Financial Performance - Revenue for the six months ended June 30, 2024, was RMB 69,137,000, a decrease of 30.9% compared to RMB 99,895,000 for the same period in 2023[2] - Gross profit for the same period was RMB 19,032,000, down 25% from RMB 25,307,000 year-on-year[2] - Operating profit decreased to RMB 8,683,000, a decline of 34.5% from RMB 13,298,000 in the previous year[2] - Net profit for the period was RMB 6,870,000, representing a 36.5% decrease from RMB 10,878,000 in the prior year[2] - Basic and diluted earnings per share were RMB 1.43, down from RMB 2.27 in the same period last year[2] - Total comprehensive income for the period was RMB 7,219,000, compared to RMB 15,696,000 in the same period last year[3] - In the first half of 2024, the company's total revenue decreased to approximately RMB 691 million, a decline of about 30.8% year-on-year[27] - The total net profit for the first half of 2024 fell to approximately RMB 69 million, representing a year-on-year decrease of about 36.8%[27] Sales Performance - Sales of refining additives amounted to RMB 43,999,000, a decrease of 21.3% from RMB 55,861,000 in 2023[7] - Sales of oil additives were RMB 25,138,000, down 43% from RMB 44,034,000 in the previous year[7] - Revenue from mainland China was RMB 67,765,000, down 32.2% from RMB 99,783,000 in the previous year[9] - Sales of refining additives dropped from RMB 55.9 million to RMB 44.0 million, while oil additives fell from RMB 44.0 million to RMB 25.1 million due to maintenance shutdowns at major domestic clients' refining facilities[32] Cash Flow and Liabilities - Cash and cash equivalents increased to RMB 98,894,000 from RMB 95,204,000 at the end of 2023[4] - Current liabilities decreased to RMB 201,468,000 from RMB 216,749,000 at the end of 2023[4] - Trade receivables net amount was RMB 66,032,000, a decrease of 20.5% from RMB 82,907,000 at the end of 2023[19] - Total trade and other payables amounted to RMB 15,460,000, down 36.8% from RMB 24,469,000 at the end of 2023[22] - Trade and other receivables decreased from RMB 82.9 million as of December 31, 2023, to RMB 66.0 million as of June 30, 2024, primarily due to a reduction in total sales[41] - Trade and other payables decreased from RMB 24.5 million as of December 31, 2023, to RMB 15.5 million as of June 30, 2024, due to accelerated settlement and payment processes[43] - The company's debt-to-asset ratio remained at zero as there were no borrowings as of both December 31, 2023, and June 30, 2024[44] Research and Development - Research and development expenses (excluding depreciation) were RMB 3,261,000, down 18.6% from RMB 4,008,000 in the previous year[11] - The company successfully obtained two invention patents in January and February 2024, and submitted nine new patent applications currently under review[27] - Research and development will focus on new products in refining agents and additives, collaborating with research institutions to produce high-end fine chemicals[31] Capital Expenditures and Investments - The company acquired property, plant, and equipment for RMB 4,597,000 during the six months ended June 30, 2024, significantly higher than RMB 161,000 in the same period last year[18] - Capital expenditures during the reporting period amounted to RMB 4.597 million, primarily for the purchase of properties and equipment, compared to RMB 0.161 million in the previous period[45] - The company has not engaged in any significant investments, acquisitions, or disposals during the reporting period[45] Strategic Focus and Market Conditions - The company continues to focus on developing and marketing refinery additives and oil products that reduce harmful emissions and comply with evolving regulatory requirements[24] - The company is accelerating product and business diversification to adapt to domestic policy directions and expand export channels[26] - The demand for aviation fuel in China is expected to reach 38.5 million tons in 2024, a year-on-year increase of 12.5%[25] - China's refining capacity is projected to grow to approximately 980 million tons per year by 2024, with an average scale of refining enterprises further increasing[25] - The rapid development of new energy vehicles in China is expected to impact the demand growth for the company's main products, refining additives and oil additives[47] - The trend of "reducing fuel and increasing chemicals" in the domestic refining industry may adversely affect the demand for the company's main products[48] - The ongoing geopolitical tensions, including the Russia-Ukraine war, have led to increased volatility in the oil industry, affecting the company's operational performance[49] - Regulatory changes following a major chemical accident have posed challenges for the company in expanding production facilities for high-purity oleic acid, a key raw material[50] Corporate Governance and Compliance - The company has complied with the Corporate Governance Code, except for the combined roles of the Chairman and CEO, which the board believes serves the company's interests[54] - The company has a total of 59 employees, all located in China, with compensation aligned with local laws and regulations[53] - The company has no plans to declare an interim dividend for the six months ending June 30, 2024[57] - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2024, consistent with the previous year[23] Future Plans and Utilization of Proceeds - The company plans to enhance production efficiency and product quality through the new distributed control system (DCS) and pursue government support by applying for "specialized and innovative small and medium enterprises" status[31] - The remaining net proceeds from the listing are expected to be fully utilized within 24 months starting from June 30, 2024[51] - Approximately HKD 42.8 million (39%) of the net proceeds is allocated for upgrading machinery and equipment at the Yixing factory, with HKD 18.6 million already spent[51] - The construction of production facilities for high-purity oleic acid, aimed at producing lubricant additives, is expected to utilize approximately HKD 53.9 million (49%), with HKD 25.6 million already used[51] - General business operations and working capital are allocated approximately HKD 8.8 million (8%), fully utilized as of the reporting date[51]
江苏创新(02116) - 2024 - 中期业绩