企展控股(01808) - 2024 - 中期业绩

Management Discussion and Analysis Business Review The Group achieved strong H1 2024 performance, with total revenue surging 333% and net profit attributable to equity holders increasing 275%, driven by software business expansion and financial asset disposal gains Key Performance Indicators for H1 2024 | Indicator | Six Months Ended June 30, 2024 (RMB) | Six Months Ended June 30, 2023 (RMB) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | Approx. RMB 127,590,000 | RMB 29,434,000 | +333% | | Consolidated Net Profit Attributable to Equity Holders | Approx. RMB 19,109,000 | Approx. RMB 5,098,000 | +275% | - Overall revenue from the software business significantly increased due to the Group's continued development of existing operations and the signing and completion of new contracts involving integrated IT solutions, edge computing, and intelligent computing data services[3] Outlook The company will focus on the digital economy, emphasizing data elements, data asset operations, and AI intelligent and edge computing, aiming to become a digital technology integrated solution provider by building a synergistic 'three chains and one circle' model and leveraging industrial incubation investments to solidify its first-mover advantage - The company strategically positions itself in new quality productive forces, particularly within the digital economy, with core elements including data, intelligent and edge computing, networks, and applications[5] - The implementation path involves establishing a 'three chains and one circle' model, focusing on the overall synergy of innovation, industry, and financial chains, and strengthening the ecosystem through business model innovation, data element assetization, investment incubation capitalization, and ecological industrial layout[5] - Future efforts will continuously optimize first-mover advantages in data elements, data asset operations, and intelligent and edge computing, leveraging the technical potential of big data, large models, and high computing power to promote the integration of the digital and real economies[6] Financial Review The period saw strong financial performance with total revenue growing 333% to RMB 128 million and gross profit increasing to RMB 33.27 million, though gross margin declined from 36% to 26% due to higher sales of lower-margin hardware products, alongside increased finance costs, distribution, and administrative expenses, culminating in a significant net profit increase to RMB 19.10 million Revenue Analysis For the six months ended June 30, 2024, the Group's total revenue reached approximately RMB 127.6 million, a 333% increase from RMB 29.43 million in the prior year, primarily driven by a 331% growth in software business revenue to RMB 126.9 million, with significant increases in both software maintenance services and product sales Revenue Composition (RMB) | Revenue Category | H1 2024 (RMB '000) | H1 2023 (RMB '000) | | :--- | :--- | :--- | | Software Maintenance and Other Services | 49,347 | 18,101 | | Software Product and Other Product Sales | 78,243 | 11,333 | | Total | 127,590 | 29,434 | Gross Profit Analysis The Group's gross profit for H1 2024 was approximately RMB 33.27 million, a significant increase from RMB 10.57 million in the prior year, though the software business gross margin decreased from 36% to 26%, primarily due to a higher proportion of lower-margin server hardware and computing server product sales Gross Profit and Gross Margin Changes | Indicator | H1 2024 (RMB) | H1 2023 (RMB) | | :--- | :--- | :--- | | Gross Profit | Approx. RMB 33,272,000 | Approx. RMB 10,568,000 | | Software Business Gross Margin | Approx. 26% | Approx. 36% | - The decline in gross margin was primarily due to an increased proportion of sales of server hardware products and computing server products, which generally have lower gross margins[8] Expenses and Other Income During the period, operating expenses increased across the board, with finance costs surging due to higher interest-bearing borrowings, and distribution and administrative expenses rising from business expansion, increased staff costs, and travel expenses; additionally, the Group recorded net gains of approximately RMB 17.17 million from financial asset disposals but recognized fair value losses of approximately RMB 1.41 million - Finance costs increased to approximately RMB 3.81 million (prior period: RMB 0.55 million), primarily due to higher interest expenses on interest-bearing borrowings[9] - Distribution expenses increased to approximately RMB 8.50 million (prior period: RMB 7.06 million), mainly due to increased staff costs and selling expenses in the China software business[10] - General and administrative expenses increased to approximately RMB 14.55 million (prior period: RMB 9.88 million), primarily due to increased staff costs, overseas travel expenses, and depreciation[11] Fair Value Changes and Disposal Gains of Financial Assets (RMB) | Item | H1 2024 (RMB '000) | H1 2023 (RMB '000) | | :--- | :--- | :--- | | Fair Value (Loss)/Gain | (1,410) | 4,160 | | Net Disposal Gains | 17,174 | 7,143 | Profit for the Period Overall, driven by strong revenue growth and successful financial asset disposals, the Group recorded a net profit of approximately RMB 19.10 million in H1 2024, a significant increase from RMB 4.68 million in the prior year Net Profit Comparison (RMB) | Indicator | H1 2024 (RMB) | H1 2023 (RMB) | | :--- | :--- | :--- | | Net Profit for the Period | Approx. RMB 19,097,000 | Approx. RMB 4,682,000 | Liquidity and Financial Resources The Group maintains a robust financial position with approximately RMB 209 million in cash and cash equivalents as of June 30, 2024, a current ratio of approximately 4.45 times, an inapplicable net debt-to-equity ratio due to cash exceeding interest-bearing borrowings, and total borrowings of approximately RMB 21.94 million Key Financial Resources Indicators | Indicator | June 30, 2024 (RMB) | December 31, 2023 (RMB) | | :--- | :--- | :--- | | Cash and Cash Equivalents | Approx. RMB 208,678,000 | Approx. RMB 177,805,000 | | Current Ratio | Approx. 4.45 times | Approx. 7.69 times | | Interest-bearing Borrowings | Approx. RMB 21,938,000 | Approx. RMB 19,816,000 | - The Directors believe the Group's foreign currency exposure is not significant, and no hedging is currently required[15] Capital Management and Investment Activities The Group's capital management strategy remains unchanged, aiming to generate shareholder returns by optimizing debt and equity balance, with no major investments or significant acquisitions/disposals of subsidiaries during the period, though the Group did acquire and dispose of several US-listed securities, including NVIDIA and Tesla, which constituted discloseable transactions - The Group's capital structure, comprising debt (interest-bearing borrowings) and equity, maintained its overall strategy during the period[17] - For the six months ended June 30, 2024, the Group acquired and disposed of several listed securities, including NVIDIA Corporation, RIOT Blockchain Inc., The Boeing Company, and Tesla Inc., which constituted discloseable transactions under the Listing Rules[19] Employees and Remuneration Policy As of June 30, 2024, the Group's full-time employees increased from 101 to 127, with corresponding staff costs rising from RMB 11.40 million to RMB 13.90 million, and remuneration determined by performance, experience, and market conditions Employee and Cost Changes | Indicator | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Full-time Employees | 127 | 101 | | Staff Costs (H1) | Approx. RMB 13,900,000 | Approx. RMB 11,400,000 | Unaudited Consolidated Financial Statements Unaudited Consolidated Statement of Profit or Loss The consolidated statement of profit or loss shows the Group achieved RMB 127.6 million in revenue for H1 2024, a 333% year-on-year increase, with operating profit surging to RMB 26.41 million, profit before tax at RMB 22.61 million, and profit attributable to equity holders at RMB 19.11 million, resulting in basic earnings per share of RMB 0.092 Consolidated Statement of Profit or Loss Summary (RMB '000) | Item | H1 2024 (RMB '000) | H1 2023 (RMB '000) | | :--- | :--- | :--- | | Revenue | 127,590 | 29,434 | | Gross Profit | 33,272 | 10,568 | | Operating Profit | 26,414 | 5,199 | | Profit Before Tax | 22,609 | 4,651 | | Profit for the Period | 19,097 | 4,682 | | Profit Attributable to Equity Holders of the Company | 19,109 | 5,098 | | Basic Earnings Per Share (RMB) | 0.092 | 0.038 | Unaudited Consolidated Statement of Comprehensive Income For H1 2024, the Group's total comprehensive income increased to RMB 16.31 million from RMB 9.66 million in the prior year, comprising RMB 19.10 million in profit for the period, partially offset by RMB 2.79 million in foreign currency translation differences (loss) from overseas operations Consolidated Statement of Comprehensive Income Summary (RMB '000) | Item | H1 2024 (RMB '000) | H1 2023 (RMB '000) | | :--- | :--- | :--- | | Profit for the Period | 19,097 | 4,682 | | Exchange Differences on Translation of Financial Statements of Foreign Operations | (2,785) | 4,977 | | Total Comprehensive Income for the Period | 16,312 | 9,659 | Unaudited Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets increased to RMB 458 million, and net current assets expanded to RMB 342 million, driven by increases in trade and other receivables, cash, and financial assets at fair value through profit or loss, with total equity rising to RMB 359 million Consolidated Statement of Financial Position Summary (RMB '000) | Item | June 30, 2024 (RMB '000) | December 31, 2023 (RMB '000) | | :--- | :--- | :--- | | Non-current Assets | 16,714 | 12,483 | | Current Assets | 441,066 | 290,281 | | Total Assets | 457,780 | 302,764 | | Current Liabilities | 99,064 | 37,748 | | Non-current Liabilities | 70 | 875 | | Total Liabilities | 99,134 | 38,623 | | Total Equity | 358,646 | 264,141 | Notes to the Unaudited Interim Financial Results Basis of Preparation and Accounting Policies These interim results are prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and adopt the same accounting policies as the 2023 annual financial statements, with no significant changes to the Group's accounting policies or financial statement amounts from new IFRS amendments effective during the period - These unaudited interim results have been prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting'[27] - The adoption of new and revised International Financial Reporting Standards and International Accounting Standards effective during the period did not result in significant changes to the Group's accounting policies or the amounts reported for the current and prior periods[28] Segment Reporting The Group is primarily segmented into a reportable 'Software Business' segment and an 'Others' segment (including securities trading), with the software business contributing RMB 126.9 million in revenue and RMB 18.65 million in adjusted profit before tax in H1 2024, while the 'Others' segment contributed RMB 9.11 million in profit, and the vast majority of revenue originated from China Segment Performance Summary (H1 2024, RMB '000) | Segment | Revenue (RMB '000) | Adjusted Profit/(Loss) Before Tax (RMB '000) | | :--- | :--- | :--- | | Software Business | 126,865 | 18,645 | | Others | 725 | 9,107 | | Total | 127,590 | 27,752 | Revenue from External Customers by Geographical Area (RMB '000) | Region | H1 2024 (RMB '000) | H1 2023 (RMB '000) | | :--- | :--- | :--- | | China | 126,865 | 29,434 | | Thailand | 725 | – | | Total | 127,590 | 29,434 | Dividends and Earnings Per Share The Board did not recommend an interim dividend for the six months ended June 30, 2024, with basic and diluted earnings per share for the period at RMB 0.092, calculated based on approximately RMB 19.11 million in profit and 207.9 million weighted average ordinary shares outstanding - No dividends were paid or proposed for the six months ended June 30, 2024 (six months ended June 30, 2023: nil)[41] Earnings Per Share Calculation | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Profit Attributable to Equity Holders (RMB) | Approx. RMB 19,109,000 | Approx. RMB 5,098,000 | | Weighted Average Number of Ordinary Shares in Issue (shares) | 207,890,108 | 133,277,036 | | Basic and Diluted Earnings Per Share (RMB) | 0.092 | 0.038 | Share Capital In H1 2024, the company issued 40,810,000 new ordinary shares via placing at HKD 2.09 per share, with the placing completed on June 13, 2024, yielding net proceeds of approximately RMB 78.19 million (approximately HKD 84.35 million) Changes in Issued Share Capital | Item | Number of Shares | HKD | | :--- | :--- | :--- | | At Beginning of Period | 204,078,185 | 20,407,818 | | Issue of Placing Shares | 40,810,000 | 4,081,000 | | At End of Period | 244,888,185 | 24,488,818 | - The placing was completed on June 13, 2024, with a successful placement of 40,810,000 shares at a placing price of HKD 2.09 per share, generating net proceeds of approximately RMB 78.19 million[51] Other Information Fundraising Activities and Use of Proceeds The report details two fundraising activities: a June 2024 share placing and a 2023 rights issue; the 2024 placing yielded net proceeds of approximately HKD 84.35 million, earmarked 70% for new business investments (e.g., AI data centers) and 30% for general working capital, remaining unutilized as of the reporting period, while the 2023 rights issue proceeds, whose use was revised in December 2023, are being utilized as planned for industrial park software projects and general working capital - The placing of 40,810,000 new shares was completed in June 2024, with net proceeds of approximately HKD 84.35 million[52] - The placing proceeds are intended to be used 70% (approximately HKD 59.04 million) for new business investments (e.g., AI data centers) and 30% (approximately HKD 25.31 million) for general working capital, with the funds remaining unutilized as of June 30, 2024[52][53] - The use of net proceeds from the 2023 rights issue was revised in December 2023, and as of June 30, 2024, a portion of the funds has been utilized as planned, with the remaining unutilized amount of approximately HKD 44.63 million expected to be fully utilized by the end of 2024[55][56] Interim Dividend The Board resolved not to declare any interim dividend for the six months ended June 30, 2024 - The Directors resolved not to declare any interim dividend for the six months ended June 30, 2024 (six months ended June 30, 2023: nil)[57] Corporate Governance The company has adopted and largely complied with the Corporate Governance Code during the period, with a key deviation being the absence of a designated Chairman, whose functions are jointly performed by the Board, and the review committee has reviewed these interim financial results - The company has adopted the Corporate Governance Code as set out in Appendix C1 to the Listing Rules and complied with all relevant code provisions during the period, except for the deviation mentioned below[60][61] - Deviation: Pursuant to Code Provision C.2.1 of the Corporate Governance Code, the roles of chairman and chief executive should be separate, but the company has not yet appointed a chairman, and these roles and functions are jointly performed by the Board[61] - The review committee, comprising three independent non-executive Directors, has reviewed the Group's unaudited interim financial results for the six months ended June 30, 2024[61]