中国铝罐(06898) - 2024 - 中期财报

Company Information This section provides fundamental company details, including board members, auditors, and key operational information Company Overview This chapter provides fundamental company information, including board and committee members, registered office, principal place of business, auditors, and stock code - The company's Chairman of the Board is Mr. Lian Yunzeng, with independent non-executive directors including Dr. Lian Dapeng, Ms. Guo Yang, and Mr. Ye Weiweng[2] - The company's auditor is Ernst & Young[4] Business Review and Outlook This section reviews the group's core business performance, highlighting revenue trends and strategic responses to market challenges Business Overview The Group's core business involves manufacturing monobloc aluminum aerosol cans, with revenue for the six months ended June 30, 2024, decreasing by 4% to HKD 119.7 million due to weak domestic demand Revenue Performance for H1 2024 | Period | Revenue (HKD million) | YoY Change | | :--- | :--- | :--- | | For the six months ended June 30, 2024 | 119.7 | -4% | | For the six months ended June 30, 2023 | 124.6 | - | - The primary reasons for the revenue decline are changes in the Chinese domestic market, with low consumer confidence leading to conservative spending and weak domestic demand suppressing market activity[5] Operating Environment and Outlook The Group anticipates ongoing challenges from global economic conditions, intense market competition, and weakening consumer demand, responding with strategies focused on R&D, customer relations, and operational efficiency - Key challenges faced by the Group include: (i) intense global market competition; (ii) continuous degradation and weakening of consumer demand; and (iii) various policy risks in China[6] - Response strategies include: - Strengthening R&D and innovation to build long-term competitive advantages - Consolidating relationships with core customers and actively expanding to new clients - Enhancing production equipment capacity, reducing costs, and optimizing production processes - Implementing a strategy of 'technology patenting, patent standardization, and standard industrialization' to strengthen industry leadership[6] Management Discussion and Analysis This section provides a comprehensive analysis of the Group's financial performance, liquidity, risk management, and capital activities during the reporting period Financial Review In H1 2024, Group turnover decreased by 4% to HKD 119.7 million due to lower China sales, while net profit declined by 5.9% to HKD 16.5 million with a 13.8% net profit margin Key Financial Indicators for H1 2024 | Indicator | H1 2024 (HKD million) | H1 2023 (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | Turnover | 119.7 | 124.6 | -4.0% | | Gross Profit | 35.4 | 37.4 | -5.3% | | Net Profit | 16.5 | 17.5 | -5.9% | | Gross Profit Margin | 29.6% | 30.0% | -0.4pp | | Net Profit Margin | 13.8% | 14.0% | -0.2pp | Revenue by Region | Region | H1 2024 (HKD million) | H1 2023 (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | China Customers | 105.3 | 114.6 | -8.1% | | Overseas Customers | 14.4 | 10.0 | +43.1% | - Sales and distribution expenses significantly decreased by 50.7% year-on-year to HKD 2.1 million, primarily due to reduced customs declaration fees and business travel and entertainment expenses[15] Liquidity and Capital Resources As of June 30, 2024, the Group maintained a sound financial position with HKD 91.6 million in net current assets, HKD 23.7 million in cash, and HKD 65.5 million in available bank facilities Liquidity Indicators | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Net Current Assets (HKD million) | 91.6 | 105.0 | | Cash and Cash Equivalents (HKD million) | 23.7 | 39.5 | | Current Ratio | 4.7 | 6.5 | | Gearing Ratio | -4% | -11% | - As of June 30, 2024, the Group had available standby bank facilities of approximately HKD 65.5 million[23] Risk Management The Group's primary risks include foreign exchange exposure from currency mismatches and raw material price volatility, with no forward aluminum ingot purchases made due to recent market fluctuations - Approximately 12% of the Group's revenue is denominated in USD, while over 95% of production costs are settled in RMB, creating foreign exchange risk[26] - Due to increased volatility in the market price of commodity aluminum ingots over the past six months, the company did not engage in any forward purchases of aluminum ingots during the reporting period[27] Use of Proceeds As of June 30, 2024, most of the HKD 80 million IPO net proceeds were used for capacity expansion and operations, with HKD 8.7 million for a new R&D lab remaining unutilized IPO Proceeds Utilization and Balance (As of June 30, 2024) | Business Objective | Actual Net Proceeds (HKD million) | Total Utilized (HKD million) | Unutilized Balance (HKD million) | | :--- | :--- | :--- | :--- | | Capacity Expansion | 48.0 | 48.0 | 0 | | Establishment of New R&D Laboratory | 12.0 | 3.3 | 8.7 | | Repayment of Bank Loans | 16.0 | 16.0 | 0 | | General Working Capital | 4.0 | 4.0 | 0 | | Total | 80.0 | 71.3 | 8.7 | Capital Operations and Convertible Notes During the period, the company issued 118 million new shares from convertible note exercises and repurchased 76.768 million shares, with full conversion of Chairman Lian Yunzeng's notes potentially impacting equity structure Share Repurchase Details During the Reporting Period | Month | Number of Shares Repurchased | Total Price Paid (HKD) | | :--- | :--- | :--- | | May 2024 | 2,384,000 | 1,489,420 | | June 2024 | 74,384,000 | 50,992,880 | | Total | 76,768,000 | 52,482,300 | - During the reporting period, the company issued 118 million new ordinary shares due to the exercise of convertible notes[38] - If the convertible notes held by Chairman Mr. Lian Yunzeng were fully exercised, his shareholding percentage would increase from 38.13% to 51.21%, but due to public float requirements, these notes will not be fully converted[46] Interim Condensed Consolidated Financial Statements This section presents the Group's interim condensed consolidated financial statements, including the statement of profit or loss, financial position, cash flows, and explanatory notes Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, the Group reported HKD 119.7 million in revenue, HKD 21.26 million profit before tax, and HKD 16.47 million profit for the period H1 2024 Statement of Profit or Loss Summary (HKD thousand) | Item | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 119,659 | 124,616 | | Gross Profit | 35,431 | 37,413 | | Profit Before Tax | 21,255 | 22,467 | | Profit for the Period | 16,473 | 17,508 | | Profit Attributable to Owners of the Parent | 16,189 | 17,210 | | Basic Earnings Per Share | 1.7 HK cents | 1.9 HK cents | | Diluted Earnings Per Share | 1.3 HK cents | 1.3 HK cents | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets were HKD 303 million, with HKD 272 million in net assets and HKD 268 million in equity attributable to owners of the parent Statement of Financial Position Summary (HKD thousand) | Item | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Total Non-Current Assets | 186,521 | 218,886 | | Total Current Assets | 116,489 | 124,152 | | Total Current Liabilities | 24,939 | 19,114 | | Net Assets | 272,102 | 316,994 | | Total Equity | 272,102 | 316,994 | Interim Condensed Consolidated Statement of Cash Flows In H1 2024, the Group generated HKD 25.53 million from operations and HKD 23.67 million from investing activities, while financing activities resulted in a HKD 65.98 million outflow, leading to a HKD 16.77 million net decrease in cash Cash Flow Statement Summary (HKD thousand) | Item | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 25,534 | 10,648 | | Net Cash from/(used in) Investing Activities | 23,673 | (55,425) | | Net Cash used in Financing Activities | (65,975) | (24,162) | | Net Decrease in Cash and Cash Equivalents | (16,768) | (68,939) | | Cash and Cash Equivalents at End of Period | 23,729 | 38,578 | Summary of Notes to Financial Statements The notes provide detailed explanations of financial statement items, including revenue segmentation by region, related party transactions, and the background and conversion status of convertible notes Revenue by Geographical Market (HKD thousand) | Geographical Market | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Mainland China | 105,258 | 114,552 | | Americas | 8,201 | 6,287 | | Asia | 5,355 | 3,322 | | Africa | 845 | 455 | | Total | 119,659 | 124,616 | - During the period, the Group's total sales to related parties Guangzhou Baoshili Chemical Co., Ltd. and Guangzhou Ouyaz Aerosol & Daily Chemical Products Manufacturing Co., Ltd. amounted to HKD 7.588 million[85] - As of June 30, 2024, the principal amount of unexercised convertible notes was HKD 152 million, convertible into 276 million shares at a price of HKD 0.55 per share[95] Other Information This section covers additional corporate information, including directors' and major shareholders' interests, share option schemes, corporate governance practices, and dividend declarations Directors' and Major Shareholders' Interests As of June 30, 2024, Chairman and Executive Director Mr. Lian Yunzeng held a 64.16% equity interest, alongside convertible notes for an additional 26.83% of issued shares Chairman Mr. Lian Yunzeng's Shareholding | Holding Method | Number of Shares | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | | Beneficial Owner | 392,546,000 | 38.13% | | Interest in Controlled Corporation (Wellmass) | 268,000,000 | 26.03% | | Total | 660,546,000 | 64.16% | Share Option Schemes The company operates Pre-IPO and 2023 Share Option Schemes, with no options granted, exercised, lapsed, or cancelled during the six months ended June 30, 2024 - For the six months ended June 30, 2024, no share options were granted, exercised, lapsed, or cancelled under the Pre-IPO Share Option Scheme and the 2023 Share Option Scheme[114][116] Corporate Governance During the reporting period, the company largely complied with the Corporate Governance Code, with the Chairman and CEO roles combined, while maintaining sufficient public float and established committees - The company deviated from Corporate Governance Code provision C.2.1, as the roles of Chairman and Chief Executive Officer are not separated, both held by Mr. Lian Yunzeng[124] - The company confirmed that as of the reporting date, it has maintained a sufficient public float of not less than 25% of the total issued shares[125] Dividends The Board declared an interim dividend of 0.28 HK cents per share for the six months ended June 30, 2024, payable around October 29, 2024 Interim Dividend | Period | Interim Dividend Per Share | | :--- | :--- | | For the six months ended June 30, 2024 | 0.28 HK cents | | For the six months ended June 30, 2023 | 0.29 HK cents |