Financial Performance - In the first half of 2021, the Group recorded revenue of RMB85.6 million, a significant increase from RMB31.2 million in the first half of 2020[17] - The gross profit for the same period was RMB5.4 million, with a gross profit margin decreasing to 6.3% from 14.4% in the first half of 2020[17] - The net loss after taxation increased to approximately RMB158.0 million, compared to RMB18.0 million in the first half of 2020[17] - Revenue from marketing and consulting services rose significantly by 209.5% to RMB49.6 million, up from RMB16.0 million in the first half of 2020[33] - Revenue from sales of agricultural products was approximately RMB28.0 million, a substantial increase from RMB10.5 million in the first half of 2020, with a gross profit margin of 7.6%[33][30] - The Group recorded a net loss of RMB158.0 million for the six months ended 30 June 2021, primarily due to impairment provisions on intangible assets, property, plant, and equipment totaling RMB157.2 million, RMB8.8 million, and RMB1.6 million, respectively[49] - The Group's total revenue increased by 174.4% to RMB85.6 million for the six months ended June 30, 2021, compared to RMB31.2 million for the same period in 2020[33] - The Group recorded a gross profit of RMB5.4 million for the six months ended June 30, 2021, compared to RMB4.5 million for the same period in 2020, but the gross profit margin decreased to 6.3% from 14.4%[34] - The loss attributable to owners of the Company for the period was RMB152,317,000, significantly higher than the loss of RMB19,125,000 in the prior year, indicating a year-over-year increase of 696.1%[193] - Basic and diluted loss per share attributable to owners of the Company was RMB22 for the six months ended June 30, 2021, compared to RMB0.1722 for the same period in 2020[189] Market and Economic Conditions - The domestic advertising market grew by 20.7% month-on-month in June 2021, with notable increases in expenses for television and elevator advertisements[12] - The total box office of the Mainland China movie market reached RMB27.57 billion, recovering 88% compared to the first half of 2019[13] - China's GDP for the first half of 2021 reached RMB53,216.7 billion, representing a year-on-year increase of 12.7%[9] - The first quarter of 2021 saw an 18.3% year-on-year GDP growth, while the second quarter recorded a 7.9% increase[9] - The overall economic recovery in China is expected to improve consumer contributions to economic growth in the second half of the year, with a continuous upgrade in consumer spending structure[94] - Management expects additional proactive economic and monetary policies from the Chinese government to stimulate economic cycles following disruptions caused by COVID-19[99] Expenses and Financial Management - Selling and marketing expenses increased by 150% to RMB5.5 million, up from RMB2.2 million in the first half of 2020, primarily due to increased expenses related to agricultural product sales[40] - General and administrative expenses rose by 51.3% to RMB24.2 million, compared to RMB16.0 million for the same period in 2020, mainly due to lower expenses in the first half of 2020 related to COVID-19[41] - Net finance costs increased by 12.8% to RMB9.7 million, compared to RMB8.6 million for the same period in 2020, primarily due to higher interest expenses on short-term borrowings[42] - Other income decreased significantly from RMB2.4 million to RMB54,000, primarily due to a reduction in government grants[35] Cash Flow and Financing Activities - Net cash used in operating activities amounted to RMB7.5 million for the six months ended June 30, 2021, primarily driven by the net loss for the period[55] - Net cash generated from investing activities was RMB4.7 million, resulting from a return of deposit for township development of RMB6.2 million, offset by purchases of property, plant, and equipment of RMB1.5 million[56] - Net cash used in financing activities amounted to RMB2.2 million, primarily due to the repayment of bank borrowings of RMB7.1 million, partially offset by net cash proceeds from bank borrowings of RMB5.9 million[57] - The Company reported a repayment of borrowings totaling RMB7,145,000 in the first half of 2021, compared to RMB2,619,000 in the previous year, indicating an increase of 172.5%[199] - The Company received RMB5,900,000 from borrowings during the first half of 2021, consistent with the same amount received in 2020[199] Assets and Liabilities - Total assets as of June 30, 2021, were RMB249,337,000, down from RMB433,245,000 as of December 31, 2020, a decrease of 42.5%[181] - Total liabilities as of June 30, 2021, were RMB341,318,000, compared to RMB371,513,000 as of December 31, 2020, a reduction of 8.1%[184] - Cash and cash equivalents decreased to RMB7,768,000 as of June 30, 2021, from RMB12,889,000 at the end of 2020, a decline of 39.5%[181] - Non-current assets decreased to RMB187,000,000 as of June 30, 2021, from RMB365,302,000 as of December 31, 2020, a decline of 48.8%[179] - Accumulated deficits increased to RMB350,308,000 as of June 30, 2021, from RMB193,721,000 at the end of 2020, indicating a worsening financial position[181] Strategic Initiatives and Future Plans - The Group has entered into a framework agreement with the Yongtai County government to develop the "Yongtai Kungfu Distinctive Town" project, which includes a 60-Chinese mu eco-friendly greenhouse farm[29] - The Group aims to develop integrated projects themed around film or media, focusing on industry positioning, cultural heritage, and eco-agriculture to create synergies with existing businesses[96] - The Group plans to restructure its publishing and advertising businesses by consolidating with cultural and film media businesses in China to broaden long-term income sources[96] - The Group will actively seek suitable industry partners and investment projects to capture business opportunities that align with its existing operations[96] Shareholder and Corporate Governance - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2021, consistent with the previous year[101] - The Company has not conducted any equity fund raising activities during the reporting period[122] - As of June 30, 2021, Mr. Chen Zhi holds 1,083,265,340 shares, representing approximately 119.16% of the Company's issued shares[130] - The interests of substantial shareholders include Shi Jianxiang with 46,712,500 shares (5.14%) and Forever Joy Investments Limited with 82,307,493 shares (9.05%)[134] - The Remuneration Committee evaluates and recommends remuneration packages based on individual and Company performance[117] - The Nomination Committee is responsible for recommending appointments and succession planning for Directors[118] Internet Operations and Regulatory Compliance - The Internet Opco has a registered capital of RMB 1 million and is engaged in value-added telecommunication business, news websites, online publication services, and printing of publications[143] - The company cannot directly acquire equity interest in Internet Opco due to foreign investment restrictions, necessitating the use of structured contracts[139] - The Internet Structured Contracts were established to ensure economic benefits flow to the group and to maintain control over the Internet Opco Group's operations[149] - The company plans to exercise its exclusive purchase right under the Exclusive Purchase Option Agreement to acquire the entire equity interest in Internet Opco when permitted by PRC laws[168]
十方控股(01831) - 2021 - 中期财报