Financial Performance - The company reported revenue of HKD 356.4 million for the first half of 2021, a decrease of 18.0% compared to HKD 434.6 million in the same period of 2020[7]. - Gross profit fell to HKD 13.6 million, down 71.7% from HKD 48.0 million year-on-year[7]. - The company achieved a profit before tax of HKD 7.2 million, a significant turnaround from a loss of HKD 151.2 million in the previous year[7]. - Basic earnings per share improved to HKD 0.5, compared to a loss of HKD 9.9 per share in the same period last year[7]. - The company's consolidated revenue decreased by approximately 18.0% to about HKD 356.4 million, down from HKD 434.6 million in the previous year[34]. - The average selling price of sweetener products did not keep pace with the rising corn costs, leading to a gross profit reduction of approximately 71.7% to about HKD 13.6 million, with a gross margin decline of about 7.2 percentage points to approximately 3.8%[34]. - The company achieved a one-time debt restructuring gain of approximately HKD 128.3 million, resulting in a net profit of about HKD 7.2 million, compared to a net loss of HKD 151.2 million in the previous year[36]. - The total comprehensive income for the period was HKD 3,655,000, compared to a loss of HKD 145,616,000 in the previous year, showing a turnaround in overall financial performance[101]. - The group recorded a profit of approximately HKD 7,200,000 for the six months ended June 30, 2021, compared to a loss of approximately HKD 151,200,000 for the same period in 2020[114]. - The group’s total comprehensive loss for the period was HKD 421,203,000, compared to a total comprehensive loss of HKD 424,858,000 in the previous year[105]. Market Conditions - The domestic sugar price in China showed a moderate increase during the first half of 2021, driven by rising corn prices and sugar prices[20]. - The GDP of China grew by 12.7% year-on-year in the first half of 2021, contributing to a steady recovery in sugar demand across various industries[20]. - The company anticipates a challenging market environment in the second half of 2021 due to ongoing COVID-19 disruptions and complex international trade conditions[23]. - Domestic corn prices are expected to stabilize in the second half of 2021, following a period of high prices, with the introduction of early corn and increased imports[23]. - The management anticipates ongoing challenges in the operating environment due to high corn prices and the impact of the COVID-19 pandemic on global economic recovery[33]. Operational Adjustments - The company focused resources on the efficient operation of its downstream sweetener production facilities in Shanghai, maintaining stable cash inflow[20]. - The company plans to explore partial resumption of operations based on market conditions and funding availability, focusing on production lines with lower capital requirements[24]. - The company continues to integrate resources towards the more efficient Shanghai production facility, suspending operations at the Jinzhou and Xinglongshan plants[31]. - The company has suspended operations of certain subsidiaries due to the ongoing impact of the COVID-19 pandemic and rising corn prices, maintaining a strategy to focus resources on more efficient operations in Shanghai[89]. - The relocation of production facilities to the Xinglongshan plant has been postponed due to challenging economic conditions and the ongoing pandemic, with plans to reassess the feasibility of the relocation as market conditions evolve[90]. Debt and Financial Management - The restructuring of the company's debt has made significant progress, marking an important step towards resolving long-standing debt issues[19]. - The company has outstanding loans totaling approximately RMB 189,900,000 under the loan agreement with China Construction Bank, which have not been repaid as of the report date[93]. - An additional outstanding loan of RMB 180,000,000 was reported under the agreement with Agricultural Bank of China, which has also become immediately due and payable[95]. - The company is working on a debt restructuring plan to improve its financial condition, particularly concerning the loans owed to Agricultural Bank of China[96]. - The group is actively negotiating debt restructuring plans with banks and creditors, with expectations to complete these plans by the end of 2021[119]. Employee and Governance - As of June 30, 2021, the group employed approximately 950 full-time employees in Hong Kong and China, maintaining the same number as of December 31, 2020[65]. - The company has adopted a remuneration policy for directors based on character, qualifications, and market benchmarks[81]. - The company has established a corporate governance committee to determine and review corporate governance policies and practices[82]. - The company emphasizes competitive compensation and career development opportunities to retain talent[65]. Shareholder Information - Major shareholders include Da Cheng Corn Bio-Tech Co., Ltd. holding 977,778,000 shares, representing 64.01% of the issued share capital[70]. - Modern Agriculture Industry Investment Co., Ltd. holds 978,278,000 shares, representing 64.04% of the issued share capital[70]. - The company does not recommend the distribution of any interim dividends for the period, consistent with the previous period ending June 30, 2020[67]. Production and Sales - The sales revenue from corn syrup increased by approximately 69.5% to about HKD 297.4 million, driven by a volume increase of about 30.9% to approximately 72,000 tons[39]. - Revenue from external customers in China was HKD 349,065,000 for the first half of 2021, down from HKD 415,720,000 in the same period of 2020[130]. - The corn refining products segment reported a loss of HKD 22,727,000 for the first half of 2021, compared to a loss of HKD 29,830,000 in the same period of 2020[130]. - The corn sweetener segment experienced a loss of HKD 53,029,000 in the first half of 2021, compared to a loss of HKD 42,370,000 in the same period of 2020[130].
大成糖业(03889) - 2021 - 中期财报