中国通商集团(01719) - 2024 - 中期财报

Company Information Company Overview This section provides essential company details, including board members, committee compositions, authorized representatives, company secretary, auditors, legal advisors, and principal bankers - The company's Board of Directors comprises Executive Directors Ms. Zhou Wei and Mr. Qiao Yun, Non-executive Directors Mr. Xu Aoling and Mr. Li Wei, and Independent Non-executive Directors Mr. Zou Guoqiang, Mr. Fu Xinping, and Dr. Mao Zhenhua[3] - Mr. Zou Guoqiang chairs both the Audit Committee and the Remuneration Committee, while the Nomination Committee members include Ms. Zhou Wei, Mr. Zou Guoqiang, Mr. Fu Xinping, and Dr. Mao Zhenhua[3] Financial Highlights Financial Highlights For the six months ended June 30, 2024, the Group's revenue decreased by 15.9% year-on-year, while profit for the period and profit attributable to owners of the company significantly increased by 129.3% and 196.7% respectively, with no interim dividend recommended by the Board 2024 Interim Performance Summary (Compared to Previous Period) | Metric | 2024 Interim | 2023 Interim | Change | | :--- | :--- | :--- | :--- | | Revenue | 157,177,000 HKD | 186,813,000 HKD | -15.9% | | Gross Profit | 37,420,000 HKD | 43,718,000 HKD | -14.4% | | Gross Margin | 23.8% | 23.4% | +0.4pp | | Profit for the Period | 3,393,000 HKD | 1,480,000 HKD | +129.3% | | Profit Attributable to Owners of the Company | 3,468,000 HKD | 1,169,000 HKD | +196.7% | | Earnings Per Share | 0.2 HK cents | 0.07 HK cents | +185.7% | | Interim Dividend | Not Recommended | Zero | - | Management Discussion and Analysis Industry Development During the reporting period, Wuhan Port expanded its reach by developing river-sea intermodal and direct shipping routes, while Yangluo Port advanced green and smart port construction to enhance operational efficiency; increased maritime demand and freight rates due to the Red Sea incident are expected to stabilize for domestic shipping in the second half - Wuhan has opened direct shipping routes to Japan, South Korea, Russia, and Vietnam, reducing transport cycles and improving service quality[7] - In the first half of 2024, maritime demand exceeded expectations and freight rates significantly increased due to the Red Sea incident and other factors; domestic freight rates faced pressure in the first half but are expected to stabilize in the second half[7] Business Review The Group's core business involves operating ports along the Yangtze River in Hubei Province and providing integrated logistics services; in the first half, the Group vigorously expanded new businesses like whole vehicle container transport, Macheng stone market, and steel product handling, while ensuring international direct shipping services, with synergistic development across Yangluo Port, Hannan Port, and Tongshang Supply Chain to consolidate and enhance the Group's logistics hub status in Central China - The Group vigorously expanded new cargo sources, completing 1,468 whole vehicles (1,072 TEUs) for container loading in the first half and successfully developing a stable source of Macheng stone for export to South Korea[8] - The Wuhan-Japan/Korea/Russia international direct shipping route completed 16,000 TEUs in the first half, with Yangluo Port providing priority and efficient loading/unloading services[9] Wuhan Yangluo Port and General Port As the core port area of the Mid-Yangtze River shipping center, Wuhan Yangluo Port serves a vast hinterland covering multiple provinces and cities; its hub status was further enhanced by new regional and international routes and increased frequency, with container throughput growing by 12.3% year-on-year in 2023, and service scope and level improved through measures like gate inspection points and diversified empty container sources - In 2023, Yangluo Port opened its fourth international direct water transport route to Cai Mep Port, Vietnam, and increased the frequency of the "Wuhan-Japan/Korea/Russia" route, improving cargo turnover efficiency[11] - In 2023, Yangluo Port's container throughput reached 900,142 TEUs, a 12.3% year-on-year increase, with CFS stuffing and unstuffing volume growing by 10% year-on-year[11] Hannan Port Hannan Port is positioned as the most crucial logistics hub in southwestern Wuhan, primarily focusing on automotive logistics and trade; the Group aims to develop it into a modern, comprehensive logistics service base integrating supply chain design, multimodal transport, and logistics finance, leveraging synergies with Yangluo Port - Hannan Port will develop into a diversified business platform primarily focused on automotive logistics and trade, supplemented by general cargo and containers, forming synergistic effects with Yangluo Port[14][15] Hanjiang Logistics Center The Hanjiang Logistics Center comprises seven warehouses and an ancillary office building, which the Group plans to hold as investment properties to generate rental income - The Hanjiang Logistics Center is held by the Group and planned as an investment property to generate rental income[17] Tongshang Supply Chain Tongshang Supply Chain leverages the Group's port resources and client network, focusing on grains and agricultural products, offering integrated services including logistics, warehousing, distribution, and supply chain finance, aiming to establish a bulk grain commodity trading center centered around Yangluo Port - Tongshang Supply Chain aims to build a modern port-side supply chain system of "port trade + warehousing + logistics," creating a bulk grain commodity trading center with Yangluo Port at its core[20] Operating Performance During the reporting period, the Group's total revenue decreased by 15.9% to HKD 157.18 million, primarily due to a 40.4% significant reduction in supply chain management and trading business revenue; despite the revenue decline, profit attributable to owners of the company surged by 196.7% to HKD 3.47 million, driven by a one-off gain from subsidiary disposal, reduced fair value loss on investment properties, and lower finance costs Revenue Total revenue for the period was approximately HKD 157 million, a 15.9% year-on-year decrease, primarily due to a HKD 32.94 million significant reduction in supply chain management and trading business revenue, while integrated logistics services and property business revenues increased Revenue Segment Details (For the Six Months Ended June 30) | Business Segment | 2024 (HKD '000) | Share | 2023 (HKD '000) | Share | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Terminal Services | 74,269 | 47.3% | 74,926 | 40.1% | -0.9% | | Integrated Logistics Services | 28,141 | 17.9% | 25,137 | 13.5% | +12.0% | | Supply Chain Management and Trading | 48,505 | 30.8% | 81,442 | 43.6% | -40.4% | | Property Business | 6,262 | 4.0% | 5,308 | 2.8% | +18.0% | | Total | 157,177 | 100.0% | 186,813 | 100.0% | -15.9% | Terminal Services Wuhan Yangluo Port's container throughput for the period was 445,805 TEUs, a 7.8% year-on-year decrease, primarily due to a 20.8% decline in transshipment container volume; however, local cargo container volume grew by 19.7%, significantly increasing the Group's market share in the Yangluo Port area from 31.6% to 47.9% Container Throughput (For the Six Months Ended June 30) | Type | 2024 (TEUs) | Share | 2023 (TEUs) | Share | Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Local Cargo Containers | 186,336 | 41.8% | 155,732 | 32.2% | +19.7% | | Transshipment Containers | 259,469 | 58.2% | 327,536 | 67.8% | -20.8% | | Total | 445,805 | 100% | 483,268 | 100.0% | -7.8% | - The Group's market share in the Yangluo Port area increased from approximately 31.6% in the previous period to approximately 47.9% in the current period, primarily due to the increase in local container volume handled[24] Gross Profit and Profit Gross profit for the period was HKD 37.42 million, a 14.4% year-on-year decrease, though gross margin slightly increased to 23.8%; other income surged by 175.0% due to a gain from subsidiary disposal, and reduced fair value loss on investment properties combined with lower finance costs ultimately led to a 196.7% year-on-year increase in profit attributable to owners of the company to HKD 3.47 million - Gross profit decreased to approximately HKD 37.42 million, but gross margin slightly increased to 23.8% (previous period: 23.4%)[27] - Other income significantly increased by 175.0% to approximately HKD 8.13 million, primarily due to a gain of approximately HKD 4.90 million from the disposal of an equity interest in a subsidiary[27] - Profit attributable to owners of the company significantly increased by 196.7% to approximately HKD 3.47 million, primarily benefiting from reduced fair value loss on investment properties, a one-off gain from subsidiary disposal, and lower finance costs[29] Future Outlook Future Outlook Facing global economic uncertainties, the Group will seize strategic opportunities from China's "14th Five-Year Plan" and "Belt and Road" initiatives, driven by "internal growth, smart reform, and pioneering innovation"; future plans include optimizing port operations, advancing smart and green port construction, expanding port logistics trade, and exploring the creation of a port-side grain trading and delivery platform to build a leading inland river port logistics system in China - The Group will adopt a "three-in-one" driven model of "internal growth," "smart reform," and "pioneering innovation" to build a port complex with superior services and stronger market expansion[30] - Regarding smart transformation, plans include operating remote-controlled gantry cranes and IGV unmanned container trucks to build a smart and green port[31] - Supply chain trading business will primarily focus on segmented grain categories, forming an integrated operation model of transport and trade, and exploring the creation of a port-side grain trading and delivery platform[31] Interim Financial Information Financial Statements Overview This section presents the unaudited condensed consolidated financial statements; the income statement shows profit for the period increased from HKD 1.48 million to HKD 3.39 million despite revenue decline; the statement of financial position as of June 30, 2024, indicates a net current liability position; and the cash flow statement reflects net cash outflow from operating activities, net inflow from investing activities due to subsidiary disposal, and net outflow from financing activities Condensed Consolidated Income Statement Summary (For the Six Months Ended June 30) | Metric (HKD '000) | 2024 | 2023 | | :--- | :--- | :--- | | Revenue | 157,177 | 186,813 | | Gross Profit | 37,420 | 43,718 | | Profit from Operations | 11,882 | 9,095 | | Profit Before Tax | 5,489 | 260 | | Profit for the Period | 3,393 | 1,480 | | Profit Attributable to Owners of the Company | 3,468 | 1,169 | Condensed Consolidated Statement of Financial Position Summary (HKD '000) | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Non-current Assets | 1,168,889 | 1,208,189 | | Current Assets | 205,768 | 283,028 | | Current Liabilities | 342,875 | 384,421 | | Net Current Liabilities | (137,107) | (101,393) | | Net Assets | 814,880 | 864,757 | Condensed Consolidated Cash Flow Statement Summary (For the Six Months Ended June 30, HKD '000) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (7,063) | (10,514) | | Net Cash Generated From/(Used in) Investing Activities | 74,664 | (5,069) | | Net Cash Used in Financing Activities | (55,098) | (6,221) | | Net Increase/(Decrease) in Cash and Cash Equivalents | 12,503 | (21,804) | Summary of Notes to Financial Statements The notes to the financial statements provide detailed explanations of financial data; key points include the directors' assessment that the going concern basis is appropriate despite a net current liability of HKD 137 million, based on expected cash flows and controlling shareholder support; segment information shows terminal and related businesses as the primary profit contributors; and the Group completed the disposal of a 60% equity interest in Zhongxiang Zhongji Port Company for approximately HKD 74.73 million in cash, recording a gain of HKD 4.90 million - Going Concern Basis: Despite the Group's net current liabilities of approximately HKD 137 million as of June 30, 2024, the directors believe that, considering expected cash flows and the financial support commitment from the ultimate holding company, Hubei Port Group, preparing the financial statements on a going concern basis is appropriate[44] Segment Results (For the Six Months Ended June 30, HKD '000) | Segment | Revenue | Results | | :--- | :--- | :--- | | Property Business | 6,262 | 2,445 | | Terminal and Related Businesses | 87,895 | 13,060 | | Integrated Logistics Business | 28,180 | 1,731 | | Supply Chain Management and Trading Business | 48,505 | (1,784) | - On June 18, 2024, the Group completed the disposal of a 60% equity interest in Zhongxiang Zhongji Port Company for a cash consideration of RMB 69,576,900, recording a gain on disposal of HKD 4,901,000, with net cash inflow of HKD 74,721,000[84][85] Other Information Shareholders and Shareholding Structure This section discloses the company's shareholding structure; as of June 30, 2024, Hubei Port (Hong Kong) International Co., Limited is the controlling shareholder, holding approximately 74.98% of the company's shares; the company adopted a share option scheme in 2018, but no options have been granted since its adoption Major Shareholders' Shareholding (As of June 30, 2024) | Shareholder Name | Capacity | Number of Shares Held (Long Position) | Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Hubei Port (Hong Kong) International Co., Limited | Beneficial Owner | 1,293,429,911 | 74.98% | | Mr. Wang Kaiwei | Beneficial Owner | 99,140,600 | 5.75% | | Zall Holdings Co., Ltd. | Interest in Controlled Corporation | 86,428,000 | 5.01% | - The company adopted a share option scheme on May 25, 2018, with a 10-year validity period; no share options have been granted, exercised, lapsed, or cancelled since its adoption[103][111] Liquidity and Capital Management The Group primarily meets its funding needs through internal resources, shareholder loans, and bank borrowings; as of June 30, 2024, the Group's total interest-bearing borrowings were approximately HKD 317 million, with a net gearing ratio of 0.3 times and a current ratio of 0.6 times, indicating a net current liability position Liquidity and Capital Indicators | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Interest-bearing Borrowings | Approx. 316,603,000 HKD | Approx. 375,434,000 HKD | | Cash and Cash Equivalents | Approx. 67,590,000 HKD | Approx. 56,648,000 HKD | | Net Gearing Ratio | 0.3 times | 0.4 times | | Net Current Liabilities | Approx. 137,107,000 HKD | Approx. 101,393,000 HKD | | Current Ratio | 0.6 times | 0.7 times | Corporate Governance and Compliance The company complied with the Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers during the reporting period; the Audit Committee reviewed the interim results and confirmed the accounting principles and practices adopted by the Group - The company has complied with the provisions of the Corporate Governance Code for the six months ended June 30, 2024[125] - All directors confirmed compliance with the Model Code for Securities Transactions by Directors during the reporting period[126] - The Group's condensed consolidated results for the six months ended June 30, 2024, were not reviewed by external auditors but were reviewed by the Audit Committee[129]