating revenue in mainland China without using financial instruments to hedge foreign exchange risk[29] Employment and Remuneration Policies As of September 30, 2020, total employees decreased to 1,251, with staff costs falling to HKD 50.19 million, and remuneration policies are performance-based, offering various benefits - The total number of employees (Hong Kong and mainland China) decreased from 1,653 in the prior period to 1,251[36] - Total staff costs for the reporting period were approximately HKD 50.19 million, a significant decrease from HKD 72.53 million in the prior period, primarily due to a reduction in the number of employees[36] Outlook and Prospects The Group anticipates ongoing challenges in hair care products from COVID-19, but sees "stay-at-home economy" opportunities and plans to explore business diversification for new revenue streams - Anticipated future challenges include subdued demand due to COVID-19, customer price pressure, shortage of skilled labor in mainland China, shortened product life cycles, and capital market and exchange rate fluctuations[37] - Market opportunities arise from the pandemic stimulating the "stay-at-home economy," with consumers more inclined to purchase hair care products for home use[37] - The Group plans to continue exploring opportunities for business expansion and diversification to create new revenue streams[37] Supplementary Information Share Capital, Dividends, and Shareholder Interests As of September 30, 2020, issued share capital was 445,646,000 shares, no interim dividend was declared, and major shareholders held 56.80% of shares - As at September 30, 2020, the company's issued shares totaled 445,646,000 with a par value of HKD 0.001 per share[40] - The Board resolved not to declare an interim dividend[42] Major Shareholders' Shareholding (As at September 30, 2020) | Name of Major Shareholder | Capacity and Nature of Interest | Number of Shares Held | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Zhongyun Capital Co., Ltd. | Beneficial Owner | 253,132,500 | 56.80% | | Li Yuelan / Liu Xuezhong | Interest in Controlled Corporation | 253,132,500 | 56.80% | | Tianjin Xiantong Investment Management Co., Ltd. | Investment Manager | 50,575,000 | 11.35% | | Donghai International Financial Holdings Co., Ltd. | Interest in Shares as Security | 227,332,500 | 51.01% | Corporate Governance The company maintains high corporate governance standards, complying with Listing Rules, with an eight-member Board including five executive and three independent non-executive directors, and established Remuneration, Nomination, and Audit Committees - The Board of Directors comprises eight directors, including five executive directors and three independent non-executive directors[73] - The company has established a Remuneration Committee, a Nomination Committee, and an Audit Committee, all chaired by independent non-executive directors[77][78][80] - The Audit Committee has reviewed this interim report and the unaudited interim financial statements[80] - The Board is fully responsible for maintaining sound and effective internal control and risk management systems and regularly reviews their effectiveness[83][84] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended September 30, 2020, revenue was HKD 194 million (down 22%), gross profit HKD 23.03 million (up 16%), net loss narrowed to HKD 2.12 million, and total comprehensive income was HKD 4.43 million Consolidated Statement of Profit or Loss Summary (For the six months ended September 30) | Item | 2020 (HKD Thousand) | 2019 (HKD Thousand) | | :--- | :--- | :--- | | Revenue | 193,997 | 248,787 | | Cost of Sales | (170,970) | (228,937) | | Gross Profit | 23,027 | 19,850 | | Administrative Expenses | (23,438) | (29,663) | | Loss Before Tax | (2,096) | (11,446) | | Loss for the Period | (2,115) | (11,381) | | Other Comprehensive Income/(Expense) | 6,544 | (9,823) | | Total Comprehensive Income/(Expense) for the Period | 4,429 | (21,204) | Condensed Consolidated Statement of Financial Position As of September 30, 2020, total assets were HKD 352 million, total liabilities HKD 250 million, net assets HKD 102 million, and net current assets HKD 18.9 million Consolidated Statement of Financial Position Summary | Item | As at September 30, 2020 (HKD Thousand) | As at March 31, 2020 (HKD Thousand) | | :--- | :--- | :--- | | Non-current Assets | 98,408 | 92,323 | | Current Assets | 253,672 | 237,416 | | Of which: Trade and Bills Receivables | 122,082 | 78,305 | | Of which: Bank Balances and Cash | 25,567 | 31,060 | | Current Liabilities | 234,776 | 217,123 | | Of which: Trade Payables | 95,647 | 71,490 | | Of which: Bank Borrowings | 38,908 | 51,211 | | Non-current Liabilities | 15,087 | 14,828 | | Net Assets | 102,217 | 97,788 | | Total Equity | 102,217 | 97,788 | Condensed Consolidated Statement of Cash Flows Operating activities generated HKD 6.54 million net cash inflow, while investing and financing activities resulted in outflows, leading to a net decrease of HKD 8.01 million in cash and cash equivalents, ending at HKD 25.57 million Cash Flow Statement Summary (For the six months ended September 30) | Item | 2020 (HKD Thousand) | 2019 (HKD Thousand) | | :--- | :--- | :--- | | Net Cash from (used in) Operating Activities | 6,540 | (15,128) | | Net Cash from (used in) Investing Activities | (2,006) | (2,365) | | Net Cash from (used in) Financing Activities | (12,542) | (14,344) | | Net (Decrease) in Cash and Cash Equivalents | (8,008) | (31,837) | | Cash and Cash Equivalents at Beginning of Period | 31,060 | 83,957 | | Cash and Cash Equivalents at End of Period | 25,567 | 49,928 | Notes to the Condensed Consolidated Financial Statements Revenue and Segment Information All Group revenue comes from electronic hair care products, with Europe contributing HKD 103 million (53.0%) and Asia HKD 74.8 million (38.6%), though all major markets saw revenue decline - The Group has only one reportable operating segment, which is the design, manufacturing, and sale of electronic hair care products[134] Revenue by Customer Geographical Location (For the six months ended September 30) | Region | 2020 (HKD Thousand) | 2019 (HKD Thousand) | YoY Change | | :--- | :--- | :--- | :--- | | Europe | 102,789 | 122,366 | -16.0% | | Asia | 74,802 | 86,729 | -13.8% | | North and South America | 13,718 | 37,981 | -63.9% | | Africa | 2,595 | 957 | +171.2% | | Australia | 93 | 754 | -87.7% | | Total | 193,997 | 248,787 | -22.0% | Trade and Other Receivables and Payables As of the period-end, trade and bills receivables rose to HKD 122 million and trade payables to HKD 95.65 million, with most balances aged within 120 days and credit terms typically 14-90 days Aging Analysis of Trade and Bills Receivables | Aging | As at September 30, 2020 (HKD Thousand) | As at March 31, 2020 (HKD Thousand) | | :--- | :--- | :--- | | Within 60 days | 86,577 | 29,752 | | 61 to 120 days | 32,907 | 44,116 | | 121 to 365 days | 2,303 | 4,201 | | Over 365 days | 295 | 236 | | Total | 122,082 | 78,305 | Aging Analysis of Trade Payables | Aging | As at September 30, 2020 (HKD Thousand) | As at March 31, 2020 (HKD Thousand) | | :--- | :--- | :--- | | Within 60 days | 66,314 | 33,437 | | 61 to 120 days | 23,329 | 18,126 | | 121 to 365 days | 3,085 | 12,134 | | Over 365 days | 2,919 | 7,793 | | Total | 95,647 | 71,490 | Loans from Related Parties As of September 30, 2020, total unsecured, interest-free loans from related parties amounted to HKD 54.9 million, repayable within one year, including HKD 14.9 million from the controlling shareholder and HKD 40 million from key management Details of Related Party Loans | Lender | Relationship | Amount (HKD Thousand) | | :--- | :--- | :--- | | Zhongyun Capital Co., Ltd. | Controlling Shareholder | 14,895 | | Mr. Tam Chi Sang and Mr. Lam Wai Ming | Key Management Personnel | 40,000 | | Total | | 54,895 | - All loans from related parties are unsecured, interest-free, and repayable within one year from the date of drawdown[162]