中国万桐园(06966) - 2021 - 中期财报

Corporate Information This section details the company's fundamental information, including board composition, key advisors, and significant personnel changes during the reporting period Corporate Information This section details the company's fundamental information, including board composition, key advisors, and significant personnel changes during the reporting period - The company underwent several personnel adjustments on March 29, 2021, including resignations and new appointments of executive directors, authorized representatives, and the company secretary[5] Financial Highlights For the six months ended June 30, 2021, the Group's revenue increased year-on-year, but profit attributable to owners of the company decreased, with the Board deciding not to declare an interim dividend Financial Highlights For the six months ended June 30, 2021, the Group's revenue increased year-on-year, but profit attributable to owners of the company decreased, with the Board deciding not to declare an interim dividend Key Financial Indicators for H1 2021 | Indicator | Six Months Ended June 30, 2021 (RMB '000) | Six Months Ended June 30, 2020 (RMB '000) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 20,745 | 19,096 | +8.6% | | Profit Attributable to Owners of the Company | 7,655 | 8,654 | -11.5% | - The Board does not recommend the payment of an interim dividend for the period[9][10] Report on Review of Condensed Consolidated Financial Statements This section presents the auditor's review report on the condensed consolidated financial statements, confirming their compliance with applicable accounting standards Report on Review of Condensed Consolidated Financial Statements Deloitte Touche Tohmatsu reviewed the company's condensed consolidated financial statements for the six months ended June 30, 2021, concluding no matters suggesting non-compliance with IAS 34 in all material respects - Auditor Deloitte issued a standard unqualified review conclusion, affirming the financial statements comply in all material respects with International Accounting Standard 34 (Interim Financial Reporting)[18] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income During the period, revenue increased 8.6% to RMB 20.745 million and gross profit rose to RMB 17.396 million, but profit attributable to owners decreased 11.5% to RMB 7.655 million due to foreign exchange losses and higher finance costs Key Profit or Loss Items (RMB '000) | Item | H1 2021 | H1 2020 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 20,745 | 19,096 | +8.6% | | Gross Profit | 17,396 | 15,919 | +9.3% | | Profit Before Tax | 10,610 | 11,609 | -8.6% | | Profit Attributable to Owners of the Company | 7,655 | 8,654 | -11.5% | | Basic Earnings Per Share (RMB cents) | 0.8 | 0.9 | -11.1% | Condensed Consolidated Statement of Financial Position As of June 30, 2021, total assets increased to RMB 261.033 million, primarily due to higher non-current prepayments, with net assets growing to RMB 177.677 million while total liabilities remained stable Key Financial Position Items (RMB '000) | Item | June 30, 2021 (RMB '000) | December 31, 2020 (RMB '000) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 261,033 | 253,376 | +3.0% | | Non-current Assets | 65,763 | 35,876 | +83.3% | | Current Assets | 195,270 | 217,500 | -10.2% | | Total Liabilities | 83,356 | 83,354 | 0.0% | | Net Assets | 177,677 | 170,022 | +4.5% | Condensed Consolidated Statement of Cash Flows In H1 2021, the company reported a net cash outflow of RMB 21.783 million from operating activities, with investing and financing activities also showing outflows, significantly reducing period-end cash and cash equivalents to RMB 110.469 million Key Cash Flow Items (RMB '000) | Item | H1 2021 (RMB '000) | H1 2020 (RMB '000) | | :--- | :--- | :--- | | Net Cash from Operating Activities | (21,783) | 7,037 | | Net Cash from Investing Activities | (10,810) | 485 | | Net Cash Used in Financing Activities | (316) | (225) | | Net Decrease in Cash and Cash Equivalents | (32,909) | 7,297 | | Cash and Cash Equivalents at End of Period | 110,469 | 197,473 | Notes to the Condensed Consolidated Financial Statements This section outlines the financial statements' basis and policies, noting revenue from cemetery sales and maintenance, a significant increase in non-current prepayments for a new project, and a post-period loan to an associate - The company primarily engages in the sale of burial plots and columbarium niches, other funeral-related services, and cemetery maintenance services, with all revenue derived from China[31][45][46] - Non-current prepayments and other receivables significantly increased from RMB 8 million to RMB 37.256 million, mainly due to a RMB 30 million prepayment for demolition works for a new cemetery project, which was refunded on August 11, 2021[99][100][101] - Subsequent to the reporting period, on July 2, 2021, the company provided a one-year loan of RMB 100 million at an annual interest rate of 12% to China Hongtai, an entity controlled by the controlling shareholder Ms. Zhao Ying[127][129] Management Discussion and Analysis This section provides an overview of the company's operational and financial performance, strategic outlook, and progress against business objectives Business and Financial Review In H1 2021, revenue grew 8.6% to RMB 20.7 million, and gross profit increased 9.3%, but net profit declined 11.5% to RMB 7.7 million due to foreign exchange losses, while the company maintained a 31.9% gearing ratio H1 2021 Performance Review | Indicator | H1 2021 (RMB million) | H1 2020 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Revenue | 20.70 | 19.10 | +8.6% | | Gross Profit | 17.40 | 15.90 | +9.3% | | Gross Margin | 83.9% | 83.4% | +0.5pp | | Net Profit | 7.70 | 8.70 | -11.5% | | Net Profit Margin | 36.9% | 45.3% | -8.4pp | - The primary reason for the decrease in net profit was foreign exchange losses[141] - As of June 30, 2021, the Group's gearing ratio (total liabilities/total assets) was 31.9%, indicating a sound liquidity position[141] Prospects The Group plans to consolidate its Langfang market position and expand into the Beijing-Tianjin-Hebei region by extending funeral services, offering collective ash storage, pursuing strategic alliances, and advancing cemetery joint ventures, despite pandemic-related delays - The company plans to consolidate and expand its business through four key strategies: (1) expanding funeral services; (2) deepening penetration into the Beijing-Tianjin-Hebei market; (3) providing collective ash storage services; and (4) seeking strategic alliances and acquisitions[145] - The cemetery joint venture project is one of the Group's key future development projects, but plans for strategic alliances and acquisitions have been delayed due to the pandemic[154][156] - The company will strengthen its Langfang market position by upgrading 'cloud memorial' online services, diversifying services, and increasing promotional efforts[151] Comparison of Business Objectives with Actual Business Progress This section compares the company's stated business objectives from its prospectus with actual progress, particularly regarding market consolidation, service expansion, and use of proceeds Business Objectives Progress This section compares the company's prospectus business objectives with actual progress as of June 30, 2021, showing good progress in Langfang market consolidation but delays in funeral service expansion and Beijing-Tianjin-Hebei market penetration due to the pandemic, with the cemetery joint venture project in planning - Consolidating Langfang Market Position: New services like flowerbed burials and tree burials have been designed and offered, and the cemetery entrance and some facilities have been upgraded[161] - Expanding Funeral Services: Promotion plans for services like farewell halls were delayed due to pandemic-related gathering restrictions, but relevant personnel have been recruited and trained, and funeral vehicles purchased[169][172] - Deepening Beijing-Tianjin-Hebei Market Penetration and M&A: Collaboration has begun with ten Beijing funeral service providers, but further marketing activities are on hold due to the pandemic; plans to establish a Beijing operating store are not yet complete, and the cemetery joint venture project has commenced planning[174][180][182] Use of Proceeds from the Global Offering The company's net proceeds from its GEM listing were approximately RMB 36.4 million, with RMB 17.5 million unutilized as of June 30, 2021, primarily for 'expanding funeral services' and 'deepening Beijing-Tianjin-Hebei market penetration and M&A', expected to be used in H2 2021 Details of Use of Proceeds (RMB million) | Objective | Intended Use (RMB million) | Utilized as of June 30, 2021 (RMB million) | Unutilized (RMB million) | | :--- | :--- | :--- | :--- | | Consolidating Langfang Market Position | 14.60 | 14.60 | 0 | | Expanding Funeral Services | 9.10 | 2.00 | 7.10 | | Deepening Beijing-Tianjin-Hebei Market Penetration and M&A | 12.70 | 2.30 | 10.40 | | Total | 36.40 | 18.90 | 17.50 | - The unutilized RMB 17.5 million proceeds are held as short-term deposits in licensed banks in Hong Kong[231] Other Information This section provides additional disclosures, including foreign exchange risks, contingent liabilities, director updates, post-reporting period events, and major shareholder information Key Disclosures and Shareholding This section details foreign exchange risks, contingent liabilities, director updates, post-reporting period events, and major shareholder holdings, including a post-period RMB 100 million loan to an associate and the controlling shareholder's 70% stake - On May 7, 2021, the company entered into a loan agreement with associate China Hongtai, providing a principal loan of RMB 100 million at an annual interest rate of 12% on July 2, 2021[238][240][242] - Ms. Zhao Ying, the company's Chairwoman and Non-executive Director, is deemed to have an interest in 700 million shares (representing 70% of the total share capital) indirectly held through The Hope Trust, a discretionary trust established by her[247][248] Corporate Governance The company complied with the Listing Rules' Corporate Governance Code during the period, and its audit committee, composed of three independent non-executive directors, reviewed and approved the interim financial statements - The company has complied with the Corporate Governance Code, and the audit committee has reviewed this interim financial report[276][278]