新利软件(08076) - 2020 Q3 - 季度财报

Company Information and Disclaimer This section covers GEM market characteristics, associated risks, and the directors' responsibility statement for report accuracy GEM Market Characteristics and Risks The GEM market provides a listing platform for SMEs but entails higher investment risks, potential market volatility, and uncertain liquidity - The GEM market is positioned as a listing platform for SMEs, but investment risks are higher[3] - Securities of GEM listed companies may experience greater market volatility and high liquidity is not guaranteed[3] Directors' Responsibility Statement Directors jointly and individually assume full responsibility for the report's content, confirming its accuracy, completeness, and absence of misleading or fraudulent information - The company's directors jointly and individually assume full responsibility for the content contained in this report[3] - Directors confirm that the report's information is accurate, complete, not misleading or fraudulent in all material aspects, and contains no omissions[3] Financial Performance Overview This section provides an overview of the group's financial performance, including the consolidated statement of profit or loss and changes in equity Consolidated Statement of Profit or Loss and Other Comprehensive Income For the nine months ended September 30, 2020, the group's sales revenue significantly decreased by 30.47% year-on-year, gross profit turned to loss, resulting in a net loss of RMB 17,361 thousand Key Data from Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the nine months ended September 30) | Indicator | 2020 (RMB thousands) | 2019 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Sales Revenue | 49,770 | 71,587 | -30.47% | | Cost of Sales and Services | (49,484) | (47,936) | 3.23% | | Gross Profit | 286 | 23,651 | -98.79% | | Profit (Loss) Before Tax | (19,167) | 3,284 | -683.34% | | Profit (Loss) and Total Comprehensive Income (Expense) for the Period | (17,361) | 1,743 | -1096.10% | | Basic Earnings (Loss) Per Share (RMB cents) | (1.32) | 0.15 | -980.00% | Consolidated Statement of Changes in Equity As of September 30, 2020, the group's total equity was RMB 79,591 thousand, a decrease from RMB 96,952 thousand at the beginning of the year, primarily due to a net loss of RMB 17,361 thousand for the period Key Data from Consolidated Statement of Changes in Equity (As of September 30) | Indicator | September 30, 2020 (RMB thousands) | January 1, 2020 (RMB thousands) | September 30, 2019 (RMB thousands) | | :--- | :--- | :--- | :--- | | Share Capital | 12,538 | 12,538 | 12,538 | | Share Premium | 179,132 | 179,132 | 179,132 | | Accumulated Losses | (152,686) | (137,728) | (161,283) | | Total Equity | 79,591 | 96,952 | 73,691 | - According to the Bermuda Companies Act, share premium distribution is subject to the company's solvency and realizable value of assets[5] - Chinese subsidiaries are required to establish two non-distributable statutory reserves: an enterprise development fund and a statutory surplus reserve[6] Notes to the Financial Statements This section details the basis of preparation for the unaudited consolidated financial statements, adherence to IFRS and GEM Listing Rules, and the impact of new accounting standards General Information This section explains the unaudited consolidated financial statements' preparation basis, adherence to IFRS, Hong Kong Companies Ordinance, and GEM Listing Rules, with RMB as the functional currency - Financial statements are prepared in accordance with International Financial Reporting Standards, the Hong Kong Companies Ordinance, and the GEM Listing Rules[8] - The Group's functional currency is RMB, accounting policies are consistent with the prior year, and the adoption of new IFRS had no material impact[9][10] Breakdown of Sales Revenue The group's sales revenue primarily derives from technical support services, followed by software and related hardware product sales, with technical support service revenue declining by 31.12% year-on-year Breakdown of Sales Revenue (For the nine months ended September 30) | Revenue Source | 2020 (RMB thousands) | 2019 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Sales of Software Products | 4,024 | 5,279 | -23.80% | | Sales of Related Hardware Products | 720 | 944 | -23.73% | | Provision of Technical Support Services | 45,026 | 65,364 | -31.12% | | Total Sales Revenue | 49,770 | 71,587 | -30.47% | Other Income For the nine months ended September 30, 2020, the group's total other income increased by 121.93% year-on-year to RMB 1,953 thousand, primarily due to a significant increase in other income items Breakdown of Other Income (For the nine months ended September 30) | Revenue Source | 2020 (RMB thousands) | 2019 (RMB thousands) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Interest Income | 510 | 371 | 37.47% | | Others | 1,443 | 509 | 183.50% | | Total Other Income | 1,953 | 880 | 121.93% | Income Tax Credit (Expense) For the nine months ended September 30, 2020, the group recorded an income tax credit of RMB 1,806 thousand, compared to an income tax expense of RMB 1,541 thousand in the prior period, mainly due to deferred tax turning into a credit Breakdown of Income Tax Credit (Expense) (For the nine months ended September 30) | Indicator | 2020 (RMB thousands) | 2019 (RMB thousands) | Change (RMB thousands) | | :--- | :--- | :--- | :--- | | China Corporate Income Tax - Under-provision for prior years | (72) | – | (72) | | Deferred Tax - Current Period | 1,878 | (1,541) | 3,419 | | Total Income Tax Credit (Expense) | 1,806 | (1,541) | 3,347 | - Hangzhou Xinli Technology Co., Ltd., as a high-tech enterprise, enjoys a preferential China corporate income tax rate of 15%[14] - The Group generated no assessable profits in Hong Kong, thus no Hong Kong profits tax provision was made; no assessable profits were generated in China in 2020 either[16] Earnings (Loss) Per Share For the nine months ended September 30, 2020, the loss attributable to owners of the company was RMB 17,361 thousand, resulting in basic and diluted loss per share of RMB 1.32 cents Earnings (Loss) Per Share Calculation (For the nine months ended September 30) | Indicator | 2020 (RMB thousands/thousand shares) | 2019 (RMB thousands/thousand shares) | | :--- | :--- | :--- | | Profit (Loss) for the Period Attributable to Owners of the Company | (17,361) | 1,743 | | Weighted Average Number of Ordinary Shares (thousand shares) | 1,317,240 | 1,149,143 | | Basic Earnings (Loss) Per Share (RMB cents) | (1.32) | 0.15 | | Diluted Earnings (Loss) Per Share (RMB cents) | (1.32) | 0.15 | - For the nine months in 2020 and 2019, diluted earnings (loss) per share calculation did not assume the exercise of certain share options, as their exercise price was higher than the average market price[20] Dividend Policy The Board does not recommend paying a dividend for the nine months ended September 30, 2020, consistent with the prior period - The Board does not recommend paying a dividend for the nine months ended September 30, 2020[21] Management Discussion and Analysis This section reviews the use of proceeds from the rights issue, financial performance, business operations, and future strategies, highlighting the impact of the global financial crisis and COVID-19 Use of Proceeds from Rights Issue The company completed a rights issue in May 2019, raising approximately HKD 24.42 million net, primarily for general working capital, with HKD 4.10 million remaining as of September 30, 2020 - A rights issue was completed in May 2019, raising net proceeds of approximately HKD 24.42 million (approximately RMB 21.564 million)[23] - The net proceeds are intended for the Group's general working capital[23] Summary of Use of Proceeds from Rights Issue (As of September 30, 2020) | Purpose | Planned Net Proceeds (HKD millions) | Actual Amount Used (HKD millions) | Unused Balance (HKD millions) | Expected Timeline | | :--- | :--- | :--- | :--- | :--- | | General Working Capital | 24.42 | 20.32 | 4.10 | December 31, 2020 | Financial Review and Performance For the nine months ended September 30, 2020, the group's sales revenue decreased by approximately 30%, leading to a net loss of RMB 17,361 thousand, primarily due to declining technical support service revenue and increased staff costs - Sales revenue was approximately RMB 49.77 million, a decrease of approximately 30% year-on-year, mainly due to a 31% decline in technical support service revenue[26] - Cost of sales was approximately RMB 49.484 million, an increase of 3%, and administrative expenses were approximately RMB 11.181 million, an increase of 13%, both primarily due to increased staff costs[26] - Distribution and selling expenses were approximately RMB 9.009 million, a decrease of 14%, mainly due to the implementation of effective cost-saving measures[26] - Finance costs were approximately RMB 1.659 million, a decrease of approximately 16%, mainly due to reduced interest expenses on lease liabilities and decreased borrowings[27] - The Group recorded a net loss of approximately RMB 17.361 million, turning from profit to loss primarily due to a significant decline in business revenue impacted by the COVID-19 pandemic[27] Business Review In Q3 2020, the group's business was severely hampered by the global financial crisis and COVID-19, leading to a 30% sales decline and a loss, prompting strategic adjustments towards online payment services and expanded offline merchant services - Affected by the global financial crisis and COVID-19, banking business was significantly delayed, leading to a 30% year-on-year sales decline in Q3 and a loss of RMB 17.361 million for the first nine months[29] - Under the 'Payment + Service' strategy, payment business R&D shifted towards online, integrating WeChat Pay and China Construction Bank channels, launching cloud-based MIS, and moving payment scenarios from offline to online[29] - Service business expanded into offline markets, with merchant services now covering 15 provinces, gradually integrating bank merchant outsourcing services with payment products to form combined offerings[30] - Collaborating with city commercial banks like Bank of Beijing and Bank of Shanghai, the group rapidly expanded financial products using existing customer and market resources, and integrated local and foreign currency products during the pandemic to build a more comprehensive financial system[32] Future Outlook The group will continue to leverage "Payment + Outsourcing Services," business district platforms, and "Bank-School Link" as big data sources, forming an "OFFLINE TO ONLINE" operational model, promoting bank collaborations, and strictly controlling costs - "Payment + Outsourcing Services," business district platforms, and "Bank-School Link" remain key big data sources for the Group, forming a unique "OFFLINE TO ONLINE" operational model[33] - The "combination punch" development approach will better align with overall financial environment needs, with the Group continuing strict cost control and enhanced risk monitoring to achieve a virtuous cycle of 'increasing revenue and reducing expenditure'[33] Equity and Directors' Interests This section details the interests of major shareholders, directors, and chief executives in the company's shares and share options, including the share option scheme Major Shareholders' Interests As of September 30, 2020, Goldcorp Industrial Limited and Great Song Enterprises Limited each held 32.78% of the company's shares, with Mr. Xiong Rongli and Ms. Li Qiling indirectly holding the same, and Ms. Yao Bin deemed to have a 44.14% interest Major Shareholders' Interests in the Company's Ordinary Shares (As of September 30, 2020) | Shareholder Name | Capacity/Nature of Interest | Number of Shares Held (Long Position) | Percentage of Share Capital Held | | :--- | :--- | :--- | :--- | | Goldcorp Industrial Limited | Beneficial Owner | 431,782,500 | 32.78% | | Great Song Enterprises Limited | Beneficial Owner | 431,782,500 | 32.78% | | Mr. Xiong Rongli | Corporate Interest | 431,782,500 | 32.78% | | Mr. Xiong Rongli | Beneficial Owner | 72,782,500 | 5.53% | | Ms. Li Qiling | Corporate Interest | 431,782,500 | 32.78% | | Ms. Yao Bin | Family Interest | 581,466,500 | 44.14% | Major Shareholders' Interests in Share Options (As of September 30, 2020) | Shareholder Name | Capacity/Nature of Interest | Number of Share Options Held | Number of Underlying Shares | | :--- | :--- | :--- | :--- | | Mr. Xiong Rongli | Beneficial Owner | 76,901,500 | 76,901,500 | - Goldcorp Industrial Limited is jointly held by Mr. Xiong Rongli and Great Song Enterprises Limited, which is wholly owned by Ms. Li Qiling[38] Directors' and Chief Executive's Interests As of September 30, 2020, Mr. Xiong Rongli, as Chairman, Executive Director, and controlling shareholder, held a total interest of 44.14% in the company's shares and share options, with other directors also holding interests Directors' Interests in the Company's Securities (As of September 30, 2020) | Director Name | Capacity/Nature of Interest | Interest in Ordinary Shares | Interest in Underlying Shares from Share Options | Total Interest | Total Percentage of Company's Issued Share Capital | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Xiong Rongli | Corporate Interest | 431,782,500 | – | 431,782,500 | 32.78% | | Mr. Xiong Rongli | Beneficial Owner | 72,782,500 | 76,901,500 | 149,684,000 | 11.36% | | Mr. Xiong Ying | Beneficial Owner | 14,547,500 | 3,862,822 | 18,410,322 | 1.40% | | Mr. Lin Xuexin | Beneficial Owner | 9,470,000 | 5,809,021 | 15,279,021 | 1.16% | | Mr. Pu Bingrong | Beneficial Owner | – | 307,606 | 307,606 | 0.02% | | Mr. Tan Guoqing | Beneficial Owner | – | 307,606 | 307,606 | 0.02% | | Mr. Lu Jingwen | Beneficial Owner | – | 307,606 | 307,606 | 0.02% | Directors' Interests in Associated Corporations (As of September 30, 2020) | Director Name | Capacity/Nature of Interest | Name of Associated Corporation | Number of Ordinary Shares Held | Percentage of Total Shares in Associated Corporation | | :--- | :--- | :--- | :--- | :--- | | Mr. Xiong Rongli | Beneficial Owner | Goldcorp Industrial Limited | 1 | 50% | Share Option Scheme The company's share option scheme, adopted in 2001 and replaced in 2011, aims to reward directors and eligible employees, with 198,275,729 unexercised options as of September 30, 2020 - The company's share option scheme was adopted in 2001, expired in 2011, and was replaced by a new scheme to reward directors and eligible employees[43] - The scheme's authorized limit has been updated multiple times, most recently on May 11, 2018, allowing subscription for a total of 61,032,000 shares, representing approximately 6.95% of the issued share capital[45] - The exercise price of share options is determined by the Board, not less than the higher of the closing price on the grant date and the average closing price for the preceding five days[46] Overview of Unexercised Share Options (As of September 30, 2020) | Director Name, Continuing Contract Employees and Consultants | Exercise Period | Adjusted Exercise Price (HKD) | Unexercised Share Options as of January 1, 2020 | Share Options Lapsed During the Period | Unexercised Share Options as of September 30, 2020 | | :--- | :--- | :--- | :--- | :--- | :--- | | Pu Bingrong | 2010.07.19-2020.01.18 | 0.1690 | 709,860 | (709,860) | – | | Tan Guoqing | 2010.07.19-2020.01.18 | 0.1690 | 709,860 | (709,860) | – | | Lu Jingwen | 2010.07.19-2020.01.18 | 0.1690 | 709,860 | (709,860) | – | | Xiong Ying | 2010.07.19-2020.01.18 | 0.1690 | 2,957,750 | (2,957,750) | – | | Lin Xuexin | 2010.07.19-2020.01.18 | 0.1690 | 769,015 | (769,015) | – | | Xiong Rongli | 2011.02.28-2021.01.09 | 0.6170 | 76,901,500 | – | 76,901,500 | | Lin Xuexin | 2011.02.28-2021.01.12 | 0.6035 | 816,339 | – | 816,339 | | Continuing Contract Employees (excluding Directors) | 2011.02.28-2021.01.12 | 0.6035 | 13,723,960 | – | 13,723,960 | | Xiong Ying | 2015.05.15-2025.05.14 | 0.3635 | 2,247,890 | – | 2,247,890 | | Lin Xuexin | 2015.05.15-2025.05.14 | 0.3635 | 3,549,300 | – | 3,549,300 | | Pu Bingrong | 2017.04.07-2027.04.06 | 0.1538 | 307,606 | – | 307,606 | | Tan Guoqing | 2017.04.07-2027.04.06 | 0.1538 | 307,606 | – | 307,606 | | Lu Jingwen | 2017.04.07-2027.04.06 | 0.1538 | 307,606 | – | 307,606 | | Total | | | 216,069,553 | (17,793,824) | 198,275,729 | Corporate Governance and Compliance This section outlines the company's adherence to corporate governance practices, including securities transactions, conflicts of interest, and the roles of its remuneration, nomination, and audit committees Dealings in Listed Securities During the reporting period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[54] Competition and Conflicts of Interest For the nine months ended September 30, 2020, no directors, management shareholders, major shareholders, or their associates engaged in any business competing with the group or had other conflicts of interest - No directors, management shareholders, major shareholders, or their associates engaged in any business competing or potentially competing with the Group, nor did any other conflicts of interest arise[55] Corporate Governance Practices The company consistently complied with the code provisions of the Corporate Governance Code as set out in Appendix 15 of the GEM Listing Rules for the nine months ended September 30, 2020 - The company consistently complied with the code provisions of the Corporate Governance Code as set out in Appendix 15 of the GEM Listing Rules for the nine months ended September 30, 2020[56] Directors' Securities Transactions For the nine months ended September 30, 2020, the company complied with GEM Listing Rules 5.48 to 5.67 regarding directors' securities transactions, with no non-compliance with the code of conduct - The company complied with GEM Listing Rules 5.48 to 5.67 regarding directors' securities transactions, with no non-compliance with the code of conduct identified[57] Remuneration Committee Established in November 2005, the Remuneration Committee's primary role is to review and recommend remuneration policies for directors and senior management, chaired by Mr. Pu Bingrong - The Remuneration Committee was established in November 2005, primarily to review and recommend remuneration policies for directors and senior management[58] - The Remuneration Committee is chaired by Mr. Pu Bingrong, with members including Mr. Xiong Rongli, Mr. Tan Guoqing, and Mr. Lu Jingwen[58] Nomination Committee Established in March 2012, the Nomination Committee formulates nomination policies, advises on director appointments and board succession, and reviews the Board Diversity Policy, chaired by Mr. Xiong Rongli - The Nomination Committee was established in March 2012, primarily to formulate nomination policies, advise on director nominations and appointments, and develop and review the Board Diversity Policy[60] - The Nomination Committee is chaired by Mr. Xiong Rongli, with members including Mr. Pu Bingrong, Mr. Tan Guoqing, and Mr. Lu Jingwen[60] Audit and Risk Management Committee Established on August 27, 2001, the Audit and Risk Management Committee reviews and oversees the group's financial reporting, internal controls, and risk management systems, confirming the unaudited results' compliance with accounting standards - The Audit and Risk Management Committee was established on August 27, 2001, primarily to review and oversee the Group's financial reporting, internal control, and risk management systems[61] - The Committee reviewed the unaudited results for the nine months ended September 30, 2020, deeming them prepared in accordance with applicable accounting standards and regulations, with adequate disclosure[61] - The Committee is chaired by Mr. Pu Bingrong, with members including Mr. Tan Guoqing and Mr. Lu Jingwen, all independent non-executive directors[61]