永盛新材料(03608) - 2023 - 中期业绩

Financial Highlights Financial Highlights For the six months ended June 30, 2023, the company's continuing operations achieved significant growth in revenue, gross profit, and net profit attributable to shareholders Financial Highlights for the Six Months Ended June 30, 2023 | Metric | 2023 (RMB in millions) | 2022 (RMB in millions) | Change | | :--- | :--- | :--- | :--- | | Revenue from continuing operations | 119.8 | 105.2 | +13.9% | | Gross profit from continuing operations | 43.8 | 34.3 | +27.7% | | Profit for the period from continuing operations | 16.3 | 11.8 | +38.1% | | Profit for the period | 16.3 | 10.4 | +56.7% | | Profit for the period attributable to owners of the Company | 18.4 | 11.2 | +64.3% | | Basic earnings per share for the period | RMB 2.6 cents | RMB 1.5 cents | +73.3% | - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2023[2][118] Interim Condensed Consolidated Financial Information Consolidated Statement of Profit or Loss and Other Comprehensive Income During the reporting period, revenue from continuing operations grew by 13.9% to RMB 119.8 million, driving a 38.1% increase in profit from these operations Condensed Consolidated Statement of Profit or Loss (Continuing Operations) | Item | 2023 (RMB in thousands) | 2022 (RMB in thousands) | | :--- | :--- | :--- | | Revenue | 119,807 | 105,188 | | Cost of sales | (75,998) | (70,868) | | Gross Profit | 43,809 | 34,320 | | Other income and net gains | 6,267 | 9,813 | | Administrative expenses | (20,997) | (19,964) | | Finance costs | (6,302) | (7,578) | | Profit before tax | 22,689 | 15,638 | | Income tax expense | (6,388) | (3,815) | | Profit for the period | 16,301 | 11,823 | - A loss from discontinued operations of RMB 1.429 million was recorded in the same period of 2022, with no such loss in the current period[25][166] Consolidated Statement of Financial Position As of June 30, 2023, the Group's total assets slightly increased to RMB 1.484 billion, maintaining a stable balance sheet structure Summary of Consolidated Statement of Financial Position | Item | June 30, 2023 (RMB in thousands) | December 31, 2022 (RMB in thousands) | | :--- | :--- | :--- | | Total non-current assets | 1,089,217 | 1,044,622 | | Total current assets | 394,567 | 405,838 | | Total Assets | 1,483,784 | 1,450,460 | | Total current liabilities | 218,060 | 180,056 | | Total non-current liabilities | 141,487 | 165,862 | | Total Liabilities | 359,547 | 345,918 | | Total Equity | 1,124,237 | 1,104,542 | Notes to the Financial Statements This section details the basis of preparation, accounting policy changes, segment performance, and breakdowns of key income and expense items - The interim financial information is prepared in accordance with IAS 34 "Interim Financial Reporting" and adopts several new and revised IFRSs for the first time[12][152] Segment Results for H1 2023 (RMB in thousands) | Operating Segment | Segment Revenue | Segment Results | | :--- | :--- | :--- | | Processing | 100,533 | 18,711 | | Environmental water services project operation | – | (4,601) | | Property investment | 19,274 | 11,623 | | Total | 119,807 | 25,733 | - During the reporting period, the Group's total bank borrowings increased to approximately RMB 240.1 million from RMB 216.1 million at the end of 2022[77] Management Discussion and Analysis Business Review The Group maintained normal and healthy development despite challenges from a global economic downturn and weak external demand - The Group is principally engaged in three business segments: (1) dyeing and processing of differentiated polyester fabrics; (2) property investment; and (3) environmental water services project operation[203] - Despite the global economic downturn and weak external demand, the Group has strived to maintain normal and healthy development[63] Dyeing and processing of differentiated polyester fabrics This segment showed recovery during the period, with revenue growing 8.9% year-on-year to approximately RMB 100.5 million, driven by lower raw material costs Key Metrics for Polyester Fabric Business | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Segment Revenue | Approx. RMB 100.5 million | Approx. RMB 92.3 million | | YoY Growth | Approx. 8.9% | - | | Gross Margin | Approx. 29.9% | Approx. 24.8% | - Despite weak demand in the US and European markets, a potential turnaround in export orders is expected in the second half of the year as US market destocking concludes[67][89] Property Investment The property investment business provided a stable source of income for the Group, with high occupancy rates at its key properties Major Investment Property Income (During the review period) | Property Name | Rental Income (RMB) | Management Service Income (RMB) | | :--- | :--- | :--- | | Yongsheng Building | Approx. 16.6 million | Approx. 1.8 million | | Office units in Zhejiang Private Enterprise Development Building | Approx. 0.9 million | - | Environmental Water Services Project Operation The Group is actively advancing its environmental water services projects in line with national green development policies - Domestic project: The Group is actively communicating with the government to obtain relevant industrial licenses for the industrial land project in Ma'anshan[70] - Overseas business: The water supply project in Malaysia, developed through a joint venture, has commenced construction[70] - The joint venture in Deqing, Zhejiang (new construction materials) is operational but currently underperforming, and the Group is striving for a turnaround[92] Outlook The Group plans to counter market uncertainties by expanding into the domestic home textile market and enhancing production capacity - Core business strategy: The Group will stabilize its core business by improving dyeing and finishing technologies while broadening its product lines[72] - Market expansion: The Group will actively explore the domestic market, aiming to penetrate the home textile market in addition to the apparel market[70] - Diversified development: The Group will focus on the environmental water services market to achieve business diversification and maximize shareholder value[72] Financial Review The Group's financial performance was strong, with significant growth in revenue, gross profit, and net profit attributable to shareholders, alongside a healthy liquidity position Key Financial Ratios | Ratio | June 30, 2023 | June 30, 2022 | | :--- | :--- | :--- | | Current Ratio | 1.81 | 3.13 | | Debt-to-Equity Ratio | 0.21 | 0.19 | - The growth in revenue and gross profit was mainly due to: (i) increased high-margin rental income from the improved occupancy rate of Yongsheng Building; and (ii) increased revenue and decreased raw material costs in the differentiated polyester fabric segment[73][87] - Other income and net gains decreased by 36.1% year-on-year, primarily due to reduced bank interest income and an increased fair value loss on financial derivatives[99] - As of June 30, 2023, the Group had 279 employees, with staff costs amounting to approximately RMB 16.1 million[104] Corporate Governance The company is committed to high standards of corporate governance and has complied with the Corporate Governance Code of the Hong Kong Stock Exchange - The company has complied with the Corporate Governance Code as set out in Appendix 14 of the Listing Rules throughout the review period[134] - The Audit Committee, comprising three independent non-executive directors, has reviewed the unaudited condensed interim results for the period[135]