华兴资本控股(01911) - 2024 - 中期业绩

Supplementary Announcement Context Introduction and Re-statement This announcement is a supplementary announcement to China Renaissance Holdings Limited's 2023 interim results, aiming to disclose the restatement of the opening balances and related financial data for the 2023 interim results due to adjustments made after the completion of the 2022 annual results audit - The 2023 interim results have been restated based on adjustments made after the completion of the 2022 annual results audit[1] - The restated interim results are unaudited but have been reviewed by the company's audit committee[1] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2023, the company's total revenue decreased year-on-year, but net investment income turned from loss to profit, driving operating profit to turn profitable; however, loss for the period and loss attributable to owners of the company both expanded, leading to an increase in loss per share Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Metric | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Total Revenue | 536,575 | 603,705 | -11.12% | | Net Investment Income (Loss) | 47,831 | (91,418) | Turned from loss to profit | | Operating Profit (Loss) | 32,447 | (73,336) | Turned from loss to profit | | Loss for the Period | (163,173) | (198,038) | Loss narrowed by 17.50% | | Loss Attributable to Owners of the Company | (180,132) | (153,735) | Loss expanded by 17.17% | | Basic and Diluted Loss Per Share | RMB (0.36) | RMB (0.30) | Loss expanded by 20.00% | Condensed Consolidated Statement of Financial Position As of June 30, 2023, the company's total assets and total liabilities both decreased compared to the end of 2022, with a reduction in net current assets; net assets and equity attributable to owners of the company slightly decreased, but the overall financial structure remained stable Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Total Assets | 10,137,779 | 13,077,557 | -22.56% | | Net Current Assets | 3,774,527 | 5,090,627 | -25.86% | | Total Assets Less Current Liabilities | 7,618,259 | 9,184,351 | -17.05% | | Net Assets | 7,521,651 | 7,539,280 | -0.23% | | Equity Attributable to Owners of the Company | 6,470,226 | 6,501,490 | -0.48% | - Accounts receivable and other receivables significantly decreased from RMB 1,252,730 thousands to RMB 454,924 thousands, a 63.69% reduction[4] - Cash and cash equivalents decreased from RMB 1,537,730 thousands to RMB 1,083,185 thousands, a 29.69% reduction[4] Notes to the Condensed Consolidated Financial Statements Basis of Preparation and Accounting Policies The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and the Listing Rules of the Hong Kong Stock Exchange, using historical cost and fair value measurements; revisions to International Financial Reporting Standards first applied in the current period had no significant impact on financial position and performance - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and the applicable disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[6] - Revisions to International Financial Reporting Standards first applied in the current interim period had no significant impact on the Group's financial position and performance[9] Revenue and Segment Information The company's chief operating decision maker segments its business into four reportable segments based on business models: Investment Banking, Investment Management, Huaxing Securities, and Others; for the six months ended June 30, 2023, Investment Management segment revenue and operating profit significantly increased, while Investment Banking and Huaxing Securities segment revenues decreased, and Investment Banking segment operating loss expanded - The Group's reportable segments include Investment Banking, Investment Management, Huaxing Securities, and Others[10] Segment Revenue and Operating Profit (Loss) (For the six months ended June 30) | Segment | 2023 Revenue (RMB thousands) | 2022 Revenue (RMB thousands) | Y-o-Y Revenue Change | 2023 Operating Profit (Loss) (RMB thousands) | 2022 Operating Profit (Loss) (RMB thousands) | Y-o-Y Operating Profit Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Investment Banking | 112,505 | 231,250 | -51.35% | (27,624) | (1,683) | Loss expanded | | Investment Management | 336,452 | 290,086 | +16.00% | 126,247 | 75,398 | Profit increased by 67.45% | | Huaxing Securities | 47,346 | 59,733 | -20.73% | (41,865) | (107,889) | Loss narrowed by 61.20% | | Others | 40,272 | 22,636 | +77.91% | (24,311) | (39,162) | Loss narrowed by 37.93% | | Consolidated Total | 536,575 | 603,705 | -11.12% | 32,447 | (73,336) | Turned from loss to profit | - Carried interest income recognition is based on fund performance and requires reaching a minimum income level; unrealized carried interest income is adjusted based on changes in fund fair value[13] Geographical Information The Group primarily operates in Mainland China and Hong Kong; for the six months ended June 30, 2023, revenue from external customers in all major geographical regions decreased, and non-current assets also showed a downward trend Revenue from External Customers (For the six months ended June 30) | Region | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Mainland China | 443,532 | 461,461 | -3.89% | | Hong Kong | 83,104 | 121,859 | -31.79% | | United States | 9,939 | 20,385 | -51.24% | | Total | 536,575 | 603,705 | -11.12% | Non-current Assets (As of June 30) | Region | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Mainland China | 199,067 | 233,128 | -14.61% | | Hong Kong | 20,510 | 25,765 | -20.39% | | United States | 592 | 2,558 | -76.86% | | Total | 220,169 | 261,451 | -15.79% | Net Investment Income (Loss) For the six months ended June 30, 2023, net investment income turned from a loss in the prior period to a profit, primarily due to improved realized and unrealized net gains from investments in listed equity securities and unlisted investment funds measured at fair value Composition of Net Investment Income (Loss) (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Realized and Unrealized Net Gains (Losses) from Financial Assets at Fair Value Through Profit or Loss | | | | | - Listed equity securities investments | 82,401 | (55,161) | Turned from loss to profit | | - Unlisted investment funds measured at fair value | 3,934 | (81,360) | Turned from loss to profit | | Total | 47,831 | (91,418) | Turned from loss to profit | Other Income, Gains or Losses For the six months ended June 30, 2023, other income, gains or losses turned from a loss in the prior period to a profit, primarily due to the positive impact of increased government grants and reduced net exchange losses Other Income, Gains or Losses (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Government grants | 19,596 | 15,753 | +24.39% | | Net exchange losses | (13,475) | (39,771) | Loss narrowed by 66.09% | | Total | 7,920 | (5,384) | Turned from loss to profit | Investment Losses from Certain Incidental and Ancillary Investments For the six months ended June 30, 2023, investment losses from certain incidental and ancillary investments significantly decreased from RMB 30,201 thousands in the prior period to zero Investment Losses from Certain Incidental and Ancillary Investments (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Investment losses | — | (30,201) | Loss significantly reduced | Income Tax Expense For the six months ended June 30, 2023, income tax expense decreased year-on-year, primarily due to deferred tax turning from an expense to income, despite a significant increase in current tax in Mainland China Composition of Income Tax Expense (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Current tax - Mainland China | 54,876 | 11,255 | +387.59% | | Deferred tax | (5,371) | 72,824 | Turned from expense to income | | Total income tax expense | 50,980 | 84,079 | -39.37% | Dividends The company did not declare or pay any dividends for the six months ended June 30, 2023, whereas a final dividend of RMB 0.38 per share was paid in the prior period - The company did not declare or pay any dividends for the six months ended June 30, 2023[22] - For the six months ended June 30, 2022, a total final dividend of RMB 201,114 thousands (RMB 0.38 per share) was declared to the owners of the company[22] Loss Per Share For the six months ended June 30, 2023, the basic and diluted loss per share attributable to owners of the company was RMB (0.36), an expansion from RMB (0.30) in the prior period Loss Per Share (For the six months ended June 30) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Loss Attributable to Owners of the Company (RMB thousands) | (180,132) | (153,735) | | Weighted average number of ordinary shares | 502,642,560 | 507,132,222 | | Basic and Diluted Loss Per Share (RMB) | (0.36) | (0.30) | Investments in Associates As of June 30, 2023, the company's total investments in associates slightly decreased, primarily due to a reduction in investments in funds Investments in Associates (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Investments in unlisted companies | 14,284 | 13,353 | +6.97% | | Investments in funds | 1,333,866 | 1,404,604 | -5.04% | | Total | 1,348,150 | 1,417,957 | -4.92% | Financial Assets at Fair Value Through Profit or Loss As of June 30, 2023, the total financial assets at fair value through profit or loss decreased, with significant reductions in listed equity securities investments and unlisted cash management products, but an increase in listed financial bond investments Financial Assets at Fair Value Through Profit or Loss (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Total Current Assets | 3,145,196 | 3,315,794 | -5.15% | | - Listed equity securities investments | 12 | 216,611 | -99.99% | | - Unlisted cash management products | 205,293 | 456,515 | -55.09% | | - Listed financial bonds | 2,257,525 | 1,854,255 | +21.75% | | Total Non-current Assets | 1,966,075 | 2,049,359 | -4.06% | | - Options to acquire non-controlling interests | 283,090 | 436,080 | -35.10% | - The fair value of options to acquire non-controlling interests decreased, primarily due to the re-determination of the fair value of options held by Huaxing Securities' non-controlling shareholders[29] Financial Assets at Fair Value Through Other Comprehensive Income As of June 30, 2023, the total financial assets at fair value through other comprehensive income significantly decreased, primarily due to a reduction in listed financial bonds Financial Assets at Fair Value Through Other Comprehensive Income (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Listed financial bonds | 143,714 | 357,672 | -59.81% | | Less: Non-current portion | (71,425) | (111,908) | -36.17% | | Total | 72,289 | 245,764 | -70.60% | Loans to Third Parties As of June 30, 2023, the total loans to third parties increased, but a significant impairment provision was made for the loan to Woby Medical Holdings Limited Loans to Third Parties (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Woby Medical Holdings Limited | 198,733 | 192,717 | +3.12% | | Zhejiang Shengze Credit Management Co., Ltd. | 27,772 | — | Newly added | | Less: Impairment loss allowance | (117,564) | (117,561) | +0.00% | | Total | 108,941 | 86,574 | +25.84% | - An impairment allowance of RMB 117,548 thousands has been made for the loan to Woby Medical Holdings Limited due to indications of credit impairment[32] Accounts Receivable and Other Receivables As of June 30, 2023, the total accounts receivable and other receivables significantly decreased, primarily due to a substantial reduction in receivables from unsettled transactions, with a corresponding decrease in impairment loss allowance Accounts Receivable and Other Receivables (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Accounts receivable | 49,979 | 93,032 | -46.30% | | Receivables from unsettled transactions | 249,482 | 977,380 | -74.47% | | Less: Impairment loss allowance | (9,467) | (38,688) | -75.55% | | Total | 454,924 | 1,252,730 | -63.69% | Amounts Due from Related Parties As of June 30, 2023, the total amounts due from related parties decreased, primarily influenced by a reduction in receivables from Huaxing New Economy RMB Phase IV Fund; the company made impairment provisions for amounts due from related parties that showed credit impairment Amounts Due from Related Parties — Trading Nature (As of June 30) | Related Party | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Huaxing New Economy RMB Phase IV Fund | 880,843 | 1,076,392 | -18.17% | | Less: Impairment loss allowance | (92,430) | (92,206) | +0.24% | | Total Trading Nature | 896,495 | 1,324,781 | -32.29% | - As of June 30, 2023, a total carrying amount of RMB 880,843 thousands was credit-impaired, and an impairment allowance of RMB 90,072 thousands was made[39] Amounts Due from Related Parties — Non-Trading Nature (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Total Non-Trading Nature | 6,144 | 5,596 | +9.79% | Impairment Assessment of Financial Assets under Expected Credit Loss Model For the six months ended June 30, 2023, the total impairment loss (reversal) recognized by the company turned from a loss last year to a reversal, primarily benefiting from the impairment reversal of accounts receivable and other receivables Impairment Loss (Reversal) Recognition (For the six months ended June 30) | Item | 2023 (RMB thousands) | 2022 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Accounts receivable and other receivables | (33,841) | (87) | Significant reversal | | Loans to third parties | (8) | 5,056 | Turned from loss to reversal | | Amounts due from related parties | 288 | 2,181 | Loss narrowed | | Total | (33,583) | 7,130 | Turned from loss to reversal | Accounts Payable and Other Payables As of June 30, 2023, the total accounts payable and other payables significantly decreased, primarily due to substantial reductions in payables from unsettled transactions and carried interest payable to management teams and other parties Accounts Payable and Other Payables (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Salaries, bonuses and other benefits payable | 268,080 | 385,574 | -30.47% | | Payables from unsettled transactions | 257,543 | 979,576 | -73.71% | | Carried interest payable to management teams and other parties | 91,235 | 238,122 | -61.68% | | Total | 730,461 | 1,718,928 | -57.40% | Financial Assets Sold Under Repurchase Agreements As of June 30, 2023, financial assets sold under repurchase agreements significantly increased, reflecting increased company activity in obtaining funds by selling securities with an agreement to repurchase them Financial Assets Sold Under Repurchase Agreements (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Analyzed by collateral type: Debt securities | 398,000 | 150,000 | +165.33% | | Total | 398,155 | 150,065 | +165.34% | - The effective annual interest rate for financial assets sold under repurchase agreements ranged from 3.11% to 3.57% (December 31, 2022: 3.50% to 3.95%), indicating a decrease in interest rates[47] Structured Notes As of June 30, 2023, the balance of structured notes slightly decreased, and the annual interest rate range narrowed and lowered Structured Notes (As of June 30) | Item | 2023 (RMB thousands) | December 31, 2022 (RMB thousands) | Change Rate | | :--- | :--- | :--- | :--- | | Structured notes | 223,479 | 236,648 | -5.61% | - The annual interest rate for structured notes ranged from 3.10% to 3.30% (December 31, 2022: 3.30% to 6.08%)[49] Bank Borrowings During the interim period, new bank loans obtained by the company decreased, but bank loans repaid significantly increased, leading to a substantial reduction in total bank borrowings - New bank loans of RMB 67,880 thousands were obtained during the interim period, a 59.99% year-on-year decrease[50] - Bank loans repaid amounted to RMB 2,170,579 thousands, a 1204.69% year-on-year increase[50] - Loans bear interest at fixed market annual rates ranging from 4.35% to 4.50%[50] Share Capital As of June 30, 2023, the company's authorized share capital and issued and fully paid share capital both remained unchanged Share Capital Information (As of June 30) | Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Number of issued and fully paid shares | 568,397,776 | 568,397,776 | | Share Capital (RMB thousands) | 93 | 93 | Major Differences between Preliminary and Supplementary Announcements Differences in Financial Position Major differences in the consolidated statement of financial position between the preliminary interim results announcement and this announcement include loans to third parties, amounts due from related parties, deferred tax assets, accounts payable and other payables, and income tax payable, primarily stemming from updated impairment assessments, extended loan maturity dates, and adjustments to bonus expense provisions and their corresponding tax impacts Major Differences in Consolidated Statement of Financial Position (As of June 30, 2023) | Item | Disclosed in this announcement (RMB thousands) | Disclosed in preliminary interim results announcement (RMB thousands) | Difference (RMB thousands) | | :--- | :--- | :--- | :--- | | Loans to third parties | 108,941 | 226,366 | (117,425) | | Amounts due from related parties | 902,639 | 674,560 | 228,079 | | Deferred tax assets | 152,436 | 219,624 | (67,188) | | Accounts payable and other payables | (730,461) | (804,434) | 73,973 | | Income tax payable | (104,277) | (90,880) | (13,397) | - The difference in loans to third parties is due to updated impairment assessments and extended loan maturity dates[53] - The difference in amounts due from related parties is due to updated impairment assessments, particularly related to the settlement agreement with Huaxing New Economy RMB Phase IV Fund[54] Differences in Profit or Loss and Other Comprehensive Income Major differences in the consolidated statement of profit or loss and other comprehensive income are reflected in interest income, impairment losses under the expected credit loss model, and income tax expense, with these adjustments also related to the impairment assessment of amounts due from related parties and adjustments to bonus expense provisions and their tax impacts Major Differences in Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30, 2023) | Item | Disclosed in this announcement (RMB thousands) | Disclosed in preliminary interim results announcement (RMB thousands) | Difference (RMB thousands) | | :--- | :--- | :--- | :--- | | Interest income | 49,802 | 76,528 | (26,726) | | Impairment losses under expected credit loss model, net of reversal | 33,583 | 37,835 | (4,252) | | Income tax expense | (50,980) | (52,043) | 1,063 | - Differences in deferred tax assets, income tax payable, and income tax expense are primarily due to the corresponding tax impacts arising from adjustments to impairment losses on amounts due from related parties and bonus expense provisions[55] Other Information Publication of 2023 Interim Report The company's interim report for the six months ended June 30, 2023, will be published on the Stock Exchange and the company's website in due course and dispatched to shareholders - The 2023 interim report will be published on the Stock Exchange and the company's website and dispatched to shareholders in due course[56]