Corporate Governance - The company confirmed that it has complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2019[21]. - The company has adopted a code of conduct regarding securities transactions by directors, confirming compliance during the relevant period[22]. - The Company established the Audit Committee on July 21, 2017, in compliance with GEM Listing Rules[29]. - The Audit Committee consists of three independent non-executive Directors, with Mr. Lee Kwok Tung Louis as the chairman[30]. - The Audit Committee reviewed the accounting principles and practices adopted by the Group for the six months ended June 30, 2019, ensuring compliance with applicable accounting principles[31]. Share Option Scheme - A total of 21,000,000 share options were granted under the Share Option Scheme at an exercise price of HK$1.16 per share, representing 4.038% of the issued Shares of the Company[37]. - The Share Option Scheme allows the Company to grant options to selected Eligible Persons as incentives for their contributions to the Group's growth[36]. - The maximum number of Shares issued under the Share Option Scheme to any Eligible Person in any 12-month period shall not exceed 1% of the number of Shares in issue unless approved by Shareholders[42]. - The Share Option Scheme will remain in force for ten years from October 17, 2017, unless terminated earlier by Shareholders[50]. - The exercise price per Share for the Share Options must be at least the higher of the closing price on the date of grant or the average closing price for the five business days preceding the grant[49]. - Share Options granted prior to termination of the Share Option Scheme will continue to be valid and exercisable[51]. - The Company may terminate the Share Option Scheme by resolution in general meeting, but provisions will remain in force for the exercise of any Share Options granted prior to termination[51]. Shareholding Structure - As of June 30, 2019, Top Access Management Limited holds 324,324,325 shares, representing approximately 62.37% of the total shareholding[60]. - The total issued share capital as of June 30, 2019, is 520,000,000 shares[66]. - Strong Eagle Holdings Limited is deemed to be interested in 324,324,325 shares, which is 62.37% of the total shareholding[66]. - Mr. Liu Hongwei, a controlling shareholder, has an interest in 327,797,914 shares, accounting for approximately 63.04% of the total shareholding[62]. - AMATA Limited holds 40,000,000 shares, representing 7.69% of the total shareholding[62]. - Oasis Investments II Master Fund Ltd. has a security interest in 324,324,325 shares, which is 62.37% of the total shareholding[66]. - The percentage of shareholding is calculated based on the total issued shares of 520,000,000 as of June 30, 2019[66]. - No other persons or corporations, apart from the Directors and Chief Executives, had interests or short positions in the shares that required disclosure under the SFO as of June 30, 2019[67]. - Strong Eagle Holdings Limited owns 203,802,750 shares of Singyes Solar, representing approximately 24.43% of its issued share capital[66]. - The interests of the Directors and Chief Executives in shares and debentures have been notified to the Company and the Stock Exchange as required by the SFO[68]. - As of June 30, 2019, Mr. Liu Hongwei holds 327,797,914 shares, representing approximately 63.04% of the company's total shares issued, which amounts to 520,000,000 shares[71]. - Mr. Liu Hongwei is deemed to have an interest in 203,802,750 shares of Singyes Solar, which is 24.43% of the total registered share capital[74]. - The company has 1,379,120 share options directly beneficially owned by Mr. Liu Hongwei, with an exercise price of HK$3.56 per share[79]. - The same number of share options (1,379,120) is also directly beneficially owned by Mr. Sun Jinli, with the same exercise price and periods[79]. - No other directors or chief executives had any interests or short positions in the shares or debentures of the company as of June 30, 2019[77]. - The company has not been a party to any arrangement enabling directors or chief executives to subscribe for securities or acquire benefits from shares or debentures since its listing on GEM on July 21, 2017[80]. - Strong Eagle, controlled by Mr. Liu Hongwei, holds 203,802,750 shares of Singyes Solar, which is 53% owned by him[75]. - The percentage of shareholding is calculated based on the total shares issued as of June 30, 2019, which is 520,000,000 shares[71]. - The company is subject to the Securities and Futures Ordinance (SFO) regarding the disclosure of interests and short positions[77]. - The company’s interim report for 2019 provides insights into the shareholding structure and interests of its directors[72]. Revenue and Sales Performance - Revenue from ITO film sales was RMB27,007,000 for the six months ended June 30, 2019, representing a significant increase of RMB16,729,000 or 162.8% from RMB10,278,000 for the same period in 2018[93]. - Revenue from Smart Light-adjusting Film sales was RMB24,808,000 for the six months ended June 30, 2019, an increase of RMB2,027,000 or 8.9% from RMB22,781,000 for the same period in 2018[94]. - Revenue from Smart Light-adjusting Glass sales was RMB6,386,000 for the six months ended June 30, 2019, a decrease of RMB723,000 or 10.2% from RMB7,109,000 for the same period in 2018[98]. - The Group acquired Huabei Limited in December 2018 to expand its market share of ITO film in Southern China, contributing to significant growth in sales volume[93]. - The Group is one of the few integrated manufacturers in the PRC producing and selling ITO film and related downstream products[92]. - Smart Light-adjusting Film can switch states to control light permeability, primarily serving construction companies and contractors[94]. - The Group's ITO film customers are primarily domestic touch-screen device manufacturers[93]. - The Group's Smart Light-adjusting Glass allows users to control light permeability by adjusting the voltage applied to the Smart Light-adjusting Film[98]. - The continuous expansion of the customer base has driven growth in sales volume for Smart Light-adjusting Film[94]. - The Group's business includes research and development, manufacturing, and sales of ITO film, Smart Light-adjusting Film, Smart Light-adjusting Glass, and Smart Light-adjusting Projection System[92]. - Revenue from Smart Light-adjusting Projection System was RMB 140,000 for the six months ended 30 June 2019, a significant decrease of RMB 18,952,000 or 99.3% from RMB 19,092,000 for the same period in 2018[99]. - Revenue from other products increased to RMB 5,629,000 for the six months ended 30 June 2019, representing a significant increase of RMB 4,362,000 or 344.3% from RMB 1,267,000 for the same period in 2018[100]. - Sales revenue from Smart Light-adjusting Glass was RMB 6,386,000 for the six months ended June 30, 2019, a decrease of RMB 723,000 or 10.2% from RMB 7,109,000 for the same period in 2018[101]. Financial Performance - The Group recorded a profit attributable to owners of the Company of RMB 6,259,000 for the six months ended June 30, 2019, a decrease of RMB 1,390,000 or 18.2% from RMB 7,649,000 for the same period in 2018[104]. - Revenue for the six months ended June 30, 2019, was RMB63,970,000, representing a slight increase of RMB3,443,000 or 5.7% from RMB60,527,000 for the same period in 2018[121][124]. - Cost of sales increased to RMB40,321,000 for the six months ended June 30, 2019, an increase of RMB5,814,000 or 16.8% from RMB34,507,000 for the same period in 2018[122][125]. - Gross profit decreased by RMB2,371,000 or 9.1%, from RMB26,020,000 for the six months ended June 30, 2018, to RMB23,649,000 for the same period in 2019[127][130]. - Gross profit margin decreased from 43.0% for the six months ended June 30, 2018, to 37.0% for the same period in 2019[127][130]. - Selling and distribution expenses were RMB5,074,000 for the six months ended June 30, 2019, a decrease of RMB368,000 or 6.8% from RMB5,442,000 for the same period in 2018[128][131]. - Administrative expenses increased to RMB10,260,000 for the six months ended June 30, 2019, an increase of approximately RMB1,254,000 or 13.9% from RMB9,006,000 for the same period in 2018[129][132]. - Gearing ratio remained stable at 27.4% as of June 30, 2019, compared to 26.1% as of December 31, 2018[138]. - Capital expenditure for the six months ended June 30, 2019, amounted to RMB221,000, primarily for the purchase of production machinery and test equipment[137]. - As of June 30, 2019, the Group did not have any bank borrowings and plans to satisfy liquidity requirements through operating cash flows and potential bank borrowings[136]. - The Group had no significant contingent liabilities as of June 30, 2019[140]. - The company's debt-to-equity ratio remained stable at 27.4% as of June 30, 2019, compared to 26.1% on December 31, 2018[143]. - Approximately HK$30.2 million of the net proceeds from the Share Offer had been utilized as of June 30, 2019, with the unused proceeds deposited in licensed banks[161]. - The actual use of proceeds was lower than planned due to delays in automation and installation of production lines[162]. - The company did not make any material acquisitions or disposals during the six months ended June 30, 2019[149]. - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2019[163]. - As of June 30, 2019, the company had a total headcount of 133 full-time employees[164]. Cash Flow and Investments - Cash generated from operations for the six months ended June 30, 2019, was RMB 13,305,000, compared to a cash used in operations of RMB 14,352,000 for the same period in 2018, showing a significant turnaround[180]. - The company reported a net decrease in cash and cash equivalents of RMB 23,905,000 for the six months ended June 30, 2019, compared to a decrease of RMB 23,224,000 in the prior year[181]. - Cash and cash equivalents at the end of the period were RMB 44,386,000, down from RMB 62,813,000 at the end of the same period in 2018[181]. - For the six months ended June 30, 2019, net cash flows used in investing activities amounted to RMB 30,855,000, a significant increase from RMB 3,190,000 in the same period of 2018[181]. - The increase in amounts due to related parties was RMB 2,508,000, compared to RMB 222,000 in the previous year[181]. - Dividends paid during the period totaled RMB 5,380,000, an increase from RMB 3,118,000 in the same period of 2018[181]. Adoption of IFRS Standards - The company adopted IFRS 16 for leases, which requires lessees to account for all leases under a single on-balance sheet model, effective January 1, 2019[193]. - The Group's financial position was not significantly affected by the adoption of new IFRS standards, except for IFRS 16[191]. - The Group adopted IFRS 16 using a modified retrospective approach effective from January 1, 2019, without restating comparative information[196]. - Under IFRS 16, a contract is considered a lease if it grants the right to control the use of an identified asset for a period in exchange for consideration[198]. - The definition of a lease under IFRS 16 applies only to contracts entered into or changed on or after January 1, 2019[199].
水发兴业新材料(08073) - 2019 - 中期财报