Financial Performance - For the six months ended June 30, 2021, the company reported revenue of HKD 130.644 million, an increase of 15.0% compared to HKD 113.631 million in the same period of 2020[10]. - Gross profit for the same period was HKD 29.402 million, representing a significant increase of 268.5% from HKD 7.978 million in 2020[10]. - The profit attributable to owners of the company was HKD 1.785 million, a turnaround from a loss of HKD 24.165 million in the previous year, marking an increase of 107.4%[10]. - The company achieved a gross profit margin of 22.5%, up from 7.0% in the prior year[10]. - The company reported a net profit of HKD 8,515,000 for the period, compared to a net loss of HKD 34,218,000 in the previous year[134]. - Basic earnings per share for the period was HKD 0.18, a significant improvement from a loss of HKD 2.28 per share in the prior year[134]. - Total comprehensive income for the period was HKD 17,113,000, compared to a loss of HKD 48,203,000 in the same period last year[134]. - The group reported a profit before tax of HKD 7,697,000 for the six months ended June 30, 2021, compared to a loss of HKD 31,501,000 in the same period of 2020[154]. Revenue Breakdown - Revenue from asphalt pavement maintenance services increased by 20.7% to approximately HKD 103.3 million, while the revenue from asphalt pavement maintenance equipment slightly decreased by 2.5% to HKD 27.4 million[18][19]. - The company's revenue from "in-situ hot recycling" projects increased by 26.0% to HKD 50.478 million, while non-"in-situ hot recycling" projects rose by 16.0% to HKD 52.798 million, leading to a total revenue increase of 20.7% to HKD 103.276 million[43]. - Total revenue for the six months was HKD 130,644,000, with maintenance services contributing HKD 103,276,000 and equipment sales contributing HKD 27,368,000[165]. - Revenue from maintenance services was HKD 103,453,000, while equipment sales contributed HKD 27,673,000, indicating a strong performance in both segments[177]. Research and Development - The company registered a total of 193 patents as of June 30, 2021, up from 189 at the end of 2020, including 20 invention patents[21]. - The company has developed a new structural polymer material for underground structure repairs, which reduces the need for extensive excavation[26]. - A warm-mix additive has been researched to lower the operating temperature of the in-situ thermal regeneration process, reducing fuel consumption[26]. - The company continues to enhance its R&D capabilities to maintain its competitive advantage in the asphalt pavement maintenance industry[27]. Market Strategy and Expansion - The company aims to enhance market penetration, especially in cities with limited use of "in-situ hot recycling" technology[33]. - The company plans to explore overseas opportunities and strategic partnerships, particularly in countries along the "Belt and Road" initiative and the four Asian Tigers[32]. - The company is focused on developing new products for the road maintenance industry and investing in testing and planning departments to create new revenue sources[33]. - The company plans to continue expanding its market presence in mainland China while exploring opportunities for new product development[159]. Operational Challenges - The company has implemented emergency measures to mitigate the impact of the recent COVID-19 outbreak in Nanjing, which has introduced more uncertainty into its operating environment[29]. - The company is committed to reducing road maintenance costs for local governments while significantly decreasing carbon emissions in the road maintenance industry[28]. Financial Position - Cash and cash equivalents, including pledged bank deposits, amounted to approximately HKD 273,500,000 as of June 30, 2021, down from HKD 293,100,000 at the end of 2020[69]. - The company’s bank borrowings stood at HKD 90,000,000 as of June 30, 2021, compared to HKD 100,000,000 at the end of 2020[71]. - The expected credit loss reversal for financial assets increased to HKD 27,800,000 from HKD 13,500,000 in the previous period, indicating improved recovery of trade receivables[55]. - The company continues to maintain a stable liquidity position and is committed to prudent financial policies to support business expansion needs[70]. Employee and Shareholder Information - The company employed 482 full-time employees as of June 30, 2021, a decrease from 499 employees as of December 31, 2020[89]. - The company has a significant shareholder, Ying Kui Technology, holding 529,688,260 shares, representing approximately 49.09% of the total issued share capital[101]. - The company has adopted a share option scheme to incentivize eligible participants, but no options were granted, exercised, or canceled during the reporting period[108]. - A share award scheme was adopted on May 7, 2014, allowing the company to grant shares to selected employees, with a total of 22,000,000 shares awarded during the period ending June 30, 2021[110]. Asset Management - The fair value of the company's investment properties is approximately HKD 1.291 billion, down from HKD 2.628 billion as of December 31, 2020[80]. - The company plans to develop part of its investment properties into a global technology R&D center, with construction expected to commence in Q4 2021 and completion anticipated by October 2023[80]. - The company's total reserves increased to HKD 671,498 thousand from HKD 667,695 thousand, a growth of 0.4%[138]. Taxation and Compliance - The income tax expense for the six months ended June 30, 2021, included current tax of HKD 632,000, down from HKD 1,051,000 in 2020, a decrease of 40.0%[196]. - The group did not have taxable profits for the six months ended June 30, 2021, which affected the implementation of the two-tiered profits tax system introduced in 2018[197]. - The applicable tax rate for high-tech companies recognized in 2020 is 15%, which applies to certain subsidiaries of the group[197].
英达公路再生科技(06888) - 2021 - 中期财报