Chairman's Statement Business Review and Financial Performance The Group achieved steady performance growth in H1 2024 amid a complex macroeconomic environment Key Financial Metrics | Metric | H1 2024 | H1 2023 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | HK$19,286.17 million | HK$16,960.78 million | +13.71% | | Gross Profit Margin | 3.34% | ~3.49% | -0.15pp | | Profit Attributable to Shareholders | HK$164.48 million | HK$164.48 million | +0.0036% | | Basic Earnings Per Share | HK 6.40 cents | - | Remained stable | Performance by Business Segment | Business Segment | Turnover (HK$ million) | Y-o-Y Change | Segment Profit (HK$ million) | Y-o-Y Change | | :--- | :--- | :--- | :--- | :--- | | ICT Consumer Products | 8,495.04 | +5.50% | 122.65 | -23.16% | | ICT Enterprise Products | 6,774.59 | +22.05% | 241.36 | +25.95% | | Other Businesses | 4,016.54 | +19.62% | 37.20 | +4.68% | - The company strategically applies advanced technologies like AI to enhance its digital intelligence capabilities and explores new growth drivers in areas such as cloud applications, the metaverse, security, and the low-altitude economy40 Business Outlook The Group will focus on technology-driven, high-quality growth and ecosystem partnerships in H2 2024 - The H2 2024 operating principle is "New Technology Traction, High-Quality Growth, and Good Ecosystem Partner", aiming for innovation-led development through AI and other technologies to expand new ecosystems43 - The company anticipates that advancements in digital technologies like 5G, high-performance computing, and AI will create development opportunities by accelerating digital transformation across industries43 Management Discussion and Analysis Liquidity and Financial Resources The Group maintained a sound and stable financial and liquidity position during the review period Financial Position | Metric (as at June 30, 2024) | Amount (HK$ million) | | :--- | :--- | | Total Interest-bearing Borrowings | 2,629.74 | | Cash and Bank Balances | 3,036.18 | | Net Current Assets | 2,730.87 | | Net Gearing Ratio | 3.95 times | Risk Management The Group deems its foreign exchange risk to be minimal and has not engaged in any hedging arrangements - The Group considers its foreign exchange risk to be minimal and has not used any currency borrowings or other hedging instruments to hedge its foreign currency investments4748 - As of June 30, 2024, the Group had HK$2.18 billion in unrecovered endorsed and discounted bills receivable with recourse, used to settle payables and raise cash49 Material Investments and Future Plans The Group had no material investments, acquisitions, or disposals during the period and has no such plans for the future - During the reporting period, the Group had no material investments, acquisitions, or disposals, nor any significant capital commitments or plans for future capital asset purchases5051 Human Resources and Dividend Policy The Group's employee count increased, and while no interim dividend is proposed, the 2023 final dividend was paid - The Group's total number of employees increased from 1,408 to 1,552 year-over-year53 - The Board does not recommend an interim dividend for the six months ended June 30, 2024; the 2023 final dividend of HK$0.05 per share, totaling approximately HK$128.53 million, was paid on June 21, 202454 Other Information Corporate Governance The company complied with most Corporate Governance Code provisions, with a disclosed deviation in the combined Chairman and CEO role - The company has a deviation from the Corporate Governance Code: the roles of Chairman and President (CEO) are held by the same individual, Mr. Zhu Jianqiu, though the Board believes the current structure ensures a balance of power56 - The company has established Audit, Remuneration, and Nomination Committees, and the Audit Committee has reviewed the unaudited interim results for the period586061 Disclosure of Directors' and Shareholders' Interests The report details share interests of directors and substantial shareholders, with Sichuan Changhong Electric Co, Ltd being the controlling shareholder Directors' Interests | Name of Director | Capacity | Number of Ordinary Shares (Long Position) | Approximate Percentage of Interest | | :--- | :--- | :--- | :--- | | Mr. Zhu Jianqiu | Beneficial Owner | 115,165,762 | 7.92% | | Mr. Zhao Qilin | Beneficial Owner | 750,000 | 0.05% | | Ms. Su Huiqing | Beneficial Owner | 34,589,636 | 2.38% | Substantial Shareholders' Interests | Name of Substantial Shareholder | Class of Shares | Number of Shares Held (Long Position) | Percentage of Interest | | :--- | :--- | :--- | :--- | | Sichuan Changhong Electric Co., Ltd. | Ordinary Shares | 874,650,000 | 60.13% | | Sichuan Changhong Electric Co., Ltd. | Preference Shares | 1,115,868,000 | 100.00% | | Sichuan Provincial Investment Group Co., Ltd. | Ordinary Shares | 83,009,340 | 5.70% | Condensed Consolidated Interim Financial Statements and Notes Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2024 Key Income Statement Items (HK$ '000) | | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 19,286,174 | 16,960,784 | | Gross Profit | 643,648 | 591,937 | | Profit Before Tax | 179,086 | 205,759 | | Profit for the Period | 164,484 | 164,478 | Key Statement of Financial Position Items (HK$ '000) | | As at June 30, 2024 | As at Dec 31, 2023 | | :--- | :--- | :--- | | Current Assets | 13,831,923 | 17,311,227 | | Current Liabilities | 11,101,053 | 14,586,457 | | Net Assets | 2,818,955 | 2,812,545 | | Total Equity | 2,818,955 | 2,812,545 | - Net cash used in operating activities was HK$3.19 billion, while investing and financing activities recorded net cash inflows of HK$3.05 billion and HK$105 million, respectively73 Notes to the Financial Statements The notes explain the basis of preparation, key accounting policies, and provide detailed breakdowns of key financial items Note 3: Revenue by Product Category (HK$ '000) | Product Category | H1 2024 | H1 2023 | | :--- | :--- | :--- | | ICT Consumer Products | 8,495,043 | 8,052,248 | | ICT Enterprise Products | 6,774,592 | 5,550,778 | | Others | 4,016,539 | 3,357,758 | | Total | 19,286,174 | 16,960,784 | Note 4: Profit by Business Segment (HK$ '000) | Business Segment | H1 2024 | H1 2023 | | :--- | :--- | :--- | | ICT Consumer Products | 122,649 | 159,615 | | ICT Enterprise Products | 241,359 | 191,625 | | Others | 37,202 | 35,539 | | Total | 401,210 | 386,779 | - Note 6: Certain subsidiaries of the Group in China are eligible for a reduced enterprise income tax rate of 15% as they are recognized as enterprises in the 'Catalogue of Encouraged Industries in the Western Region'91 - Note 7: Diluted earnings per share is the same as basic earnings per share at HK 6.40 cents, as there were no potential dilutive shares during the period92 - Note 10 & 11: As of the period end, the Group's total bank borrowings amounted to HK$2.63 billion, all of which were unsecured, and the Board does not recommend an interim dividend9798
长虹佳华(03991) - 2024 - 中期财报