福田股份(08196) - 2021 Q3 - 季度财报

Financial Summary The company's financial performance for the nine months ended September 30, 2021, shows significant revenue growth and reduced losses Financial Performance Highlights | Indicator | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 65,329 | 36,733 | +77.9% | | Gross Profit | 8,738 | 4,050 | +115.8% | | Loss attributable to ordinary equity holders | (10,639) | (17,333) | -38.6% (Loss narrowed) | - The Board of Directors does not recommend the payment of any dividend for the period[8] Condensed Consolidated Statement of Comprehensive Income This statement details the breakdown of revenue, costs, and profit/loss for the nine months ended September 30, 2021 and 2020 Condensed Consolidated Statement of Comprehensive Income | Indicator | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 65,329 | 36,733 | | Cost of sales | (56,591) | (32,683) | | Gross Profit | 8,738 | 4,050 | | Other income and gains | 1,883 | 1,884 | | Selling and distribution expenses | (908) | (1,628) | | Administrative expenses | (19,028) | (22,293) | | Finance costs | (1,914) | (1,942) | | Loss before tax | (11,229) | (19,929) | | Income tax credit | 590 | 2,596 | | Loss for the period | (10,639) | (17,333) | | Loss attributable to owners of the parent | (10,639) | (17,333) | | Loss per share attributable to ordinary equity holders of the parent (Basic and Diluted) | RMB (0.035) | RMB (0.058) | Other Comprehensive Income | Indicator | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | | :--- | :--- | :--- | | Exchange differences on translation of foreign operations | (435) | (1,927) | | Total comprehensive income/(loss) for the period | (11,074) | (19,260) | Condensed Consolidated Statement of Changes in Equity This statement details the changes in the company's equity components from January 1, 2021, to September 30, 2021 Condensed Consolidated Statement of Changes in Equity | Indicator | January 1, 2021 (RMB thousands) | September 30, 2021 (RMB thousands) | | :--- | :--- | :--- | | Share capital | 2,397 | 2,397 | | Share premium account | 98,818 | 98,818 | | Merger reserve | (13,830) | (13,830) | | Asset revaluation reserve | 9,134 | 9,134 | | Statutory surplus reserve | 15,029 | 15,029 | | Exchange fluctuation reserve | 3,937 | 3,502 | | Retained profits | (23,584) | (34,233) | | Total | 91,901 | 80,827 | | Non-controlling interests | (6) | (6) | | Total equity | 91,895 | 80,821 | - Total equity decreased due to a loss for the period of RMB 10,639 thousand and exchange differences of RMB (435) thousand[16] Notes to the Condensed Consolidated Financial Statements (Unaudited) This section provides explanatory notes and disclosures for the unaudited condensed consolidated financial statements 1. General Information The company is incorporated in the Cayman Islands, with its principal place of business in Hong Kong, focusing on environmental protection businesses - The company was incorporated in the Cayman Islands as an exempted company on March 25, 2015[18] - The Group primarily engages in environmental protection businesses, including wastewater treatment and soil remediation, through the design, construction, operation, and maintenance of related facilities, as well as equipment trading[18] 2. Basis of Preparation The unaudited condensed consolidated financial statements are prepared in accordance with HKFRS and reviewed by the audit committee - The financial statements are prepared in accordance with Hong Kong Financial Reporting Standards, Hong Kong Generally Accepted Accounting Principles, and the disclosure requirements of the Hong Kong Companies Ordinance[20] - The condensed consolidated financial statements are unaudited but have been reviewed by the Company's Audit Committee[21] 3. Operating Segment Information The group's business is divided into five reportable operating segments, with management assessing performance based on adjusted profit/loss before tax for each segment - The Group's business is divided into five reportable operating segments: EPC projects, Construction projects, Equipment projects, Service Concession Arrangements, and Other projects (primarily including operation and maintenance services)[22][25] Segment Revenue | Segment Revenue (RMB thousands) | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :--- | :--- | :--- | | EPC projects | 428 | 793 | | Construction projects | 3,031 | 2,716 | | Equipment projects | 36,284 | 26,380 | | Service Concession Arrangements | 18,401 | 2,693 | | Other | 7,185 | 4,151 | | Total | 65,329 | 36,733 | Segment Results (Gross Profit) | Segment Results (Gross Profit) (RMB thousands) | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :--- | :--- | :--- | | EPC projects | (33) | 101 | | Construction projects | 804 | 12 | | Equipment projects | 4,139 | 3,349 | | Service Concession Arrangements | 1,126 | 151 | | Other | 2,702 | 437 | | Total | 8,738 | 4,050 | 4. Revenue, Other Income and Gains Group revenue primarily derives from EPC, construction, equipment, service concession arrangements, and other services, totaling RMB 65,329 thousand, with other income and gains of RMB 1,883 thousand Revenue Sources | Revenue Source (RMB thousands) | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :--- | :--- | :--- | | EPC projects | 428 | 793 | | Construction projects | 3,031 | 2,716 | | Equipment projects | 36,284 | 26,380 | | Service Concession Arrangements | 18,401 | 2,693 | | Other | 7,185 | 4,151 | | Total Revenue | 65,329 | 36,733 | Other Income and Gains | Other Income and Gains (RMB thousands) | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :--- | :--- | :--- | | Bank interest income | 151 | 71 | | Rental income | 1,282 | 1,313 | | Government grants | 450 | 487 | | Other | - | 13 | | Total Other Income and Gains | 1,883 | 1,884 | 5. Finance Costs For the nine months ended September 30, 2021, the Group's finance costs, primarily bank loan interest, totaled RMB 1,914 thousand, a slight decrease from the prior year Finance Costs | Finance Costs (RMB thousands) | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :--- | :--- | :--- | | Bank loan interest | 1,914 | 1,942 | 6. Income Tax This section details the applicable income tax rates for Hong Kong, Mainland China (including preferential rates for high-tech enterprises), and Vietnam - The statutory Hong Kong profits tax rate is 16.5%, with no provision for the period[34] - Mainland China subsidiaries are subject to a corporate income tax rate of 25%, with high-tech enterprises enjoying a preferential rate of 15%[35] - Vietnamese subsidiaries are subject to a corporate income tax rate of 22%[35] Income Tax Credit | Income Tax Credit (RMB thousands) | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :--- | :--- | :--- | | Current period - outside Hong Kong Deferred | (590) | (2,596) | | Total tax recovery for the period | (590) | (2,596) | 7. Dividends The Board of Directors does not recommend the payment of any dividend for the nine months ended September 30, 2021 - The Directors do not recommend the payment of any dividend for the nine months ended September 30, 2021[37] 8. Loss Per Share Attributable to Ordinary Equity Holders of the Parent Basic loss per share was RMB (0.035) for the period, an improvement from RMB (0.058) in the prior year, with diluted loss per share being the same Loss Per Share Calculation | Indicator | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :--- | :--- | :--- | | Loss for the period attributable to ordinary equity holders | RMB 10,639,000 | RMB 17,333,000 | | Weighted average number of ordinary shares in issue | 300,000,000 shares | 300,000,000 shares | | Basic loss per share | RMB (0.035) | RMB (0.058) | - Diluted loss per share is the same as basic loss per share as the Group had no potential dilutive ordinary shares in issue[39] Management Discussion and Analysis This section provides an overview of the group's business performance, financial results, and future outlook Business Review The group, a wastewater and drinking water treatment engineering service provider in China, saw revenue increase by 77.9% and loss decrease by 38.6% - The Group is a wastewater and drinking water treatment engineering service provider in China, primarily engaged in EPC projects, equipment projects, service concession arrangements, and O&M projects[41] Key Financial Performance | Indicator | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 65,329 | 36,733 | +77.9% | | Loss attributable to ordinary equity holders | (10,639) | (17,333) | -38.6% (Loss narrowed) | Revenue Composition | Revenue Composition (RMB thousands) | Nine Months Ended September 30, 2021 | Nine Months Ended September 30, 2020 | | :--- | :--- | :--- | | EPC projects | 428 | 793 | | Construction projects | 3,031 | 2,716 | | Equipment projects | 36,284 | 26,380 | | Service Concession Arrangements | 18,401 | 2,693 | | Other environmental projects | 7,185 | 4,151 | Outlook The group plans to mitigate operational risks, control costs, stabilize revenue, and focus on cash flow amidst economic uncertainties, with some projects progressing and others delayed - The Group's future operational focus will be on preventing operational risks from the pandemic, carefully selecting customers, controlling costs, stabilizing revenue, and focusing on cash flow[43] - Chinese projects are progressing, such as the Guangzhou Eastern Industrial Solid Waste Treatment Equipment Project, with a contract value of approximately RMB 47,880,000, which has entered the substantial procurement phase and is expected to enter the delivery and installation phase in the fourth quarter of this year[43] - The Vietnam project has been temporarily suspended again due to recurring local pandemic outbreaks, and the Group is actively communicating and coordinating with the client[43] - The Group will continue to deepen its presence in the Greater Bay Area, striving for more municipal projects, and has secured new project contracts in the second and third quarters of 2021[45] - Revenue and profitability are expected to improve in the fourth quarter of 2021, but the full-year performance remains cautious due to the domestic pandemic, adjustments in prevention policies, and insufficient energy supply[46] Financial Review This section analyzes the group's revenue, costs, and profit components, highlighting significant growth in revenue and gross profit, and a reduction in loss Revenue Total group revenue increased by 77.9% to RMB 65,329 thousand, driven by equipment projects, service concession arrangements, and other projects - The Group's revenue for the period was approximately RMB 65,329,000, representing an increase of approximately 77.9% compared to the same period in 2020[47] EPC Projects and Construction Projects EPC project revenue decreased by 46.0% to RMB 428 thousand, while construction project revenue increased by 11.6% to RMB 3,031 thousand EPC and Construction Project Revenue | Project Type | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | EPC project revenue | 428 | 793 | -46.0% | | Construction project revenue | 3,031 | 2,716 | +11.6% | - Construction project revenue increased primarily due to revenue from three construction projects in the nine months of 2021, compared to two in the same period of 2020[50] Equipment Projects Equipment project revenue increased by 37.5% to RMB 36,284 thousand, primarily due to an increase in project numbers Equipment Project Revenue | Project Type | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Equipment project revenue | 36,284 | 26,380 | +37.5% | - Revenue increased primarily due to revenue from six equipment projects in the nine months of 2021, compared to two in the same period of 2020[52] Service Concession Arrangements Service concession arrangement revenue surged by 583.3% to RMB 18,401 thousand, mainly due to the Guangzhou sludge treatment project's formal operation Service Concession Arrangement Revenue | Project Type | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Service Concession Arrangement revenue | 18,401 | 2,693 | +583.3% | - Revenue increased primarily because the Guangzhou sludge treatment project passed formal acceptance and commenced operation in mid-2020, whereas the prior year period was a trial operation period[53] Other Other segment revenue increased by 73.1% to RMB 7,185 thousand, driven by more technical consulting projects and increased O&M contributions Other Segment Revenue | Project Type | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Other segment revenue | 7,185 | 4,151 | +73.1% | - Revenue increased primarily due to an increase in the number of technical consulting projects (five projects contributing RMB 4,823 thousand in 2021, compared to one project contributing RMB 2,170 thousand in 2020) and increased contributions from O&M projects[54] Other Income and Gains Total other income and gains remained stable at RMB 1,883 thousand, a slight decrease of 0.1% year-on-year Other Income and Gains | Indicator | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Other income and gains | 1,883 | 1,884 | -0.1% | Cost of Sales Cost of sales increased by 73.2% to RMB 56,591 thousand, in line with revenue growth, with increases in inventory, subcontracting, and service costs Cost of Sales Breakdown | Cost Type | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total cost of sales | 56,591 | 32,683 | +73.2% | | Cost of inventories sold | 34,976 | 22,989 | +52.1% | | Subcontracting costs | 9,922 | 2,664 | +272.4% | | Cost of services provided | 11,693 | 7,030 | +66.3% | Gross Profit Gross profit increased by 115.8% to RMB 8,738 thousand, driven by high-margin technical consulting projects and growth in equipment and service concession segments Gross Profit | Indicator | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Gross Profit | 8,738 | 4,050 | +115.8% | - Gross profit increased primarily due to undertaking high-margin technical consulting projects and increased revenue from the equipment projects and service concession arrangements segments[58] Selling and Distribution Expenses Selling and distribution expenses decreased by 44.2% to RMB 908 thousand, mainly due to reductions in salaries, maintenance, and tender fees Selling and Distribution Expenses | Indicator | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Selling and distribution expenses | 908 | 1,628 | -44.2% | - Selling and distribution expenses decreased primarily due to a reduction of approximately RMB 120 thousand in salaries and employee benefits, approximately RMB 411 thousand in maintenance expenses, and approximately RMB 174 thousand in tender handling fees[59] Administrative Expenses Administrative expenses decreased by 14.6% to RMB 19,028 thousand, primarily due to the absence of one-off expenses for construction qualification upgrades incurred in the prior year Administrative Expenses | Indicator | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Administrative expenses | 19,028 | 22,293 | -14.6% | - Administrative expenses decreased primarily because approximately RMB 3,000,000 in expenses incurred in the same period of 2020 for upgrading construction qualifications were not incurred in the current period[60] Loss for the Period Loss for the period decreased by 38.6% to RMB 10,639 thousand, attributed to higher gross profit, increased revenue from key segments, and reduced administrative expenses Loss for the Period | Indicator | Nine Months Ended September 30, 2021 (RMB thousands) | Nine Months Ended September 30, 2020 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Loss for the period | (10,639) | (17,333) | -38.6% (Loss narrowed) | - The decrease in loss was primarily due to increased gross profit (contributed by high-margin technical consulting projects), increased revenue from equipment projects and service concession arrangements, and the elimination of expenses for upgrading construction qualifications incurred in the same period of 2020[61] Dividends The Board of Directors does not recommend the payment of any dividend for the nine months ended September 30, 2021 - The Board of Directors does not recommend the payment of any dividend for the nine months ended September 30, 2021[63] Corporate Governance Practices The company adheres to the GEM Listing Rules' Corporate Governance Code, with the exception of the Chairman and CEO roles being held by the same individual - The Company has adopted the Corporate Governance Code set out in Appendix 15 to the GEM Listing Rules[64] - Except for the roles of Chairman and Chief Executive Officer being held by Mr. Xie Yang, the Company has complied with the code provisions of the Corporate Governance Code throughout the period[64] - The Board believes that combining the roles of Chairman and Chief Executive Officer is beneficial to the Group's business prospects and management, with the balance of power ensured by senior management and the Board[64] Purchase, Sale or Redemption of Listed Securities Neither the company nor its subsidiaries purchased, sold, or redeemed any of its listed securities during the period - During the period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[65] Directors' and Chief Executive's Interests and Short Positions in the Shares, Underlying Shares and Debentures of the Company and its Associated Corporations As of September 30, 2021, Mr. Xie Yang, the Director and Chief Executive, held 30.45% of the total issued shares through a controlled corporation Directors' and Chief Executive's Interests | Director's Name | Capacity | Number of Shares (L) | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Xie Yang | Interest in controlled corporation | 91,350,000 | 30.45% | - Mr. Xie Yang holds shares through Oceanic Expert Investments Limited, which is wholly owned by Mino Holdings Limited, and Mino Holdings Limited is 100% beneficially owned by Mr. Xie Yang[70] Major Shareholders' Interests and Short Positions in Shares or Underlying Shares As of September 30, 2021, major shareholders included Oceanic Expert Investments Limited (30.45%), Waterman Global Limited (22.37%), and Jiasheng Venture Capital Co., Ltd. (14.68%) Major Shareholders' Interests | Shareholder Name | Capacity | Number of Ordinary Shares (L) | Approximate Percentage of Total Issued Shares | | :--- | :--- | :--- | :--- | | Oceanic Expert Investments Limited | Beneficial owner | 91,350,000 | 30.45% | | Mino Holdings Limited | Interest in controlled corporation | 91,350,000 | 30.45% | | Waterman Global Limited | Beneficial owner | 67,117,500 | 22.37% | | Keen Leap Investments Limited | Interest in controlled corporation | 67,117,500 | 22.37% | | Keen Leap Investments Limited | Beneficial owner | 2,732,000 | 0.91% | | Mr. Zhang Yao | Interest in controlled corporation | 69,849,500 | 23.28% | | Jiasheng Venture Capital Co., Ltd. | Beneficial owner | 44,032,500 | 14.68% | | Chongmin Venture Capital Co., Ltd. | Interest in controlled corporation | 44,032,500 | 14.68% | | Mr. Song Xiaoxing | Interest in controlled corporation | 44,032,500 | 14.68% | - The percentage of shares is calculated based on 300,000,000 issued shares as of September 30, 2021[77] Share Option Scheme The group did not adopt any share option scheme as of September 30, 2021 - As of September 30, 2021, the Group had not adopted any share option scheme[80] Compliance with the Code of Conduct Regarding Securities Transactions The company adopted a code of conduct for directors' securities transactions no less stringent than GEM Listing Rules, and all directors complied during the period - The Company has adopted a code of conduct for directors' securities transactions, the terms of which are no less stringent than the required standard of dealings set out in the GEM Listing Rules[81] - All Directors have confirmed compliance with the required standard of dealings throughout the period[81] Review of Financial Statements The Audit Committee, comprising three independent non-executive directors, reviewed the group's accounting policies and the unaudited condensed consolidated financial statements - The Audit Committee consists of three independent non-executive Directors, with Mr. Xie Zhiwei as Chairman[82] - The Audit Committee has reviewed the accounting policies and practices adopted by the Group and discussed financial reporting matters, including the unaudited condensed consolidated financial statements for the period[82]