中国创新投资(01217) - 2024 - 中期财报

Company Information Company Overview and Key Partners This chapter outlines China Innovation Investment Limited's basic information, including board members, committees, key locations, and primary banking partners - Key management and committee structure: Executive Directors: Mr. Xiang Xin (Chairman and Chief Executive Officer), Mr. Chen Changyi; Independent Non-executive Directors: Ms. An Jing, Ms. Zhou Zan, Ms. Qin Han; Executive Committee: Composed of all executive directors, with Mr. Xiang Xin as Chairman; Audit and Remuneration Committee Chairman: Ms. An Jing; Nomination Committee Chairman: Mr. Xiang Xin[4] - The company's key external partners include: Investment Manager: Everbright Securities (Hong Kong) Limited; Primary Banks: Bank of China (Hong Kong) Limited, UBS; Custodian: China Everbright Securities (Hong Kong) Limited, UBS[5] Financial Highlights Half-Year Performance Overview For the six months ended June 30, 2024, the company achieved significant growth in both turnover and profit, with turnover increasing by 250% and profit by approximately 13.6% year-on-year, while the board decided against an interim dividend to retain capital for future operations and investments Half-Year Performance Summary as of June 30, 2024 | Indicator | Six Months Ended June 30, 2024 (HK$ Thousand) | Six Months Ended June 30, 2023 (HK$ Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Turnover | 269,660 | 77,028 | +250.1% | | Revenue | 11,843 | 10,254 | +15.5% | | Profit for the Period | 8,109 | 7,136 | +13.6% | | Basic Earnings Per Share | 0.063 HK Cents | 0.056 HK Cents | +12.5% | - The Board of Directors does not recommend an interim dividend for the six months ended June 30, 2024, aiming to retain capital to support operational needs and seize potential investment opportunities[7] Management Discussion and Analysis Financial Review During the reporting period, the company's turnover significantly increased to approximately HK$270 million, with net profit growth primarily driven by increased realized gains from fair value investments, partially offset by unrealized holding losses Revenue Composition for H1 2024 | Item | Amount (HK$ Thousand) | | :--- | :--- | | Dividend income from Hong Kong listed securities | 3,411 | | Net realized gains on disposal of investments | 24,522 | | Net unrealized holding losses on investments | (17,771) | | Total Revenue | 11,843 | - Net profit for the six months ended June 30, 2024, was approximately HK$8,109,000, an increase from HK$7,136,000 in the prior period, primarily due to higher realized gains from investment disposals[8] Business Review As an investment company listed under Chapter 21 of the Stock Exchange Listing Rules, the company primarily focuses on equity investments in both unlisted and listed entities, maintaining stable book values for five unlisted investments and actively engaging in short-term Hong Kong listed company transactions during the period - The company is an investment company listed on the Main Board of the Stock Exchange, adhering to the provisions of Chapter 21 of the Listing Rules[9] Unlisted Investment Portfolio (as of June 30, 2024) | Unlisted Company | Book Value (HK$ Thousand) | | :--- | :--- | | Sun Creation Limited | 36,149 | | Weimei Vision Limited | 53,933 | | Link Crown Future Limited | 40,955 | | Fengtian Huifu Limited | 34,935 | | Guangyuan Starry Sky Limited | 44,249 | - For short-term investments in Hong Kong listed companies, total proceeds from sales for the half-year ended June 30, 2024, amounted to HK$269,660,000, significantly higher than HK$77,028,000 in the prior period[12] Outlook The company's core strategy is to achieve medium to long-term capital appreciation by investing in quality listed and unlisted companies, having recently established substantial project layouts in five emerging industries—new energy, new light sources, new materials, new health, and new capital—to identify innovative business models focused on energy conservation and emission reduction - The company has established investment layouts in five emerging industrial sectors: New Energy: Investment in Sun Creation Limited, focusing on solar cell technology and application products; New Light Source: Investment in Weimei Vision Limited, focusing on energy-saving and environmentally friendly LED lighting products; New Materials: Investment in Link Crown Future Limited, focusing on green and environmentally friendly home decoration materials; New Health: Investment in Fengtian Huifu Limited, engaged in the development and sales of health communication products; New Capital: Investment in Guangyuan Starry Sky Limited, engaged in asset management and holding office properties in Shanghai[13][14] - Looking ahead, the company will continue to explore investment opportunities with innovative business models and fulfill its social responsibilities, leveraging the power of investment for good[14] Investment Portfolio Details This section details the company's listed and unlisted investment portfolios as of June 30, 2024, showing a decrease in the market value of Hong Kong equity securities from the beginning of the year, with major holdings including Alibaba, Dayu Financial Holdings, and China Merchants Commercial REIT, while the unlisted portfolio comprises five core companies aligned with the company's emerging industry strategy Changes in Market Value of Hong Kong Listed Equity Securities | Item | June 30, 2024 (HK$ Thousand) | December 31, 2023 (HK$ Thousand) | | :--- | :--- | :--- | | Hong Kong listed equity securities | 53,159 | 137,382 | Major Hong Kong Listed Equity Securities Holdings (as of June 30, 2024) | Listed Equity Securities | Number of Shares Held | Cost (HK$ Thousand) | Market Value (HK$ Thousand) | | :--- | :--- | :--- | :--- | | Alibaba Group Holding Limited (09988.hk) | 689,000 | 79,166 | 48,575 | | Dayu Financial Holdings Limited (01073.hk) | 8,355,000 | 3,760 | 802 | | China Merchants Commercial REIT (01503.hk) | 3,470,000 | 11,555 | 3,782 | - The company's five unlisted investments are all investment holding companies, corresponding to the five strategic areas of "New Energy," "New Light Source," "New Materials," "New Health," and "New Capital," in which the company holds a significant proportion of non-voting shares[17][18] Liquidity and Financial Position The company maintains a robust financial position with ample cash and cash equivalents and no bank financing, ending the reporting period in a net cash position with a zero debt-to-equity ratio, indicating sufficient financial resources for ongoing operations and development - As of June 30, 2024, the company's cash and cash equivalents amounted to approximately HK$195,499,000, primarily denominated in Hong Kong Dollars[19] - The company funds its operations with its own capital, has not raised any bank financing, and maintains a zero debt-to-equity ratio (net debt to equity)[19] Human Resources As of June 30, 2024, the company had 19 employees with total remuneration of approximately HK$1.325 million, an increase from the prior period, and regularly reviews its compensation policy to ensure market competitiveness Employee and Remuneration Information | Item | June 30, 2024 | Prior Period (2023) | | :--- | :--- | :--- | | Number of Employees | 19 | 21 | | Total Remuneration (including directors' emoluments) | Approximately HK$1,325,000 | Approximately HK$952,000 | Disclosure of Interests Directors' and Chief Executive's Interests This section discloses the stock options held by the company's directors as of June 30, 2024, noting that several directors hold options granted under the share option scheme, with some held by Chairman Mr. Xiang Xin having expired post-reporting period Share Options Held by Directors (as of June 30, 2024) | Director Name | Number of Shares Involved | Exercise Price Per Share (HK$) | Exercise Period | | :--- | :--- | :--- | :--- | | Xiang Xin | 60,394,737 | 0.0497 | Until July 5, 2024 | | An Jing | 30,000,000 | 0.0497 | Until April 13, 2030 | | Zhou Zan | 30,000,000 | 0.0497 | Until April 3, 2028 | | Qin Han | 30,000,000 | 0.0497 | Until September 28, 2033 | - Note: 60,394,737 share options held by Director Mr. Xiang Xin automatically expired on July 5, 2024[28] Major Shareholders' Interests As of June 30, 2024, Harvest Rise Investments Limited was the company's major shareholder, holding approximately 29.82% of shares, wholly owned by China Trends Holdings Limited, with China Science and Technology Education Foundation being China Trends' largest shareholder Major Shareholder Holdings (as of June 30, 2024) | Shareholder Name | Capacity | Number of Shares Held | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Harvest Rise Investments Limited | Beneficial | 3,817,807,905 | 29.82% | | China Trends Holdings Limited | Controlled Corporation Interest | 3,817,807,905 | 29.82% | | China Science and Technology Education Foundation | Controlled Corporation Interest | 3,817,807,905 | 29.82% | Corporate Governance and Other Information Corporate Governance Practices The company is committed to high corporate governance standards, largely complying with the Corporate Governance Code during the reporting period, with the sole deviation being the combined roles of Chairman and Chief Executive Officer held by Mr. Xiang Xin, an arrangement the board deems currently in the company's best interest, supported by four committees assisting the board in its duties - The company has one deviation from the Corporate Governance Code: the roles of Chairman and Chief Executive Officer are not separated, both held by Mr. Xiang Xin, which the Board believes helps maintain policy continuity and operational stability[34] - The company has established an Executive Committee, Remuneration Committee, Nomination Committee, and Audit Committee, each composed of directors with relevant professional expertise to ensure effective corporate governance[35][37][38][39] - For the six months ended June 30, 2024, the company did not purchase, sell, or redeem any of its listed securities and consistently maintained sufficient public float[40][42] Condensed Financial Statements Condensed Statement of Profit or Loss and Other Comprehensive Income This statement presents the company's income, expenses, and profitability for the reporting period, showing a turnover of HK$270 million, a profit before tax of HK$8.109 million, and total comprehensive income attributable to owners of HK$8.109 million Profit or Loss Statement Summary for the Six Months Ended June 30, 2024 | Item | Amount (HK$ Thousand) | | :--- | :--- | | Turnover | 269,660 | | Revenue | 11,843 | | Administrative and other operating expenses | (3,741) | | Profit before tax | 8,109 | | Profit for the period and attributable to owners of the Company | 8,109 | | Basic earnings per share | 0.063 HK Cents | Condensed Statement of Financial Position This statement presents the company's assets, liabilities, and equity as of the reporting period end, with total assets of approximately HK$557 million and total equity of HK$556 million, primarily comprising unlisted equity investments, listed equity investments, and cash and cash equivalents Financial Position Statement Summary (as of June 30, 2024) | Item | Amount (HK$ Thousand) | | :--- | :--- | | Non-current assets | 212,296 | | Current assets | 345,388 | | Total assets | 557,684 | | Total equity | 555,777 | | Total liabilities | 1,907 | | Net asset value per share (HK$) | 0.043 | Condensed Statement of Changes in Equity This statement reflects changes in shareholders' equity during the reporting period, with total equity increasing from approximately HK$548 million at the beginning of the period to HK$556 million at the end, primarily due to the HK$8.109 million total comprehensive income recorded during the period Summary of Changes in Equity (for the Six Months Ended June 30, 2024) | Item | Amount (HK$ Thousand) | | :--- | :--- | | As at January 1, 2024 (audited) | 547,668 | | Total comprehensive income for the period | 8,109 | | As at June 30, 2024 (unaudited) | 555,777 | Condensed Statement of Cash Flows This statement summarizes cash inflows and outflows during the reporting period, with operating activities generating approximately HK$150 million in net cash inflow, primarily from investment sales, leading to a significant increase in period-end cash and cash equivalents to approximately HK$195 million Cash Flow Summary (for the Six Months Ended June 30, 2024) | Item | Amount (HK$ Thousand) | | :--- | :--- | | Net cash generated from operating activities | 150,250 | | Net cash flows from investing activities | 5,092 | | Net cash used in financing activities | (421) | | Net increase in cash and cash equivalents | 154,921 | | Cash and cash equivalents at beginning of period | 40,578 | | Cash and cash equivalents at end of period | 195,499 | Summary of Notes to the Financial Statements The notes to the financial statements provide detailed explanations and supplementary information for various items, including analyses of turnover composition, earnings per share calculation, fair value measurement of investments, share option scheme details, and related party transactions Note 3: Revenue Composition Details | Item | Amount (HK$ Thousand) | | :--- | :--- | | Bank interest income | 1,681 | | Dividend income from Hong Kong listed equity securities | 3,411 | | Net realized gains on disposal of investments | 24,522 | | Net unrealized (losses) on investments | (17,771) | | Total Revenue | 11,843 | - Note 6: Basic earnings per share is calculated based on profit attributable to owners of approximately HK$8,109,000 and a weighted average of 12,801,578,629 issued shares; diluted earnings per share is not applicable due to the absence of potential dilutive ordinary shares[54] - Note 8: As of June 30, 2024, the company's Hong Kong listed equity securities had a market value of approximately HK$53,159,000, with holdings in Alibaba Group valued at approximately HK$48,575,000, representing about 8.7% of the company's total assets[57] - Note 14: During the reporting period, the company paid HK$240,000 in investment management fees to related party Everbright Securities (Hong Kong) Limited and HK$480,000 in rent to New Times Group (China) Limited[73]