中国地利(01387) - 2021 - 中期财报

Chairman's Report The Group actively promoted its "New Food Circulation Strategy" in the first half of 2021, achieving double-digit growth in revenue and net profit amidst national rural revitalization policies Summary of Chairman's Report In the first half of 2021, the Group achieved double-digit growth in revenue and net profit by advancing its "New Food Circulation Strategy" under the national rural revitalization policy, while accelerating digital upgrades for its stable agricultural product wholesale market business and expanding innovative business models 2021 Half-Year Key Financial Indicators | Indicator | Amount (RMB) | Year-over-Year Growth | | :--- | :--- | :--- | | Operating Revenue | 730 million | 5.5% | | Net Profit | 165 million | 15.9% | - The core strategy focuses on transforming from a traditional transaction-centric model to a diversified integrated service model encompassing trading, procurement, warehousing, processing, and distribution[8] - Innovative business expansion emphasizes integrating supply chains at the production end and extending to sub-terminal channels at the sales end, offering comprehensive supply chain services and solutions[9] - The Group established a joint venture with JD.com and formed strategic partnerships with regional leaders like Gansu Agricultural Reclamation Group and Guizhou Vegetable Group to build a dual circulation system for agricultural products[9] Management Discussion and Analysis This section provides an overview of the Group's operations, financial performance, and key strategic initiatives during the reporting period Business Overview The Group's core business involves operating ten agricultural product wholesale markets across seven cities in China, which are categorized into five key clusters and serve as crucial regional logistics hubs contributing the majority of the Group's revenue - The Group's core business is operating 10 agricultural product wholesale markets in 7 cities in China[12] Revenue Contribution by Market Cluster for H1 2021 | Market Cluster | H1 2021 Revenue (RMB) | | :--- | :--- | | Hangzhou Dili Logistics Park Cluster | 189.1 million | | Shenyang Shouguang Dili Agricultural and Sideline Products Market | 181.1 million | | Heilongjiang Dili Logistics Park Cluster | 171.0 million | | China Shouguang Agricultural Products Logistics Park | 84.0 million | | Guiyang Agricultural Products Logistics Park | 74.4 million | Business Review The Group acquired a 19% equity stake in Dili Fresh in 2019 to expand into downstream retail, subsequently securing a priority supply right for up to 90% of Dili Fresh's annual procurement in 2020 to scale its supply chain business and enhance upstream customer loyalty - Completed the acquisition of a 19% equity stake in Dili Fresh in October 2019, with the investment's fair value at RMB 1.0273 billion as of June 30, 2021[35] - Signed a framework agreement with Dili Fresh, securing priority supply rights for up to 90% of its annual procurement, aiming to expand supply chain operations and connect upstream and downstream customers[36] Financial Review In the first half of 2021, the Group maintained a robust financial position with total revenue increasing by 5.5% to RMB 727 million, improved liquidity from net current liabilities to net current assets, and a strengthened capital structure due to JD.com's subscription, leading to a reduced gearing ratio Revenue Analysis For the six months ended June 30, 2021, the Group's total revenue increased by 5.5% to RMB 727.4 million, driven by a recovery in transaction volumes post-pandemic and new agricultural product sales, despite varied performance across markets H1 2021 Revenue Composition (RMB million) | Revenue Type | H1 2021 | H1 2020 | Change (%) | | :--- | :--- | :--- | :--- | | Commission Income | 485.0 | 478.1 | +1.4% | | Rental Income | 214.6 | 211.2 | +1.6% | | Agricultural Product Sales | 27.8 | - | +100% | | Total | 727.4 | 689.3 | +5.5% | - Revenue growth was primarily due to the gradual recovery from the adverse effects of COVID-19, increased transaction volumes, and the launch of new agricultural product sales business[40] - Revenue decline in Harbin Hada Market and Youyi Market was mainly due to decreased transaction volumes for certain imported fruits affected by COVID-19 contamination[45] Liquidity, Capital Structure, and Resources As of June 30, 2021, the Group's liquidity significantly improved, transitioning from a net current liability of RMB 967 million to a net current asset of RMB 1.287 billion, with the current ratio rising from 0.63 to 1.96, while the gearing ratio decreased to 10.77% following JD.com's HKD 797 million subscription - Significant improvement in liquidity: As of June 30, 2021, the Group's net current assets were approximately RMB 1.287 billion, compared to net current liabilities of RMB 967 million at the end of 2020, with the current ratio increasing from 0.63 to 1.96[52] - A subsidiary of JD.com completed a subscription, generating net proceeds of approximately HKD 797 million for future investments and general working capital[58][61] - The gearing ratio (total interest-bearing borrowings and lease liabilities / total assets) decreased from 11.68% at the end of 2020 to 10.77% as of June 30, 2021[69] Human Resources and Dividends As of June 30, 2021, the Group employed 2,587 staff, with total remuneration for the first half of the year amounting to approximately RMB 182 million, and the Board resolved not to declare an interim dividend - As of June 30, 2021, the Group's total number of employees was 2,587, an increase from 2,419 in the same period last year[70] - The Board resolved not to declare an interim dividend for the six months ended June 30, 2021[71] Other Information This section provides details on directors' and major shareholders' interests, the share award scheme, and corporate governance practices Directors' and Major Shareholders' Interests This section discloses the shareholdings of the company's directors and major shareholders as of June 30, 2021, highlighting JD.com's 5.37% stake through Nelson Innovation Limited and Mr. Dai Yongge's significant controlling interest through various holding companies - JD.com, Inc., through its indirect wholly-owned subsidiary Nelson Innovation Limited, holds 478,067,066 shares, representing 5.37% of the company's issued share capital[79][84] - Mr. Dai Yongge and his spouse Ms. Zhang Xingmei collectively control over 60% of the company's shareholding interests through various entities, including New Joy Limited and Super Intelligence Investment Limited[76][80] Share Award Scheme and Corporate Governance The company adopted a share award scheme in 2018, under which the trustee purchased approximately 124 million shares by June 30, 2021, with no shares granted during the period, and the company generally complied with corporate governance code provisions, except for the Chairman's absence from the AGM - As of June 30, 2021, the trustee purchased 123,796,200 shares of the company under the share award scheme, but no shares were granted to any employees during the period[86] - The Audit Committee reviewed the Group's unaudited interim results for the six months ended June 30, 2021[88] - During the reporting period, the company complied with the Corporate Governance Code, with the only deviation being the absence of Chairman Mr. Wang Yan from the Annual General Meeting on June 24, 2021, due to other commitments[89] Unaudited Interim Financial Report This section presents the unaudited interim financial statements, including the consolidated statement of profit or loss, statement of financial position, and statement of cash flows, along with explanatory notes Consolidated Statement of Profit or Loss For the six months ended June 30, 2021, the Group's revenue increased by 5.5% to RMB 727 million, and despite higher operating and administrative expenses, profit for the period rose by 15.9% to RMB 165 million due to a significant reduction in fair value loss on investment properties H1 2021 Consolidated Statement of Profit or Loss Key Data (RMB thousand) | Indicator | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Revenue | 727,418 | 689,299 | | Operating Profit | 267,350 | 330,002 | | Profit Before Tax | 225,754 | 192,889 | | Profit for the Period | 164,613 | 142,007 | | Profit attributable to equity holders of the Company | 158,548 | 137,184 | | Basic earnings per share (RMB cents) | 1.83 | 2.45 | Consolidated Statement of Financial Position As of June 30, 2021, the Group's total assets were RMB 19.60 billion and net assets were RMB 13.97 billion, with a notable improvement in liquidity from a net current liability of RMB 967 million at year-end 2020 to a net current asset of RMB 1.287 billion, primarily driven by reduced short-term borrowings and increased cash Consolidated Statement of Financial Position Key Data (RMB thousand) | Indicator | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Total Non-current Assets | 16,963,946 | 17,437,004 | | Total Current Assets | 2,631,929 | 1,682,380 | | Total Current Liabilities | 1,345,272 | 2,649,679 | | Net Current Assets/(Liabilities) | 1,286,657 | (967,299) | | Total Non-current Liabilities | 4,283,073 | 3,364,955 | | Net Assets | 13,967,530 | 13,104,750 | | Total Equity | 13,967,530 | 13,104,750 | Condensed Consolidated Statement of Cash Flows In the first half of 2021, the Group generated RMB 28.56 million in net cash from operating activities, experienced a net cash outflow of RMB 291 million from investing activities, and a net cash inflow of RMB 495 million from financing activities, resulting in a net increase of RMB 233 million in cash and cash equivalents to RMB 1.147 billion at period-end H1 2021 Consolidated Statement of Cash Flows Summary (RMB thousand) | Activity Type | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Net cash generated from operating activities | 28,559 | 153,650 | | Net cash used in investing activities | (290,819) | (148,034) | | Net cash generated from financing activities | 495,499 | 159,687 | | Net increase in cash and cash equivalents | 233,239 | 165,303 | | Cash and cash equivalents at beginning of period | 914,653 | 651,619 | | Cash and cash equivalents at end of period | 1,147,389 | 817,478 | Summary of Notes to the Financial Statements The notes to the financial statements detail key items, including revenue sources from commissions, rent, and new agricultural product sales, the RMB 1.027 billion fair value of the investment in Dili Fresh, total interest-bearing borrowings of RMB 1.618 billion, and significant related party transactions - Revenue primarily derived from commission income (RMB 485 million) and rental income (RMB 215 million), both falling outside the scope of IFRS 15[116] - As of June 30, 2021, the fair value of the investment in Dili Fresh and related derivative financial instruments totaled RMB 1.027 billion, with valuations estimated using Level 3 inputs such as market approach and binomial option pricing models[136][169][171] - Significant related party transactions include a loan to Dili Fresh with an annual interest rate of 6%, with an outstanding balance of RMB 870 million at period-end, and a bank loan guarantee of RMB 185 million provided for Dili Fresh[176]