远航港口(08502) - 2021 - 中期财报

Corporate Information Far East Port Development Limited, listed on HKEX GEM (stock code 8502), is an investment holding company primarily engaged in port operations in Chizhou City, Anhui Province, China - Far East Port Development Limited is a Cayman Islands-incorporated company listed on HKEX GEM (stock code 8502), primarily engaged in investment holding with subsidiaries operating ports in Chizhou City, Anhui Province, China[24] - The company's ultimate controlling parties are Mr. Gui Sihai and his spouse Ms. Zhang Huifeng, who exercise control through Vital Force Developments Limited[24] Financial Statements This section presents the unaudited condensed consolidated financial statements, including comprehensive income, financial position, cash flows, and changes in equity Unaudited Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2021, revenue increased to RMB 89.77 million, gross profit slightly decreased, and profit for the period remained stable at RMB 43.23 million, with basic and diluted EPS at RMB 3.88 cents Summary of Results for the Six Months Ended June 30, 2021 | Indicator | For the Six Months Ended June 30, 2021 (RMB Thousand) | For the Six Months Ended June 30, 2020 (RMB Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 89,771 | 86,405 | +3.9% | | Gross Profit | 54,555 | 55,594 | -1.9% | | Profit Before Income Tax | 51,497 | 52,665 | -2.2% | | Profit for the Period | 43,233 | 42,600 | +1.5% | | Profit Attributable to Owners of the Company | 31,054 | 30,519 | +1.8% | | Basic and Diluted Earnings Per Share | RMB 3.88 cents | RMB 3.81 cents | +1.8% | Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2021, total assets increased to RMB 676.34 million and total equity to RMB 519.75 million, indicating growth in asset base and net assets, with a significant increase in net current assets Summary of Financial Position | Indicator | June 30, 2021 (RMB Thousand) | December 31, 2020 (RMB Thousand) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 496,528 | 505,480 | -1.8% | | Current Assets | 179,812 | 144,700 | +24.3% | | Total Assets | 676,340 | 650,180 | +4.0% | | Current Liabilities | 114,825 | 133,834 | -14.2% | | Non-current Liabilities | 41,769 | 38,816 | +7.6% | | Total Liabilities | 156,594 | 172,650 | -9.3% | | Total Equity | 519,746 | 477,530 | +8.8% | Unaudited Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2021, net cash from operating activities was RMB 50.03 million, but increased net cash used in investing activities led to a decrease in cash and cash equivalents to RMB 96.55 million at period-end Summary of Cash Flows | Indicator | For the Six Months Ended June 30, 2021 (RMB Thousand) | For the Six Months Ended June 30, 2020 (RMB Thousand) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 50,032 | 56,768 | | Net Cash Used in Investing Activities | (80,394) | (25,659) | | Net Cash Generated from/(Used in) Financing Activities | 4,392 | (34,942) | | Net Decrease in Cash and Cash Equivalents | (25,970) | (3,833) | | Cash and Cash Equivalents at Beginning of Period | 122,523 | 84,161 | | Cash and Cash Equivalents at End of Period | 96,553 | 80,328 | Unaudited Condensed Consolidated Statement of Changes in Equity As of June 30, 2021, total equity grew from RMB 477.53 million at the beginning of the year to RMB 519.75 million, primarily driven by profit for the period, with equity attributable to owners increasing from RMB 352 million to RMB 383 million - Profit for the period of RMB 43.23 million was the primary driver of equity growth, with RMB 31.05 million attributable to owners of the company[20] Notes to the Financial Statements This section provides detailed notes to the unaudited condensed consolidated financial statements, covering revenue, income tax, earnings per share, interim dividends, and capital commitments Note 5. Revenue All company revenue is derived from port services in China, with total revenue for the six months ended June 30, 2021, at RMB 89.77 million, a 3.9% year-on-year increase, predominantly from stevedoring services, while ancillary port services revenue grew rapidly Revenue Breakdown (For the Six Months Ended June 30) | Revenue Category | 2021 (RMB Thousand) | 2020 (RMB Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Provision of Stevedoring Services | | | | | Bulk and General Cargo | 81,013 | 79,774 | +1.6% | | Container | 1,065 | 1,311 | -18.8% | | Subtotal | 82,078 | 81,085 | +1.2% | | Provision of Ancillary Port Services | 7,693 | 5,320 | +44.6% | | Total | 89,771 | 86,405 | +3.9% | Note 7. Income Tax Expense Current period income tax expense was RMB 8.26 million, lower than the prior period's RMB 10.07 million, primarily due to a corporate income tax exemption for a qualified infrastructure project of subsidiary Chizhou Port Holdings, valid until the end of 2021 - The qualified infrastructure project of subsidiary Chizhou Port Holdings enjoys a "three-year tax exemption, three-year 50% tax reduction" incentive, with 2021 still within the full exemption period, effectively reducing the group's overall tax burden[46] Note 8. Earnings Per Share For the six months ended June 30, 2021, basic and diluted earnings per share were RMB 3.88 cents, a slight increase from RMB 3.81 cents in the prior period, calculated based on profit attributable to owners of RMB 31.05 million and a weighted average of 800 million ordinary shares - Diluted earnings per share are the same as basic earnings per share due to the absence of potentially dilutive shares during the period[50] Earnings Per Share Calculation | Indicator | For the Six Months Ended June 30, 2021 | For the Six Months Ended June 30, 2020 | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company (RMB Thousand) | 31,054 | 30,519 | | Weighted Average Number of Ordinary Shares in Issue | 800,000,000 | 800,000,000 | | Basic Earnings Per Share | RMB 3.88 cents | RMB 3.81 cents | Note 9. Interim Dividend The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2021, consistent with the policy for the prior period - No interim dividend is recommended for the six months ended June 30, 2021[51] Note 14. Capital Commitments As of June 30, 2021, the Group had contracted but unprovided capital commitments, primarily for investments in subsidiary Chizhou Meilong (RMB 21.6 million) and an equity investment at fair value through other comprehensive income (RMB 15 million) - The Group committed to inject a total of RMB 36 million cash capital in installments into subsidiary Chizhou Meilong for new pier construction, with RMB 21.6 million remaining to be injected[64] - The Group agreed to inject a total of RMB 20 million cash capital in installments into an investee, with RMB 5 million already injected and RMB 15 million remaining[65] Management Discussion and Analysis This section provides an overview of the Group's business performance, financial results, and future outlook, highlighting key operational and financial trends Business Review As the largest public port operator in Chizhou City, Anhui Province, the Group operates Jiangkou and Niutoushan port areas; in H1 2021, bulk and general cargo throughput grew 10.3% year-on-year, driving a 3.9% revenue increase, while container business volume fell 17.1% due to international conditions Key Operating Data for H1 2021 | Indicator | H1 2021 | H1 2020 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Bulk and General Cargo Throughput | 14.4 million tonnes | 13.1 million tonnes | +10.3% | | Container Throughput | 7,020 TEUs | 8,471 TEUs | -17.1% | | Revenue | RMB 89.8 million | RMB 86.4 million | +3.9% | | Profit | RMB 43.2 million | RMB 42.6 million | +1.4% | - Performance growth was primarily driven by domestic economic recovery, the advancement of the Yangtze River Economic Belt strategy, and the throughput capacity advantage of Jiangkou Terminal Phase III[90][93] Outlook Management maintains a relatively optimistic outlook for the H2 2021 transportation market, citing positive factors like stable Chinese economic development and increased demand for construction materials, but acknowledges uncertainties from regional floods and the ongoing COVID-19 pandemic - Management is confident in the Group's operational outlook and will continue to leverage its throughput capacity advantages, control costs, and seize market opportunities[97] - Key uncertainties for the second half of the year stem from the potential impact of floods and the COVID-19 pandemic on the economy[94] Financial Review In H1 2021, the Group's total revenue grew 3.9% to RMB 89.8 million, driven by increased cargo throughput; however, cost of services rose 14.3% due to new fixed asset depreciation and increased subcontracting fees, leading to a gross margin decline from 64.3% to 60.8%, with profit for the period slightly increasing by 1.4% to RMB 43.2 million Revenue Revenue growth primarily stemmed from increased cargo handling volume, reflecting a gradual recovery in market demand post-pandemic, with ancillary port services revenue significantly increasing by 44.6% year-on-year, while container handling revenue declined - An increase of approximately 1.3 million tonnes in cargo throughput was the main reason for revenue growth, benefiting from the gradual recovery of China's domestic and foreign trade economies[101] Cost of Services Cost of services increased by 14.3% year-on-year to RMB 35.2 million, primarily due to approximately RMB 1.8 million in increased depreciation expenses for new property, plant, and equipment, and approximately RMB 1.6 million in increased subcontracting fees driven by higher cargo throughput - The primary drivers of increased cost of services were higher depreciation of fixed assets and subcontracting fees related to increased business volume[102] Gross Profit and Gross Margin Gross profit slightly decreased by 1.9% year-on-year to RMB 54.6 million, with gross margin declining from 64.3% to 60.8%, primarily because the growth rate of fixed costs, especially depreciation, outpaced revenue growth Gross Profit and Gross Margin Changes | Indicator | H1 2021 | H1 2020 | Change | | :--- | :--- | :--- | :--- | | Gross Profit (RMB Thousand) | 54,555 | 55,594 | -1.9% | | Gross Margin (%) | 60.8 | 64.3 | -3.5 percentage points | Income Tax Expense Income tax expense decreased by 17.8% year-on-year to RMB 8.3 million, mainly because more profit was derived from qualified projects enjoying corporate income tax exemption, resulting in an effective tax rate of approximately 16.0% for the period, significantly lower than the standard 25% rate - The lower effective tax rate is primarily attributable to the three-year full tax exemption enjoyed by Chizhou Port Holdings' qualified project[110] Capital Structure, Liquidity and Financial Resources The Group maintains a robust financial position, relying on operating cash flow and shareholder contributions for funding; as of June 30, 2021, bank and cash balances (including time deposits) were approximately RMB 166 million, with a very low gearing ratio (total liabilities/total equity) of approximately 0.2%, indicating minimal financial risk Key Financial Ratios | Indicator | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Bank and Cash Balances (including time deposits) | RMB 166 million | RMB 123 million | | Total Liabilities | RMB 1.0 million | RMB 1.0 million | | Gearing Ratio | Approx. 0.2% | Approx. 0.2% | Employees and Remuneration Policy As of June 30, 2021, the Group had approximately 212 employees, a slight decrease from the beginning of the year, with total staff costs for the first half of the year at approximately RMB 10 million, an increase year-on-year, and remuneration policy determined based on individual responsibilities, capabilities, and market levels - Total staff costs for the six months ended June 30, 2021, were approximately RMB 10 million, higher than the RMB 9.3 million in the prior period[124] Other Information This section covers additional disclosures including directors' and major shareholders' interests and corporate governance practices Directors' and Major Shareholders' Interests As of June 30, 2021, controlling shareholder Vital Force Developments Limited held 75% of the company's shares, with Executive Director Mr. Gui Sihai and his spouse (Non-executive Director Ms. Zhang Huifeng) deemed to jointly own this interest Major Shareholder Holdings | Shareholder Name | Capacity | Number of Shares Held | Percentage of Holding | | :--- | :--- | :--- | :--- | | Vital Force | Beneficial Owner | 600,000,000 | 75% | | Mr. Gui Sihai | Interest in Controlled Corporation | 600,000,000 | 75% | | Ms. Zhang Huifeng | Interest in Controlled Corporation | 600,000,000 | 75% | Corporate Governance During the reporting period, the company consistently complied with applicable provisions of the Corporate Governance Code in Appendix 15 to the GEM Listing Rules, having established an Audit Committee comprising three independent non-executive directors responsible for overseeing financial reporting and internal controls, which has reviewed the interim financial statements - The company has adopted a code of conduct for directors' securities transactions, and all directors have confirmed compliance with relevant provisions during the reporting period[158] - The Audit Committee has reviewed the unaudited condensed consolidated financial statements for the six months ended June 30, 2021, and considers them to be in compliance with applicable accounting standards and disclosure requirements[162]