国际精密(00929) - 2024 - 中期业绩

Financial Statements Condensed Consolidated Statement of Profit or Loss The Group's H1 2024 revenue increased 19.6% to HKD 502.1 million, with operating profit up 114.6% to HKD 26.36 million and profit for the period rising 54.1% to HKD 12.69 million, turning basic EPS positive to HKD 0.2 cents | Metric (HKD Thousands) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 502,149 | 419,761 | +19.6% | | Gross Profit | 137,394 | 96,418 | +42.5% | | Operating Profit | 26,364 | 12,282 | +114.6% | | Profit Before Tax | 16,904 | 7,306 | +131.4% | | Profit for the Period | 12,688 | 8,231 | +54.1% | | Profit/(Loss) Attributable to Equity Holders of the Company | 2,378 | (1,249) | Turned Profitable | | Basic Earnings Per Share | 0.2 HK Cents | -0.1 HK Cents | Turned Profitable | Condensed Consolidated Statement of Comprehensive Income Despite a HKD 12.69 million profit for the period, total comprehensive income resulted in a net loss of HKD 22.89 million due to HKD 35.58 million in foreign currency translation losses, a narrower loss than HKD 43.61 million in the prior year | Metric (HKD Thousands) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Profit for the Period | 12,688 | 8,231 | | Exchange Differences on Translation of Foreign Operations | (35,578) | (51,844) | | Total Comprehensive Income for the Period | (22,890) | (43,613) | Condensed Consolidated Statement of Financial Position As of June 30, 2024, total assets were HKD 2.47 billion and net assets HKD 1.94 billion, largely stable from year-end 2023, with non-current assets rising due to property, plant, and equipment investments, while non-current liabilities increased to support M&A and expansion | Metric (HKD Thousands) | June 30, 2024 (Unaudited) | December 31, 2023 (Unaudited) | | :--- | :--- | :--- | | Non-current Assets | 1,112,483 | 1,082,453 | | Current Assets | 1,359,194 | 1,464,374 | | Total Assets | 2,471,677 | 2,546,827 | | Current Liabilities | 330,237 | 427,357 | | Non-current Liabilities | 200,140 | 155,280 | | Total Liabilities | 530,377 | 582,637 | | Net Assets | 1,941,300 | 1,964,190 | Condensed Consolidated Statement of Cash Flows H1 2024 net cash from operating activities decreased to HKD 23.17 million, while investing activities saw a HKD 254.28 million net outflow due to M&A and fixed asset investments, leading to a HKD 110.07 million net financing inflow and a HKD 121.04 million net decrease in cash to HKD 556.89 million | Activity (HKD Thousands) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 23,174 | 39,818 | | Net Cash Used in Investing Activities | (254,278) | (35,474) | | Net Cash Generated From/(Used In) Financing Activities | 110,065 | (24,539) | | Net Decrease in Cash and Cash Equivalents | (121,039) | (20,195) | | Cash and Cash Equivalents at End of Period | 556,885 | 705,552 | Condensed Consolidated Statement of Changes in Equity As of June 30, 2024, total equity slightly decreased from HKD 1.964 billion to HKD 1.941 billion, with profit for the period contributing HKD 2.38 million to shareholders' equity, offset by HKD 37.84 million in exchange differences, resulting in a HKD 35.46 million reduction in equity attributable to owners of the Company - Total comprehensive income for the period was HKD -22.89 million, with HKD -35.46 million attributable to equity holders of the Company and HKD 12.57 million to non-controlling interests[6] Notes to the Financial Statements Company Information, Basis of Preparation and Principal Accounting Policies The report is prepared in accordance with HKAS 34 'Interim Financial Reporting', with accounting policies consistent with the 2023 annual financial statements, focusing on manufacturing and selling precision metal parts for automotive, hydraulic, and electronic equipment - The Group's principal business involves manufacturing and selling precision metal parts for automotive components, hydraulic equipment, and electronic devices[8] - The interim financial statements are prepared in accordance with HKAS 34 and the Listing Rules, with accounting policies consistent with the prior year[9][10] Segment Information The Group segments business by customer geography, with Mainland China, Macau, and Hong Kong as the largest market, generating HKD 275.25 million in H1 2024 revenue, a 45.7% increase, while North America grew 18.2% to HKD 102.04 million, and Europe saw a decline | Region (HKD Thousands) | H1 2024 Revenue | H1 2023 Revenue | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Mainland China, Macau & Hong Kong | 275,248 | 188,887 | +45.7% | | North America | 102,037 | 86,326 | +18.2% | | Europe | 86,503 | 102,497 | -15.6% | | Malaysia | 14,068 | 21,384 | -34.2% | | Thailand | 9,562 | 6,321 | +51.3% | | Other Countries | 14,731 | 14,346 | +2.7% | | Total | 502,149 | 419,761 | +19.6% | Revenue and Other Income In H1 2024, hydraulic equipment parts sales grew 39.8% to HKD 251.69 million, becoming the largest revenue source, while auto parts sales increased 9.4% to HKD 226.89 million, and electronic parts business continued to decline by 35.3% | Business Segment (HKD Thousands) | H1 2024 Revenue | H1 2023 Revenue | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Sales of Hydraulic Equipment Parts | 251,685 | 180,051 | +39.8% | | Sales of Automotive Parts | 226,890 | 207,303 | +9.4% | | Sales of Electronic Parts | 14,327 | 22,130 | -35.3% | | Others | 9,247 | 10,277 | -10.0% | | Total | 502,149 | 419,761 | +19.6% | Finance and Taxation H1 2024 finance costs doubled year-on-year from HKD 4.37 million to HKD 8.78 million due to increased bank loans for M&A, while income tax expense was HKD 4.22 million, compared to a HKD 0.925 million tax credit in the prior period - Finance costs were HKD 8.78 million, doubling from HKD 4.37 million in the prior year, primarily due to increased interest on bank and other borrowings[14][31] - Income tax expense for the period was HKD 4.22 million, compared to a tax credit of HKD 0.925 million in the prior period[17] Earnings Per Share Basic and diluted earnings per share both turned profitable at HKD 0.2 cents, up from HKD -0.1 cents in the prior year, primarily due to profit attributable to equity holders of the Company improving from a HKD 1.25 million loss to a HKD 2.38 million profit | Metric | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Equity Holders of the Company (HKD Thousands) | 2,378 | (1,249) | | Weighted Average Number of Ordinary Shares in Issue (Thousands) | 1,052,254 | 1,052,254 | | Basic and Diluted Earnings Per Share | 0.2 HK Cents | -0.1 HK Cents | Dividends The Board does not recommend an interim dividend for the six months ended June 30, 2024, consistent with the prior period's policy - The Board does not recommend paying any interim dividend for the six months ended June 30, 2024 (2023: Nil)[20][39] Key Balance Sheet Items As of June 30, 2024, key balance sheet items remained largely stable, with property, plant, and equipment net book value slightly increasing due to construction in progress, inventory decreasing from HKD 330.5 million to HKD 315.1 million, and trade receivables rising from approximately HKD 324 million to HKD 361 million, with most within three months - Net book value of property, plant and equipment increased from HKD 924 million to HKD 948 million, primarily due to construction in progress rising from HKD 35.34 million to HKD 103 million[21] Inventories (HKD Thousands) | Inventories (HKD Thousands) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Raw Materials | 78,709 | 99,655 | | Work-in-progress | 80,439 | 88,445 | | Finished Goods | 135,768 | 125,787 | | Total | 315,136 | 330,503 | - Total trade receivables amounted to HKD 361 million, with approximately 84% (HKD 308 million) aged within three months[23] Management Discussion and Analysis Business Review In H1 2024, the Group's total sales grew 19.6%, primarily driven by hydraulic equipment parts, which saw a 39.8% sales increase due to last year's acquisition and synergies, accounting for over 50% of total sales, while auto parts sales rose 9.4% due to deferred European ICE bans, and electronic parts continued to decline - Hydraulic equipment parts business sales increased by HKD 71.63 million year-on-year due to last year's successful acquisition, accounting for over half of total sales[28] - Automotive parts business orders rebounded due to Europe's delayed ban on internal combustion engine vehicles, with sales increasing 9.4% year-on-year[28] Business Segment Sales | Business Segment | H1 2024 Sales (HKD Thousands) | Proportion | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Automotive Parts | 226,890 | 45.2% | +9.4% | | Hydraulic Equipment Parts | 251,685 | 50.1% | +39.8% | | Electronic Equipment Parts | 14,327 | 2.9% | -35.3% | | Total | 502,149 | 100% | +19.6% | Financial Review Gross profit increased 42.5% and gross margin improved from 23.0% to 27.4% due to sales growth and M&A synergies, despite increased selling, administrative, and R&D expenses, and doubled finance costs from acquisition-related loans, ultimately driving a 54.1% rise in net profit to HKD 12.69 million - Gross margin increased by 4.4 percentage points from 23.0% to 27.4% year-on-year, primarily due to lean manufacturing, cost control, and M&A synergies[29][30] - Due to the acquisition, patent amortization expenses within administrative expenses increased by HKD 4.39 million, and R&D expenses increased by HKD 4.72 million[31] - Finance costs increased by HKD 4.41 million year-on-year due to the larger scale of acquisition-related loans[31] Liquidity, Financial Strategy and Financial Ratios The Group relies on internal cash flow and bank financing, with total bank loans increasing to HKD 297 million for M&A and new plant construction; H1 operating cash inflow decreased, while investing cash outflow significantly rose due to HKD 168 million M&A payments and HKD 95.43 million fixed asset investments, resulting in net cash decreasing from HKD 489 million to HKD 254 million - Total bank loans increased from HKD 166 million to HKD 297 million, primarily used for M&A payments and new plant construction costs[32] - Net cash outflow from investing activities was HKD 254 million, mainly comprising HKD 168 million for prior year M&A outstanding payments and HKD 95.43 million for property, plant, and equipment purchases[5][34] - Net cash (cash and bank balances less total bank borrowings) decreased from HKD 489 million to HKD 254 million[34] Human Resources As of June 30, 2024, the Group had 2,257 employees, an increase of 86 year-on-year, with total remuneration of approximately HKD 120 million in H1, focusing on talent development, safety, and employee incentives through share option schemes Employee and Remuneration Data | Metric | June 30, 2024 | June 30, 2023 | | :--- | :--- | :--- | | Number of Employees | 2,257 | 2,171 | | Total Remuneration (HKD Thousands) | 119,663 | 109,302 | Outlook The Group anticipates challenges from new energy vehicles, potential global construction machinery demand decline, and domestic hydraulic industry price competition, thus focusing on 'sales breakthroughs, R&D-driven innovation, cost reduction and efficiency improvement, and transformation and upgrading' to strengthen its market position - Challenges include new energy vehicles displacing traditional internal combustion engine vehicle markets, anticipated decline in global construction machinery sales, and intensifying price competition in the domestic hydraulic industry[37] - Strategies include focusing on 'sales breakthroughs, R&D-driven innovation, cost reduction and efficiency improvement, and transformation and upgrading', increasing investment in new product development, new customer acquisition, talent recruitment, and automation projects[37] Supplementary Information and Corporate Governance Dividends and Securities Transactions The Board decided not to declare an interim dividend for 2024, and neither the Company nor its subsidiaries purchased, sold, or redeemed any listed securities during the period, while adhering to adopted codes of conduct for directors' and employees' securities transactions - The Board does not recommend paying any interim dividend for the six months ended June 30, 2024[39] - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period[38] Corporate Governance The Company maintains high corporate governance standards, complying with most code provisions, with the only deviation being the combined roles of Chairman and Chief Executive Officer held by Mr. Zeng Guangsheng, which the Board believes provides strong unified leadership, and the Audit Committee has reviewed these interim results - The Company complies with the Corporate Governance Code, with the only deviation from Code Provision C.2.1 being the combined roles of Chairman and Chief Executive Officer held by Mr. Zeng Guangsheng[42] - The Audit Committee, comprising three independent non-executive directors, has reviewed the Group's interim results for the six months ended June 30, 2024[43]