Business Operations - As of September 30, 2021, the group operates the largest network of Japanese-style pachinko parlors with a total of 438 locations[19]. - The core business of the company is managing the largest chain of Japanese-style pachinko parlors in Japan, which generates strong cash flow[18]. - The company aims to leverage the strong cash flow from its pachinko business to drive stable growth in its newly established aircraft leasing business, Dynam Aviation[24]. - Dynam Aviation focuses on operating leases for narrow-body aircraft, targeting a market with good growth potential[25]. - The company offers approximately 1,000 different types of prizes in its parlors, continuously introducing new products and popular items to enhance customer service[22]. - The company has a diversified business structure, directly controlling eight subsidiaries, including major operators in the pachinko industry[14]. - The company aims to standardize game hall types and open new locations in densely populated areas to control initial operating costs and benefit from economies of scale[33][37]. - The strategy includes acquiring other Japanese-style pachinko hall operators to expand the network, leveraging the company's public status for share exchange acquisitions[41]. - The company has established 16 distribution centers across Japan to manage logistics and share gaming machines efficiently[43]. Financial Performance - Total revenue for the six months ended September 30, 2021, was ¥50,897 million (HK$3,540 million), an increase of 10.0% compared to ¥45,992 million (HK$3,369 million) for the same period in 2020[27]. - Operating profit for the six months ended September 30, 2021, was ¥6,714 million (HK$467 million), significantly up from ¥2,781 million (HK$203 million) in the previous year, representing a growth of 141.5%[27]. - Net profit for the period was ¥3,416 million (HK$238 million), compared to ¥689 million (HK$49 million) in the same period last year, marking a substantial increase of 394.1%[27]. - The company reported EBITDA of ¥11,187 million (HK$778 million), up from ¥7,854 million (HK$575 million) in the previous year, reflecting a growth of 42.5%[27]. - Total betting for the six months ended September 30, 2021, was ¥255,403 million, an increase of 16.3% from ¥219,663 million in the same period of 2020[51]. - Total payout for the same period was ¥205,264 million, up 17.7% from ¥174,408 million in 2020[62]. - The company's total revenue for the six months ended September 30, 2021, was ¥50,897 million, representing a 10.7% increase from ¥45,992 million in the previous year[55]. - The operating profit for the same period was ¥6,714 million, a significant increase of 241.4% compared to the previous year's ¥2,784 million[55]. - The net profit for the six months ended September 30, 2021, was ¥3,416 million, which is 495.8% higher than the ¥577 million reported in the same period of 2020[55]. Asset Management - Non-current assets as of September 30, 2021, totaled ¥224,751 million (HK$15,629 million), an increase from ¥209,283 million (HK$14,697 million) as of March 31, 2021[28]. - Current assets as of September 30, 2021, totaled 62,120 million yen (approximately 4,320 million HKD), while current liabilities were 50,813 million yen (approximately 3,534 million HKD), resulting in a net current asset value of 11,307 million yen (approximately 786 million HKD)[94]. - The total assets as of September 30, 2021, amounted to ¥286,871 million, a decrease from ¥301,073 million as of March 31, 2021[149]. - The total liabilities as of September 30, 2021, were ¥155,548 million, down from ¥169,101 million as of March 31, 2021[185]. - The company’s total equity as of September 30, 2021, was ¥131,323 million, slightly down from ¥131,972 million as of March 31, 2021[149]. Cash Flow and Investments - The operating cash flow for the six months ended September 30, 2021, was 10,519 million yen (approximately 732 million HKD), a decrease from 13,363 million yen (approximately 979 million HKD) in the same period of the previous year[88]. - The net cash used in investing activities for the six months ended September 30, 2021, was 23,115 million yen (approximately 1,607 million HKD), primarily due to the acquisition of properties, plants, and equipment[90]. - The net cash used in financing activities for the same period was 10,865 million yen (approximately 755 million HKD), with significant cash outflows from bank loan repayments of 6,770 million yen (approximately 470 million HKD) and share buybacks of 2,241 million yen (approximately 156 million HKD)[92]. - The company incurred capital expenditures of ¥23,672 million for property, plant, and equipment, a substantial increase from ¥1,311 million in the previous year[157]. - The company paid dividends amounting to ¥1,505 million during the reporting period, compared to ¥2,298 million in the same period of the previous year[157]. Risk Management - The group faces various market risks, including foreign currency risk, credit risk, and liquidity risk, with a focus on minimizing potential adverse impacts on financial performance[110]. - The group has no foreign currency hedging policy in place and will monitor foreign currency risks closely, considering hedging when necessary[111]. - Credit risk is managed by ensuring sales are made to customers with appropriate credit records, and the management regularly reviews the recoverability of trade receivables[115]. - The group maintains sufficient cash reserves and liquid securities to meet both short-term and long-term liquidity needs[116]. - The group has implemented policies to monitor and manage its financial risks effectively, ensuring compliance with loan covenants and maintaining good relationships with banks[116]. Corporate Governance - The company complied with all applicable provisions of the corporate governance code, except for the deviation regarding the roles of the Chairman and CEO being held by the same individual[128]. - The company has adopted a standard code and rules to prevent insider trading for its directors and employees[130]. - The company’s audit committee reviewed the unaudited interim consolidated financial statements during the reporting period[131]. - The company’s interim report was reviewed by external auditors PricewaterhouseCoopers Aarata LLC[131]. - The company’s annual general meeting was held on June 24, 2021, with the notice sent out on June 2, 2021, which was less than the required 20 business days[129]. Shareholder Information - As of September 30, 2021, the total issued shares amounted to 731,505,896, with major shareholders holding significant stakes[124]. - Major shareholders include SAC with a 37.407% stake, Rich-O with 13.098%, and Eurasia Foundation with 10.936%[125]. - The company declared an interim dividend of 2.40 JPY per share, amounting to approximately 1,756 million JPY (around 122 million HKD) based on 731,505,896 shares issued[133]. - A total of 21,195,400 shares were repurchased during the reporting period, with a total cost of 157,862,578 HKD[135]. Accounting Policies - The company has not adopted new accounting standards that may impact its financial performance, which are still under evaluation[168]. - The impact of COVID-19 on the financial results for the six months ended September 30, 2021, has not significantly changed[172]. - The company continues to assess the implications of new and revised international financial reporting standards on its financial statements[168]. - The useful life of Japanese pachinko machines and slot machines is now set at 2 years[164]. - The company recorded additional property, plant, and equipment of ¥25,332 million due to a new accounting policy for Japanese pachinko and slot machines[199].
DYNAM JAPAN(06889) - 2022 - 中期财报