中国科技产业集团(08111) - 2020 Q3 - 季度财报

Company Information and Regulatory Statements This section outlines the company's basic information and regulatory disclosures, including GEM listing features and disclaimers GEM Listing Features and Disclaimer The report highlights GEM as a high-risk platform for SMEs, urging investor caution, while the Exchange disclaims responsibility for content accuracy - The GEM market is positioned for high-investment-risk small and medium-sized companies, where securities may experience significant market volatility and high liquidity is not guaranteed[1] - Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited accept no responsibility for the contents of this report and make no statement as to its accuracy or completeness[1] - The Board confirms that the report's content is accurate, complete, and free from misleading or false statements in all material aspects[1] Company Basic Information The report title identifies the company as China Technology Solar Power Holdings Limited - The company's name is China Technology Solar Power Holdings Limited[2] Financial Performance Overview This section provides a summary of the company's quarterly financial results and comprehensive income statement for the period Quarterly Results Summary For the nine months ended December 31, 2019, the company's loss widened, revenue decreased by 13.8% year-on-year, gross profit margin significantly declined to 11.7%, and basic loss per share increased Key Financial Indicators for the Nine Months Ended December 31, 2019 | Indicator | 2019 (RMB) | 2018 (RMB, Restated) | Change | | :--- | :--- | :--- | :--- | | Loss attributable to owners of the Company | 10,400,000 | 5,900,000 | Loss widened | | Revenue | 79,100,000 | 91,900,000 | Decreased by 13.8% | | Gross Profit Margin | 11.7% | 27.5% | Decreased by 15.8 percentage points | | Basic Loss Per Share | 0.56 cents | 0.37 cents | Loss widened | - The Directors do not recommend the payment of a dividend for the nine months ended December 31, 2019[4] Consolidated Statement of Profit or Loss and Other Comprehensive Income For the nine months ended December 31, 2019, the company experienced a year-on-year revenue decrease and a significant reduction in gross profit, leading to expanded loss before tax and loss attributable to owners Key Data from Consolidated Statement of Profit or Loss for the Nine Months Ended December 31, 2019 | Indicator (RMB thousands) | 2019 9 Months | 2018 9 Months (Restated) | Change | | :--- | :--- | :--- | :--- | | Revenue | 79,149 | 91,852 | -13.83% | | Cost of sales | (69,863) | (66,564) | +4.96% | | Gross profit | 9,286 | 25,288 | -63.28% | | Loss (Profit) before tax | (9,140) | 3,449 | Turned from profit to loss | | Loss (Profit) for the period | (9,667) | (3,943) | Loss widened | | Loss (Profit) for the period attributable to owners of the Company | (10,353) | (5,893) | Loss widened | | Basic Loss Per Share (RMB cents) | (0.56) | (0.37) | Loss widened | Business Operations Review This section reviews the group's overall business performance, including revenue trends, gross profit margins, and specific segment contributions Overall Business Performance For the nine months ended December 31, 2019, the group's loss attributable to owners expanded to RMB10.4 million, with revenue decreasing by 13.8% and gross profit margin falling to 11.7% - The Group's principal businesses include sales of solar-related products, new energy power system integration, sales of ATM and printing systems, and provision of hardware and software technical support services[6] - The 13.8% revenue decrease was primarily due to a reduction of approximately RMB39.5 million in solar-related product sales, partially offset by an increase of approximately RMB26.8 million in new energy power system integration services revenue[7] - Gross profit margin declined to 11.7% (2018: 27.5%) due to lower-margin prefabricated solar products (13.8% vs. 19.7% for customized products last year) and increased subcontracting costs for new energy power system integration services due to adverse weather[8] Changes in Selling and Administrative Expenses | Indicator (RMB) | 2019 9 Months | 2018 9 Months (Restated) | Change | | :--- | :--- | :--- | :--- | | Selling expenses | 2,200,000 | 2,000,000 | Increased by 7.6% | | Administrative expenses | 9,000,000 | 8,600,000 | Increased by 4.2% | Sales of Solar-Related Products For the nine months ended December 31, 2019, revenue from solar-related product sales significantly decreased to RMB25.8 million, reducing its proportion of total group revenue from 71.0% to 32.5% - Business scope includes R&D, sales, and technical consulting services for photovoltaic brackets, solar trackers, solar power station fences, and other solar-related products[11] Revenue from Sales of Solar-Related Products | Indicator (RMB) | 2019 9 Months | 2018 9 Months (Restated) | Change | | :--- | :--- | :--- | :--- | | Revenue | 25,800,000 | 65,200,000 | Significant decrease | | Proportion of Group Revenue | 32.5% | 71.0% | Significant decrease | New Energy Power System Integration Business Driven by government support for solar and distributed PV, the group's new energy power system integration revenue significantly grew to RMB53.4 million, now comprising 67.5% of total revenue, primarily from the Zhangbei project - The Chinese government continues to support solar industry development, especially distributed photovoltaic power generation, and the Group will continue to seek related projects and integration services[12][13] - Shaanxi Baike (a wholly-owned subsidiary) and Sichuan Company jointly signed a subcontract for the Zhangbei project with PowerChina, valued at RMB380 million, also providing engineering consulting services[13] Revenue from New Energy Power System Integration Business | Indicator (RMB) | 2019 9 Months | 2018 9 Months (Restated) | Change | | :--- | :--- | :--- | :--- | | Revenue | 53,400,000 | 26,600,000 | Increased by approximately 100.75% | | Proportion of Group Revenue | 67.5% | 29.0% | Significant increase | - Power system integration aims to optimize civil, electrical, and supporting systems, integrating equipment, functions, and data for full resource utilization, optimized performance, centralized efficiency, convenient maintenance, and low-cost management[15] Other Businesses For the nine months ended December 31, 2019, the sales of self-service ATM and printing systems, along with hardware and software technical support services, generated no revenue - Sales of self-service ATM systems and printing systems generated no revenue (2018: nil)[16] - Provision of hardware and software technical support services generated no revenue (2018: nil)[17] Business Outlook The Group will focus on new energy power system integration, negotiate new contracts, and explore downstream solar opportunities to diversify and expand revenue, funding future plans through internal cash flow and borrowings - The Group will continue to seek opportunities in solar power generation projects and new energy power system integration services, having negotiated and entered into new contracts during the review period[35] - The Group will identify and develop downstream solar business opportunities to diversify its business and expand revenue streams[35] - Facing new government policies to reduce solar power subsidies, the Group will leverage the strength of its new energy power system integration segment and seize other market opportunities[35] - Future business plans will be financed through internally generated cash flows and borrowings[36] Significant Corporate Events This section details major corporate activities including investments, acquisitions, changes in auditors, equity movements, and proposed company name changes Major Investments, Acquisitions, and Disposals During the review period, the Group had no other major investments, acquisitions, or disposals of subsidiaries, apart from the subsequent acquisition of Tianjin Hengqing equity - During the review period, the Group had no major investments or significant acquisitions or disposals of subsidiaries, other than the acquisition of Tianjin Hengqing equity[18] Liquidity and Financial Resources As of December 31, 2019, the Group's cash and bank balances decreased to approximately RMB2.1 million, with no outstanding bank overdrafts, primarily funding operations through internal cash flow and borrowings Cash and Bank Balances | Indicator (RMB) | December 31, 2019 | March 31, 2019 | Change | | :--- | :--- | :--- | :--- | | Cash and bank balances | 2,100,000 | 2,600,000 | Decreased by RMB500,000 | - The Group had no outstanding bank overdrafts[19] - The Group finances its operations through internally generated cash flows and borrowings[20] Change of Auditors Tianqi CPA Limited resigned as the company's auditor on May 10, 2019, due to a change in business strategy, and Deloitte Touche Tohmatsu was appointed as the new auditor on May 24, 2019 - Tianqi CPA Limited resigned as the company's auditor on May 10, 2019, due to a change in its business strategy[21] - The Board and audit committee confirmed no disagreement between the company and Tianqi CPA Limited[22] - Deloitte Touche Tohmatsu was appointed as the company's new auditor on May 24, 2019[22] Equity Changes and Director Retirement Major shareholder Baihao Investment Limited sold approximately 11.87% of its shares to Mr. Huang Bo on July 11, 2019, ceasing to be a major shareholder, while Mr. Hou Xiaobing retired as an executive director on August 26, 2019 - Major shareholder Baihao Investment Limited sold 217,766,038 shares (approximately 11.87% of issued share capital) to Mr. Huang Bo on July 11, 2019[25] - Following the disposal, Baihao ceased to be a major shareholder[26] - Mr. Hou Xiaobing retired as an executive director on August 26, 2019, as the re-election resolution was not passed[27] Proposed Change of Company Name The Board proposes changing the company's English name to "China Technology Industry Group Limited" and adopting "中国科技产业集团有限公司" as its dual foreign name to better reflect its business and future strategy, subject to shareholder and Cayman Islands Registrar approval - The Board proposes changing the company's English name from 'China Technology Solar Power Holdings Limited' to 'China Technology Industry Group Limited' and adopting '中国科技产业集团有限公司' as its dual foreign name[28] - The name change aims to better reflect the Group's business nature and future strategic direction, providing a new corporate image[29] - The change requires approval by a special resolution at an EGM and by the Registrar of Companies in the Cayman Islands[29] Acquisition of Tianjin Hengqing Equity and Issue of Consideration Shares On December 20, 2019, the company agreed to acquire the remaining 40% equity of Tianjin Hengqing Photovoltaic Technology Co., Ltd. for RMB26.5 million, to be paid by issuing 295,472,031 consideration shares, a discloseable and connected transaction requiring independent shareholder approval for share issuance - On December 20, 2019, the company signed an agreement to acquire the remaining 40% equity of Tianjin Hengqing Photovoltaic Technology Co., Ltd. (legal and beneficial owner of Tibet Lineng Photovoltaic Technology Co., Ltd.) for RMB26.5 million[30] - The consideration will be settled by allotting and issuing 295,472,031 ordinary shares (consideration shares) to the vendor at an issue price of HK$0.1 per share[30] - Tianjin Hengqing is a 60% indirectly held subsidiary of the company, and the vendor is a connected person, making the acquisition a discloseable and connected transaction[32] - The acquisition is exempt from circular, independent financial advice, and independent shareholder approval requirements, but the issuance of consideration shares still requires independent shareholder approval[32][34] Notes to Financial Statements This section provides detailed explanations of the unaudited consolidated results, including the basis of preparation, accounting policies, prior period adjustments, and changes in presentation currency Basis of Preparation and Accounting Policies This section details the basis of preparation for the unaudited consolidated results, accounting policies, prior period adjustments, and changes in presentation currency, along with their financial statement impact Basis of Preparation The unaudited consolidated results are prepared under HKFRSs, HKASs, and GEM Listing Rules, using historical cost, with no material impact from new standards adopted this period - The results are prepared in accordance with Hong Kong Financial Reporting Standards, Hong Kong Accounting Standards, and GEM Listing Rules, using the historical cost convention, with certain financial instruments measured at fair value[39] - The new and revised HKFRSs and HKASs adopted in the current period had no material impact on the results or financial position for the current or prior periods[40] - The consolidated results are unaudited but have been reviewed by the Board's audit committee[40] Prior Period Adjustments and Change in Presentation Currency The company retrospectively adjusted prior period financial statements for errors and changed the presentation currency from HKD to RMB to better reflect performance, which also reclassified convertible bonds as derivative instruments - The company identified certain errors in prior year consolidated financial statements and has made retrospective adjustments for prior periods[42] - The presentation currency of the consolidated financial statements has been changed from HKD to RMB to better reflect the Group's performance, with prior period data retrospectively adjusted[43] - Following the correction of the functional currency from HKD to RMB, the conversion option of the 2011 convertible bonds is treated as a derivative instrument, not an equity instrument[47] - Under HKFRS 9, trade receivables and contract assets measure lifetime expected credit losses using a simplified approach, while other financial assets are assessed for twelve-month expected credit losses[48] Revenue Breakdown For the nine months ended December 31, 2019, total group revenue was RMB79,149 thousand, with new energy power system integration services contributing RMB53,391 thousand and solar-related product sales RMB25,758 thousand Revenue Breakdown (For the nine months ended December 31) | Goods or Service Type (RMB thousands) | 2019 | 2018 (Restated) | | :--- | :--- | :--- | | Sales of solar-related products | 25,758 | 65,249 | | Provision of new energy power system integration services | 53,391 | 26,603 | | Total | 79,149 | 91,852 | Timing of Revenue Recognition (For the nine months ended December 31) | Timing of Revenue Recognition (RMB thousands) | 2019 | 2018 (Restated) | | :--- | :--- | :--- | | At a point in time | 25,758 | 65,249 | | Over time | 53,391 | 26,603 | | Total | 79,149 | 91,852 | Components of Loss (Profit) Before Tax For the nine months ended December 31, 2019, the components of loss (profit) before tax included recognized inventory costs, depreciation of equipment, right-of-use assets, and short-term lease payments Components of Loss (Profit) Before Tax (For the nine months ended December 31) | Item (RMB thousands) | 2019 | 2018 (Restated) | | :--- | :--- | :--- | | Cost of inventories recognized as expense | 22,213 | 52,413 | | Depreciation of equipment | 303 | 77 | | Depreciation of right-of-use assets | 286 | – | | Short-term lease payments | 1,028 | – | Other Income and Losses For the nine months ended December 31, 2019, the Group recorded other losses of RMB2,260 thousand, primarily due to foreign exchange losses of RMB2,175 thousand, despite gains from disposal of right-of-use assets Other Income and Losses (For the nine months ended December 31) | Item (RMB thousands) | 2019 | 2018 (Restated) | | :--- | :--- | :--- | | Foreign exchange gains (losses) | (2,175) | (6,376) | | Gain on disposal of right-of-use assets and lease liabilities | 313 | – | | Loss on termination of lease contracts | (398) | – | | Total | (2,260) | (6,284) | - The Group's lease contracts terminated on June 30, 2019, recognizing a gain of RMB313,000 on disposal of right-of-use assets and lease liabilities[52] Finance Costs For the nine months ended December 31, 2019, total finance costs amounted to RMB3,344 thousand, primarily comprising effective interest on convertible bonds of RMB3,085 thousand Finance Costs (For the nine months ended December 31) | Item (RMB thousands) | 2019 | 2018 (Restated) | | :--- | :--- | :--- | | Effective interest on convertible bonds | 3,085 | 2,695 | | Interest on other borrowings | 151 | 934 | | Interest on lease liabilities | 108 | – | | Total | 3,344 | 3,629 | Impairment Assessment of Financial Assets For the nine months ended December 31, 2019, the Group recognized impairment losses of RMB855 thousand, mainly from trade receivables, partially offset by reversals for other receivables and contract assets Impairment Losses (For the nine months ended December 31) | Item (RMB thousands) | 2019 | 2018 (Restated) | | :--- | :--- | :--- | | Trade receivables | 988 | 814 | | Other receivables and deposits | (63) | (258) | | Contract assets | (70) | – | | Total | 855 | 556 | Income Tax Expense For the nine months ended December 31, 2019, the Group's income tax expense was RMB527 thousand, with Chinese subsidiaries subject to a 25% rate, some enjoying a 15% preferential rate, and no tax provision for non-taxable entities Income Tax Expense (For the nine months ended December 31) | Item (RMB thousands) | 2019 | 2018 (Restated) | | :--- | :--- | :--- | | PRC enterprise income tax | (527) | (4,589) | | Under-provision in prior years | – | (2,803) | | Total | (527) | (7,392) | - PRC subsidiaries are subject to a 25% enterprise income tax rate, while certain subsidiaries participating in the Western Development Program enjoy a 15% preferential tax rate[58] - Subsidiaries in Hong Kong, Cayman Islands, and British Virgin Islands had no assessable profits, thus no income tax provision[57][58] Dividend Policy During the review period, the company neither paid, declared, nor proposed any dividends - No dividends were paid, declared, or proposed during the review period[59] Loss (Earnings) Per Share For the nine months ended December 31, 2019, both basic and diluted loss per share were RMB0.56 cents, representing an expanded loss compared to the prior year, with unexercised convertible bonds and options having an anti-dilutive effect Loss (Earnings) Per Share (For the nine months ended December 31) | Indicator (RMB cents) | 2019 | 2018 (Restated) | | :--- | :--- | :--- | | Basic Loss (Earnings) Per Share | (0.56) | (0.37) | | Diluted Loss (Earnings) Per Share | (0.56) | (0.37) | Weighted Average Number of Ordinary Shares for Loss (Earnings) Per Share Calculation (Thousands) | Indicator (Thousands of shares) | 2019 | 2018 (Restated) | | :--- | :--- | :--- | | Weighted average number of ordinary shares for basic loss (earnings) per share | 1,835,233 | 1,582,140 | | Weighted average number of ordinary shares for diluted loss (earnings) per share | 1,835,233 | 1,582,140 | - Unexercised convertible bonds and share options had an anti-dilutive effect, as their exercise would reduce the basic loss per share[61][62] Consolidated Statement of Changes in Equity As of December 31, 2019, total equity attributable to owners was RMB16,974 thousand, with non-controlling interests at RMB13,320 thousand, totaling RMB30,294 thousand, a decrease from April 1, 2019, reflecting a period loss of RMB10,353 thousand attributable to owners Key Data from Consolidated Statement of Changes in Equity (RMB thousands) | Item | April 1, 2019 (Audited) | Loss (Profit) for the period | December 31, 2019 (Unaudited) | | :--- | :--- | :--- | :--- | | Share capital | 153,135 | – | 153,135 | | Share premium | 126,912 | – | 126,912 | | Accumulated losses | (232,392) | (10,353) | (242,745) | | Total attributable to owners of the Company | 27,327 | (10,353) | 16,974 | | Non-controlling interests | 12,634 | 686 | 13,320 | | Total | 39,961 | (9,667) | 30,294 | - Reorganization reserve represents the difference between the nominal value of the share capital of acquired subsidiaries and the cost of the Company's investment in those subsidiaries used for exchange[64] Equity and Corporate Governance This section covers directors' and major shareholders' interests, the audit committee's role, directors' competing interests, share transactions, and compliance with the code for securities transactions Directors' and Chief Executive's Interests As of December 31, 2019, no company director or chief executive held any disclosable interests or short positions in the company's shares, related shares, or debentures under SFO or GEM Listing Rules - As of December 31, 2019, no Director or Chief Executive of the Company held any disclosable interests or short positions in the shares, underlying shares, or debentures of the Company or its associated corporations[66] Major Shareholders' Interests As of December 31, 2019, Mr. Huang Bo, Grand Virtue Limited and its controller Ms. Sun Aihui, and Mr. Hou Xiaobing were major shareholders, holding approximately 11.87%, 11.79%, and 7.15% of shares, respectively Major Shareholders' Shareholdings (As of December 31, 2019) | Name of Shareholder | Number of Ordinary Shares (L) | Capacity | Approximate Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Mr. Huang Bo | 217,766,038 | Beneficial owner | 11.87% | | Grand Virtue Limited | 216,363,636 | Beneficial owner | 11.79% | | Ms. Sun Aihui | 216,363,636 | Interest in controlled corporation | 11.79% | | Mr. Hou Xiaobing | 131,140,000 | Beneficial owner | 7.15% | - Mr. Huang Bo's shares originated from the disposal by major shareholder Baihao Investment Limited on July 11, 2019[70] - Ms. Sun Aihui holds 100% interest in Grand Virtue Limited and is therefore deemed to have an interest in the shares held by Grand Virtue Limited[71] - As of December 31, 2019, the Company had no controlling shareholder[74] Audit Committee The Audit Committee, comprising three independent non-executive directors, facilitates communication between the Board and auditors, assesses audit effectiveness, reviews risk management, and has approved the unaudited consolidated results - The Audit Committee comprises three independent non-executive Directors: Ms. Ma Xingqin, Mr. Meng Xianglin, and Mr. Dong Guangwu[72] - The Committee is responsible for providing a link between the Board and the auditors, assessing audit effectiveness, and reviewing risk management and internal control systems[72] - The Audit Committee has reviewed and approved the Group's unaudited consolidated results for the nine months ended December 31, 2019[72] Directors' Competing Interests For the nine months ended December 31, 2019, no director or their close associates held any interests in businesses competing or potentially competing with the Group's operations - For the nine months ended December 31, 2019, no Director or their close associates held any interests in businesses that compete or may compete with the Group's operations[73] Share Purchases, Sales, or Redemptions For the nine months ended December 31, 2019, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's shares - For the nine months ended December 31, 2019, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares[75] Directors' Code for Securities Transactions The company adopted a code for directors' securities transactions no less stringent than GEM Listing Rules and confirmed no non-compliance for the nine months ended December 31, 2019 - The company has adopted a code for directors' securities transactions no less stringent than required by the GEM Listing Rules[77] - The company confirmed no non-compliance with the code for the nine months ended December 31, 2019[77]