创业集团控股(02221) - 2020 - 中期财报

Corporate Information This section provides essential company information, including key management, registered office, and principal place of business Corporate Information This chapter provides essential company information, including executive and non-executive directors, committee members, company secretary, registered office, Hong Kong principal place of business, independent auditor, legal counsel, and principal bankers - Key management includes Mr. Zhu Yongjun, Chairman of the Board, and Ms. Qin Shulan, Chief Executive Officer. Audit, Nomination, and Remuneration Committees are chaired by Dr. Tang Jiale, Mr. Luo Junchao, and Mr. Cai Weishi, respectively[5] - The company's registered office is in the Cayman Islands, with its Hong Kong headquarters and principal place of business located at Goldin Financial Global Centre, 19 Hung Yip Road, Kowloon Bay[8] Management Discussion and Analysis This section analyzes the Group's financial performance, business operations, and future outlook, highlighting key drivers and challenges Financial Highlights For the six months ended September 30, 2019, group revenue slightly decreased by 1.65% to HKD 502.6 million, but gross profit significantly increased by 29.61% to HKD 117.1 million; loss attributable to owners of the company narrowed substantially by 68.84% to HKD 5.476 million, with basic loss per share also decreasing to HKD 0.96 cents Financial Performance Summary (HKD thousands) | Indicator | H1 2019 (HKD thousands) | H1 2018 (HKD thousands) | Percentage Change | | :--- | :--- | :--- | :--- | | Consolidated Revenue | 502,552 | 510,986 | (1.65)% | | Gross Profit | 117,138 | 90,375 | 29.61% | | Loss Attributable to Owners of the Company | (5,476) | (17,576) | (68.84)% | | Basic Loss Per Share (HK cents) | (0.96) | (3.15) | (69.52)% | Business Review The Group's core businesses, including construction, environmental protection, and industrial fluid systems, experienced varied performance, complemented by a strategic investment disposal - The Group primarily engages in three core businesses: (i) construction business in Hong Kong (foundation, civil engineering, building construction); (ii) environmental protection business (kitchen waste treatment, industrial wastewater treatment, etc.); and (iii) industrial fluid systems services[19][20] I Construction Business Construction business revenue remained stable at HKD 348.7 million, with gross margin significantly improving to 10.99% due to high-margin projects and effective cost control - Construction business revenue was approximately HKD 348.7 million, largely consistent with HKD 342.1 million in the same period of 2018[21][22] - The overall gross margin for the construction business significantly increased from approximately 6.35% in H1 2018 to 10.99% in the current period, primarily due to an increase in high-margin projects and no unexpected cost overruns[27] - As of September 30, 2019, the Group had 11 projects under construction with a total contract value of approximately HKD 775.1 million[58] II Environmental Protection Business Environmental protection business revenue declined by 27.91% to HKD 43.9 million as kitchen waste projects shifted to operation, while EPC profit commitments are under negotiation - Environmental protection business revenue decreased by approximately 27.91% to HKD 43.9 million, primarily due to reduced construction revenue related to kitchen waste treatment[63][66] - Kitchen waste treatment business revenue was HKD 36.8 million (HKD 54.4 million in the prior period), with the decrease mainly due to Taiyuan and Hefei projects entering the operational phase[64][67] - The profit commitment for Clear EPC Group (Suzhou Commitment) is expected to be unachievable, and the company anticipates receiving approximately RMB 87.975 million in compensation, currently under negotiation with the counterparty[94] III Industrial Fluid Systems Services The newly acquired Vimab Group contributed SEK 134.9 million (HKD 110 million) in revenue, though issues regarding employee share subscription payments from the acquisition remain unresolved - Vimab Group, acquired in May 2018, contributed approximately SEK 134.9 million (about HKD 110 million) in revenue during this period, higher than SEK 85.4 million in the prior period (May 31 to September 30, 2018)[115][118] - Regarding the misappropriation of HKD 17.066 million for 12 employee share subscriptions in the Vimab acquisition, the relevant deed of repayment expired in June 2019, and parties are still negotiating a solution[108][109][115] IV Strategic Investments The Group completed the disposal of its Indonesian hydropower project, generating an unaudited gain of approximately HKD 32.6 million from impairment reversal and interest income - The Group completed the Stand Ascent Disposal, divesting its interests in Indonesian hydropower projects (DSE Company and SPM Company)[119][121] - This disposal resulted in an unaudited gain of approximately HKD 32.6 million for the Group, including a reversal of prior impairment of approximately HKD 15.9 million and recognition of interest income of approximately HKD 16.8 million[129] Outlook Management expresses optimism for the Hong Kong construction market and sees significant opportunities in China's waste treatment sector, with plans to expand industrial fluid systems services into the Chinese market - Despite political uncertainties, the company maintains a positive outlook on the Hong Kong construction market given government's large-scale infrastructure projects and land supply policies[132] - Waste sorting regulations implemented in Shanghai and other major Chinese cities are expected to bring significant opportunities for China's kitchen waste treatment industry[133] - The Group is discussing with Chinese partners to introduce its expertise in industrial fluid systems businesses, such as valve services, into the Chinese market[134] Financial Review Group revenue slightly decreased to HKD 502.6 million, but net loss significantly narrowed to HKD 5.5 million, primarily driven by strategic investment disposal gains offsetting increased administrative and finance costs - Net other income and gains increased from HKD 22.2 million to HKD 47.3 million, primarily from a HKD 15.9 million impairment reversal and HKD 16.8 million interest income from the Stand Ascent Disposal completion[143] - Administrative expenses increased by 22.73% year-on-year to HKD 140.7 million, mainly due to amortization and depreciation from the Vimab acquisition (approx. HKD 9 million) and share option expenses (approx. HKD 3.5 million)[143] - Finance costs increased by 46.10% year-on-year to HKD 22.5 million, primarily due to an increase in the Group's overall borrowing scale[143] Liquidity and Financial Resources Total assets stood at HKD 1.67 billion, with bank balances at HKD 57.7 million, while increased interest-bearing loans raised the gearing ratio to 116.99%, and negotiations continue for a USD 6 million convertible bond repayment Financial Position Summary (HKD millions) | Indicator | September 30, 2019 | March 31, 2019 | | :--- | :--- | :--- | | Total Assets | Approx. 1,669.7 million HKD | Approx. 1,817.0 million HKD | | Bank Balances and Cash | Approx. 57.7 million HKD | Approx. 38.7 million HKD | | Total Interest-Bearing Loans | Approx. 448.9 million HKD | Approx. 417.9 million HKD | | Current Ratio | Approx. 1.04 | Approx. 1.13 | | Gearing Ratio | Approx. 116.99% | Approx. 99.88% | - The increase in gearing ratio was primarily due to an increase in the Group's overall borrowings during the period[151][154] - Approximately USD 6 million in principal and interest remains outstanding under the company's issued convertible bonds (now classified as other payables), with the company negotiating a settlement arrangement with creditor Sanlinshui[149][150][153] Other Disclosures This section details human resources, significant investments, contingent liabilities, and governance, including the decision not to declare an interim dividend, share option scheme, and compliance with corporate governance codes Human Resources, Investments, and Liabilities The Group had 613 employees with HKD 98.1 million in staff costs, holds a 9.10% significant investment in Josab Water Solutions AB, and has HKD 47 million in contingent liabilities for performance bonds - As of September 30, 2019, the Group had 613 employees, with total staff costs for the period approximately HKD 98.1 million[168] - The Group holds a significant investment of approximately 9.10% of the issued share capital of Josab Water Solutions AB, a Swedish listed company[170] - The Group's contingent liabilities include approximately HKD 47 million in unfulfilled performance bonds provided for construction contracts[171] Interim Dividend The Board of Directors does not recommend the payment of any interim dividend for the period - The Directors do not recommend the payment of an interim dividend for the six months ended September 30, 2019[180] Shareholder and Governance Information This section details the share option scheme with 69.48 million unexercised options, discloses directors' and major shareholders' holdings including Chairman Zhu Yongjun's 14.36% interest, and confirms compliance with governance codes - As of September 30, 2019, a total of 69,484,000 share options remained unexercised under the company's share option scheme[198] - Mr. Zhu Yongjun, Chairman of the Board, collectively holds 14.36% interest in the company. Other major shareholders include Changwei Group holding 13.35% and Simple Gain International Limited holding 6.98%[207][208][226] - The company has adopted the standard code for securities transactions by directors and confirms all directors complied with it during the period. Additionally, the company believes it has complied with the provisions of the Corporate Governance Code[239][249][254] Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, including the statement of profit or loss, financial position, cash flows, and their accompanying notes Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended September 30, 2019, the company recorded revenue of HKD 502.6 million and gross profit of HKD 117.1 million; total loss for the period was HKD 11.893 million, with loss attributable to owners of the company at HKD 5.476 million; basic and diluted loss per share were both HKD 0.96 cents Statement of Profit or Loss and Other Comprehensive Income (HKD thousands) | Item (HKD thousands) | H1 2019 | H1 2018 | | :--- | :--- | :--- | | Revenue | 502,552 | 510,986 | | Gross Profit | 117,138 | 90,375 | | Net Other Income and Gains | 47,348 | 22,203 | | Administrative Expenses | (140,665) | (114,370) | | Finance Costs | (22,491) | (15,448) | | Loss Before Tax | (17,967) | (23,242) | | Loss for the Period | (11,893) | (19,890) | | Loss Attributable to Owners of the Company | (5,476) | (17,576) | | Loss Per Share (HK cents) | (0.96) | (3.15) | Unaudited Condensed Consolidated Statement of Financial Position As of September 30, 2019, the Group's total assets were HKD 1.67 billion, and total liabilities were HKD 1.231 billion; net assets were HKD 438.3 million, a decrease from HKD 482.4 million as of March 31, 2019; non-current assets constituted a significant portion at HKD 1.104 billion Statement of Financial Position (HKD thousands) | Item (HKD thousands) | September 30, 2019 | March 31, 2019 | | :--- | :--- | :--- | | Non-current Assets | 1,104,407 | 1,189,844 | | Current Assets | 565,313 | 627,184 | | Total Assets | 1,669,720 | 1,817,028 | | Current Liabilities | 544,640 | 554,758 | | Non-current Liabilities | 686,758 | 779,861 | | Total Liabilities | 1,231,398 | 1,334,619 | | Net Assets | 438,322 | 482,409 | | Equity Attributable to Owners of the Company | 383,712 | 418,399 | | Non-controlling Interests | 54,610 | 64,010 | | Total Equity | 438,322 | 482,409 | Unaudited Condensed Consolidated Statement of Cash Flows For the six months ended September 30, 2019, the Group generated net cash of HKD 80.456 million from operating activities, compared to a net outflow in the prior period; investing and financing activities recorded net cash outflows of HKD 3.681 million and HKD 55.697 million, respectively; cash and cash equivalents at period-end were HKD 57.67 million Statement of Cash Flows (HKD thousands) | Item (HKD thousands) | H1 2019 | H1 2018 | | :--- | :--- | :--- | | Net Cash Generated From Operating Activities | 80,456 | (43,989) | | Net Cash (Used In)/Generated From Investing Activities | (3,681) | 82,216 | | Net Cash Used In Financing Activities | (55,697) | (23,953) | | Net Increase in Cash and Cash Equivalents | 21,078 | 14,274 | | Cash and Cash Equivalents at Beginning of Period | 38,745 | 61,726 | | Cash and Cash Equivalents at End of Period | 57,670 | 74,452 | Notes to the Unaudited Condensed Consolidated Financial Statements The notes detail key accounting policies, including HKFRS 16 adoption, and provide breakdowns of revenue, segment information, and significant items like disposal gains and reclassified convertible bonds 3. Principal Accounting Policies This period's financial statements adopted several new and revised Hong Kong Financial Reporting Standards, with HKFRS 16 'Leases' having the most significant impact; the Group applied the modified retrospective approach from April 1, 2019, recognizing right-of-use assets and lease liabilities, but not restating comparative period data; this directly impacted the statement of financial position structure - The Group first adopted HKFRS 16 'Leases' from April 1, 2019, applying the modified retrospective approach without restating 2018 comparative information[280][287] - Adoption of HKFRS 16 resulted in the recognition of HKD 14.387 million in right-of-use assets (included in property, plant and equipment) and HKD 21.675 million in lease liabilities as of April 1, 2019, with an adjustment of HKD 1.095 million to opening equity[302][304][308] 4. Revenue and Segment Information Group total revenue was HKD 502.6 million, with construction engineering contributing HKD 348.6 million, industrial fluid systems services HKD 110.0 million, and environmental protection HKD 43.9 million; segment results show construction engineering and industrial fluid systems were profitable, while environmental business incurred a loss Revenue and Segment Results (HKD thousands) | Segment | Revenue (HKD thousands) | Segment Results (HKD thousands) | | :--- | :--- | :--- | | Construction Engineering | 348,649 | 13,720 | | Environmental Protection | 43,921 | (28,153) | | Industrial Fluid Systems Services | 109,982 | 525 | | Total | 502,552 | (13,908) | Key Financial Statement Items The notes detail key financial items, including a significant HKD 32.65 million gain from the Stand Ascent disposal, an increase in trade receivables over 90 days, and the reclassification of a USD 6 million convertible bond to other payables due to share suspension - The 'Other' category under 'Other income and gains' includes a significant gain of approximately HKD 32.648 million from the Stand Ascent Disposal[356][357] - Due to the suspension of the company's shares for over 30 business days, the originally issued convertible bonds were reclassified as 'other payables', with outstanding principal, interest, and related fees of approximately USD 6 million (approx. HKD 49.1 million) at period-end[395][396]