海天天线(08227) - 2021 Q3 - 季度财报

Performance Highlights In the first three quarters of 2021, the Group achieved substantial year-on-year growth in total operating revenue and a significant narrowing of net loss, primarily driven by strong antenna product sales, with the Board deciding against an interim dividend Key Financial Indicators | Metric | Q1-Q3 2021 (RMB million) | Q1-Q3 2020 (RMB million) | Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | Approx. 26.04 | Approx. 6.15 | +323% | | Net Loss | Approx. 14.13 | Approx. 20.92 | Loss narrowed by 32.5% | - The Board does not recommend declaring a dividend for the nine months ended September 30, 2021[4] Consolidated Financial Statements Consolidated Balance Sheet As of September 30, 2021, the company's total assets increased by 6.6% to RMB 113.25 million from the beginning of the year, primarily driven by current assets, while total liabilities rose from RMB 61.28 million to RMB 82.43 million, leading to a decrease in shareholders' equity from RMB 44.94 million to RMB 30.82 million Key Balance Sheet Items | Key Balance Sheet Items (RMB million) | Sep 30, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | | Current Assets | 37.35 | 18.24 | | Of which: Accounts Receivable | 14.50 | 2.17 | | Inventories | 16.33 | 7.84 | | Non-current Assets | 75.90 | 87.99 | | Total Assets | 113.25 | 106.22 | | Current Liabilities | 78.44 | 53.98 | | Of which: Accounts Payable | 19.41 | 11.36 | | Total Liabilities | 82.43 | 61.28 | | Total Shareholders' Equity | 30.82 | 44.94 | Consolidated Income Statement In the first three quarters of 2021, total operating revenue significantly increased by 323% to RMB 26.04 million, and despite a rise in total operating costs from RMB 29.49 million to RMB 41.06 million, net loss attributable to owners of the parent company narrowed from RMB 20.46 million to RMB 14.10 million, with improved basic earnings per share Key Income Statement Items | Key Income Statement Items (RMB million) | Q1-Q3 2021 | Q1-Q3 2020 | | :--- | :--- | :--- | | Total Operating Revenue | 26.04 | 6.15 | | Total Operating Costs | 41.06 | 29.49 | | Of which: Operating Costs | 17.10 | 5.47 | | Administrative Expenses | 10.47 | 14.76 | | Research and Development Expenses | 9.99 | 8.65 | | Operating Profit (Loss) | (14.17) | (21.01) | | Net Profit (Net Loss) | (14.13) | (20.92) | | Net Profit (Net Loss) Attributable to Parent Company Owners | (14.10) | (20.46) | | Basic Earnings Per Share (RMB/share) | (0.00743) | (0.01117) | Consolidated Cash Flow Statement In the first three quarters of 2021, net cash flow from operating activities was a negative RMB 20.17 million, with increased outflows primarily due to higher purchases and employee compensation, while net cash inflow from financing activities reached RMB 17.87 million, mainly from capital contributions and borrowings, supporting the company's funding needs, resulting in a cash and cash equivalents balance of RMB 1.73 million at period-end Key Cash Flow Items | Cash Flow Items (RMB million) | Q1-Q3 2021 | Q1-Q3 2020 | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | (20.17) | (10.90) | | Net Cash Flow from Investing Activities | 1.86 | 7.37 | | Net Cash Flow from Financing Activities | 17.87 | 1.15 | | Net Increase (Decrease) in Cash and Cash Equivalents | (0.34) | (2.38) | | Cash and Cash Equivalents at Period-End | 1.73 | 3.29 | Consolidated Statement of Changes in Equity As of September 30, 2021, total shareholders' equity decreased to RMB 30.82 million from RMB 44.94 million at the beginning of the year, primarily due to the net loss incurred during the period, which further reduced retained earnings from negative RMB 346 million to negative RMB 361 million - Total shareholders' equity decreased from RMB 44.94 million at the beginning of the year to RMB 30.82 million at period-end, primarily due to a RMB 14.10 million net loss incurred during the period, which reduced retained earnings[10][11][27] Notes to the Financial Statements Company Overview and Basis of Preparation Established in 1999 and listed on Hong Kong GEM in 2003, the company's main business spans mobile communication antennas, microwave technology, and communication electronic products, with financial statements prepared on a going concern basis in accordance with Chinese Accounting Standards and RMB as the functional currency - The company's business scope is extensive, primarily including mobile communication system antennas, microwave technology products, communication electronic products, data communication products, underwater engineering and monitoring equipment, and aerospace products[29] - The financial statements are prepared on a going concern basis and in accordance with the Accounting Standards for Business Enterprises issued by the Ministry of Finance of China and the disclosure requirements of the Hong Kong GEM Listing Rules[30] Share Capital Structure As of September 30, 2021, the company's total share capital remained unchanged at RMB 189.76 million, with domestic shares accounting for approximately 65.97% and H-shares for approximately 34.03% Share Capital Breakdown | Share Class | Number of Shares | Approximate Percentage of Total Share Capital | | :--- | :--- | :--- | | Domestic Shares | 125,186,429.40 | 65.97% | | H-Shares | 64,576,470.60 | 34.03% | | Total | 189,762,900.00 | 100.00% | Analysis of Key Income Statement Items In the first three quarters of 2021, main business revenue grew by 321% year-on-year to RMB 25.38 million, while selling expenses increased by 841% to RMB 3.32 million due to business expansion, management expenses decreased by 29% to RMB 10.47 million through internal resource allocation, and R&D expenses increased by 15% to RMB 9.99 million, reflecting continued investment in antenna product improvements Main Business Revenue and Cost | Item (RMB million) | Q1-Q3 2021 | Q1-Q3 2020 | | :--- | :--- | :--- | | Main Business Revenue | 25.38 | 6.03 | | Main Business Cost | 16.76 | 5.47 | - Selling expenses significantly increased from RMB 0.35 million in the prior period to RMB 3.32 million, primarily due to increased employee compensation, procurement activities, and transportation costs following the expansion of the antenna product sales team[41][69] - Management expenses decreased from RMB 14.76 million in the prior period to RMB 10.47 million, mainly due to reduced office rental expenses through internal resource allocation[43][72] - Research and development expenses increased from RMB 8.65 million in the prior period to RMB 9.99 million, primarily for further improvement and development of antenna products[45][69] Segment Information In the first three quarters of 2021, the company's business structure significantly shifted, with antenna product sales and services becoming the core business, generating RMB 14.91 million in revenue (58% of main revenue), while agricultural product sales also grew to RMB 10.40 million (41%), and despite high growth, the antenna business recorded a RMB 4.79 million loss, whereas the agricultural product business turned profitable with RMB 0.04 million in profit Segment Main Business Revenue | Segment Main Business Revenue (RMB million) | Q1-Q3 2021 | Percentage | | :--- | :--- | :--- | | Antenna Product Sales and Related Services | 14.91 | 58.8% | | Agricultural Product Sales | 10.40 | 41.0% | | Underwater Monitoring and Related Product Sales | 0.07 | 0.2% | | Total Main Business Revenue | 25.38 | 100% | Segment Profit/Loss | Segment Profit/Loss (RMB million) | Q1-Q3 2021 | | :--- | :--- | | Antenna Product Sales and Related Services | (4.79) | | Agricultural Product Sales | 0.04 | | Underwater Monitoring and Related Product Sales | (0.31) | | Aircraft Product Sales | (0.52) | | Total Segment Profit (Loss) | (5.57) | Earnings Per Share and Dividends In the first three quarters of 2021, net loss attributable to owners of the parent company was RMB 14.10 million, resulting in a basic and diluted loss per share of RMB 0.00743, which narrowed from RMB 0.01117 in the prior period, and the Board decided not to declare a dividend for the nine months ended September 30, 2021 - Basic loss per share was RMB 0.00743/share, compared to RMB 0.01117/share in the prior period[62] - The Board does not recommend declaring a dividend for the current period[63] Management Discussion and Analysis Business Review During the reporting period, the Group's performance significantly improved, with total operating revenue increasing by 423% year-on-year and gross profit margin rising from 11.10% to 34.32%, primarily driven by the antenna product segment's over 12-fold revenue growth, while the agricultural product segment also achieved revenue growth and profitability through channel optimization, and despite overall improvement, the antenna business still recorded an operating loss due to climbing capacity utilization post-expansion, with management expenses effectively reduced through resource optimization Overall Performance For the nine months ended September 30, 2021, total operating revenue increased by 423% year-on-year to RMB 26.04 million, with gross profit of approximately RMB 8.94 million and a significant increase in gross profit margin from 11.10% to 34.32%, primarily due to a substantial increase in high-margin antenna product sales, ultimately narrowing the Group's net loss from RMB 20.92 million to RMB 14.13 million Key Performance Indicators | Metric | Q1-Q3 2021 | Q1-Q3 2020 | | :--- | :--- | :--- | | Total Operating Revenue | Approx. 26.04 RMB million | Approx. 6.15 RMB million | | Gross Profit | Approx. 8.94 RMB million | Approx. 0.68 RMB million | | Gross Profit Margin | 34.32% | 11.10% | - Despite significant increases in revenue and gross profit, the Group still recorded a net loss of RMB 14.13 million as the expanded production scale did not generate sufficient revenue to cover all operating costs and expenses[75] Segment Performance Analysis The antenna product segment became the core growth driver, with revenue soaring from RMB 1.11 million to RMB 14.91 million, accounting for 58% of main revenue, but still recorded a RMB 4.79 million loss due to underutilized expanded capacity caused by delayed procurement from communication operators, while the agricultural product segment achieved profitability with RMB 0.04 million in profit on revenue growth to RMB 10.40 million through channel optimization, and underwater monitoring and aircraft product segments remained in R&D and technical support phases with no significant revenue contribution, recording losses - Antenna product segment: Revenue increased from approximately RMB 1.11 million to RMB 14.91 million, but recorded a segment loss of approximately RMB 4.79 million due to insufficient capacity utilization[65][69] - Agricultural product segment: Revenue increased from approximately RMB 3.38 million to RMB 10.40 million, and achieved profitability with a segment profit of approximately RMB 0.04 million[66][71] - Underwater monitoring and aircraft product segments: Did not generate significant operating revenue, recording segment losses of approximately RMB 0.31 million and RMB 0.52 million, respectively[65][71] Expenses and Other Income/Expenses Period expenses showed divergence: selling expenses increased over 8-fold year-on-year to RMB 3.32 million due to antenna business expansion, management expenses decreased by 29% year-on-year to RMB 10.47 million due to internal resource allocation, and R&D expenses increased by 15% year-on-year to RMB 9.99 million, reflecting continued investment in antenna products, additionally, the company sold some financial assets to meet working capital needs, recognizing RMB 0.27 million in investment income - Selling expenses increased to RMB 3.32 million (prior period: RMB 0.35 million), management expenses decreased to RMB 10.47 million (prior period: RMB 14.76 million), and R&D expenses increased to RMB 9.99 million (prior period: RMB 8.65 million)[69][72] - To meet working capital needs, the company sold financial assets previously measured at fair value, recognizing approximately RMB 0.27 million in investment income[73] Business Outlook Looking ahead, the company will focus on its core communication business, continue to promote lens antennas, having successfully bid on projects for Henan Unicom and Heilongjiang Unicom, and plans to seize the historical opportunity of 5G new infrastructure to develop communication antennas and derivative products for 4G, 5G, and other fields based on new material lens technology, while considering various financing channels such as share issuance, bank loans, and asset revitalization to support business development - Market Strategy: Actively participating in operator tenders, having successfully bid on the Henan Unicom Longbo lens antenna procurement project and China Unicom Heilongjiang Shuangyashan high-speed rail coverage project, laying the foundation for expanding into the North China and Northeast markets[78] - Product and Technology Strategy: Seizing the opportunity of 5G new infrastructure, developing communication antennas for different frequency bands based on new material lenses, and expanding the application of related derivative products in various industries[79] - Financing Plan: Will consider various financing methods such as additional share issuance, bank loans, and revitalization of existing assets as needed to ensure business development[81] Other Disclosure Matters Shareholding of Directors, Supervisors, and Major Shareholders The report details the long and short positions of the company's directors, supervisors, CEO, and major shareholders in the company's shares (domestic and H-shares) as of September 30, 2021, with Executive Directors Mr. Xiao Bing and Mr. Chen Ji and their associates holding significant interests in domestic and H-shares, and Mr. Chen Ji and his associates also holding short positions in H-shares through derivative instruments Directors' and Major Shareholders' Interests | Name | Identity | Share Class Held | Number of Shares Held | Approximate Percentage of Total Share Capital | | :--- | :--- | :--- | :--- | :--- | | Mr. Xiao Bing | Beneficial Owner, Family and Controlled Company Interests | Domestic Shares | 550,832,335 | 29.03% | | | Beneficial Owner | H-Shares | 10,000,000 | 0.53% | | Mr. Chen Ji | Controlled Company Interests | Domestic Shares | 273,344,804 | 14.40% | | | Beneficial Owner, Spouse and Controlled Company Interests | H-Shares | 46,371,000 | 2.44% | - Mr. Chen Ji holds a short position of 36,300,000 relevant H-shares through his controlled company, representing 5.62% of all issued H-shares[84][88] - Among major shareholders, excluding directors' associates, Xi'an International Medical Investment Co., Ltd. holds 5.27% of the shares, representing a significant institutional shareholder[90][92] Corporate Governance The company complied with the Corporate Governance Code set out in Appendix 15 of the GEM Listing Rules during the reporting period, with an Audit Committee comprising two independent non-executive directors and one non-executive director responsible for overseeing financial reporting and internal controls, which has reviewed the quarterly results and deemed their preparation compliant with accounting standards and adequately disclosed - The company has complied with the Corporate Governance Code and Corporate Governance Report provisions set out in Appendix 15 of the GEM Listing Rules[108] - The company has adopted a code of conduct for directors' securities transactions, and upon inquiry, all directors have complied with the relevant provisions[109] - The Audit Committee, comprising Independent Non-executive Directors Professor Shi Ping and Mr. Liu Lidong, and Non-executive Director Mr. Xu Xiong, has reviewed the unaudited consolidated results for the quarter[111]