青岛控股(00499) - 2021 - 中期财报

Financial Statements Interim Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2021, total revenue increased 18.9% to RMB 24.75 million, with profit attributable to owners of the parent rising 138% to RMB 3.52 million and basic EPS at RMB 0.57 fen Key Profit or Loss Data for H1 2021 | Metric | H1 2021 (RMB thousands) | H1 2020 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Revenue | 24,753 | 20,818 | +18.9% | | Profit Before Tax | 3,401 | 1,746 | +94.8% | | Profit for the Period | 361 | 40 | +802.5% | | Profit Attributable to Owners of the Parent | 3,520 | 1,479 | +138.0% | - Basic and diluted earnings per share were both RMB 0.57 fen, a 90% increase from RMB 0.30 fen in the prior period[3][53] Interim Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2021, the company recorded a total comprehensive loss of RMB 1.25 million, a reversal from the prior year's gain, primarily due to a RMB 1.61 million exchange difference loss from overseas operations translation Comprehensive Income/Loss Overview | Metric | H1 2021 (RMB thousands) | H1 2020 (RMB thousands) | | :--- | :--- | :--- | | Profit for the Period | 361 | 40 | | Exchange difference on translation of overseas operations | (1,611) | 3,850 | | Total Comprehensive (Loss) / Income | (1,250) | 3,890 | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2021, total assets increased 30.4% to RMB 1.043 billion from year-end 2020, with total liabilities at RMB 594 million, and net assets significantly grew 55.7% to RMB 449 million, mainly due to capital raised from share issuance during the period Financial Position Summary | Metric | June 30, 2021 (RMB thousands) | Dec 31, 2020 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Total Non-current Assets | 727,659 | 658,397 | +10.5% | | Total Current Assets | 315,038 | 141,359 | +122.9% | | Total Assets | 1,042,697 | 799,756 | +30.4% | | Total Current Liabilities | 93,038 | 54,558 | +70.5% | | Total Non-current Liabilities | 500,513 | 456,663 | +9.6% | | Total Liabilities | 593,551 | 511,221 | +16.1% | | Net Assets | 449,146 | 288,535 | +55.7% | - Current assets significantly increased, primarily due to substantial growth in inventories, trade receivables, and cash and cash equivalents[8] Interim Condensed Consolidated Statement of Changes in Equity As of June 30, 2021, total equity increased to RMB 449 million, a 55.7% rise from RMB 289 million at the beginning of the year, primarily driven by approximately RMB 160 million in capital inflow from share issuance during the period - In H1 2021, the company raised RMB 159.9 million through share issuance, significantly strengthening its equity base[13] Summary of Changes in Equity | Item | Amount (RMB thousands) | | :--- | :--- | | Total Equity as at January 1, 2021 | 288,535 | | Total comprehensive (loss) for the period | (1,250) | | Acquisition of a subsidiary | 1,945 | | Issue of shares | 159,916 | | Total Equity as at June 30, 2021 | 449,146 | Interim Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2021, the company experienced a net cash outflow of RMB 57.61 million from operating activities and RMB 57.24 million from investing activities, but financing activities generated a net cash inflow of RMB 230 million, primarily from share issuance and new borrowings, leading to a significant increase in cash and cash equivalents to RMB 222 million at period-end Cash Flow Overview | Activity Type | H1 2021 (RMB thousands) | H1 2020 (RMB thousands) | | :--- | :--- | :--- | | Net cash flow from operating activities | (57,610) | 13,923 | | Net cash flow from investing activities | (57,243) | 8,250 | | Net cash flow from financing activities | 229,554 | (6,259) | | Net increase in cash | 114,701 | 15,914 | | Cash and cash equivalents at end of period | 221,758 | 82,083 | - Cash flow from financing activities primarily stemmed from proceeds of approximately RMB 161 million from share issuance, and increased loans from intermediary and ultimate holding companies[18] Notes to the Interim Condensed Consolidated Financial Information 1. Basis of Preparation & 2. Changes in Accounting Policies and Disclosures This interim financial information is prepared in accordance with HKAS 34, with a significant change being the presentation currency shifting from HKD to RMB since December 31, 2020, and comparative figures restated to accurately reflect RMB-denominated business activities - The presentation currency of the Group's consolidated financial statements has changed from HKD to RMB, with comparative figures retrospectively restated[23] 3. Segment Information The Group's business is divided into four segments: property leasing, production and sale of education equipment, loan financing, and consulting services; in H1 2021, property leasing contributed most revenue and all operating profit, while education equipment sales significantly grew 63.3% year-on-year but still incurred an operating loss, and loan financing and consulting services generated no revenue during the period H1 2021 Segment Revenue and Results (RMB thousands) | Segment | Segment Revenue | Segment Results | | :--- | :--- | :--- | | Property Leasing | 13,710 | 11,295 | | Production and Sale of Education Equipment | 11,043 | (5,727) | | Consulting Services | – | (3,209) | | Loan Financing | – | (9) | | Total Segments | 24,753 | 2,350 | - Geographically, the vast majority of revenue (approximately 93.7%) originated from Mainland China, where non-current assets are also primarily concentrated[36][37] 4. Revenue, Other Income, Other Gains and Losses In H1 2021, revenue from contracts with customers primarily derived from the sale of education equipment, totaling RMB 11.043 million, while other income surged year-on-year, mainly due to new entrusted loan interest income of RMB 10.192 million Revenue and Other Income Details (RMB thousands) | Item | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Revenue | | | | Sale of education equipment | 11,043 | 6,763 | | Rental income from investment properties | 13,710 | 13,994 | | Other Income | | | | Entrusted loan interest | 10,192 | – | 9. Earnings Per Share For the six months ended June 30, 2021, basic and diluted earnings per share attributable to ordinary equity holders of the parent company were both RMB 0.57 fen, representing a 90% increase from RMB 0.30 fen in the prior period, primarily driven by the increase in profit attributable to owners of the parent Earnings Per Share Calculation | Metric | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Profit attributable to owners of the parent (RMB thousands) | 3,520 | 1,479 | | Weighted average number of ordinary shares in issue | 618,548,331 | 499,276,680 | | Basic and Diluted Earnings Per Share | RMB 0.57 fen | RMB 0.30 fen | 16. Share Capital & 17. Pledged Assets In H1 2021, the company doubled its issued share capital by issuing approximately 499 million new shares through a rights issue, raising a total of approximately RMB 161 million, and at period-end, the Group pledged certain investment properties and property, plant and equipment to secure bank mortgage financing - The company completed a rights issue in May 2021, issuing 499,276,680 shares at approximately RMB 0.32 per share, raising a total cash consideration (before expenses) of approximately RMB 161 million[74] - As of June 30, 2021, the Group pledged investment properties with a market value of approximately RMB 135 million and property, plant and equipment with a carrying amount of approximately RMB 21.2 million to secure bank financing[75] 18. Related Party Disclosures During the period, the Group engaged in several significant transactions with its controlling shareholder and its associates, including obtaining loans from the ultimate and intermediary holding companies and providing high-interest entrusted loans to a joint venture, which served as important financing and revenue sources for the Group - The Group provided an entrusted loan with an annual interest rate of 15% to Huizhou Jiuyu, a joint venture, recognizing approximately RMB 10.19 million in interest income during the period[78] - The Group obtained loans from its ultimate holding company, Qingdao City Construction Investment (Group) Co., Ltd., at annual interest rates ranging from 3.85% to 4.75%, used to fund the aforementioned entrusted loans[77][80] - The Group obtained a HKD 50 million loan from an intermediary holding company at an annual interest rate of 2.80%[81] 20. Events After Reporting Period Subsequent to the reporting period, the company disclosed a very substantial potential acquisition, where its indirect wholly-owned subsidiary plans to acquire approximately 81.91% equity interest in Qingdao Urban and Rural Construction Financial Leasing Co., Ltd. for approximately RMB 1.98 billion, payable in cash and convertible bonds, with the transaction not yet completed as of the report date - The company plans to acquire approximately 81.91% equity interest in Qingdao Urban and Rural Construction Financial Leasing Co., Ltd. for a total consideration of approximately RMB 1.98 billion[92] - The acquisition consideration will be settled through approximately RMB 129 million in cash and the issuance of approximately RMB 1.85 billion in convertible bonds[92][93] Management Discussion and Analysis Business Review In H1 2021, the Group's total revenue grew 19.2%, primarily driven by the production and sale of education equipment business, which saw a 61.8% year-on-year increase as installation projects resumed after the pandemic, while investment property leasing revenue remained stable, and although consulting services and loan financing generated no revenue during the period, new entrusted loan activities are expected to become a key future revenue source Investment Property Leasing The investment property leasing business performed stably, recording rental income of approximately RMB 13.7 million during the period, largely consistent with RMB 14 million in the prior period - Investment property leasing business in China and Hong Kong provided stable returns, with revenue of approximately RMB 13.7 million[100] Production and Sale of Digital Chinese Calligraphy Education Equipment This segment's revenue significantly increased by 61.8% year-on-year to approximately RMB 11 million, mainly due to the resumption of classroom installation projects as the COVID-19 pandemic came under control in China - Education equipment business revenue grew approximately 61.8% to RMB 11 million, primarily benefiting from the resumption of installation projects post-pandemic[101] Provision of Consulting Services This business segment, launched in H2 2020, generated no revenue during the period, but management is optimistic about its future opportunities and anticipates revenue generation in the second half of the year - The consulting services segment generated no revenue in this period but is expected to start contributing revenue in the second half of the year[103][104] Provision of Loan Financing The traditional loan financing business generated no revenue during the period; however, with new entrusted loan activities, this business is expected to continue to be a part of the Group's primary revenue sources - Traditional loan financing business had no revenue during the period, but new entrusted loan activities are expected to bring significant revenue to the Group[105] Financial Review The Group's consolidated revenue increased 19.2% to RMB 24.8 million during the period, with profit attributable to owners of the parent rising to RMB 3.5 million, mainly due to an increase in fair value of investment properties and a significant surge in other income from entrusted loans; however, staff welfare expenses, other operating expenses (due to increased marketing and legal fees), and finance costs all increased, while the gearing ratio improved from 63.9% to 56.9% - Other income surged 1,733.3% year-on-year to RMB 11 million, primarily attributable to approximately RMB 10.2 million in entrusted loan interest income[106] - Staff welfare expenses and other operating expenses both significantly increased, mainly due to higher commissions and promotion fees in the education equipment business, as well as increased legal and professional fees related to the proposed acquisition[108] - As of June 30, 2021, the gearing ratio (total liabilities/total assets) was 56.9%, a decrease from 63.9% at the end of 2020[110] Outlook Management believes the business environment in H2 2021 remains challenging; to address this, the Group will adhere to prudent financial management and strict cost control while continuing to seek high-quality business and investment opportunities, committed to promoting long-term sustainable development with the full support of its ultimate controlling shareholder, Qingdao City Construction Investment (Group) Co., Ltd., aiming to deliver stable returns to shareholders - Facing challenges, the Group will adhere to prudent financial management, strict cost control, and continue to seek business and investment opportunities[119] - The Group, with the support of its ultimate controlling shareholder Qingdao City Construction Investment (Group) Co., Ltd., will promote long-term sustainable development, aiming to deliver stable returns to shareholders[119] Significant Transactions During and after the period, the Group engaged in several significant transactions, including a core transaction of providing an entrusted loan of up to RMB 195 million to a joint venture, from which it earned interest income, completing the acquisition of a 95% equity interest in Huaiyi Construction, and most notably, announcing a very substantial acquisition plan to acquire approximately 81.91% equity interest in Qingdao Urban and Rural Construction Financial Leasing Co., Ltd., for which it completed a rights issue to raise capital Provision of Entrusted Loans The Group, through its subsidiary, provided an entrusted loan with a principal amount of RMB 195 million to Huizhou Jiuyu, a joint venture, for land acquisition and development, which not only generated substantial interest income for the Group but also allowed it to indirectly share in the potential benefits of land development; as of period-end, Huizhou Jiuyu had drawn down RMB 169 million of the loan - The Group provided an entrusted loan with a principal amount of RMB 195 million to Huizhou Jiuyu, a joint venture, to support its land acquisition and development projects[123] - This arrangement generated positive interest income and cash flow for the Group, as the entrusted loan interest rate was higher than the financing rates obtained from the controlling shareholder[126] Acquisition of 95% Equity Interest in Bengbu Huaiyi Construction Development Co., Ltd. by a Non-wholly Owned Subsidiary On May 24, 2021, the Group, through its non-wholly owned subsidiary, completed the acquisition of a 95% equity interest in Bengbu Huaiyi Construction Development Co., Ltd. for a consideration of RMB 37.564 million, and following the acquisition, Huaiyi's financial results have been consolidated into the Group's financial statements - The Group completed the acquisition of 95% equity interest in Huaiyi Construction for a consideration of RMB 37.564 million, and its financial results are now consolidated[129] Very Substantial Acquisition, Issue of Convertible Bonds Under Specific Mandate and Rights Issue The Group announced a very substantial connected transaction to acquire approximately 81.91% equity interest in Qingdao Urban and Rural Construction Financial Leasing Co., Ltd., a subsidiary of its controlling shareholder; to raise part of the funds, the company completed a "1-for-1" rights issue, raising net proceeds of approximately RMB 160 million, and as of the report date, the preconditions for this acquisition had not yet been fully met - The company proposes to acquire approximately 81.91% equity interest in Qingdao Urban and Rural Construction Financial Leasing Co., Ltd., which constitutes a very substantial acquisition and connected transaction[131] - To fund this, the company completed a rights issue, raising net proceeds of approximately RMB 160 million, which remains unutilized pending the fulfillment of acquisition conditions[133][134] Other Information Directors' and Major Shareholders' Interests in Shares As of June 30, 2021, the company's directors and chief executives held no interests in the company's shares, while the ultimate controlling shareholder, Qingdao City Construction Investment (Group) Co., Ltd., indirectly held 689,243,266 shares through its wholly-owned subsidiaries, representing 69.02% of the total issued shares - The ultimate controlling shareholder, Qingdao City Construction Investment (Group) Co., Ltd., is deemed to hold a 69.02% equity interest in the company through its controlled corporations[145] Share Option Scheme The company adopted a share option scheme in 2013 with a ten-year validity, but no share options have been granted under the scheme since its adoption; as of the report date, the maximum number of shares issuable under the scheme is approximately 49.93 million, representing 5% of the total issued shares - No share options have been granted by the company since the adoption of the share option scheme[141] Corporate Governance Code During the period, the company complied with most provisions of the Corporate Governance Code, with only one deviation: the Chairman of the Board was unable to attend the Annual General Meeting held on June 4, 2021, due to pandemic-related travel restrictions - The company complied with the Corporate Governance Code, with the sole deviation being the Chairman's inability to attend the Annual General Meeting due to pandemic travel restrictions[148] Audit Committee and Review of Interim Report The company's Audit Committee, comprising four independent non-executive directors, is responsible for overseeing auditing, financial reporting, risk management, and internal controls, and has reviewed the unaudited financial information contained in this interim report - The financial information in this interim report is unaudited but has been reviewed by the company's Audit Committee[153]