百勤油服(02178) - 2024 - 中期财报

Corporate Information Corporate Profile This section provides key information on Petro-king Oilfield Services Limited, including its board, committees, and key advisors - The company's Executive Directors are Mr. Zhao Jindong, Mr. Lin Jingyu, and Ms. Zhou Sisi[11] - The company's principal place of business in Hong Kong is at Room 1603A, 16/F, Tower 1, Silvercord, 30 Canton Road, Kowloon[11] - The company's auditor is BDO Limited[12] Management Discussion and Analysis Business Review and Financial Summary Group revenue surged 60.8% YoY to HKD 166 million in H1 2024, driven by strong demand for production enhancement services Financial Highlights | Metric | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | HKD 165.9 million | HKD 103.2 million | +60.8% | | Loss for the period | HKD 0.4 million | HKD 18.0 million | -97.8% | | Loss attributable to owners | HKD 0.4 million | HKD 17.1 million | -97.7% | | Basic loss per share | HKD 0.02 cents | HKD 1.0 cent | -98.0% | | Interim dividend | Nil | Nil | - | - The significant revenue growth was primarily driven by strong demand for production enhancement services in China, supported by firm international oil prices and shale gas consumption policies[14] - The narrowed loss was mainly due to increased revenue and a net reversal of impairment losses on financial assets[14] Geographical Market Analysis The China market was the main growth driver, contributing 89.2% of total revenue with an 80.4% YoY increase Revenue by Market | Market | H1 2024 Revenue (HKD million) | H1 2023 Revenue (HKD million) | YoY Change | Revenue Contribution (H1 2024) | | :--- | :--- | :--- | :--- | :--- | | China Market | 147.9 | 82.0 | +80.4% | 89.2% | | Overseas Market | 18.0 | 21.2 | -15.1% | 10.8% | | Total | 165.9 | 103.2 | +60.8% | 100% | China Market Revenue Growth in the China market was primarily driven by a 193% surge in the Southwest region due to increased production enhancement services Revenue by Region in China | China Region | H1 2024 Revenue (HKD million) | H1 2023 Revenue (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | Southwest | 113.7 | 38.8 | +193.0% | | North | 21.9 | 37.8 | -42.1% | | Northwest | 9.4 | 4.4 | +113.6% | | Other Regions | 2.9 | 1.0 | +190.0% | Overseas Market Revenue The decline in overseas revenue was mainly caused by the expiration of a supervision service contract in the Middle East Revenue by Overseas Region | Overseas Region | H1 2024 Revenue (HKD million) | H1 2023 Revenue (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | Middle East | 14.2 | 21.1 | -32.7% | | Others | 3.8 | 0.1 | +3700.0% | Business Segment Analysis Oilfield project tools and services remained the core business, accounting for 89.0% of total revenue with an 81.9% YoY growth Revenue by Business Segment | Business Segment | H1 2024 Revenue (HKD million) | H1 2023 Revenue (HKD million) | YoY Change | Revenue Contribution (H1 2024) | | :--- | :--- | :--- | :--- | :--- | | Oilfield project tools and services | 147.7 | 81.2 | +81.9% | 89.0% | | Consultancy services | 18.2 | 22.0 | -17.3% | 11.0% | Oilfield Project Tools and Services Production enhancement was the dominant business line, with revenue growing 90.3% YoY to HKD 137 million, driven by services in Southwest China Revenue Breakdown for Oilfield Project Tools and Services | Business Type | H1 2024 Revenue (HKD million) | H1 2023 Revenue (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | Production enhancement | 136.6 | 71.8 | +90.3% | | Drilling | 8.1 | 7.4 | +9.5% | | Completion | 3.0 | 2.0 | +50.0% | Customer Analysis The Group exhibits very high customer concentration, with the top three customers contributing 96.1% of total revenue - Revenue from the largest customer (Customer 1) grew 153.9% YoY to HKD 115 million, accounting for 69.3% of total revenue[25] - The top three customers (Customers 1, 2, and 3) collectively contributed 96.1% of total revenue, indicating high customer concentration risk[25] Human Resources and R&D The Group streamlined its organization, reducing its workforce by 23.0%, and holds 38 patents, reflecting a focus on technology - As of June 30, 2024, the Group had 197 employees, a 23.0% decrease from 256 at the end of 2023[26] - The Group holds 28 utility model patents and 10 invention patents, with 5 additional invention patents pending, demonstrating its emphasis on intellectual property[27] Outlook Management remains cautiously optimistic, expecting strong market demand to continue and plans to explore diversified investment opportunities - Market demand for production enhancement and other oilfield services is expected to remain strong for the rest of 2024[28] - The Group plans to explore other profitable investment opportunities, such as surface geothermal projects, to diversify its business[28] Financial Review The Group's financial performance improved with a 60.8% revenue increase and a turnaround to operating profit, while operational efficiency also improved Key P&L Items The Group achieved an operating profit of HKD 7.6 million, a significant turnaround from a loss of HKD 10.7 million in the prior year Key Profit & Loss Figures | Item | H1 2024 (HKD million) | H1 2023 (HKD million) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 165.9 | 103.2 | +60.8% | | Technical service fees | 70.5 | 32.6 | +116.3% | | Net reversal of impairment on financial assets | 3.7 | 0.2 | +1750% | | Operating profit/(loss) | 7.6 | (10.7) | Turnaround | | Loss for the period | (0.4) | (18.0) | -97.8% | Key Balance Sheet Items Working capital management improved significantly, with inventory and trade receivables turnover days both decreasing, and the gearing ratio slightly improved - Average inventory turnover days decreased from 184 to 131 days[45] - Average trade receivables turnover days decreased significantly from 365 to 206 days[46] - Contract assets increased by 31.5% from the beginning of the year to HKD 158 million[47] - The gearing ratio decreased from 45.3% to 42.2%[51] Other Information Corporate Governance and Compliance The company complied with all applicable Corporate Governance Code provisions and did not declare an interim dividend for H1 2024 - The company has complied with all applicable Corporate Governance Code provisions during the reporting period[58] - The Board resolved not to declare an interim dividend for the first half of 2024[61] - During the period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities[60] Directors, Chief Executive and Substantial Shareholders' Interests Non-executive Director Mr. Wang Jinlong is the largest shareholder with a 28.32% interest through his controlled corporation - Mr. Wang Jinlong (Non-executive Director) holds 488,920,138 shares (28.32%) in the company through a controlled corporation[63][64] - Substantial shareholder Lee & Leung (B.V.I.) Limited and its affiliates hold a combined interest of approximately 19.53% in the company[66][70] Share Option Scheme The 2013 share option scheme expired in February 2023, and consequently, no new options were granted in H1 2024 - The share option scheme expired on February 18, 2023, and no new options were granted in H1 2024[73] - 500,000 share options held by the former company secretary, Mr. Tong Tat Chiu, lapsed in June following his resignation on March 20, 2024[73][75] Interim Condensed Consolidated Financial Statements Interim Condensed Consolidated Statement of Comprehensive Income The Group's loss for the period narrowed significantly to HKD 0.4 million on revenue of HKD 165.9 million, with a turnaround to operating profit Statement of Comprehensive Income Summary (HKD thousand) | Item (HKD thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 165,908 | 103,215 | | Operating profit/(loss) | 7,636 | (10,747) | | Profit/(loss) before tax | 594 | (18,444) | | Loss for the period | (412) | (17,973) | | Loss attributable to owners of the Company | (395) | (17,113) | | Basic loss per share (HKD cents) | (0.02) | (1.0) | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group had total assets of HKD 694 million and net assets of HKD 193 million, with a current ratio of approximately 1.03 Statement of Financial Position Summary (HKD thousand) | Item (HKD thousand) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | 694,056 | 712,011 | | Total Liabilities | 500,948 | 520,856 | | Net Assets | 193,108 | 191,155 | | Net Current Assets | 14,543 | 22,504 | | Cash and cash equivalents | 29,787 | 26,294 | | Bank and other borrowings (Total) | 179,248 | 187,061 | Interim Condensed Consolidated Statement of Changes in Equity Equity attributable to owners increased by approximately HKD 2.0 million to HKD 188.8 million, mainly driven by other comprehensive income - Equity attributable to owners of the Company increased from HKD 186,829 thousand to HKD 188,802 thousand[82] - The change in equity was primarily driven by the combined effect of other comprehensive income (+HKD 1,907 thousand), share-based payments (+HKD 461 thousand), and loss for the period (-HKD 395 thousand)[82] Interim Condensed Consolidated Statement of Cash Flows Cash and cash equivalents increased by HKD 3.5 million to HKD 29.8 million, primarily due to cash inflows from investing activities Statement of Cash Flows Summary (HKD thousand) | Item (HKD thousand) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net cash used in operating activities | (1,521) | (9,044) | | Net cash from investing activities | 13,259 | 8,868 | | Net cash used in financing activities | (7,390) | (17,055) | | Net increase/(decrease) in cash | 4,348 | (17,231) | | Cash and cash equivalents at end of period | 29,787 | 22,228 | Notes to the Interim Condensed Consolidated Financial Information Basis of Preparation and Going Concern A material uncertainty exists regarding the Group's ability to continue as a going concern due to its net current liability position and liquidity pressure - As of June 30, 2024, the Group's current bank and other borrowings of HKD 115 million significantly exceeded its cash and cash equivalents of approximately HKD 29.8 million, indicating liquidity pressure[90] - Management states that the Group's ability to continue as a going concern depends on successfully obtaining new bank loans, drawing down shareholder loan facilities, and timely repayments from an associate[93] - The report explicitly states the existence of a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern[93] Revenue and Segment Information The oilfield project tools and services segment generated HKD 148 million in revenue but incurred a loss of HKD 4.2 million Revenue by Source (HKD thousand) | Revenue Source (HKD thousand) | H1 2024 | | :--- | :--- | | Oilfield project tools and services | 147,716 | | Of which: Production enhancement | 136,623 | | Consultancy services | 18,192 | | Total Revenue | 165,908 | Segment Results (HKD thousand) | Segment Results (HKD thousand) | H1 2024 | | :--- | :--- | | Oilfield project tools and services | (4,219) | | Consultancy services | 8,717 | | Total segment results | 4,498 | Related Party Transactions The Group has a loan receivable of HKD 6.5 million from an associate, Star Petrotech, due by the end of 2024 - The loan receivable from associate Star Petrotech has a balance of HKD 6.53 million, carries an annual interest rate of 7%, and is repayable on or before December 31, 2024[136][137] - Amounts due to an associate company are HKD 12.33 million and are trade in nature[136][137] - Total remuneration for key management personnel during the period was HKD 2.41 million, a decrease year-over-year[135] Events After the Reporting Period A subsidiary is involved in a major lawsuit over technical service fees, resulting in the freezing of approximately RMB 14.9 million in bank deposits - A subsidiary of the Group is involved in a major lawsuit, with the plaintiff claiming technical service fees of approximately RMB 28.9 million[139] - The first-instance judgment ordered a payment of approximately RMB 12.6 million, but the plaintiff has appealed, and the outcome is pending[139] - As of the report date, approximately RMB 14.9 million of the subsidiary's bank deposits have been frozen[139]