中国万桐园(06966) - 2020 - 年度财报

Corporate Information This section provides core corporate and management information, including board composition, key appointments, and significant executive changes in March 2021 Corporate Information This section outlines the company's core corporate and management information, including board composition, key appointments, and significant executive changes in March 2021 - The company's Board of Directors comprises one non-executive director, three executive directors, and three independent non-executive directors, with established Audit, Nomination, and Remuneration Committees[4] - Subsequent to the reporting period, the company underwent several personnel changes on March 29, 2021, including Mr. Huang Guangming's resignation as Executive Director, the appointment of Ms. Wang Wei and Mr. Huang Peikun as Executive Directors, and Ms. Li Minghui succeeding Mr. Deng Junwen as Authorized Representative and Company Secretary[4] Financial Summary This section presents a five-year summary of core financial performance, balance sheet, and key ratios, highlighting 2020's revenue and profit decline alongside improved financial stability Five-Year Financial Data Summary This section provides a five-year summary of core financial performance, balance sheet, and key ratios, highlighting 2020's revenue and profit decline alongside improved financial stability Five-Year Performance Overview (As of December 31) | Metric | 2020 (RMB'000) | 2019 (RMB'000) | 2018 (RMB'000) | 2017 (RMB'000) | 2016 (RMB'000) | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 38,891 | 63,377 | 43,385 | 38,617 | 31,179 | | Profit Before Tax | 25,215 | 33,316 | 35,300 | 13,895 | 20,716 | | Profit for the Year Attributable to Owners of the Company | 17,541 | 23,551 | 28,247 | 7,123 | 16,193 | Five-Year Assets and Liabilities Overview (As of December 31) | Metric | 2020 (RMB'000) | 2019 (RMB'000) | 2018 (RMB'000) | 2017 (RMB'000) | 2016 (RMB'000) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | 253,376 | 235,344 | 220,963 | 176,060 | 135,808 | | Total Liabilities | 83,354 | 82,863 | 92,033 | 87,633 | 80,660 | | Total Equity Attributable to Owners of the Company | 170,022 | 152,481 | 128,930 | 88,427 | 55,148 | Five-Year Key Financial Ratios and Indicators | Metric | 2020 | 2019 | 2018 | 2017 | 2016 | | :--- | :--- | :--- | :--- | :--- | :--- | | Current Ratio | 12.1 | 9.3 | 5.2 | 2.4 | 1.7 | | Gearing Ratio (%) | 32.9 | 35.2 | 41.7 | 49.8 | 59.4 | | Return on Total Assets (%) | 6.9 | 10.0 | 12.8 | 4.1 | 11.9 | | Net Profit Margin (%) | 45.1 | 37.2 | 65.1 | 18.5 | 51.9 | | Earnings Per Share (RMB) | 0.018 | 0.024 | 0.028 | 0.009 | 0.022 | | Net Asset Value Per Share (RMB) | 0.170 | 0.152 | 0.129 | 0.108 | 0.074 | Chairman's Statement Chairwoman Zhao Ying reviews 2020's stable operations despite the pandemic, highlighting innovative services and a key cemetery project win, while outlining future M&A-driven expansion in the Jing-Jin-Ji region and Asia Chairman's Address Chairwoman Zhao Ying reviews 2020's stable operations despite the pandemic, highlighting innovative services and a key cemetery project win, while outlining future M&A-driven expansion in the Jing-Jin-Ji region and Asia 2020 Operating Performance | Metric | Amount | | :--- | :--- | | Revenue | RMB 38.9 million | | Profit Attributable to Shareholders | RMB 17.5 million | - To address the pandemic, the company focused on optimizing and upgrading 'Cloud Memorial Services', introducing online and proxy memorial services, achieving innovative service model enhancements[30][33] - In June 2020, the company successfully won the bid for the Beijing New Airport (Langfang Area) Resettlement Zone Cemetery project, establishing a joint venture in July to advance its construction and operation, further solidifying its market position in Langfang and the Jing-Jin-Ji region[31][33] - Future strategy will focus on M&A opportunities in the Jing-Jin-Ji region and Asia, increasing asset allocation in the core funeral and interment business to drive more stable profit growth[36][38] Management Discussion and Analysis This section reviews the Group's 2020 core business in Langfang, dominated by funeral and interment services, highlights competitive advantages, and outlines strategic plans for market consolidation and expansion Business Review This section reviews the Group's 2020 core business in Langfang, dominated by funeral and interment services (89.4% of revenue), highlighting competitive advantages and optimism despite pandemic challenges - The company's core business is funeral and interment services (including sales of burial plots and columbarium niches), accounting for 89.4% of total revenue in 2020, with cemetery maintenance services contributing 10.6%[41][43][84] - The company's core competitive advantages include: - Strategic Location: Deep roots in Langfang, familiarity with the local market, and geographical advantage within the Jing-Jin-Ji metropolitan area - Comprehensive Services: Offering diverse, customizable funeral and interment services to meet varied customer needs, including innovative 'Cloud Memorial Services' - Brand Reputation: Operating under the 'Wantongyuan' brand, emphasizing professionalism and social responsibility - Management Team: Possessing an experienced and stable management team[44][49][51][55] Outlook and Strategy The Group plans to consolidate and expand its market position through four key strategies: developing a joint venture cemetery, strengthening the Langfang market, expanding to one-stop funeral services, and exploring the Jing-Jin-Ji region's potential - The company will prioritize the development of its joint venture cemetery project with Langfang Xinhangcheng Real Estate Development Co., Ltd., to consolidate and expand its market position in Langfang and the Jing-Jin-Ji region[58][62] - The company plans to consolidate the Langfang market by upgrading cemetery environments, introducing diverse pricing products, utilizing online platforms for promotion, and undertaking government-related relocation and ash storage services for urban development[65][67][69] - The Group will expand from single funeral and interment services to integrated one-stop funeral and interment services, actively communicating with the government to broaden its service scope[71][74][76] - Leveraging its strategic location in Langfang, the company will increase marketing investment and channel partnerships in the Jing-Jin-Ji metropolitan area, particularly the Beijing market, to unlock greater market potential[77][80] Financial Review FY2020 saw a 38.6% revenue decline to RMB 38.9 million due to a high 2019 base, yet gross margin improved to 84.6%, administrative expenses fell 49.0%, and net profit margin increased to 45.1%, reflecting a robust financial position with a 32.9% debt-to-asset ratio 2020 vs 2019 Revenue Composition (RMB'000) | Revenue Source | 2020 Revenue | % of Total Revenue | 2019 Revenue | % of Total Revenue | | :--- | :--- | :--- | :--- | :--- | | Sale of Burial Plots | 29,595 | 76.1% | 30,228 | 47.7% | | Sale of Columbarium Niches | 1,682 | 4.3% | 24,886 | 39.3% | | Other Funeral-Related Services | 3,484 | 9.0% | 4,472 | 7.0% | | Subtotal: Funeral and Interment Services | 34,761 | 89.4% | 59,586 | 94.0% | | Provision of Cemetery Maintenance Services | 4,130 | 10.6% | 3,791 | 6.0% | | Total | 38,891 | 100.0% | 63,377 | 100.0% | - Total revenue decreased by 38.6% year-on-year, primarily due to a 93.2% significant reduction in columbarium niche sales in 2020, as a single client made a concentrated purchase of RMB 24.9 million worth of columbarium niches in 2019[86][87] 2020 vs 2019 Gross Profit and Gross Profit Margin | Business Segment | 2020 Gross Profit (RMB'000) | 2020 Gross Profit Margin | 2019 Gross Profit (RMB'000) | 2019 Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | Funeral and Interment Services | 29,133 | 83.8% | 47,436 | 79.6% | | Cemetery Maintenance | 3,760 | 91.0% | 3,178 | 83.8% | | Total | 32,893 | 84.6% | 50,614 | 79.9% | - Administrative expenses significantly decreased by 49.0% year-on-year, from RMB 16.7 million to RMB 8.5 million, primarily due to approximately RMB 10 million in one-off professional fees related to the GEM to Main Board transfer in 2019[105] - Profit for the year decreased by 25.5% year-on-year to RMB 17.5 million, but net profit margin increased from 37.2% to 45.1%[105] - As of the end of 2020, the Group's debt-to-asset ratio was 32.9% (2019: 35.2%), indicating a robust liquidity position[117][122] Corporate Governance Report This report details the company's 2020 corporate governance framework, confirming compliance with Listing Rules, outlining board structure, committee functions, risk management, and shareholder rights, reflecting a commitment to high standards Corporate Governance Practices This report details the company's 2020 corporate governance framework, confirming compliance with Listing Rules, outlining board structure, committee functions, risk management, and shareholder rights, reflecting a commitment to high standards - The company has complied with all code provisions of the Corporate Governance Code throughout the year 2020[138][144] - The Board of Directors comprises seven directors, including one non-executive director, three executive directors, and three independent non-executive directors, meeting Listing Rules requirements[140][145] 2020 Board Meeting Attendance | Name | Position | Board Meetings | Audit Committee | Remuneration Committee | Nomination Committee | General Meetings | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Zhao Ying | Non-executive Director and Chairwoman | 4/4 | — | 1/1 | 1/1 | 1/1 | | Li Xingying | Executive Director | 3/4 | — | — | — | 1/1 | | Huang Guangming | Executive Director | 3/4 | — | — | — | 1/1 | | Zhang Yingkun | Independent Non-executive Director | 4/4 | 3/3 | 1/1 | 1/1 | 1/1 | | Wang Yongquan | Independent Non-executive Director | 4/4 | 3/3 | 1/1 | — | 1/1 | | Cai Hanqiang | Independent Non-executive Director | 4/4 | 3/3 | — | 1/1 | 1/1 | - The Board has established three committees: Audit, Remuneration, and Nomination, all chaired by or with a majority of independent non-executive directors to ensure their independence and effectiveness[184][185][187][194] - The Board has conducted an annual review of the Group's risk management and internal control systems, deeming them effective and adequate[216][220] Biographies of Directors and Senior Management This section details the biographies of the company's directors and senior management, including their experience and education, noting significant board changes post-reporting period with new executive director appointments Biographies of Directors and Senior Management This section details the biographies of the company's directors and senior management, including their experience and education, noting significant board changes post-reporting period with new executive director appointments - Ms. Zhao Ying, 50, is the Non-executive Director and Chairwoman, also serving as a Non-executive Director of China Hongtai Industry Town Development Co., Ltd. (6166.HK)[237][241] - Ms. Li Xingying, 42, is an Executive Director and Executive Vice President, with 17 years of experience in the funeral and interment services industry[238][242] - Post-reporting period personnel changes: Mr. Huang Guangming resigned as Executive Director on March 29, 2021. On the same day, Ms. Wang Wei (28, daughter of Chairwoman Zhao Ying) and Mr. Huang Peikun (58) were appointed as Executive Directors[246][247][252] - The three Independent Non-executive Directors, Mr. Zhang Yingkun, Dr. Wang Yongquan, and Mr. Cai Hanqiang, all possess extensive experience in finance, accounting, or law, and hold positions in multiple listed companies[253][258][269] Directors' Report This report reviews 2020 operations, confirming funeral services as the core business, with no dividend recommended, identifies key risks, details global offering proceeds utilization, explains project delays, and notes post-period director changes Directors' Annual Report This report reviews 2020 operations, confirming funeral services as the core business, with no dividend recommended, identifies key risks, details global offering proceeds utilization, explains project delays, and notes post-period director changes - The Board does not recommend the payment of a final dividend for the year ended December 31, 2020[294][302] - Key risks faced by the company include: business concentration in a single cemetery in Langfang, making it susceptible to regional economic and policy impacts; and the funeral and interment industry being strictly regulated, with licensing and land supply limiting expansion[297][306] - As of the end of 2020, purchases from the top five suppliers accounted for 85.8% of total purchases, with the largest supplier accounting for 53.5%, indicating high supplier concentration. Conversely, no single customer contributed more than 10% of revenue[324][332] Summary of Use of Proceeds from Global Offering (RMB) | Intended Use | Amount Planned in Prospectus (million) | Actual Utilization as of End of 2020 (million) | Estimated Utilization in 2021 (million) | | :--- | :--- | :--- | :--- | | Consolidate Langfang Market Position | 14.6 | 13.3 | 1.3 | | Expand Funeral Services Business | 9.1 | 1.5 | 7.6 | | Jing-Jin-Ji Market Expansion and M&A | 12.7 | 1.8 | 10.9 | - Subsequent to the reporting period, the company announced several personnel changes on March 29, 2021, including the resignation and appointment of Executive Directors, Chief Financial Officer, and Company Secretary[453][454][457] Independent Auditor's Report Deloitte Touche Tohmatsu issued an unmodified audit opinion on the 2020 consolidated financial statements, affirming their true and fair presentation in accordance with IFRS, with 'Revenue recognition for burial plot sales' identified as a key audit matter Audit Opinion Deloitte Touche Tohmatsu issued an unmodified audit opinion on the 2020 consolidated financial statements, affirming their true and fair presentation in accordance with IFRS, with 'Revenue recognition for burial plot sales' identified as a key audit matter - Auditor Deloitte Touche Tohmatsu issued an unmodified opinion (Clean Opinion) on the company's 2020 consolidated financial statements[460][463] - The auditors concluded that the financial statements truly and fairly reflect the Group's financial position and performance in accordance with International Financial Reporting Standards (IFRSs)[460][463] - A Key Audit Matter highlighted in the report is 'Revenue recognition for burial plot sales,' primarily due to its significant amounts and transaction volumes. Auditors performed procedures including understanding internal controls, examining sales agreements, and verifying transaction amounts and collections[467][469][470] Consolidated Financial Statements This section presents the company's consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, cash flows, and detailed notes, providing a comprehensive overview of its financial performance and health Consolidated Statement of Profit or Loss and Other Comprehensive Income This statement shows FY2020 operating results, with total revenue at RMB 38.891 million, a gross profit margin of 84.6%, and profit for the year at RMB 17.541 million, despite a significant revenue decline 2020 vs 2019 Key Profit or Loss Statement Data (RMB'000) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Revenue | 38,891 | 63,377 | | Gross Profit | 32,893 | 50,614 | | Profit Before Tax | 25,215 | 33,316 | | Profit and Total Comprehensive Income for the Year | 17,541 | 23,551 | | Basic Earnings Per Share (RMB cents) | 1.8 | 2.4 | Consolidated Statement of Financial Position This statement shows the company's financial position as of December 31, 2020, with total assets at RMB 253.376 million, total liabilities at RMB 83.354 million, and total equity at RMB 170.022 million, reflecting a solid financial foundation 2020 vs 2019 Key Statement of Financial Position Data (RMB'000) | Metric | 2020年12月31日 | 2019年12月31日 | | :--- | :--- | :--- | | Non-current Assets | 35,876 | 26,053 | | Current Assets | 217,500 | 209,291 | | Total Assets | 253,376 | 235,344 | | Current Liabilities | 17,911 | 22,560 | | Non-current Liabilities | 65,443 | 60,303 | | Total Liabilities | 83,354 | 82,863 | | Net Assets/Total Equity | 170,022 | 152,481 | Consolidated Statement of Changes in Equity This statement details changes in shareholders' equity for 2020, showing an increase from RMB 152.481 million at the beginning of the year to RMB 170.022 million by year-end, driven by profit and statutory surplus reserve appropriation 2020 Changes in Equity (RMB'000) | Item | Amount | | :--- | :--- | | Total Equity as at January 1, 2020 | 152,481 | | Profit and Total Comprehensive Income for the Year | 17,541 | | Transfer to Statutory Surplus Reserve | — | | Total Equity as at December 31, 2020 | 170,022 | Consolidated Statement of Cash Flows This statement details 2020 cash flows, showing a net cash inflow of RMB 8.985 million from operations, a net outflow of RMB 51.161 million from investing, and year-end cash and cash equivalents of RMB 144 million 2020 vs 2019 Key Cash Flow Statement Data (RMB'000) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | Net Cash Generated From Operating Activities | 8,985 | (5,485) | | Net Cash (Used In)/Generated From Investing Activities | (51,161) | 2,321 | | Net Cash Used In Financing Activities | (615) | — | | Net Decrease In Cash And Cash Equivalents | (42,791) | (3,164) | | Cash And Cash Equivalents At Beginning Of Year | 189,280 | 191,412 | | Cash And Cash Equivalents At End Of Year | 143,830 | 189,280 | Notes to the Consolidated Financial Statements This section provides detailed notes to the financial statements, explaining accounting policies, revenue recognition, asset/liability breakdowns, and related party transactions, highlighting long-term contract liabilities from maintenance prepayments and disclosing director compensation Note 5: Revenue Recognition Over Time (2020, RMB'000) | Revenue Recognition Timing | Sale of Burial Plots, Columbarium Niches and Related Services | Provision of Cemetery Maintenance Services | | :--- | :--- | :--- | | At a point in time | 31,277 | — | | Over time | 3,484 | 4,130 | - Note 22: Contract liabilities are significant, reaching RMB 71.227 million as of end-2020, with RMB 63.194 million classified as non-current liabilities, primarily from customer prepayments for long-term cemetery maintenance fees[827][828] Note 9: Total Remuneration of Directors and Chief Executive (RMB'000) | Item | 2020 | 2019 | | :--- | :--- | :--- | | Fees | 267 | 264 | | Salaries and other benefits | 596 | 705 | | Discretionary performance-related bonuses | 291 | 421 | | Contributions to retirement benefit schemes | 4 | 51 | | Total | 1,158 | 1,441 |