宁波建工(601789) - 2024 Q2 - 季度财报

Company Profile and Key Financial Indicators This section provides an overview of the company's fundamental information and key financial performance indicators for the reporting period Company Basic Information Ningbo Construction Co., Ltd. (stock code: 601789) is a Shanghai Stock Exchange-listed company primarily engaged in construction-related businesses - Overview of the company's basic information, including name, stock code, and legal representative[7][11] - The company's designated information disclosure media include China Securities Journal, Shanghai Securities News, Securities Times, Securities Daily, and the Shanghai Stock Exchange website (www.sse.com.cn)[10](index=10&type=chunk) Key Accounting Data and Financial Indicators In the first half of 2024, the company's operating revenue decreased by 3.78% to 10.025 billion RMB, and net profit attributable to shareholders declined by 17.75% to 143.89 million RMB, while total assets grew by 17.68% to 29.841 billion RMB, and operating cash flow significantly deteriorated 2024 H1 Key Accounting Data | Key Accounting Data | Current Period (Jan-Jun) | Prior Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 10,025,099,137.77 RMB | 10,419,270,946.10 RMB | -3.78% | | Net Profit Attributable to Shareholders | 143,891,171.93 RMB | 174,933,860.79 RMB | -17.75% | | Net Profit Attributable to Shareholders (Excluding Non-Recurring Items) | 118,292,100.02 RMB | 149,339,314.06 RMB | -20.79% | | Net Cash Flow from Operating Activities | -1,576,540,010.13 RMB | -339,476,796.53 RMB | N/A | | Asset Status | End of Current Period | End of Prior Year | YoY Change (%) | | Net Assets Attributable to Shareholders | 4,833,906,341.67 RMB | 4,798,695,028.74 RMB | 0.73% | | Total Assets | 29,841,041,678.84 RMB | 25,357,003,418.46 RMB | 17.68% | 2024 H1 Key Financial Indicators | Key Financial Indicators | Current Period (Jan-Jun) | Prior Period | YoY Change (%) | | :--- | :--- | :--- | :--- | | Basic Earnings Per Share (RMB/share) | 0.1243 | 0.1487 | -16.41% | | Diluted Earnings Per Share (RMB/share) | 0.1243 | 0.1487 | -16.41% | | Weighted Average Return on Net Assets (%) | 3.09% | 3.85% | Decrease of 0.76 percentage points | | Weighted Average Return on Net Assets (Excluding Non-Recurring Items) (%) | 2.50% | 3.24% | Decrease of 0.74 percentage points | - During the reporting period, the total amount of non-recurring gains and losses was 25.60 million RMB, primarily including government subsidies and fair value changes from financial assets and liabilities[14][15] Management Discussion and Analysis This section analyzes the company's operational performance, core competencies, and financial position, highlighting key business developments and risk factors Industry and Principal Business Overview The company operates in the construction industry, with principal businesses covering a complete industry chain from housing construction to municipal infrastructure, leveraging its regional leadership and "large market, large owner, large project" strategy - The company's main business is the construction industry, with a complete industrial chain covering surveying, design, construction, installation, decoration, and building materials production[16] - The company's operating strategy focuses on "large market, large owner, large project," consolidating the local market and expanding external markets through general contracting and specialized subcontracting collaboration[16] Core Competitiveness Analysis The company's core competitiveness stems from its strong regional brand, experienced management, integrated industry chain, and significant technological advantages - The company has formed a complete industrial chain centered on construction, municipal landscaping, and decoration curtain walls, encompassing research, design, installation, building materials, and prefabricated construction, with synergistic development across business segments[17] - The company enjoys an outstanding brand reputation in the regional market, having undertaken numerous landmark buildings and received 4 "Luban Awards" and the "National May 1st Labor Medal"[18] - The company possesses strong technological research and development capabilities, with 11 high-tech enterprises, 1 national postdoctoral workstation, and 3 provincial enterprise technology centers, having obtained 11 new invention patents and 52 utility model and design patents during the reporting period[18] Discussion and Analysis of Operations In the first half of 2024, the company achieved 10.025 billion RMB in operating revenue and 148 million RMB in net profit, while securing 9.958 billion RMB in new contracts, focusing on core businesses and expanding outside its home province 2024 H1 Operating Performance | Indicator | Amount (Billion RMB) | YoY Change | | :--- | :--- | :--- | | Operating Revenue | 10.025 | -3.78% | | Net Profit | 0.148 | -18.28% | | Net Profit Attributable to Parent | 0.144 | -17.75% | | Net Profit Attributable to Parent (Excluding Non-Recurring Items) | 0.118 | -20.79% | 2024 H1 New Contracted Business Composition | Business Type | Contracted Amount (Billion RMB) | Proportion | | :--- | :--- | :--- | | Housing Construction | 5.403 | 54.26% | | Municipal Landscaping | 2.947 | 29.59% | | Decoration Curtain Wall | 0.376 | 3.77% | | Regional Distribution | Contracted Amount (Billion RMB) | Proportion | | Ningbo City | 5.604 | 56.28% | | Zhejiang Province (Outside Ningbo) | 1.092 | 10.96% | | Outside Zhejiang Province | 3.262 | 32.76% | - The company continues to optimize its industrial layout, establishing Zhejiang Yongzhen Engineering Construction Co., Ltd. in Zhenhai District and integrating subsidiaries of Jianle Engineering, while the Municipal Group actively applies for a Grade A highway engineering general contracting qualification[19] Analysis of Key Operating Conditions During the reporting period, the company experienced slight declines in revenue and costs, shifts in expense structure, significant increases in total assets and borrowings, and strategic investments in subsidiaries, with major subsidiaries contributing substantially to overall performance Analysis of Principal Business During the reporting period, the company's operating revenue and cost both slightly decreased, while sales expenses significantly dropped and financial expenses rose due to increased interest, leading to a substantial deterioration in operating cash flow Analysis of Major Financial Statement Items Changes | Item | Current Period Amount (RMB) | Prior Period Amount (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Operating Revenue | 10,025,099,137.77 | 10,419,270,946.10 | -3.78 | | Operating Cost | 9,140,419,040.84 | 9,562,228,038.42 | -4.41 | | Sales Expenses | 2,234,571.46 | 4,706,979.10 | -52.53 | | Financial Expenses | 111,750,003.24 | 77,170,385.62 | 44.81 | | Net Cash Flow from Operating Activities | -1,576,540,010.13 | -339,476,796.53 | N/A | | Net Cash Flow from Investing Activities | -169,744,738.87 | -99,751,300.73 | N/A | | Net Cash Flow from Financing Activities | 1,247,051,003.68 | 606,818,100.37 | 105.51 | Analysis of Assets and Liabilities As of the end of the reporting period, the company's total assets increased by 17.68% to 29.841 billion RMB, with significant increases in prepayments, short-term borrowings, and long-term borrowings, while employee compensation and taxes payable decreased substantially Major Balance Sheet Item Changes | Item Name | Amount at End of Current Period (RMB) | Change from End of Prior Year (%) | Primary Reason | | :--- | :--- | :--- | :--- | | Prepayments | 516,668,880.79 | 71.41% | Increase in prepayments for material purchases and labor subcontracting | | Short-term Borrowings | 3,246,648,173.04 | 34.71% | Increase in new short-term borrowings | | Long-term Borrowings | 2,050,787,465.55 | 35.20% | Increase in new long-term borrowings | | Non-current Liabilities Due Within One Year | 679,583,755.20 | 203.05% | Reclassification of bonds due soon | | Bonds Payable | 0 | -100.00% | Reclassification of bonds due soon | | Employee Compensation Payable | 60,809,547.78 | -60.35% | Payment of year-end bonuses accrued at end of prior year | | Taxes Payable | 28,545,739.56 | -62.23% | Payment of corporate income tax accrued at end of prior year | - As of the end of the reporting period, the company's major restricted assets included 175 million RMB in monetary funds for guarantee deposits, and 133 million RMB in fixed assets and 82 million RMB in intangible assets pledged for loans[26] Analysis of Investment Status During the reporting period, the company made significant equity investments totaling 99.5 million RMB, including capital injections into two subsidiaries and the establishment of a new one, alongside a 140 million RMB private equity fund subscription by a subsidiary Major Equity Investments During the Reporting Period | Investee Company Name | Investment Method | Investment Amount (RMB) | Shareholding Ratio | Source of Funds | | :--- | :--- | :--- | :--- | :--- | | Wenzhou Ningjian Jinke Investment Management Co., Ltd. | Capital Increase | 40,000,000.00 | 90% | Own Funds | | Ninghai Hongshun Construction Co., Ltd. | Capital Increase | 32,300,000.00 | 85% | Own Funds | | Zhejiang Yongzhen Engineering Construction Co., Ltd. | New Establishment | 27,200,000.00 | 85% | Own Funds | - The company's subsidiary, Municipal Group, subscribed for 140 million RMB in Ningbo Haishu Lanhong Private Equity Fund Partnership (Limited Partnership), accounting for 2.33% of the fund's total size as of the end of the reporting period[30] Analysis of Major Holding and Participating Companies The company's major holding subsidiaries operate steadily, providing strong support to its performance, with Ningbo Construction Engineering Group Co., Ltd. being the largest contributor to revenue and net profit Major Holding Subsidiaries' Operating Performance in 2024 H1 | Subsidiary Name | Total Assets (Ten Thousand RMB) | Operating Revenue (Ten Thousand RMB) | Net Profit (Ten Thousand RMB) | | :--- | :--- | :--- | :--- | | Ningbo Construction Engineering Group Co., Ltd. | 1,182,060.65 | 508,355.52 | 6,334.27 | | Ningbo Municipal Engineering Construction Group Co., Ltd. | 949,521.84 | 302,093.47 | 4,209.31 | | Ningbo Jianle Engineering Co., Ltd. | 430,025.94 | 143,181.41 | 2,371.81 | | Zhejiang Guangtian Component Group Co., Ltd. | 190,700.30 | 57,143.61 | 2,888.45 | | Ningbo Metallurgical Survey and Design Research Co., Ltd. | 46,628.74 | 12,591.90 | 584.94 | Risk Analysis The company faces significant risks including macroeconomic fluctuations, accounts receivable collection, raw material price volatility, market expansion challenges, and potential litigation - The company faces five major risks: macroeconomic fluctuations, accounts receivable collection, raw material price volatility, market expansion, and potential litigation risks[33] Corporate Governance This section details changes in the company's board of directors, supervisors, and senior management, as well as its profit distribution policy Changes in Directors, Supervisors, and Senior Management and Profit Distribution During the reporting period, the company's board of directors saw changes with the departure of three directors and the election of a new independent director, with no profit distribution or capital reserve capitalization plans for the first half of 2024 - During the reporting period, three directors (Mei Xiaopeng, Zhang Yeyi, Fang Oujie) resigned, and one new independent director (Xie Weimin) was elected[35][36] - The company's board of directors resolved that there is "none" for the profit distribution plan or capital reserve capitalization plan for the current reporting period[3][36] Environmental and Social Responsibility (ESG) This section outlines the company's efforts in environmental protection and social responsibility initiatives Environmental Protection The company actively promotes green construction and prefabricated buildings to reduce carbon emissions, energy consumption, and waste, aligning with national "dual carbon" goals - The company is committed to promoting green construction and developing prefabricated buildings to reduce carbon emissions[37] - By adopting large-scale intensive production and mechanized installation, the company effectively reduces construction waste and various pollutant emissions[37] Social Responsibility The company actively fulfills its social responsibilities by continuing poverty alleviation efforts and participating in rural revitalization initiatives, including charitable donations - The company actively participates in rural revitalization and poverty alleviation efforts, implementing the "village-enterprise pairing" special action[38] - Subsidiaries have made donations to charitable organizations such as the Ningbo Charity Federation and Fenghua District Red Cross Society, supporting various public welfare projects[38] Significant Matters This section covers major legal proceedings, related party transactions, significant contracts, guarantees, and the use of raised funds Major Lawsuits and Arbitrations During the reporting period, the company and its subsidiaries were involved in multiple significant lawsuits and arbitrations, primarily construction contract disputes over unpaid project fees, with several cases reaching judgment or enforcement stages - The company and its subsidiaries are involved in multiple significant lawsuits and arbitrations arising from unpaid project fees, with parties including Anshun Jiaotou, Ningbo Fenghua Shengjian Real Estate, Yuyao Shengjian Real Estate, and Ningbo Suihua Real Estate[42][43][44] - Several cases have resulted in favorable judgments, such as the lawsuit with Ningbo Suihua Real Estate, where the court ordered the counterparty to pay 132 million RMB in project fees and interest, confirming the company's priority claim[43] - Some cases are still pending or in enforcement, such as the dispute with Jilin Baishan Hefeng Real Estate, for which a retrial has been requested, and the lawsuit with Wenzhou Ouhai Avenue Construction Development, which is still in trial[45][47] Major Related Party Transactions During the reporting period, the company engaged in various daily operational related party transactions totaling approximately 302 million RMB, primarily involving services received, goods purchased, and services provided, all conducted at market prices without affecting the company's independence - The company engaged in daily operational related party transactions with several related parties (mostly subsidiaries of shareholders), totaling 302.08 million RMB[54] - Related party transactions primarily include purchasing goods (e.g., materials, commercial concrete) from Ningbo Jiaotou Supply Chain Co., Ltd. and others (173 million RMB), receiving services (e.g., testing fees, technical service fees) from Ningbo Municipal Public Utility Investment Co., Ltd. and others (54 million RMB), and providing services (e.g., surveying, design income) to Ningbo City Ring Expressway Connection Line Construction Co., Ltd. and others (3 million RMB)[52][53][54] Major Contracts and Guarantees During the reporting period, the company and its subsidiaries signed major engineering contracts exceeding 4 billion RMB, while its total external guarantees amounted to 7.965 billion RMB, representing 150.22% of its net assets - The company signed multiple new major contracts, including the Changfeng County Gangji Town project (1.082 billion RMB), Yuyao Fengshan Street project EPC (804 million RMB), and Fenghua District Jinping Street project EPC (648 million RMB)[59] Guarantee Status at End of Reporting Period | Guarantee Item | Amount (RMB) | | :--- | :--- | | Total Guarantees (A+B) | 7,965,113,413.58 | | Total Guarantees as % of Company's Net Assets | 150.22% | | Guarantees Provided to Shareholders, Actual Controllers, and Related Parties (C) | 2,785,000,000.00 | | Debt Guarantees Provided to Guaranteed Parties with Debt-to-Asset Ratio Exceeding 70% (D) | 4,985,316,953.21 | Progress of Raised Funds Utilization The company's 2020 convertible bond issuance raised 525 million RMB, with 424 million RMB utilized as planned, and the remaining 104 million RMB from a partially uncompleted PPP project reallocated to permanent working capital - The net proceeds from the convertible bond issuance were 525,247,169.80 RMB, with a cumulative investment of 424,083,432.32 RMB as of the end of the reporting period, representing an investment progress of 80.74%[61] - The Jiangyou City PPP project could not be fully implemented as planned, with the main project completed; the company decided in April 2024 to permanently supplement working capital with the remaining 104,452,025.28 RMB of raised funds from this project, and the decision process has been completed[63][64] Share Changes and Shareholder Information This section provides an overview of the company's shareholder structure, including the total number of shareholders and the holdings of its top shareholders Shareholder Information As of the end of the reporting period, the company had 80,252 common shareholders, with Ningbo Communications Investment Group Co., Ltd. as the controlling shareholder holding 26.87% - As of the end of the reporting period, the company had 80,252 shareholders[65] Top Three Shareholders' Shareholding | Shareholder Name | Shares Held at Period End (Shares) | Proportion (%) | Shareholder Nature | | :--- | :--- | :--- | :--- | | Ningbo Communications Investment Group Co., Ltd. | 292,000,000 | 26.87 | State-owned Legal Person | | Ningbo Ningju Asset Management Center (Limited Partnership) - Ningju Quantitative Multi-Strategy No. 8 Private Securities Investment Fund | 19,600,000 | 1.80 | Other | | Ningbo Guangtian Riyue Construction Co., Ltd. | 14,650,000 | 1.35 | Domestic Non-state-owned Legal Person | Bond-Related Information This section details the company's outstanding non-financial enterprise debt financing instruments in the interbank bond market and key solvency indicators Non-Financial Enterprise Debt Financing Instruments As of the end of the reporting period, the company had 2.3 billion RMB in outstanding medium-term notes and super short-term commercial papers in the interbank market, while its solvency indicators showed a slight decline Overview of Outstanding Non-Financial Enterprise Debt Financing Instruments | Bond Abbreviation | Code | Maturity Date | Bond Balance (RMB) | Interest Rate (%) | | :--- | :--- | :--- | :--- | :--- | | 22 Ningbo Construction MTN001 | 102280589 | 2025-03-23 | 500,000,000.00 | 3.60% | | 22 Ningbo Construction MTN002 | 102281992 | - | 500,000,000.00 | 3.55% | | 23 Ningbo Construction SCP004 | 012384113 | 2024-08-11 | 400,000,000.00 | 2.92% | | 23 Ningbo Construction SCP005 | 012384374 | 2024-09-02 | 300,000,000.00 | 2.98% | | 24 Ningbo Construction SCP001 | 012480961 | 2024-12-15 | 200,000,000.00 | 2.54% | | 24 Ningbo Construction SCP002 | 012482371 | 2025-05-04 | 400,000,000.00 | 2.00% | Changes in Key Solvency Indicators | Key Indicator | End of Current Period / Current Period | End of Prior Year / Prior Period | Change | | :--- | :--- | :--- | :--- | | Asset-Liability Ratio (%) | 82.23 | 81.54 | Increased by 0.85 percentage points | | Interest Coverage Ratio | 2.26 | 3.49 | -35.17% | | Cash Interest Coverage Ratio | -10.77 | -1.87 | N/A (Deteriorated) | Financial Report This section presents the company's unaudited consolidated and parent company financial statements for the first half of 2024, including balance sheets, income statements, cash flow statements, and statements of changes in owners' equity Financial Statements This report includes unaudited consolidated and parent company financial statements for the first half of 2024, showing growth in total assets and liabilities, a year-over-year decline in net profit, and a significant net cash outflow from operating activities - This semi-annual report is unaudited[3] Consolidated Income Statement Core Data (Jan-Jun 2024) | Item | Amount (RMB) | | :--- | :--- | | Total Operating Revenue | 10,025,099,137.77 | | Total Operating Costs | 9,804,852,617.11 | | Total Profit | 174,568,900.79 | | Net Profit | 148,262,143.91 | | Net Profit Attributable to Parent Company Shareholders | 143,891,171.93 | Consolidated Cash Flow Statement Core Data (Jan-Jun 2024) | Item | Amount (RMB) | | :--- | :--- | | Net Cash Flow from Operating Activities | -1,576,540,010.13 | | Net Cash Flow from Investing Activities | -169,744,738.87 | | Net Cash Flow from Financing Activities | 1,247,051,003.68 | | Net Increase in Cash and Cash Equivalents | -499,233,745.31 | Significant Accounting Policies and Estimates The company's financial statements are prepared on a going concern basis, adhering to accounting standards, with specific policies for financial instrument impairment, revenue recognition, and tax benefits - Financial instrument impairment is accounted for using a three-stage expected credit loss model[122][123] - Revenue recognition policies: construction services are recognized based on performance progress (input method), while building material sales are recognized at the point control is transferred to the customer[163][164] - The company owns several high-tech enterprises, enjoying a 15% corporate income tax preferential rate; some small-profit enterprises enjoy a 20% preferential rate[172][173][174] Notes to Consolidated Financial Statement Items This section provides detailed explanations of the composition and changes in various consolidated financial statement accounts, including restricted cash, accounts receivable, contract assets, and borrowings Accounts Receivable As of the end of the period, accounts receivable had a book balance of 5.713 billion RMB, with a book value of 4.941 billion RMB after deducting 772 million RMB in bad debt provisions, primarily comprising amounts less than one year old Accounts Receivable Bad Debt Provisioning | Category | Book Balance (RMB) | Bad Debt Provision (RMB) | Book Value (RMB) | | :--- | :--- | :--- | :--- | | Provisioned Individually | 666,669,252.73 | 298,415,797.53 | 368,253,455.20 | | Provisioned by Portfolio | 5,046,389,308.85 | 473,246,967.79 | 4,573,142,341.06 | | Total | 5,713,058,561.58 | 771,662,765.32 | 4,941,395,796.26 | Contract Assets At period-end, contract assets had a book value of 8.642 billion RMB, primarily consisting of completed but unsettled project amounts, with a bad debt provision of 300 million RMB Contract Assets Status | Item | Book Balance (RMB) | Bad Debt Provision (RMB) | Book Value (RMB) | | :--- | :--- | :--- | :--- | | Project Quality Guarantees | 21,733,627.00 | 108,668.16 | 21,624,958.84 | | Completed but Unsettled Amounts | 8,920,404,041.21 | 299,970,744.50 | 8,620,433,296.71 | | Total | 8,942,137,668.21 | 300,079,412.66 | 8,642,058,255.55 | Short-term Borrowings At period-end, short-term borrowings significantly increased to 3.247 billion RMB from 2.410 billion RMB at the beginning of the period, with guaranteed borrowings being the primary component Short-term Borrowings Classification | Item | Period-End Balance (RMB) | Period-Beginning Balance (RMB) | | :--- | :--- | :--- | | Pledged Borrowings | 30,000,000.00 | 63,192,148.79 | | Mortgaged + Guaranteed Borrowings | 118,000,000.00 | 75,000,000.00 | | Guaranteed Borrowings | 2,946,200,000.00 | 2,141,500,000.00 | | Credit Borrowings | 150,000,000.00 | 128,211,715.17 | | Total | 3,246,648,173.04 | 2,410,125,204.52 | Long-term Borrowings At period-end, long-term borrowings (net of current portion) significantly increased to 2.051 billion RMB from 1.517 billion RMB at the beginning of the period, primarily comprising pledged and guaranteed borrowings, with several loans secured by PPP project receivables - Long-term borrowings at period-end totaled 2.051 billion RMB, a 35.2% increase from the beginning of the period[257][258] - Multiple large long-term borrowings are pledged against accounts receivable from PPP projects, such as Ninghai Smart Auto Town, Ninghai County Eastern Coastal Flood Control and Drainage Project, and Wenzhou Financial Technology Cultural Center[258] Changes in Consolidation Scope During the reporting period, the company expanded its consolidation scope by acquiring three subsidiaries through non-same control business combinations and establishing four new subsidiaries, while deregistering one subsidiary - During this period, the company added three subsidiaries through non-same control business combinations, established four new subsidiaries, and deregistered one subsidiary, leading to changes in the consolidation scope[311][315]