Financial Performance - For the six months ended June 30, 2020, the company achieved sales revenue of approximately RMB 338 million, representing a year-on-year increase of about 107.4% or RMB 175 million [8]. - The company recorded a loss attributable to owners of the company of approximately RMB 42 million, an improvement of about RMB 38 million compared to a loss of RMB 80 million in the same period last year [10]. - International sales revenue for the six months ended June 30, 2020, was approximately RMB 12 million, significantly impacted by global pandemic and trade disruptions [10]. - The company's revenue for the six months ended June 30, 2020, was approximately RMB 33.8 million, an increase of about RMB 17.5 million or 107.4% compared to RMB 16.3 million in the same period of 2019 [22]. - The gross profit for the six months ended June 30, 2020, was approximately RMB 7.6 million, a significant improvement from a loss of RMB 2.2 million in the same period of 2019 [26]. - The company reported a net loss of RMB 4,233,000, compared to a net loss of RMB 7,988,000 for the same period in 2019, indicating a 47% improvement in loss [85]. - The company incurred a loss before tax of RMB 6,344,000, an improvement from a loss of RMB 8,209,000 in the previous year, reflecting a reduction in losses by 22.7% [80]. - The total comprehensive loss for the period was RMB 5,137,000, compared to a total comprehensive loss of RMB 7,988,000 in the previous year, showing a 36% reduction in comprehensive loss [85]. Sales and Market Strategy - Domestic sales revenue amounted to approximately RMB 326 million, with sales of evaporators, condensers, and compressors contributing approximately RMB 79 million, RMB 72 million, and RMB 162 million respectively [8]. - The company has strengthened cooperation with major distributors in the domestic aftermarket, enhancing promotional efforts to reliable customers with established sales networks [8]. - The company plans to enhance sales efforts in the domestic aftermarket, focusing on collaboration with major dealers and expanding the sales network [16]. - The company has diversified its product line by adding automotive air conditioning compressors since the establishment of Huangshan Shuanghua Donglin Compressor Co., Ltd. in November 2019 [8]. Operational Developments - The company plans to utilize its vacant properties in Shanghai to develop cold storage and cold chain supply businesses, transitioning from traditional manufacturing to cold chain logistics services [11]. - The company has established a partnership with Fuzhou Anda Shengdong Logistics Co., Ltd. to transform part of its vacant properties into a large cold storage area [11]. - The first cold storage area began construction in June 2020 and is expected to be completed around October 2020, with a second cold storage area planned to start construction in December 2020 [17]. - The company recognizes the growing demand for cold chain logistics in China, driven by the rapid development of the e-commerce sector for fresh food [17]. Financial Position and Assets - As of June 30, 2020, the group's net current assets decreased to approximately RMB 167.8 million from RMB 170.8 million as of December 31, 2019 [38]. - The group's cash and cash equivalents as of June 30, 2020, were approximately RMB 141.9 million, down from RMB 154.8 million as of December 31, 2019 [39]. - The company has approximately RMB 10 million of unutilized funds from its IPO, with planned allocations of RMB 2 million for facility upgrades, RMB 3 million for equipment upgrades, and RMB 5 million for general working capital [49]. - The company’s total assets less current liabilities stood at RMB 334,376,000, slightly down from RMB 340,469,000 in the previous year [84]. - The company’s equity attributable to owners of the parent decreased to RMB 329,447,000 from RMB 333,429,000, a decline of 1.2% [84]. Expenses and Cost Management - Sales and distribution costs for the six months ended June 30, 2020, amounted to approximately RMB 2.5 million, an increase of about 92.3% year-on-year, primarily due to increased sales revenue and related transportation costs [31]. - Administrative expenses for the six months ended June 30, 2020, were approximately RMB 13.3 million, a 43.0% increase compared to the same period last year, mainly due to office expenses related to business recovery post-COVID-19 [32]. - The total remuneration for key management personnel decreased to RMB 1,079,000 in the first half of 2020 from RMB 1,189,000 in the same period of 2019, reflecting cost control measures [140]. Governance and Compliance - The company has established a nomination committee to recommend suitable directors and management personnel to enhance corporate strategy [72]. - The board diversity policy was adopted on March 5, 2019, aiming to improve company performance and promote long-term development through diverse board composition [74]. - The company has complied with the corporate governance code, with no significant deviations reported, except for specific provisions regarding the roles of the chairman and CEO [67][68]. - Independent non-executive directors have served for over nine years, and their reappointment will be addressed at the next annual general meeting [69]. Risk Management - The company is currently monitoring foreign exchange risks, particularly from fluctuations in HKD and USD against RMB, but has no intention to hedge these risks at present [46]. - The company has no assets pledged as collateral as of June 30, 2020 [48]. - The company has no collateral for trade receivables or payables as of June 30, 2020, maintaining a risk management strategy focused on credit monitoring [126]. Cash Flow and Investments - The net cash generated from investing activities increased significantly to RMB 18,194,000 in 2020, compared to RMB 10,763,000 in 2019, representing an increase of approximately 69% [87]. - The company reported a net cash inflow of RMB 8,945,000 for the six months ended June 30, 2020, compared to a net inflow of RMB 1,420,000 in the same period of 2019, indicating a significant improvement in cash flow [87]. - The company sold 40% equity in its wholly-owned subsidiary Shanghai Shuanghua Supply Chain Management Co., Ltd. for RMB 1 and unpaid capital of RMB 8 million, to Fuzhou Anda, with payments scheduled for August 31 and September 30, 2020 [44]. Audit and Financial Reporting - The company appointed a new auditor, RSM Hong Kong, after the resignation of Ernst & Young due to a disagreement over audit fees [53]. - The interim financial statements were approved by the board of directors on August 31, 2020 [153]. - The financial department, led by the finance manager, is responsible for determining the fair value measurement policies and procedures for financial instruments [145].
双桦控股(01241) - 2020 - 中期财报