Financial Performance - For the six months ended June 30, 2021, the group's revenue increased by approximately RMB 7.7 million or 18.5% to approximately RMB 49.0 million compared to the same period in 2020[6]. - The group's net loss for the six months ended June 30, 2021, was approximately RMB 8.6 million, a decrease from a net loss of approximately RMB 16.3 million for the same period in 2020[17]. - Gross profit increased by approximately RMB 0.5 million or 15.7% to approximately RMB 3.7 million for the six months ended June 30, 2021, with a stable gross profit margin of approximately 7.6%[9]. - The company reported a loss before tax of RMB 8,632,000, which is an improvement from a loss of RMB 16,259,000 in the prior year, indicating a 46.8% reduction in losses[51]. - Total comprehensive loss for the period was RMB 11,249,000, compared to RMB 12,824,000 in the previous year, reflecting a 12.3% improvement[51]. - The company reported a loss attributable to owners of RMB 8,632,000 for the six months ended June 30, 2021, compared to a loss of RMB 16,259,000 for the same period in 2020, representing a 47% improvement year-over-year[78]. Revenue Breakdown - The group's revenue for branded watches reached RMB 45,871,000 for the six months ended June 30, 2021, compared to RMB 34,082,000 in the same period of 2020, representing a growth of approximately 34.5%[68]. - Total revenue for the group was RMB 48,954,000 for the six months ended June 30, 2021, an increase of 18.5% from RMB 41,300,000 in the same period of 2020[68]. - Revenue from the Chinese market was RMB 23,218,000, up from RMB 17,446,000 in the previous year, indicating a growth of approximately 33.5%[69]. - Revenue from the Asian market (excluding China) was RMB 25,736,000, compared to RMB 23,854,000 in the same period of 2020, reflecting an increase of about 7.8%[69]. Expenses and Costs - Selling and distribution expenses decreased by approximately RMB 0.5 million to approximately RMB 5.0 million for the six months ended June 30, 2021, primarily due to reduced advertising expenses[11]. - The total employee compensation cost for the six months ended June 30, 2021, was approximately RMB 6.8 million, an increase from RMB 6.5 million for the same period in 2020[34]. - The total employee expenses, including directors' remuneration, increased to RMB 6,773,000 in 2021 from RMB 6,490,000 in 2020, reflecting a 4.4% increase[77]. - Advertising expenses decreased to RMB 2,137,000 in 2021 from RMB 2,721,000 in 2020, showing a reduction of 21.5%[77]. - The cost of inventory recognized as an expense rose to RMB 45,222,000 in 2021, up from RMB 38,077,000 in 2020, indicating an increase of 18.5%[77]. Assets and Liabilities - The group's cash and bank balances totaled approximately RMB 4.8 million as of June 30, 2021, down from approximately RMB 5.3 million as of December 31, 2020[20]. - The current ratio decreased from 99.1 times as of December 31, 2020, to 34.8 times as of June 30, 2021[20]. - Inventory increased to RMB 59,547,000 from RMB 52,228,000, indicating a 14.2% rise in stock levels[53]. - Trade receivables decreased to RMB 39,747,000 from RMB 46,324,000, a decline of 14.3%[53]. - Trade receivables decreased to RMB 99,330,000 as of June 30, 2021, from RMB 102,900,000 as of December 31, 2020, a decline of 3.5%[83]. - The expected credit loss provision for trade receivables increased to RMB 59,583,000 in 2021 from RMB 56,576,000 in 2020, reflecting a rise of 5.3%[83]. Investments and Acquisitions - As of June 30, 2021, the total value of significant investments was RMB 6,797,000, with a return of RMB 359,000 for the period[32]. - The major investment in China Automotive Interior Group Limited reported a loss of RMB 3,890,000 for the year ended December 31, 2020, with revenue of approximately RMB 141,626,000[32]. - The company acquired property, plant, and equipment amounting to RMB 1,680,000 during the six months ended June 30, 2021, compared to no acquisitions in the same period of 2020[82]. - There were no significant acquisitions or disposals of subsidiaries or associates during the six months ended June 30, 2021[29]. - No significant investments exceeding 1% of the group's total assets were held as of June 30, 2021[33]. Corporate Governance - The company has adopted and complied with the corporate governance code as per the listing rules, with two independent non-executive directors absent from the annual general meeting[44]. - All directors confirmed compliance with the standards set out in the code for securities transactions during the six months ended June 30, 2021[45]. - The board of directors consists of three executive directors and three independent non-executive directors, ensuring governance and oversight[50]. - The company has adopted a code of conduct for securities trading, confirming compliance by all directors as of June 30, 2021[48]. Future Plans and Market Adaptation - The group plans to enhance its design and development capabilities by recruiting more talent and improving the design team's artistic skills[18]. - The group remains committed to seeking new opportunities and adapting its business and product mix to meet market demands[19]. - The impact of COVID-19 has significantly affected the company's revenue, with ongoing monitoring and response strategies in place[49]. - The group anticipates that the adoption of new and revised Hong Kong Financial Reporting Standards will not have a significant impact on its financial performance and position[65]. Stock Options and Shareholder Matters - The company has a stock option plan that has granted 34,560,000 options as of June 30, 2021, unchanged from the previous year[89]. - The company granted a total of 65,664 thousand stock options, with 34,560 thousand options exercised during the period[90]. - The exercise price for the stock options granted in 2020 was HKD 0.41, with a closing price of HKD 0.104 prior to the grant date[90]. - Following the reporting period, the company entered into a placement agreement to place up to 89,856,000 shares at a price of HKD 0.1 per share, completed on August 18, 2021[91]. - No interim dividend was recommended for the six months ended June 30, 2021, consistent with the previous year[28].
励时集团(01327) - 2021 - 中期财报