谭木匠(00837) - 2021 - 中期财报

Company Information This section details the company's fundamental registration, board composition, key operational locations, and professional advisory services - Comprehensive details regarding the company's registration, board and committee members, principal business locations, legal counsel, auditors, and share registrars are provided[5][8] Financial Highlights The group achieved strong financial recovery for the six months ended June 30, 2021, with significant growth in revenue, profit, and improved liquidity - For the six months ended June 30, 2021, the group achieved strong performance recovery, with revenue increasing by 56.9%, gross profit by 70.4%, profit for the period by 106.7%, and basic earnings per share by 112.0% year-on-year[13] Financial Highlights for H1 2021 (Compared to H1 2020) | Indicator | For the six months ended June 30 (RMB '000) | | Percentage Change | | :--- | :--- | :--- | :--- | | | 2021 (Unaudited) | 2020 (Unaudited) | Increase / (Decrease) | | Revenue | 169,565 | 108,069 | 56.9% | | Gross Profit | 104,617 | 61,405 | 70.4% | | Profit Before Tax | 73,043 | 35,760 | 104.3% | | Profit for the Period | 57,612 | 27,878 | 106.7% | | Profit Attributable to Owners of the Company | 56,867 | 26,808 | 112.1% | | Basic EPS (RMB cents) | 22.9 | 10.8 | 112.0% | - The group's liquidity improved, with the current ratio increasing from 6.16 to 7.10, and no interest-bearing bank borrowings at period-end, rendering the gearing ratio inapplicable[13][16] Chairman's Statement The Chairman's statement highlights the group's proactive brand promotion and market expansion in H1 2021, focusing on strengthening fundamentals amidst ongoing market challenges - Chairman Mr. Tan Chuan Hua noted that despite market recovery in H1 2021, COVID-19 impacts persist, presenting both challenges and opportunities, leading the group to actively engage in brand promotion and market expansion, including offline pop-up events and university design collaborations[21] - The group emphasizes strengthening its core capabilities, seizing opportunities, and responding to market changes with optimism and confidence[22] Management Discussion and Analysis Management Review In H1 2021, with effective COVID-19 control in China, the group maintained stable operations and market conditions, with specialty store orders and retail sales entering a positive development trajectory - With effective COVID-19 control in China, market conditions significantly recovered and stabilized compared to last year, with company operations largely meeting planned objectives[26] Business Review The group's business review covers offline store optimization and sales growth, significant online business expansion, and progress in R&D, production, and human resources, while addressing cost and talent challenges Offline Business As of June 30, 2021, total stores decreased to 1,146, with domestic sales growing through store upgrades and marketing, though still below 2019 levels, while international operations largely paused due to the pandemic Store Count Changes | Region | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Mainland China | 1,139 | 1,149 | | Hong Kong | 2 | 2 | | Other Countries and Regions | 5 | 6 | | Total | 1,146 | 1,159 | - Offline sales significantly increased compared to H1 2020, but the sales growth rate was negative 12.8% compared to pre-pandemic H1 2019[38] - Overseas offline business was severely impacted by the pandemic, with outbound sales of RMB 690,000, a 1.3% year-on-year decrease[44][47] Online Business Online business showed strong performance, with domestic e-commerce sales reaching RMB 81.8 million in H1, growing 32.0% year-on-year, while international online sales increased 11.0% through self-operated Amazon platforms H1 2021 Domestic Online Monthly Sales (RMB '000) | Month | 2021 Actual Sales | 2020 Actual Sales | YoY 2020 Growth Rate | 2019 Actual Sales | YoY 2019 Growth Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | January | 12,527 | 7,318 | 71.2% | 10,121 | 23.8% | | February | 12,627 | 8,043 | 57.0% | 9,868 | 28.0% | | March | 15,558 | 11,597 | 34.2% | 12,192 | 27.6% | | April | 12,166 | 8,923 | 36.3% | 8,416 | 44.6% | | May | 18,643 | 17,362 | 7.4% | 14,682 | 27.0% | | June | 10,277 | 8,719 | 17.9% | 8,662 | 18.6% | | Total | 81,798 | 61,962 | 32.0% | 63,941 | 27.9% | - Total sales from overseas online platforms (primarily US and Japan Amazon) amounted to RMB 162,893, representing an 11.0% year-on-year increase[60] Creative R&D The Creative Design Center continuously innovated products, launching 7 series and 37 new products in the reporting period, including high-end hairbrushes and infant combs, to expand product lines and consumer reach - During the reporting period, 7 series and 37 new products were launched, including high-end hairbrushes and infant combs, expanding product categories and consumer demographics[61][66][68] Production Technology The Wanzhou factory produced 2.38 million products in H1, a 62.3% year-on-year increase, while advancing processing technologies, prioritizing pandemic control, and implementing environmental upgrades - In H1, 2,381,927 products were manufactured, representing a 62.3% year-on-year increase[73] Logistics and Distribution The logistics center dispatched over 2.1 million products in H1, meeting order demands, enhancing quality control, resolving metal comb pin oxidation, and implementing strict pandemic prevention measures - Over 2.1 million products were dispatched in H1, and the quality issue of metal comb pin oxidation was effectively resolved[74] Corporate Culture Centered on the 'Crafting Oriental Beauty' brand strategy, the group promoted comb culture and brand philosophy through collaborations with universities, publications, and heritage exhibitions - The group continuously built and disseminated its 'Crafting Oriental Beauty' brand culture through collaborations with universities, publications, and exhibitions[78] Human Resources and Comprehensive Governance The group maintained compliance with labor, safety, and environmental regulations, focusing HR efforts on marketing, product design, and R&D, filing 9 new patents and managing operational risks, while addressing challenges like rising costs and talent shortages - In H1, 9 patents were filed, bringing the total number of effective patents to 61, an increase of 12 year-on-year[83] - The group enhanced operational risk control by strengthening identification and tracking of counterfeit products and non-compliant online sales, and revising relevant internal control systems[87] - Key challenges include the conflict between rising costs and market positioning, difficulties in training new craftspeople, and the aging of existing management personnel[88] Financial Review In H1 2021, the group reported strong financial performance, with revenue up 56.9% to RMB 170 million, gross margin improving to 61.7%, and profit for the period increasing 106.7% to RMB 57.61 million, maintaining a healthy cash flow with no bank loans H1 2021 Key Financial Indicators (RMB '000) | Indicator | 2021 H1 | 2020 H1 | Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 169,565 | 108,069 | +61,496 | +56.9% | | Cost of Sales | 64,948 | 46,664 | +18,284 | +39.2% | | Gross Profit | 104,617 | 61,405 | +43,212 | +70.4% | | Gross Margin | 61.7% | 56.8% | +4.9pp | - | | Operating Profit | 73,207 | 36,001 | +37,206 | +103.3% | | Profit Before Tax | 73,043 | 35,760 | +37,283 | +104.3% | | Profit for the Period | 57,612 | 27,878 | +29,734 | +106.7% | - Revenue growth was primarily driven by market demand recovery as the pandemic came under control, while the increase in gross margin was due to a higher proportion of revenue from products with better margins[91][95] - At the end of the reporting period, the group had no bank loans, with cash and bank balances totaling RMB 60.28 million[109][111] Future Outlook Looking ahead, the group will focus on six key areas: continuous pandemic control, strategic raw material reserves, intensified anti-counterfeiting efforts, strengthened cost management, production technology innovation, and comprehensive governance to enhance brand value - The group's future focus areas include pandemic control, raw material reserves, combating counterfeits, cost management, technological innovation, and comprehensive governance[122][123][126] Human Resources and Training As of June 30, 2021, the group employed 965 staff, emphasizing employee development through diverse training programs covering teamwork, professional etiquette, and production management to foster corporate culture - As of June 30, 2021, the group employed 965 staff and provided diverse on-the-job training[127] Other Information Principal Activities The group, an investment holding company, primarily designs, manufactures, and distributes small wooden ornaments under the 'Tan Mujiang' brand, including combs, mirrors, and gift sets, operating through franchised and self-operated retail stores in China and Hong Kong - The group's core business involves designing, manufacturing, and distributing small wooden ornaments under the 'Tan Mujiang' brand, primarily combs, mirrors, accessories, and gift sets[131] Directors' and Chief Executives' Interests in Securities This section discloses the shareholdings of directors and major shareholders, with Chairman Mr. Tan Chuan Hua holding 67.43% through Linker Investment Limited as the controlling shareholder, and Executive Director Mr. Tan Lizi beneficially owning 300,000 shares - Chairman Mr. Tan Chuan Hua holds 167,700,000 shares, representing 67.43% of the total share capital, through his controlled entity, Linker Investment Limited[133][138] Share Option Scheme This section details the 2009 Share Option Scheme, including its terms, eligible participants, share limits, and exercise price rules, noting 700,000 outstanding options at period-end, granted to three executives including Executive Director Mr. Tan Lizi, with an exercise price of HKD 4.896 Outstanding Share Options as of June 30, 2021 | Grantee | Position | Grant Date | Exercise Price (HKD) | Number of Outstanding Options | | :--- | :--- | :--- | :--- | :--- | | Mr. Tan Lizi | Executive Director | August 31, 2018 | 4.896 | 300,000 | | Ms. Liu Kejia | Marketing Director | August 31, 2018 | 4.896 | 200,000 | | Mr. Luo Hongping | Administrative Director | August 31, 2018 | 4.896 | 200,000 | | Total | | | | 700,000 | Dividends The company paid a final dividend of HKD 19.58 cents per share for FY2020, totaling approximately HKD 48.7 million, but the Board resolved not to declare any interim dividend for the six months ended June 30, 2021 - A final dividend of HKD 19.58 cents per share for 2020, totaling approximately HKD 48.7 million, was paid[159] - The Board resolved not to declare an interim dividend for 2021[160] Use of Net Proceeds from Initial Public Offering Of the approximately RMB 117 million net proceeds from the 2009 IPO, about RMB 64.09 million had been utilized by June 30, 2021, primarily for enhancing design, sales network, logistics, and working capital, with remaining funds held in banks for future business development - As of June 30, 2021, approximately RMB 64.09 million of the approximately RMB 117 million net IPO proceeds had been utilized[162] Corporate Governance Practices The Board is committed to corporate governance, implementing measures to strengthen internal controls, and confirming compliance with all applicable code provisions during the reporting period, with the Audit Committee reviewing the interim financial report - During the reporting period, the company consistently complied with all applicable code provisions of the Corporate Governance Code[164] - The Audit Committee reviewed this interim financial report and concurred with the accounting policies adopted by the company[168] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss This statement presents the income, costs, expenses, and profit for the six months ended June 30, 2021, with profit for the period at RMB 57.612 million and profit attributable to owners of the company at RMB 56.867 million Condensed Consolidated Statement of Profit or Loss Summary (For the six months ended June 30) | Item (RMB '000) | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Revenue | 169,565 | 108,069 | | Gross Profit | 104,617 | 61,405 | | Operating Profit | 73,207 | 36,001 | | Profit Before Tax | 73,043 | 35,760 | | Profit for the Period | 57,612 | 27,878 | | Profit Attributable to Owners of the Company | 56,867 | 26,808 | | Basic and Diluted EPS | RMB 22.9 cents | RMB 10.8 cents | Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement includes other comprehensive income items, such as exchange differences, in addition to profit for the period, resulting in a total comprehensive income of RMB 57.875 million for the period - After accounting for exchange differences, total comprehensive income for the six months ended June 30, 2021, was RMB 57.875 million, with RMB 57.130 million attributable to owners of the company[185] Condensed Consolidated Statement of Financial Position This statement presents the assets, liabilities, and equity as of June 30, 2021, with total assets at RMB 724 million and net assets at RMB 621 million at period-end Condensed Consolidated Statement of Financial Position Summary | Item (RMB '000) | As of June 30, 2021 (Unaudited) | As of December 31, 2020 (Audited) | | :--- | :--- | :--- | | Non-current Assets | 202,695 | 198,947 | | Current Assets | 521,046 | 535,468 | | Current Liabilities | (73,361) | (86,914) | | Non-current Liabilities | (29,779) | (28,362) | | Net Assets | 620,601 | 619,139 | | Total Equity | 620,601 | 619,139 | Condensed Consolidated Statement of Changes in Equity This statement illustrates changes in equity items, including share capital, reserves, and retained profits, during the reporting period, encompassing profit for the period, dividends paid, and equity transactions with non-controlling interests - As of June 30, 2021, total equity increased from RMB 619 million at the beginning of the year to RMB 621 million, primarily due to a RMB 57.61 million increase in profit for the period, a RMB 40.54 million decrease from dividends paid, and equity transactions with non-controlling interests[194] Condensed Consolidated Statement of Cash Flows This statement reflects cash inflows and outflows from operating, investing, and financing activities during the reporting period, showing a net decrease in cash and cash equivalents of RMB 35.75 million Condensed Consolidated Statement of Cash Flows Summary (For the six months ended June 30) | Item (RMB '000) | 2021 (Unaudited) | 2020 (Unaudited) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 18,585 | (11,822) | | Net Cash from Investing Activities | 3,836 | 215,300 | | Net Cash Used in Financing Activities | (58,171) | (213,411) | | Net Decrease in Cash and Cash Equivalents | (35,750) | (9,933) | | Cash and Cash Equivalents at Period-End | 60,280 | 24,429 | Notes to the Unaudited Interim Financial Report Segment Reporting Management views the business as a single operating segment—manufacturing and distribution of wooden crafts and ornaments—contributing over 90% of the group's revenue, results, and assets, with no segment or geographical information provided as operations are primarily in China - The group considers its business as a single operating segment, the manufacturing and distribution of wooden crafts and ornaments, with primary assets and activities in China, thus no segment information is presented[211] Revenue and Other Income This note details the composition of revenue and other income, with total revenue of RMB 169.6 million primarily from goods sales, and other income of RMB 18.49 million, including RMB 12.23 million in VAT refunds and RMB 3.15 million in investment property rental income Revenue and Other Income Details (For the six months ended June 30, RMB '000) | Item | 2021 | 2020 | | :--- | :--- | :--- | | Revenue | 169,565 | 108,069 | | Of which: Sales of goods | 169,518 | 107,975 | | Other Income | 18,489 | 25,672 | | Of which: China VAT refund for preferential policies | 12,230 | 5,085 | | Of which: Rental income from investment properties | 3,147 | 2,716 | | Of which: Fair value changes of financial assets | 1,646 | 11,838 | Income Tax This note explains income tax expense calculation, totaling RMB 15.43 million for the period at an effective tax rate of 21.1%, primarily comprising China corporate income tax and withholding tax on dividends, with the group benefiting from VAT refunds for employing disabled staff - Income tax expense for the reporting period was RMB 15.431 million, with an effective tax rate of 21.1%, a decrease from 22.0% in the prior period[105][227] - The group benefits from social welfare enterprise tax incentives for employing disabled staff, including income tax deductions and VAT refunds[233] Earnings Per Share This note details the calculation of basic earnings per share, which is RMB 22.9 cents, based on RMB 56.867 million profit attributable to owners and 248.7 million weighted average ordinary shares, with no dilutive effect from share options - Basic earnings per share is RMB 22.9 cents, calculated based on RMB 56.867 million profit and 248,714 thousand weighted average shares[235] - Diluted earnings per share is the same as basic earnings per share, as share options have no dilutive effect[236] Dividends This note reiterates dividend distribution, confirming the Board's decision not to declare a 2021 interim dividend, and the payment of a 2020 final dividend of HKD 19.58 cents per share, totaling approximately RMB 40.54 million Dividend Payments for Past Financial Years (For the six months ended June 30) | Dividend Type | 2021 Paid (RMB '000) | 2020 Paid (RMB '000) | | :--- | :--- | :--- | | Final Dividend | 40,540 | 62,502 | | Special Dividend | – | 148,006 | Equity Transactions with Non-Controlling Shareholders In January 2021, the group acquired the remaining 9.09% equity in Jiangsu Tan Mujiang for RMB 15.873 million, making it a wholly-owned subsidiary, which reduced non-controlling interests by RMB 10.557 million and equity attributable to owners by RMB 5.316 million - The group acquired a 9.09% equity interest in Jiangsu Tan Mujiang for RMB 15.873 million, achieving full ownership of the subsidiary[272] Events After the Reporting Period This note indicates that the ongoing COVID-19 pandemic creates uncertainties for the group's operating environment, which is being closely monitored, and directors confirm no significant adverse changes to the group's financial or trading position as of the report date - As of the report date, despite ongoing COVID-19 uncertainties, there have been no significant adverse changes to the group's financial or trading position[273]