浙江世宝(01057) - 2024 - 中期业绩

Main Accounting Data and Financial Indicators Zhejiang Shibao Co., Ltd. announced its interim results for the six months ended June 30, 2024, showing significant growth in revenue, net profit, total assets, and net assets attributable to shareholders Key Accounting Data and Financial Indicators for January-June 2024 | Indicator | Jan-Jun 2024 (RMB) | Jan-Jun 2023 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue | 1,126,360,975.88 | 727,947,938.24 | 54.73% | | Net Profit Attributable to Shareholders of the Listed Company | 66,887,755.99 | 19,837,169.51 | 237.18% | | Net Profit Attributable to Shareholders of the Listed Company (Excluding Non-recurring Gains and Losses) | 63,997,448.86 | 8,507,594.78 | 652.24% | | Net Cash Flow from Operating Activities | 15,607,460.23 | -61,917,321.13 | 125.21% | | Basic Earnings Per Share (RMB/share) | 0.0830 | 0.0251 | 230.68% | | Diluted Earnings Per Share (RMB/share) | 0.0830 | 0.0251 | 230.68% | | Weighted Average Return on Net Assets | 3.99% | 1.41% | 2.58% | | Indicator | June 30, 2024 (RMB) | December 31, 2023 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Total Assets | 2,766,828,436.06 | 2,650,678,847.84 | 4.38% | | Net Assets Attributable to Shareholders of the Listed Company | 1,880,840,720.49 | 1,469,865,219.48 | 27.96% | I. Financial Statements This section presents Zhejiang Shibao's unaudited consolidated balance sheet and income statement as of June 30, 2024, reflecting the company's financial position and operating results with increased assets, equity, revenue, and net profit Consolidated Balance Sheet As of June 30, 2024, the company's total assets increased by 4.38% from 2023-end, total equity attributable to parent company owners grew by 27.96%, and total liabilities decreased, indicating a more stable financial structure Key Data from Consolidated Balance Sheet | Item | June 30, 2024 (RMB) | December 31, 2023 (RMB) | | :--- | :--- | :--- | | Total Assets | 2,766,828,436.06 | 2,650,678,847.84 | | Total Current Assets | 1,804,918,771.43 | 1,682,158,653.02 | | Total Non-current Assets | 961,909,664.63 | 968,520,194.82 | | Total Liabilities | 888,674,365.25 | 1,192,715,244.11 | | Total Equity Attributable to Parent Company Owners | 1,880,840,720.49 | 1,469,865,219.48 | - Total current liabilities decreased from RMB 1,123,234,093.19 at the end of 2023 to RMB 856,003,234.30 as of June 30, 2024, primarily due to a reduction in short-term borrowings and notes payable[4] Consolidated Income Statement During the reporting period, the company's total operating revenue increased by 54.73% year-on-year, and net profit attributable to parent company owners significantly increased by 237.18% year-on-year, demonstrating strong profitability and improved operating efficiency Key Data from Consolidated Income Statement | Item | Jan-Jun 2024 (RMB) | Jan-Jun 2023 (RMB) | | :--- | :--- | :--- | | Total Operating Revenue | 1,126,360,975.88 | 727,947,938.24 | | Total Operating Costs | 1,059,156,834.66 | 711,656,154.19 | | Operating Profit | 73,770,308.63 | 20,762,286.27 | | Net Profit | 76,102,722.06 | 21,225,695.47 | | Net Profit Attributable to Parent Company Owners | 66,887,755.99 | 19,837,169.51 | | Basic Earnings Per Share (RMB/share) | 0.0830 | 0.0251 | - Financial expenses significantly decreased by 79.96% year-on-year, primarily due to reduced interest expenses and increased interest income[5] - Income tax expense was negative, mainly due to no current income tax expense in the current period and an increase in deductible temporary differences leading to a corresponding increase in deferred tax assets[5] II. Notes to Financial Statements This section outlines the basis of preparation, accounting standards, accounting period, and functional currency for the company's financial statements, ensuring transparency and compliance of financial information Basis of Preparation These interim financial statements are prepared in accordance with Accounting Standard for Business Enterprises No. 32 — Interim Financial Reporting issued by the Ministry of Finance, and on a going concern basis - Financial statements are prepared in accordance with Accounting Standard for Business Enterprises No. 32 — Interim Financial Reporting[6] - The company's financial statements are prepared on a going concern basis[6] Significant Accounting Policies and Accounting Estimates The company declares that its financial statements comply with enterprise accounting standards, accurately and completely reflecting its financial position. The accounting year runs from January 1 to December 31 of the Gregorian calendar, and RMB is used as the functional currency Statement of Compliance with Enterprise Accounting Standards - The company's financial statements comply with enterprise accounting standards, accurately and completely reflecting its financial position, operating results, and cash flows[7] Accounting Period - The accounting year runs from January 1 to December 31 of the Gregorian calendar[8] Functional Currency - RMB is adopted as the functional currency[9] III. Taxation This section details the main tax categories and applicable rates for the company and its subsidiaries, disclosing various tax incentives enjoyed during the reporting period that positively impacted the company's tax burden Main Tax Categories and Rates The company and its subsidiaries' main tax categories include Value-Added Tax, Property Tax, Urban Maintenance and Construction Tax, Education Surcharge, Local Education Surcharge, and Enterprise Income Tax, with applicable rates varying based on business type and entity qualification Main Tax Categories and Rates | Tax Category | Tax Basis | Tax Rate | | :--- | :--- | :--- | | Value-Added Tax | Sale of goods or provision of taxable services | 13%、9%、6%、5% | | Property Tax | Ad valorem/Based on rental income | 1.2%、12% | | Urban Maintenance and Construction Tax | Amount of turnover tax payable | 7%、5% | | Education Surcharge | Amount of turnover tax payable | 3% | | Local Education Surcharge | Amount of turnover tax payable | 2% | | Enterprise Income Tax | Taxable income | 15%、25% | Explanation of Enterprise Income Tax Rates for Taxable Entities with Different Rates | Taxable Entity Name | Income Tax Rate | | :--- | :--- | | The Company | 15% | | Hangzhou Shibao Auto Steering Gear Co., Ltd. | 15% | | Hangzhou New Shibao Electric Steering System Co., Ltd. | 15% | | Beijing Autonic Technology Co., Ltd. | 15% | | Wuhu Sterry Steering System Co., Ltd. | 15% | | Other Taxable Entities (excluding the above) | 25% | Tax Incentives The company and several subsidiaries enjoy high-tech enterprise income tax incentives (15% rate) and benefit from the advanced manufacturing VAT additional deduction policy. Additionally, the company received VAT reductions for employing demobilized soldiers and key groups, and a VAT immediate refund policy for software products - The Company and its subsidiaries Hangzhou Shibao Auto Steering Gear Co., Ltd., Hangzhou New Shibao Electric Steering System Co., Ltd., Beijing Autonic Technology Co., Ltd., and Wuhu Sterry Steering System Co., Ltd. are all recognized as high-tech enterprises, enjoying a reduced Enterprise Income Tax rate of 15% for 2023-2025[12] - The company and several subsidiaries enjoy a 5% additional VAT deduction policy for advanced manufacturing enterprises, effective from January 1, 2023, to December 31, 2027[12] - Hangzhou Shibao Auto Steering Gear Co., Ltd., a subsidiary, received a VAT reduction of RMB 58,500.00 for employing self-employed demobilized soldiers[13] - Beijing Autonic Technology Co., Ltd., a subsidiary, enjoys a VAT immediate refund policy for self-developed and produced software products, where the actual VAT burden exceeds 3%[13] IV. Notes to Consolidated Financial Statement Items This section provides detailed notes on key items in the consolidated financial statements, including accounts receivable, various borrowings, operating revenue and costs, financial expenses, income tax expenses, earnings per share, and other significant matters, offering deeper financial disclosure Accounts Receivable As of June 30, 2024, the company's total accounts receivable amounted to RMB 884,046,309.82, with the highest proportion being within 1 year, and a bad debt provision of RMB 32,171,934.35 Aging Analysis Aging Distribution of Accounts Receivable | Aging | June 30, 2024 (RMB) | December 31, 2023 (RMB) | | :--- | :--- | :--- | | Within 1 year | 831,834,100.06 | 708,412,987.42 | | 1-2 years | 16,729,823.37 | 8,706,884.90 | | 2-3 years | 6,483,525.04 | 2,122,197.40 | | Over 3 years | 28,998,861.35 | 29,834,084.97 | | Total | 884,046,309.82 | 749,076,154.69 | - The company generally grants customers a credit period of 90-180 days, with new customers typically required to prepay for goods[15] Provision for Bad Debts Provision for Bad Debts | Type | Book Balance as of June 30, 2024 (RMB) | Bad Debt Provision (RMB) | Provision Rate (%) | | :--- | :--- | :--- | :--- | | Individually Assessed Bad Debt Provision | 25,896,048.42 | 25,896,048.42 | 100.00 | | Collectively Assessed Bad Debt Provision | 858,150,261.40 | 6,275,885.93 | 0.73 | | Total | 884,046,309.82 | 32,171,934.35 | 3.64 | Short-term Borrowings As of June 30, 2024, the company's total short-term borrowings amounted to RMB 11,009,342.47, a significant decrease from RMB 147,820,497.81 at the end of 2023, primarily consisting of guaranteed borrowings Details of Short-term Borrowings | Item | June 30, 2024 (RMB) | December 31, 2023 (RMB) | | :--- | :--- | :--- | | Guaranteed Borrowings | 11,009,342.47 | 68,068,000.00 | | Credit Borrowings | - | 35,014,006.14 | | Mortgage Borrowings | - | 44,738,491.67 | | Total | 11,009,342.47 | 147,820,497.81 | - The guaranteed borrowing with a principal of RMB 11 million in the period-end balance is guaranteed by Zhang Shiquan[17] Accounts Payable As of June 30, 2024, the company's total accounts payable amounted to RMB 649,855,177.83, largely consistent with the end of 2023, with the highest proportion being within 1 year Aging Distribution of Accounts Payable | Aging | June 30, 2024 (RMB) | December 31, 2023 (RMB) | | :--- | :--- | :--- | | Within 1 year | 622,354,205.97 | 624,256,741.61 | | 1-2 years | 11,217,469.83 | 15,349,059.78 | | 2-3 years | 3,284,307.63 | 4,447,245.72 | | Over 3 years | 12,999,194.40 | 8,411,198.67 | | Total | 649,855,177.83 | 652,464,245.78 | Long-term Borrowings As of June 30, 2024, the company had no outstanding long-term borrowings, a significant decrease from RMB 34,836,594.99 at the end of 2023, indicating an optimized debt structure Details Details of Long-term Borrowings | Item | June 30, 2024 (RMB) | December 31, 2023 (RMB) | | :--- | :--- | :--- | | Guaranteed Borrowings | - | 34,836,594.99 | | Total | - | 34,836,594.99 | Maturity Analysis of Long-term Borrowings Maturity Analysis of Long-term Borrowings | Item | June 30, 2024 (RMB) | December 31, 2023 (RMB) | | :--- | :--- | :--- | | Current or within 1 year | - | 25,084,088.74 | | 1-2 years | - | 34,836,594.99 | | Subtotal | - | 59,920,683.73 | | Of which: Long-term borrowings due within 1 year | - | 25,084,088.74 | | Long-term borrowings due after 1 year | - | 34,836,594.99 | Operating Revenue/Operating Costs During the reporting period, both the company's operating revenue and operating costs achieved significant growth, with a high proportion of main business revenue, fulfilling performance obligations by selling automotive steering gears and accessories with 90-180 day credit terms Details Details of Operating Revenue/Operating Costs | Item | Jan-Jun 2024 Revenue (RMB) | Jan-Jun 2024 Costs (RMB) | Jan-Jun 2023 Revenue (RMB) | Jan-Jun 2023 Costs (RMB) | | :--- | :--- | :--- | :--- | :--- | | Main Business | 1,094,383,091.09 | 896,005,355.79 | 690,871,908.27 | 581,007,543.67 | | Other Businesses | 31,977,884.79 | 7,541,021.04 | 37,076,029.97 | 8,136,084.91 | | Total | 1,126,360,975.88 | 903,546,376.83 | 727,947,938.24 | 589,143,628.58 | Performance Obligations - The company, as the principal, sells automotive steering gears and accessories to customers, fulfilling its performance obligations upon product delivery[22] - Contract prices are granted a credit period of 90-180 days, with no significant financing components or variable consideration[22] Revenue from Contract Liabilities at Beginning of Period - Revenue recognized in the current period, included in the book value of contract liabilities at the beginning of the period, amounted to RMB 8,633,243.54[22] Financial Expenses During the reporting period, the company's financial expenses significantly decreased by 79.96%, primarily due to reduced interest expenses and increased interest income, while accounts receivable financing discount losses were reported under financial expenses Details of Financial Expenses | Item | Jan-Jun 2024 (RMB) | Jan-Jun 2023 (RMB) | | :--- | :--- | :--- | | Interest Expense | 3,106,646.99 | 4,161,570.62 | | Interest Income | -2,904,013.97 | -946,080.27 | | Exchange Gains and Losses | 30,236.59 | -313,480.53 | | Other | 379,801.78 | 154,798.76 | | Total | 612,671.39 | 3,056,808.58 | - Accounts receivable financing discount losses of RMB 380,755.41 were reported under "Financial Expenses" in the current period, and comparative data for the prior year was adjusted accordingly[23] Income Tax Expense During the reporting period, the company's income tax expense was negative, primarily due to an increase in deferred income tax expense, reflecting the impact of deductible temporary differences Details of Income Tax Expense | Item | Jan-Jun 2024 (RMB) | Jan-Jun 2023 (RMB) | | :--- | :--- | :--- | | Deferred Income Tax Expense | -3,086,485.99 | -783,999.06 | | Total | -3,086,485.99 | -783,999.06 | - During the reporting period, neither the company nor its subsidiaries generated or derived profits in Hong Kong, thus no Hong Kong profits tax was payable[24] Earnings Per Share During the reporting period, both the company's basic and diluted earnings per share were RMB 0.0830/share, a significant increase from RMB 0.0251/share in the prior corresponding period, reflecting a substantial improvement in net profit Earnings Per Share Calculation | Item | Jan-Jun 2024 (RMB) | Jan-Jun 2023 (RMB) | | :--- | :--- | :--- | | Net Profit Attributable to Ordinary Shareholders of the Company | 66,887,755.99 | 19,837,169.51 | | Weighted Average Number of Ordinary Shares Outstanding | 806,138,510 | 789,644,637.00 | | Basic Earnings Per Share (RMB/share) | 0.0830 | 0.0251 | | Diluted Earnings Per Share (RMB/share) | 0.0830 | 0.0251 | - During the current period, the company had no dilutive potential ordinary shares[25] Other Matters This section discloses that the company does not require detailed segment reporting, provides depreciation and amortization expenses, non-recurring gains and losses, net current assets, significant commitments, and post-balance sheet events, offering supplementary information on the company's operations and financial position Segment Reporting - Operating Segments - The operations and assets of the company and its subsidiaries are all related to automotive steering systems and accessories, concentrated domestically, with 94.82% of operating revenue derived from domestic sales, thus no more detailed segment information is required[26] Depreciation and Amortization Expenses Depreciation and Amortization Expenses | Item | Jan-Jun 2024 (RMB) | Jan-Jun 2023 (RMB) | | :--- | :--- | :--- | | Depreciation of fixed assets, depletion of oil and gas assets, depreciation of productive biological assets | 44,128,391.80 | 42,218,939.25 | | Amortization of intangible assets | 2,346,599.60 | 2,047,579.31 | | Total | 46,474,991.40 | 44,266,518.56 | Non-recurring Gains and Losses Items and Amounts Net Non-recurring Gains and Losses Attributable to Parent Company Owners | Item | Amount (RMB) | | :--- | :--- | | Gains or losses on disposal of non-current assets | -1,909,788.36 | | Government grants recognized in current profit or loss | 2,645,763.42 | | Gains or losses from changes in fair value and disposal of financial assets and liabilities | 1,177,184.76 | | Reversal of impairment provisions for accounts receivable subject to individual impairment testing | 231,246.46 | | Other non-operating income and expenses apart from the above | 196,649.87 | | Net Non-recurring Gains and Losses Attributable to Parent Company Owners | 2,890,307.13 | Net Current Assets and Total Assets Less Current Liabilities Net Current Assets and Total Assets Less Current Liabilities | Item | June 30, 2024 (RMB) | December 31, 2023 (RMB) | | :--- | :--- | :--- | | Net Current Assets | 948,915,537.13 | 558,924,559.83 | | Total Assets Less Current Liabilities | 1,910,825,201.76 | 1,527,444,754.65 | Significant Commitments Significant Asset Acquisition Contracts Signed but Not Yet Recognized | Item | June 30, 2024 (RMB) | December 31, 2023 (RMB) | | :--- | :--- | :--- | | Significant asset acquisition contracts signed but not yet recognized | 106,644,551.67 | 68,354,203.08 | Post-Balance Sheet Events - As of the date of this announcement, there are no post-balance sheet events[32] V. Interim Dividend The company plans not to declare an interim dividend for the six months ended June 30, 2024, consistent with the prior corresponding period - The company plans not to declare an interim dividend for the six months ended June 30, 2024 (June 30, 2023: nil)[33] VI. Management Discussion and Analysis This section provides an in-depth analysis of the overall performance of China's automotive industry and discusses the company's operating results, asset and liability status, significant acquisitions and disposals, foreign currency risks, and contingent liabilities, comprehensively presenting the company's operational dynamics and financial health during the reporting period Review of China's Automotive Industry From January to June 2024, China's automotive production and sales increased year-on-year, with new energy vehicles and Chinese brand passenger vehicles performing exceptionally well, providing a favorable market environment for the company's electrified and intelligent steering system products China Automotive Industry Production and Sales Data, Jan-Jun 2024 | Item | Production (ten thousand units) | Sales (ten thousand units) | YoY Growth (Production) | YoY Growth (Sales) | | :--- | :--- | :--- | :--- | :--- | | Overall Automotive | 1,389.10 | 1,404.70 | 4.90% | 6.10% | | Passenger Vehicles | 1,188.60 | 1,197.90 | 5.40% | 6.30% | | Commercial Vehicles | 200.50 | 206.80 | 2.00% | 4.90% | | New Energy Vehicles | 492.90 | 494.40 | 30.10% | 32.00% | - Sales of Chinese brand passenger vehicles reached 7.419 million units, a year-on-year increase of 23.90%, with continuous market share growth[34] Analysis of Main Business Operations During the reporting period, the company's main business benefited from the trend of automotive electrification and intelligence, with operating revenue increasing by 54.73% year-on-year and net profit attributable to parent company owners increasing by 237.18%, alongside improved gross profit margin, reduced expense ratios, and significantly better cash flow Overview - The company's sales of electrified and intelligent steering system products grew significantly, achieving operating revenue of RMB 1,126,360,975.88, a year-on-year increase of 54.73%[35] - The gross profit margin for the main business was 18.13% (prior corresponding period: 15.90%), an increase of 2.23 percentage points, mainly due to expanded product sales and improved production costs[35] - Selling expenses increased by 22.31% year-on-year, but their proportion to operating revenue decreased by 0.52 percentage points to 1.95%[35] - Administrative expenses increased by 35.20% year-on-year, but their proportion to operating revenue decreased by 0.79 percentage points to 5.50%[36] - R&D expenses increased by 28.21% year-on-year, with their proportion to operating revenue decreasing by 1.18 percentage points to 5.72%, primarily invested in core technological areas such as steering electrification, intelligence, and automation[36] - Financial expenses decreased by 79.96% year-on-year, mainly due to reduced interest expenses and increased interest income[36] - Net profit attributable to shareholders of the listed company was RMB 66,887,755.99, a year-on-year increase of 237.18%[36] - Net cash flow from operating activities was RMB 15,607,460.23, a year-on-year increase of 125.21%, primarily due to increased cash received from product sales[36] - Net cash flow from financing activities increased by 603.52% year-on-year, mainly due to the proceeds from shares issued to specific investors received in the current period[36] Composition of Operating Revenue Composition of Operating Revenue | Item | Jan-Jun 2024 Amount (RMB) | Proportion of Operating Revenue | Jan-Jun 2023 Amount (RMB) | Proportion of Operating Revenue | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Operating Revenue | 1,126,360,975.88 | 100% | 727,947,938.24 | 100% | 54.73% | | By Industry | | | | | | | Automotive Parts and Accessories Manufacturing | 1,094,383,091.09 | 97.16% | 690,871,908.27 | 94.91% | 58.41% | | Other | 31,977,884.79 | 2.84% | 37,076,029.97 | 5.09% | -13.75% | | By Product | | | | | | | Steering Systems and Components | 1,051,178,321.64 | 93.33% | 660,865,069.26 | 90.79% | 59.06% | | Accessories and Other | 43,204,769.45 | 3.83% | 30,006,839.01 | 4.12% | 43.98% | | Other | 31,977,884.79 | 2.84% | 37,076,029.97 | 5.09% | -13.75% | | By Region | | | | | | | Mainland China | 1,068,057,380.88 | 94.82% | 678,107,444.44 | 93.15% | 57.51% | | Outside Mainland China | 58,303,595.00 | 5.18% | 49,840,493.80 | 6.85% | 16.98% | Industry and Product Information Accounting for Over 10% of the Company's Operating Revenue or Operating Profit Operating Performance by Main Industry, Product, and Region | Item | Operating Revenue (RMB) | Operating Costs (RMB) | Gross Profit Margin | YoY Change in Operating Revenue | YoY Change in Operating Costs | YoY Change in Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | By Industry | | | | | | | | Automotive Parts and Accessories Manufacturing | 1,094,383,091.09 | 896,005,355.79 | 18.13% | 58.41% | 54.22% | 2.23% | | By Product | | | | | | | | Steering Systems and Components | 1,051,178,321.64 | 865,214,400.29 | 17.69% | 59.06% | 55.15% | 2.07% | | By Region | | | | | | | | Mainland China | 1,068,057,380.88 | 876,334,409.81 | 17.95% | 57.51% | 55.38% | 1.12% | Analysis of Assets and Liabilities At the end of the reporting period, the company's asset composition remained stable, with an increase in the proportion of monetary funds, financial assets held for trading, and accounts receivable to total assets; total loans and borrowings significantly decreased, and the capital-to-debt ratio turned negative, indicating a substantial reduction in financial leverage and a healthy capital structure Significant Changes in Asset Composition Changes in Asset Composition | Item | June 30, 2024 Amount (RMB) | Proportion of Total Assets | December 31, 2023 Amount (RMB) | Proportion of Total Assets | Change in Proportion | | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 234,924,473.35 | 8.49% | 158,481,484.94 | 5.98% | 2.51% | | Financial Assets Held for Trading | 152,710,470.24 | 5.52% | 110,253,432.83 | 4.16% | 1.36% | | Accounts Receivable | 851,874,375.47 | 30.79% | 717,577,606.43 | 27.07% | 3.72% | | Inventories | 484,119,674.51 | 17.50% | 478,208,228.06 | 18.04% | -0.54% | | Investment Properties | 179,342,487.15 | 6.48% | 181,278,705.33 | 6.84% | -0.36% | | Fixed Assets | 654,142,565.83 | 23.64% | 682,550,682.51 | 25.75% | -2.11% | | Accounts Payable | 649,855,177.83 | 23.49% | 652,464,245.78 | 24.61% | -1.12% | - At the end of the reporting period, there were no significant changes in the company's asset composition, but the proportion of monetary funds, financial assets held for trading, and accounts receivable to total assets increased[41] Assets and Liabilities Measured at Fair Value Financial Assets Measured at Fair Value | Item | Beginning Balance (RMB) | Fair Value Change Gains/Losses for the Period (RMB) | Ending Balance (RMB) | | :--- | :--- | :--- | :--- | | Financial Assets Held for Trading | 2,843,387.88 | -132,917.64 | 2,710,470.24 | | Bank Short-term Wealth Management Products | 107,410,044.95 | - | 150,000,000.00 | | Accounts Receivable Financing | 199,966,034.43 | - | 64,178,065.25 | | Subtotal of Financial Assets | 310,219,467.26 | -132,917.64 | 216,888,535.49 | Asset Rights Restrictions as of the End of the Reporting Period Assets with Restricted Ownership or Use Rights | Item | Period-end Book Value (RMB) | Reason for Restriction | | :--- | :--- | :--- | | Monetary Funds | 1,247.78 | Long-dormant Account Deposits | | Monetary Funds | 15,000.00 | ETC Frozen Funds | | Monetary Funds | 22,996,676.45 | Bill Pool Margin | | Accounts Receivable Financing | 2,322,155.69 | Bill Pool Pledge | | Fixed Assets | 41,865,724.14 | Borrowing and Comprehensive Credit Mortgage | | Intangible Assets | 19,493,046.27 | Borrowing and Comprehensive Credit Mortgage | | Total | 86,693,850.33 | | Financial Resources and Capital Structure - At the end of the reporting period, the company's total loans and borrowings amounted to RMB 11,000,000.00, a decrease of RMB 196,540,000.00 from the beginning of the year, mainly due to reductions in guaranteed borrowings, mortgage borrowings, and credit borrowings[44] - The company's capital-to-debt ratio was -11.98% (December 31, 2023: 5.69%), indicating a significant reduction in the company's financial leverage[44] Significant Acquisitions and Disposals During the review period, the Group had no significant acquisitions or disposals of subsidiaries and associates - During the review period, the Group had no significant acquisitions or disposals of subsidiaries and associates[45] Foreign Currency Risk The Group's sales and purchases are primarily denominated in RMB, thus it is not exposed to significant foreign currency risk and has not entered into any hedging arrangements - The Group's sales and purchases are primarily denominated in RMB, with no significant foreign currency risk exposure[46] - The Group has not entered into any hedging arrangements[46] Contingent Liabilities As of the end of the reporting period, the Group had no significant contingent liabilities - As of the end of the reporting period, the Group had no significant contingent liabilities[47] VII. Future Outlook The company anticipates the automotive market will benefit from favorable policies in the second half of the year and will continue to focus on its core business, promoting the marketization of electrified and intelligent automotive steering system products to support advanced autonomous driving and localization of components, thereby maintaining its competitive advantage - From January to June 2024, the automotive industry experienced overall growth, with new energy vehicle production and sales maintaining rapid growth, and Chinese brand passenger vehicles exceeding 60% market share, driving significant sales growth for the company's electrified and intelligent steering system products[48] - The company's independently developed Rack-Assist Electric Power Steering (R-EPS) system has achieved mass production[48] - In the second half of the year, favorable policies such as trade-in programs and new energy vehicles going to rural areas will further unleash the consumption potential of the automotive market[48] - The company will continue to focus on its main business, promoting the marketization of electrified and intelligent automotive steering system products to support advanced autonomous driving and localization of automotive components[48] VIII. Corporate Governance During the reporting period, the company generally complied with the HKEX Corporate Governance Code, with a deviation from Rule C.1.8 regarding directors' liability insurance, which the Board will review periodically - The company complied with most provisions of Appendix C1 'Corporate Governance Code' of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[49] - Deviation from Code Provision C.1.8: no liability insurance was purchased for directors and senior officers due to the company's stable financial position and sound internal control system[49] - The Board will review the need for insurance coverage from time to time[49] IX. Purchase, Sale or Redemption of the Company's Listed Securities During the review period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities - During the review period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities[50]