Financial Performance - For the fiscal year ending June 30, 2021, Huazhang Technology reported revenue of approximately RMB 496.9 million, a 35.0% increase compared to RMB 368.2 million in the previous year[13]. - Gross profit for the same period was approximately RMB 105.6 million, reflecting a 42.4% increase from RMB 74.2 million in the prior year[13]. - The company achieved a net profit of approximately RMB 16.5 million, a significant improvement from a net loss of RMB 77.5 million in the previous fiscal year[13]. - The gross margin improved to 21.3%, up from 20.2% in the previous year[9]. - Revenue increased by approximately 35.0% from RMB 368.2 million for the year ended June 30, 2020, to approximately RMB 496.9 million for the year ended June 30, 2021, driven by project progress and increased customer demand[43]. - Industrial product sales revenue surged approximately 185.6% from RMB 85.4 million to RMB 244.0 million, attributed to the recovery of the paper industry and increased demand for flow box equipment[44]. - Project contracting service revenue rose by about 8.0% from RMB 169.0 million to RMB 182.5 million, mainly due to the completion of installation work for the Vietnam Mia project[45]. - The group reported income tax expenses of approximately RMB 6.6 million for the year ended June 30, 2021, compared to a tax credit of RMB 5.7 million for the previous year, reflecting an increase in operating profit[57]. - The effective tax rate rose from approximately 6.9% for the year ended June 30, 2020, to approximately 28.5% for the year ended June 30, 2021, primarily due to a decrease in unrecognized deferred tax assets[60]. - The group achieved a net profit of approximately RMB 16.5 million for the year ended June 30, 2021, reversing a net loss of RMB 77.2 million for the same period in 2020, resulting in a profit margin of approximately 3.3%[61]. - Shareholders' profit for the year ended June 30, 2021, was approximately RMB 18.0 million, compared to a loss of RMB 77.5 million for the previous year[62]. Assets and Liabilities - Non-current assets decreased to RMB 359.8 million from RMB 464.3 million year-on-year[9]. - Current assets increased to RMB 1,024.8 million, compared to RMB 908.4 million in the previous year[9]. - The company's capital debt ratio improved to 7.2%, down from 15.8% in the previous year[9]. - As of June 30, 2021, the group's borrowings amounted to approximately RMB 530 million, a decrease from RMB 1,072 million as of June 30, 2020, reflecting a reduction in interest-bearing borrowings[76]. - The group's asset-liability ratio decreased to approximately 7.2% as of June 30, 2021, down from 15.8% as of June 30, 2020, primarily due to the reduction in interest-bearing borrowings[77]. - Accounts receivable decreased from approximately RMB 563.7 million as of June 30, 2020, to approximately RMB 477.6 million as of June 30, 2021, attributed to the recovery in the paper industry[80]. Operational Highlights - The company successfully completed five domestic turnkey projects in the paper machine sector during the fiscal year[13]. - The company successfully delivered five major projects in the year, including the commissioning of a special paper machine for Shandong Taiyang Paper and the installation of a boxboard machine in Vietnam, showcasing its technical capabilities[36]. - The company has been proactive in adjusting its raw materials and production structures to adapt to market changes and improve operational efficiency[33]. - The company has a strong team of engineering professionals, which is considered a competitive advantage in the paper industry[36]. - The company has established relationships with five major suppliers, with partnerships ranging from one to eight years, ensuring no reliance on a single supplier for key components[153]. Research and Development - The company invested RMB 27.4 million in R&D for the year ended June 30, 2021, focusing on innovations in paper-making equipment and technology[52]. - The company registered a total of 127 patents, including 26 invention patents and 72 utility model patents, with 11 new patents added during the year[42]. Environmental Initiatives - The company is focusing on environmental protection initiatives, aligning with China's government policies to peak carbon emissions before 2030 and achieve carbon neutrality by 2060[15]. - The company aims to enhance energy efficiency and reduce energy consumption as part of its climate change mitigation efforts[109]. - The company has implemented ISO14001 environmental management system certification to prevent and manage pollution[107]. - The company reported a reduction in waste generation to approximately 0.96 tons in the reporting year, down 61.0% from 2.46 tons in 2020[110]. - The company has established internal procedures to ensure compliance with applicable environmental laws and regulations[110]. Human Resources - The company employed a total of 301 employees as of June 30, 2021, with a focus on talent management as a key human resources strategy[125]. - The average training hours per employee decreased from 12 hours in 2020 to 8 hours in 2021[144]. - The company has established a competitive compensation and benefits system to attract and retain talent, including retirement and medical insurance[135]. - There were no reported work-related injuries during the year ended June 30, 2021[141]. Market and Industry Context - The paper and paperboard production in China reached 11.26 million tons in 2020, an increase of 4.60% year-on-year, while consumption rose to 11.83 million tons, up 10.49% year-on-year[33]. - The total number of paper and paperboard production enterprises in China is approximately 2,500, reflecting a competitive landscape in the industry[33]. - The demand for the company's products and services is heavily reliant on the capital expenditure levels of Chinese paper mills, which may fluctuate[173]. - The procurement prices of raw materials are influenced by market supply and demand conditions, which can directly impact the company's operating performance[174]. Corporate Governance and Compliance - The company has not encountered any violations of anti-corruption laws and regulations as of June 30, 2021[161]. - The company has complied with applicable laws and regulations without any significant violations impacting its business operations[178]. - The company emphasizes transparency and communication with stakeholders, including shareholders and regulatory bodies[104]. Shareholder Relations - The company has adopted a dividend policy aimed at allowing shareholders to share in profits while retaining sufficient reserves for future development[184]. - The company did not declare any interim dividends for the six months ended December 31, 2020, and no final dividends for the year ended June 30, 2021[181][182]. - The company repurchased a total of 962,000 shares at a total cost of approximately HKD 1.7 million, representing about 0.11% of the total issued shares as of June 30, 2021[197]. - The repurchase of shares is believed to be in the best interest of the company and its shareholders, potentially enhancing earnings per share[197].
华章科技(01673) - 2021 - 年度财报