中国三江化工(02198) - 2024 - 中期财报

Management Discussion and Analysis Overall Performance The Group achieved profitability in H1 2024, with gross margin improving to 4.2% and total revenue surging over 100% to RMB 9.24 billion, driven by new production facilities and cost efficiencies - The Group successfully turned its performance around, with gross margin improving by 6.6 percentage points from -2.4% in H1 2023 to 4.2%[4] - Total revenue increased by over 100% year-on-year to approximately RMB 9.24 billion, primarily driven by significant increases in production capacity for key products like ethylene oxide, ethylene glycol, and polypropylene[4] - The commissioning of the sixth phase production facility increased output by approximately 80%, reduced ethylene oxide/ethylene glycol processing costs by about 20%, and introduced butadiene product sales[4] - The Board decided not to declare an interim dividend to retain sufficient liquidity for potential economic fluctuations[4][34] Financial Review Total revenue surged over 100% to RMB 9.24 billion, driven by substantial sales volume increases across key products, with new capacity and product mix optimization significantly improving overall gross margin Revenue by Product Category (RMB '000) | Product Category | H1 2024 Revenue (RMB '000) | H1 2023 Revenue (RMB '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total | 9,239,833 | 4,591,142 | >100% | | Ethylene Oxide | 1,042,308 | 745,844 | 39.7% | | Ethylene Glycol | 1,685,508 | 457,476 | >100% | | Polypropylene | 1,784,769 | 1,463,004 | 22.0% | | Ethylene | 702,378 | — | >100% | | Surfactants | 1,578,465 | 917,249 | 72.1% | | Butadiene | 358,984 | — | >100% | Sales Volume by Product Category (Metric Tons) | Product Category | H1 2024 Sales Volume (Metric Tons) | H1 2023 Sales Volume (Metric Tons) | Change (%) | | :--- | :--- | :--- | :--- | | Ethylene Oxide | 175,767 | 128,923 | 36.3% | | Ethylene Glycol | 427,091 | 124,243 | >100% | | Polypropylene | 280,455 | 229,052 | 22.4% | | Ethylene | 102,827 | — | >100% | | Butadiene | 36,809 | — | >100% | Product Performance Major product lines experienced significant growth, with ethylene oxide and ethylene glycol revenues surging due to improved market conditions, polypropylene revenue increasing by 22.0%, and butadiene contributing RMB 359 million with a 34.0% gross margin - Ethylene oxide revenue increased by 39.7% to RMB 1.042 billion, primarily due to a 36.3% increase in output[6] - Ethylene glycol revenue increased by 268.4% to RMB 1.686 billion, primarily due to a 243.8% increase in output[7] - Polypropylene revenue increased by 22.0%, primarily due to a 22.4% increase in output[8] - New product butadiene contributed approximately RMB 359 million in revenue with a gross margin as high as 34.0%[9] Gross Margin Analysis The Group's overall gross margin improved by 6.6 percentage points to 4.2%, driven by better product pricing, increased output, and cost savings from new production facilities - Overall gross margin improved by 6.6 percentage points to 4.2%[10] - Gross margins for ethylene oxide, ethylene glycol, and polypropylene business lines increased by 20.2%, 18.0%, and 0.5% respectively[10] Unaudited Consolidated Results Condensed Consolidated Statement of Profit or Loss For H1 2024, the Group achieved profitability with a profit of RMB 154 million, total revenue more than doubled to RMB 9.24 billion, and basic earnings per share attributable to owners of the parent company increased to 13.30 fen Condensed Consolidated Statement of Profit or Loss (RMB '000) | Indicator (RMB '000) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 9,239,833 | 4,591,142 | | Gross Profit/(Loss) | 386,432 | (109,238) | | Profit/(Loss) Before Tax | 164,429 | (44,457) | | Profit for the Period | 154,364 | 7,367 | | Profit Attributable to Owners of the Parent Company | 154,055 | 26,121 | | Basic Earnings Per Share (RMB Fen) | 13.30 | 2.22 | Condensed Consolidated Statement of Financial Position As of June 30, 2024, total assets were RMB 21.48 billion, total liabilities RMB 16.96 billion, and net assets increased to RMB 4.51 billion, with net current liabilities of approximately RMB 6.21 billion Condensed Consolidated Statement of Financial Position (RMB '000) | Indicator (RMB '000) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Total Non-current Assets | 14,285,252 | 14,718,210 | | Total Current Assets | 7,192,943 | 6,283,562 | | Total Assets | 21,478,195 | 21,001,772 | | Total Current Liabilities | 13,400,884 | 12,419,637 | | Total Non-current Liabilities | 3,563,099 | 4,220,793 | | Total Liabilities | 16,963,983 | 16,640,430 | | Net Assets | 4,514,212 | 4,361,342 | - As of June 30, 2024, the Group's net current liabilities were approximately RMB 6.208 billion[14][20] Condensed Consolidated Statement of Cash Flows In H1 2024, net cash flow from operating activities turned positive to RMB 163 million, while investing cash outflow increased to RMB 916 million, and financing cash inflow was RMB 902 million, with period-end cash and cash equivalents at RMB 514 million Condensed Consolidated Statement of Cash Flows (RMB '000) | Indicator (RMB '000) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 162,992 | (337,562) | | Net Cash Flow from Investing Activities | (915,561) | (811,957) | | Net Cash Flow from Financing Activities | 902,464 | 1,451,310 | | Net Increase in Cash and Cash Equivalents | 149,895 | 301,791 | | Cash and Cash Equivalents at End of Period | 514,286 | 522,490 | Condensed Consolidated Statement of Changes in Equity As of June 30, 2024, total equity increased to RMB 4.51 billion from RMB 4.36 billion at 2023 year-end, primarily driven by the RMB 154 million profit recorded during the period - Total equity increased from RMB 4,361.3 million at the end of 2023 to RMB 4,514.2 million as of June 30, 2024[17] - The primary driver for the increase in equity was the RMB 154.4 million profit recorded during the period[17] Notes to the Condensed Consolidated Financial Information Note 1 & 3: Company Business and Segment Information The Group primarily produces and supplies chemical products in China, managed as a single operating segment, with approximately 98% of revenue generated from the PRC market - The Group's principal business involves the production and supply of various fine chemical products and related processing services in China[18] - Management monitors the Group as a single reportable operating segment[23] Revenue by Geographical Region (RMB '000) | Region | H1 2024 Revenue (RMB '000) | Proportion (%) | | :--- | :--- | :--- | | Mainland China | 9,054,834 | 98.0% | | Singapore | 183,357 | 2.0% | | Other | 1,642 | <0.1% | | Total | 9,239,833 | 100% | Note 2.1: Going Concern Assumption As of June 30, 2024, the Group had net current liabilities of approximately RMB 6.21 billion, but directors believe there are sufficient funds to continue operations, thus financial statements are prepared on a going concern basis - As of June 30, 2024, the Group's net current liabilities were approximately RMB 6.208 billion[20] - The directors believe the Group has sufficient funds to continue as a going concern, and the financial statements are prepared on this basis[20] Note 15: Interest-bearing Bank and Other Borrowings As of June 30, 2024, total interest-bearing borrowings increased to RMB 11.54 billion, with RMB 8.64 billion due within one year, and certain borrowings are secured by the Group's assets Interest-bearing Bank and Other Borrowings (RMB '000) | Borrowing Category (RMB '000) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current Borrowings | 8,642,451 | 7,113,868 | | Non-current Borrowings | 2,899,303 | 3,076,147 | | Total | 11,541,754 | 10,190,015 | - Some of the Group's bank borrowings are secured by leasehold land (carrying value approximately RMB 470 million), property, plant and equipment (carrying value approximately RMB 5.61 billion), financial assets (carrying value approximately RMB 50 million), and pledged deposits (carrying value approximately RMB 2.01 billion)[43] Other Information Directors' and Substantial Shareholders' Interests As of June 30, 2024, Chairperson Ms. Han held approximately 46.86% of the company's shares, and substantial shareholder Sure Capital Holdings Limited held 45.12%, with its ownership detailed - Ms. Han, the Chairperson of the Board, is deemed to be interested in 557,674,000 shares, representing 46.86% of the Company's issued share capital[47] - Substantial shareholder Sure Capital Holdings Limited holds 536,936,000 shares, representing 45.12% of the issued share capital[50] Share Award Scheme The Company's share award scheme held 32,125,000 shares as of June 30, 2024, with no awards granted or expenses recognized during the review period despite share purchases - As of June 30, 2024, 32,125,000 shares were held in the share pool of the Share Award Scheme[52][53] - For the six months ended June 30, 2024, no shares were granted, and no share award scheme expenses were deducted in the statement of profit or loss[52][53] Liquidity and Financial Resources The Group's gearing ratio increased to 53.7% from 48.5% at 2023 year-end, while working capital turnover days, including inventory and trade receivables, remained stable Financial Ratios | Financial Ratio | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Gearing Ratio | 53.7% | 48.5% | | Inventory Turnover Days | 43.7 days | 42.6 days | | Trade and Bills Receivables Turnover Days | 28.0 days | 28.3 days | | Trade and Bills Payables Turnover Days | 38.9 days | 48.0 days | Corporate Information Basic Corporate Information The Company is a Cayman Islands-incorporated limited company listed on the Main Board of the Hong Kong Stock Exchange (Stock Code: 2198), with key corporate details provided - Company Name: China Sanjiang Fine Chemicals Company Limited[1] - Listing Venue: Main Board of The Stock Exchange of Hong Kong Limited[67] - Stock Code: 2198[1][67]