集海黄金(02489) - 2024 - 中期财报

Company Information Company Information This section outlines Persistence Resources Group Limited's basic administrative and governance structure, including board members, key committee compositions, professional advisor information, and company contact details and stock code - Executive Directors include Dr. Shao Xuxin (Chairman and CEO), Mr. Mackie James Thomas, Mr. Lu Zhuoguang, and Mr. Chen Shaohui[3] - Independent Non-Executive Directors include Dr. Malaihollo Jeffrey Francis A, Mr. Chen Yifen, Dr. Zeng Ming, and Ms. Liu Li[3] - The company's auditor is Ernst & Young, stock code is 2489, and company website is http://www.persistenceresource.com/[3](index=3&type=chunk) Management Discussion and Analysis I. Interim Results The Group achieved significant growth in revenue and net profit in the first half of 2024, primarily due to higher average selling prices, despite a slight decrease in total gold production due to operational disruptions - Total gold production was approximately 453.7 kg (approximately 14,587.0 ounces), a decrease of approximately 4% compared to the same period in 2023, mainly due to limited explosive supply and suspension of underground mining activities during the Lunar New Year holiday[4] - The Board declared an interim dividend of HKD 0.0295 per ordinary share, totaling approximately HKD 59,000,000, on August 30, 2024[8] 2024 H1 Key Financial Results | Metric | 2024 (RMB thousand) | 2023 (RMB thousand) | Year-on-Year Change (RMB thousand) | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 236,173 | 196,659 | 39,514 | 20.1% | | Net Profit | 78,867 | 52,769 | 26,098 | 49.5% | | Basic and Diluted EPS | 0.03 | 0.02 (restated) | 0.01 | 50.0% | II. Market Overview In the first half of 2024, global and Chinese gold market demand increased, and prices continued to rise, driven by geopolitical risks, US budget deficit concerns, inflation hedging, and central bank gold purchases - The average global spot gold price was USD 2,205.06/ounce in H1 2024, with a peak of USD 2,444.35/ounce in Q2[9] - The average spot gold price in China was RMB 520.63/gram in H1 2024, with a peak of RMB 574.11/gram in Q2[9] - Gold price increases were mainly driven by escalating geopolitical risks, interest rate outlook under US budget deficit concerns, inflation hedging, and central bank purchases[9] III. Business Review The Group experienced a slight decrease in gold production during the reporting period, yet achieved significant growth in revenue and net profit, with no exploration and development expenditures incurred - Gold production was approximately 453.7 kg (approximately 14,587.0 ounces), a decrease of approximately 4.0% compared to the same period in 2023, mainly due to limited explosive supply and suspension of mining activities during the Lunar New Year holiday[10] - Revenue increased by approximately 20.1% to approximately RMB 236,173,000, with net profit of approximately RMB 78,867,000 and basic and diluted earnings per share of approximately RMB 0.03[10] - For the year ended June 30, 2024, the Group had no exploration and development expenditures, as the drilling program disclosed in the prospectus had not yet commenced[10] IV. Financial Analysis The Group's financial analysis shows significant growth in revenue and gross profit, primarily due to higher average selling prices, while other income increased substantially, and administrative and income tax expenses also rose Revenue The Group's revenue increased by 20.1% year-on-year to RMB 236,173,000, primarily driven by a 21.1% increase in average selling price, partially offset by a 0.8% decrease in sales volume - Revenue was approximately RMB 236,173,000, an increase of approximately 20.1% compared to the same period in 2023[11] - The increase in revenue was mainly attributable to a 21.1% rise in average selling price, partially offset by a 0.8% decrease in sales volume[11] Cost of Sales The Group's cost of sales increased by 6.2% year-on-year to RMB 110,693,000 - Cost of sales was approximately RMB 110,693,000, an increase of approximately 6.2% compared to the same period in 2023[12] Gross Profit and Gross Margin The Group's gross profit increased by 35.8% to RMB 125,480,000, and gross margin rose by 13.1% to 53.1%, primarily due to higher average selling prices - Gross profit was approximately RMB 125,480,000, an increase of approximately 35.8%, mainly attributable to the rise in average selling price[13] - Gross margin was approximately 53.1%, an increase of approximately 13.1% compared to the same period in 2023, mainly attributable to a 21.1% rise in average selling price, partially offset by a 6.2% increase in cost of sales[13] Other Income and Gains The Group's other income and gains increased by 97.6% year-on-year to RMB 10,725,000, primarily due to increased interest income earned on cash and cash equivalents balances - Other income and gains were approximately RMB 10,725,000, an increase of approximately 97.6% compared to the same period in 2023[14] - The increase was mainly attributable to increased interest income earned on the Group's cash and cash equivalents balances[14] Administrative Expenses The Group's administrative expenses increased by 16.8% year-on-year to RMB 19,445,000, primarily due to increased post-listing administrative expenses and R&D costs - Administrative expenses were approximately RMB 19,445,000, an increase of approximately 16.8% compared to the same period in 2023[15] - The increase was mainly attributable to increased administrative expenses after listing and increased research and development expenses (included in administrative expenses)[15] Other Expenses The Group's other expenses increased from zero to RMB 586,000, primarily due to increased foreign exchange losses - Other expenses were approximately RMB 586,000 (2023: nil), mainly attributable to increased foreign exchange losses during the reporting period[16] Finance Costs The Group's finance costs decreased by 15.7% year-on-year to RMB 1,397,000, primarily due to a decrease in effective interest rates - Finance costs were approximately RMB 1,397,000, a decrease of approximately 15.7% compared to the same period in 2023[16] - The decrease was mainly attributable to a decrease in effective interest rates[16] Income Tax Expense The Group's income tax expense increased by 34.3% year-on-year to RMB 35,910,000, primarily due to increased profit before tax, with the effective tax rate slightly decreasing to 31.3% - Income tax expense was approximately RMB 35,910,000, an increase of approximately 34.3% compared to the same period in 2023[17] - The effective tax rate was approximately 31.3% (2023: approximately 33.6%), with the increase mainly attributable to the Group's increased profit before tax[17] Profit Attributable to Owners of the Parent The Group's profit attributable to owners of the parent increased by 53.7% year-on-year to RMB 57,284,000, primarily due to increased profit after tax - Profit attributable to owners of the parent was approximately RMB 57,284,000, an increase of approximately 53.7% compared to the same period in 2023[18] - The increase was mainly attributable to increased profit after tax[18] Liquidity and Capital Resources The Group's cash and cash equivalents increased to RMB 661,318,000 as of June 30, 2024, maintaining a robust liquidity position - As of June 30, 2024, cash and cash equivalents were RMB 661,318,000 (December 31, 2023: approximately RMB 586,840,000)[18] - The Group will continue to maintain a robust liquidity position to fund its business development[18] Financing and Financial Policies The Group's working capital and funds primarily originate from operating cash flow, bank borrowings, and shareholder contributions, used for raw material procurement, various operating expenses, and capital expenditures - Working capital and funds primarily come from cash flows generated from operations, bank borrowings, and shareholder contributions[19] - Funds from operating activities are mainly used to finance the procurement of raw materials, various operating expenses, and capital expenditures[19] Cash Flows and Working Capital Both the Group's cash and cash equivalents and working capital increased, primarily driven by net cash generated from operating activities. Cash holdings include HKD, CAD, USD, and RMB - Cash and cash equivalents increased from approximately RMB 586,840,000 as of December 31, 2023, to approximately RMB 661,318,000 as of June 30, 2024, mainly attributable to net cash generated from operating activities[20] - Working capital increased from approximately RMB 458,108,000 as of December 31, 2023, to approximately RMB 537,551,000 as of June 30, 2024[20] - Cash and cash equivalents were denominated in approximately RMB 182,226,000 in HKD, approximately RMB 626,000 in CAD, approximately RMB 110,053,000 in USD, with the remainder in RMB[20] Borrowings The Group's outstanding bank borrowings remained stable at RMB 30,000,000, all denominated in RMB and bearing fixed interest rates - Outstanding bank borrowings were approximately RMB 30,000,000 (December 31, 2023: RMB 30,000,000), all denominated in RMB[21] - 100% of interest-bearing bank loans and other borrowings bear fixed interest rates[21] Gearing Ratio The Group's total gearing ratio decreased to 2.8%, and the net gearing ratio was not presented as cash and cash equivalents exceeded financial liabilities - Total gearing ratio was approximately 2.8% (December 31, 2023: 3.1%)[22] - Net gearing ratio was not presented as cash and cash equivalents exceeded financial liabilities[22] Market Risk The Group faces various financial risks, including interest rate, credit, foreign currency, and liquidity risks, and adopts a conservative risk management strategy without using derivative instruments for hedging - The Group faces interest rate risk, credit risk, foreign currency risk, and liquidity risk[23] - The Group adopts a conservative strategy for risk management and does not use any derivative or other instruments for hedging purposes[23] Gold Price and Other Commodity Price Risk The Group's revenue and profit are affected by gold price fluctuations, with products sold at market prices referencing the Shanghai Gold Exchange, and future price volatility cannot be guaranteed - The Group's revenue and profit are affected by fluctuations in gold prices and other commodity prices, as all products are sold at market prices[24] - Product prices refer to the prevailing spot gold (T+D) prices reported by the Shanghai Gold Exchange[24] Interest Rate Risk The Group faces market interest rate fluctuation risks related to interest-bearing bank borrowings, but all bank borrowings bear fixed interest rates, and no derivative financial instruments are used for hedging - The Group faces market interest rate fluctuation risks mainly related to interest-bearing bank borrowings[25] - The Group obtains all bank borrowings at fixed interest rates and does not use any derivative financial instruments to hedge interest rate risk[25] Credit Risk The Group minimizes credit risk by transacting with reputable customers, conducting credit verification, and monitoring receivables, with zero trade receivables balance at the end of the reporting period - The Group only transacts with recognized and reputable customers and conducts credit verification procedures[26] - The recoverable amount of each individual trade receivable is regularly reviewed, and monitoring procedures are in place to ensure the recovery of overdue receivables[26] - Trade receivables balance was zero as of June 30, 2024, and December 31, 2023[26] Foreign Currency Risk The Group's transactions are primarily denominated in RMB, but USD and CAD cash balances introduce foreign exchange risk, which is currently not planned for hedging but continuously monitored - The Group's transactions are primarily denominated in RMB, but currency risk mainly arises from bank cash denominated in USD and CAD[27] - Currently, there are no plans to hedge foreign exchange fluctuation risk, but economic conditions are continuously monitored[27] Risk of Changes in Industry Policies Changes in China's laws and regulations for the gold mining and smelting industry may significantly impact the Group's business operations and production, including licenses and permits - Laws, regulations, and rules issued by China for the gold mining and smelting industry have a significant impact on the Company's business operations and production[28] - If relevant industry policies change, it may have a corresponding impact on the Company's production and operations[28] Pledges As of June 30, 2024, the Group had not pledged any assets, except for an environmental restoration deposit of RMB 20,896,000 - Except for pledged deposits of RMB 20,896,000 (referring to environmental restoration deposits placed in banks), the Group has not pledged any assets[29] Commitments As of June 30, 2024, the Group's total capital commitments for contractual costs not provided for in the financial statements amounted to RMB 7,584,000 - As of June 30, 2024, the Group's total capital commitments for contractual costs not provided for in the financial statements amounted to RMB 7,584,000 (December 31, 2023: nil)[30] Contingent Liabilities As of June 30, 2024, the Group had no significant contingent liabilities - As of June 30, 2024, the Group had no significant contingent liabilities[30] V. Business Outlook The Group anticipates continued gold price increases driven by geopolitical risks and central bank purchases, while actively advancing infrastructure construction and initiating drilling programs to enhance gold reserves - Gold prices are expected to continue rising in the foreseeable future, influenced by escalating geopolitical risks, interest rate outlook under US budget deficit concerns, inflation hedging, and central bank gold purchases[31] - Construction of mining infrastructure for the southern boundary extension of Songjiagou open-pit mine is progressing well, with the +81-meter working platform completed, the +69-meter working platform substantially completed, and the +57-meter construction expected to be finished by year-end[31] - Drilling contracts have been signed to enhance gold reserves, with Phase 1 (10 drill holes) planned for completion by September 30, and Phase 2 (17 drill holes) by year-end[31] VI. Use of Proceeds from Global Offering The Group has utilized approximately HKD 24.9 million of the net proceeds from the global offering, with HKD 193.4 million remaining unutilized, and a portion reallocated to business expansion through selective acquisitions - Net proceeds from the global offering were approximately HKD 218.3 million[32] - As of June 30, 2024, approximately HKD 24.9 million of the net proceeds had been utilized, with approximately HKD 193.4 million remaining unutilized[32] - The portion originally allocated for repayment of existing bank loan guarantees has been reallocated to expand the Group's business through selective acquisitions of gold mining assets[33] Allocation of Proceeds from Global Offering | Business Objectives stated in Prospectus | Percentage of Net Proceeds | Amount Utilized as of Report Date (HKD million) | Net Proceeds Unutilized as of Report Date (HKD million) | Revised Allocation (HKD million) | Expected Timeline for Utilization | | :--- | :--- | :--- | :--- | :--- | :--- | | Further construction of mining infrastructure | 20.4% | 15.3 | 29.2 | 29.2 | Before June 2025 | | Upgrade gold ore reserves through additional exploration activities | 2.0% | 0 | 4.4 | 4.4 | Before December 2024 | | Expand business through selective acquisitions of gold mining assets | 55.0% | 0 | 120.1 | 147.6 | Before February 2025 | | Repayment of existing bank loan guarantees | 12.6% | 0 | 27.5 | Reallocated to acquisitions | Not applicable | | Working capital | 10.0% | 9.6 | 12.2 | 12.2 | Before December 2025 | | Total | 100.0% | 24.9 | 193.4 | 193.4 | | Corporate Governance and Other Information Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, or Debentures of the Company and its Associated Corporations This section discloses the interests and short positions of the Company's directors and chief executive in the shares, underlying shares, or debentures of the Company and its associated corporations as of June 30, 2024 Directors' and Chief Executive's Shareholdings | Name and Position | Name of Associated Corporation | Capacity | Number of Shares Held | Position | Approximate Percentage of Issued Share Capital in the Company and/or Associated Corporation | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Mackie James Thomas (Executive Director) | Majestic Gold Corp. | Beneficial Owner | 280,000 | Long Position | 0.03% | | Mr. Chen Libei (Non-Executive Director) | Persistence Resources Group Limited | Spouse's Interest | 18,180,000 | Long Position | 0.91% | - Except as disclosed above, as of June 30, 2024, no other directors or chief executive of the Company held any interests or short positions required to be disclosed under the Securities and Futures Ordinance[35] Major Shareholders' Interests in the Company This section discloses the major shareholders holding 5% or more interest in the Company's shares or underlying shares as of June 30, 2024, including Majestic Gold Corp. and Oriental Gold Industry (Hong Kong) Limited Major Shareholders' Shareholdings | Shareholder Name | Capacity | Number of Shares Held | Position | Approximate Percentage of Issued Share Capital in the Company | | :--- | :--- | :--- | :--- | :--- | | Majestic Gold Corp. | Beneficial Owner | 1,410,000,000 | Long Position | 70.50% | | Oriental Gold Industry (Hong Kong) Limited | Beneficial Owner | 198,000,000 | Long Position | 9.90% | - Majestic Gold Corp. is a limited liability company incorporated in British Columbia, Canada, and listed on the TSX Venture Exchange[37] - Oriental Gold Industry (Hong Kong) Limited is a wholly-owned subsidiary of Shandong Zhaojin Group Zhaoyuan Gold Smelting Co., Ltd[37] Changes in Information of Directors and Chief Executive The Company disclosed that Mr. Chen Libei was appointed as a Non-Executive Director effective June 26, 2024, with no other disclosable changes in directors' or chief executive's information - Mr. Chen Libei was appointed as a Non-Executive Director of the Company effective June 26, 2024[38] - The Company is not aware of any other changes in the information of directors, supervisors, or chief executive required to be disclosed under Listing Rule 13.51B(1) since the last annual report until the date of this report[38] Directors' Rights to Purchase Shares or Debentures During the reporting period, none of the Company's directors, supervisors, or their associates were granted or exercised any rights to subscribe for shares or debentures of the Company or its associated corporations - No rights to subscribe for equity or debentures of the Company or any of its associated corporations were granted to or exercised by the directors, supervisors, their spouses, and children under 18 years of age[39] - Neither the Company nor any of its subsidiaries, holding companies, or any fellow subsidiaries entered into any arrangements enabling the Company's directors and supervisors to acquire shares or debentures of the Company or any other body corporate for profit[39] Sufficient Public Float The Company maintained the prescribed public float under the Listing Rules throughout the reporting period and up to the date of this report - The Company maintained the prescribed public float under the Listing Rules for the six months ended June 30, 2024, and up to the date of this report[40] Purchase, Sale, or Redemption of the Company's Listed Securities During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - During the reporting period, neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities[41] Convertible Securities, Share Options, Warrants, or Similar Rights During the reporting period, the Company did not issue any convertible securities, share options, warrants, or similar rights - During the reporting period, the Company did not issue any convertible securities, share options, warrants, or similar rights[42] Remuneration Policy and Employee Numbers of the Group The Group's remuneration policy links employee compensation to company performance and individual achievement, aiming to incentivize staff and enhance professional capabilities. As of June 30, 2024, the Company had 485 employees - The Company adopts a policy that links employee remuneration to the Company's performance and employee work performance, and establishes performance appraisal indicators[43] - The remuneration distribution system strengthens research on management and technical position series, broadens salary promotion channels, and encourages professional and technical personnel to improve their professional technical capabilities[43] - As of June 30, 2024, the Company had 485 employees[43] Overview of Material Investments, Material Acquisitions, and Disposals of Subsidiaries, Associates, and Joint Ventures The Group, through its wholly-owned subsidiary PRG Res Holding 2 Ltd., is negotiating to acquire a 70% equity interest in a target company that holds mining licenses for three gold mines in Yantai City, Shandong Province, China, with due diligence currently underway - PRG Res Holding 2 Ltd., a wholly-owned subsidiary of the Company, entered into a letter of intent with a potential seller and a target company incorporated in China to acquire a 70% equity interest in the target company[44] - The target company is primarily engaged in gold ore mining and beneficiation and holds mining licenses for three gold mines located in Yantai City, Shandong Province, China[44] - Due diligence is currently being conducted on the target company by professionals including lawyers, auditors, valuers, and technical consultants[44] Details of Material Events After the Reporting Period Except for matters disclosed in this report, no other material events occurred after the reporting period and up to the date of this report - Except as disclosed in this report, no other material events occurred after the reporting period and up to the date of this report[45] Compliance with Corporate Governance Code The Company has generally complied with the Corporate Governance Code since its listing date, with the Chairman and CEO roles combined, which the Board believes is in the Group's best interest and will be continuously reviewed - The Company has complied with the code provisions of Appendix C1 of the Listing Rules (Corporate Governance Code) since its listing date and up to the date of this report, with certain deviations as noted below[46] - The roles of Chairman and Chief Executive are combined and held by Dr. Shao Xuxin, deviating from Code Provision C.2.1 of the Corporate Governance Code[47] - The Board believes that Dr. Shao's dual role is in the best interest of the Group, ensuring consistent internal leadership and enhancing overall strategic planning efficiency, and the existing arrangement does not undermine the balance of power and authority[47] Directors' Interests in Competing Businesses During the reporting period, none of the Company's directors or controlling shareholders and their close associates held any interests in any business that competes or is likely to compete with the Group's business - During the reporting period, none of the Company's directors or controlling shareholders and their respective close associates held any interests in any business that directly or indirectly competes or is likely to compete with the Group's business[48] Share Option Scheme The Company's share option scheme was conditionally adopted on November 30, 2023, to incentivize eligible participants, but no share options were granted during the reporting period - The Company's share option scheme was conditionally adopted on November 30, 2023, and is effective until November 30, 2033[49] - The share option scheme was established to recognize and acknowledge the contributions made or to be made by eligible participants to the Group and to encourage them to enhance their performance[49] - During the reporting period, the Company did not grant any share options under the share option scheme[49] Compliance with the Model Code for Securities Transactions by Directors of Listed Issuers ("Model Code") All directors of the Company confirmed full compliance with the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules during the reporting period and up to the date of this announcement, with no breaches by senior management - Following specific enquiries made to all directors, all directors confirmed that they had fully complied with the required standards of the Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules during the reporting period and up to the date of this announcement[50] - The Company is not aware of any non-compliance with the Model Code by the Group's senior management during the period from the listing date up to the date of this report[50] Audit Committee The Company's Audit Committee, comprising three independent non-executive directors, has reviewed this interim report and the unaudited condensed consolidated interim financial statements, deeming them compliant with applicable accounting standards and disclosure requirements - The Audit Committee comprises three independent non-executive directors, namely Mr. Chen Yifen (Chairman), Dr. Malaihollo Jeffrey Francis A, and Dr. Zeng Ming[51] - The primary responsibilities of the Audit Committee are to review and monitor the Group's financial reporting process, internal control systems, risk management, and internal audit[51] - The Audit Committee has reviewed this report and the Group's unaudited condensed consolidated interim financial statements contained herein, and is of the opinion that they have been prepared in compliance with applicable accounting standards and requirements and that adequate disclosures have been made[51] Continuing Disclosure Obligations under the Listing Rules Except for disclosures in this interim report, the Company has no other continuing disclosure obligations under Listing Rules 13.20, 13.21, and 13.22 - Except as disclosed in this interim report, the Company has no other disclosure obligations under Listing Rules 13.20, 13.21, and 13.22[52] Investor Relations The Company values effective communication with shareholders, maintaining continuous dialogue through annual general meetings and extraordinary general meetings, where the Board Chairman and committee chairmen will attend and respond to inquiries, and auditor representatives will also be present - The Company believes that effective communication with its shareholders is crucial for enhancing investor relations and their understanding of the Group's business, performance, and strategies[53] - The Company strives to maintain continuous communication with its shareholders, particularly through annual general meetings and extraordinary general meetings[53] - The Chairman of the Board and the chairmen of various Board committees will meet with the Company's shareholders and respond to their inquiries at annual general meetings and extraordinary general meetings, and representatives of the auditors will also attend to answer questions[53] Acknowledgements The Board extends its sincere gratitude to shareholders, investors, business partners, and the management team and employees for their support and contributions during the reporting period - The Board sincerely thanks its shareholders, investors, and business partners for their strong support, and the management team and employees for their efforts and contributions during the reporting period[54] Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income The Group's condensed consolidated interim statement of profit or loss and other comprehensive income for the six months ended June 30, 2024, shows significant growth in revenue and gross profit, with substantial increases in profit for the period and total comprehensive income, and a corresponding rise in earnings per share Summary of Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income | Metric | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 236,173 | 196,659 | | Cost of sales | (110,693) | (104,277) | | Gross profit | 125,480 | 92,382 | | Other income and gains | 10,725 | 5,428 | | Administrative expenses | (19,445) | (16,655) | | Other expenses | (586) | – | | Finance costs | (1,397) | (1,657) | | Profit before tax | 114,777 | 79,498 | | Income tax expense | (35,910) | (26,729) | | Profit for the period | 78,867 | 52,769 | | Profit attributable to owners of the parent | 57,284 | 37,261 | | Profit attributable to non-controlling interests | 21,583 | 15,508 | | Other comprehensive income for the period, net of tax | 1,715 | 1,193 | | Total comprehensive income for the period | 80,582 | 53,962 | | Basic and diluted earnings per share | RMB 0.03 | RMB 0.02 (restated) | Condensed Consolidated Interim Statement of Financial Position Condensed Consolidated Interim Statement of Financial Position The Group's condensed consolidated interim statement of financial position as of June 30, 2024, shows growth in both total assets and net assets, with a significant increase in net current assets, reflecting a robust financial position and ample liquidity Summary of Condensed Consolidated Interim Statement of Financial Position | Metric | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | | | | Property, plant and equipment | 350,700 | 342,520 | | Right-of-use assets | 108,333 | 110,885 | | Intangible assets | 114,191 | 117,843 | | Deferred tax assets | 7,260 | 6,727 | | Other long-term assets | 5,480 | 3,732 | | Total non-current assets | 585,964 | 581,707 | | Current assets | | | | Inventories | 17,282 | 21,821 | | Prepayments, other receivables and other assets | 4,508 | 7,901 | | Restricted and pledged deposits | 20,896 | 19,232 | | Cash and cash equivalents | 661,318 | 586,840 | | Current portion of other long-term assets | 400 | 400 | | Total current assets | 704,404 | 636,194 | | Current liabilities | | | | Trade payables | 10,909 | 10,273 | | Other payables and accrued expenses | 21,467 | 29,055 | | Deferred revenue | 85 | 170 | | Interest-bearing bank and other borrowings | 30,000 | 30,000 | | Tax payable | 95,718 | 99,914 | | Provisions | 1,305 | 1,305 | | Current portion of other long-term liabilities | 7,369 | 7,369 | | Total current liabilities | 166,853 | 178,086 | | Net current assets | 537,551 | 458,108 | | Total assets less current liabilities | 1,123,515 | 1,039,815 | | Non-current liabilities | | | | Provisions | 25,415 | 25,091 | | Other long-term liabilities | 23,844 | 23,878 | | Deferred tax liabilities | 17,739 | 14,911 | | Total non-current liabilities | 66,998 | 63,880 | | Net assets | 1,056,517 | 975,935 | | Total equity | 1,056,517 | 975,935 | Condensed Consolidated Interim Statement of Changes in Equity Condensed Consolidated Interim Statement of Changes in Equity The Group's condensed consolidated interim statement of changes in equity for the six months ended June 30, 2024, shows an increase in total equity due to profit for the period and other comprehensive income, alongside changes from dividends paid to non-controlling shareholders and capital contributions from non-controlling shareholders Summary of Condensed Consolidated Interim Statement of Changes in Equity | Metric | January 1, 2024 (Audited) (RMB thousand) | Profit for the period (RMB thousand) | Total other comprehensive income for the period (RMB thousand) | Transfer to retained earnings (RMB thousand) | Dividends paid to non-controlling shareholders (RMB thousand) | Capital contribution from non-controlling shareholders (RMB thousand) | Appropriation to safety fund surplus reserve (RMB thousand) | Utilisation of safety fund surplus reserve (RMB thousand) | June 30, 2024 (Unaudited) (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Share capital | 18,172 | – | – | – | – | – | – | – | 18,172 | | Share premium | 214,663 | – | – | – | – | – | – | – | 214,663 | | Capital reserve | 370,792 | – | – | – | – | – | – | – | 370,792 | | Statutory surplus reserve | 46,720 | – | – | 8,635 | – | – | – | – | 55,355 | | Special reserve | – | – | – | – | – | – | 1,124 | (1,124) | – | | Exchange fluctuation reserve | 11,722 | – | 1,715 | – | – | – | – | – | 13,437 | | Retained profits | 165,719 | 57,284 | – | (8,635) | – | – | (1,124) | 1,124 | 214,368 | | Total attributable to owners of the parent | 827,788 | 57,284 | 1,715 | – | – | – | – | – | 886,787 | | Non-controlling interests | 148,147 | 21,583 | – | – | (10,000) | 10,000 | – | – | 169,730 | | Total equity | 975,935 | 78,867 | 1,715 | – | (10,000) | 10,000 | – | – | 1,056,517 | Condensed Consolidated Interim Statement of Cash Flows Condensed Consolidated Interim Statement of Cash Flows The Group's condensed consolidated interim statement of cash flows for the six months ended June 30, 2024, shows strong net cash flow from operating activities, leading to a net increase in cash and cash equivalents, with an ending balance of RMB 661,318,000 Summary of Condensed Consolidated Interim Statement of Cash Flows | Metric | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Net cash flows from operating activities | 108,058 | 96,220 | | Net cash flows used in investing activities | (33,566) | (28,353) | | Net cash flows used in financing activities | (1,729) | (1,260) | | Net increase in cash and cash equivalents | 72,763 | 66,607 | | Cash and cash equivalents at beginning of period | 586,840 | 282,187 | | Effect of exchange rate changes on cash and cash equivalents | 1,715 | 1,207 | | Cash and cash equivalents at end of period | 661,318 | 350,001 | Notes to the Condensed Consolidated Interim Financial Information 1. Company and Group Information Persistence Resources Group Limited is an investment holding company incorporated in the Cayman Islands, with its subsidiaries primarily engaged in gold ingot mining, processing, and sales in China. Majestic Gold Corp. is identified as the Company's controlling company - The Company is an investment holding company, and its subsidiaries are engaged in the mining, processing, and sale of gold ingots in the People's Republic of China[64] - The Company's controlling company is Majestic Gold Corp., incorporated in British Columbia, Canada[64] - Yantai Zhongjia Mining Co., Ltd. (75% owned), a major indirect subsidiary, is engaged in gold mining, processing, and sales[64] 2. Basis of Preparation The condensed consolidated interim financial information for the six months ended June 30, 2024, has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting and presented in RMB, with all amounts rounded to the nearest thousand - The condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting[66] - The interim financial information is presented in RMB, and all amounts have been rounded to the nearest thousand (RMB thousand)[66] 3. Changes in Accounting Policies and Disclosures The Group has adopted several revised International Financial Reporting Standards for the first time, including amendments to IFRS 16, IAS 1, IAS 7, and IFRS 7. These amendments primarily clarify existing requirements and have no significant impact on the Group's financial position or performance - The Group has for the first time adopted amendments to International Financial Reporting Standard 16, International Accounting Standard 1 (2020 and 2022), and International Accounting Standard 7 and International Financial Reporting Standard 7 for the financial statements of the current year[67] - The amendments to International Financial Reporting Standard 16 have no impact on the Group's financial position or performance, as the Group has no sale and leaseback transactions[67] - The amendments to International Accounting Standard 1 and International Accounting Standard 7 and International Financial Reporting Standard 7 also have no impact on the Group's financial position or performance, as they are mainly clarifying amendments or not applicable[68] 4. Operating Segment Information The Group has only one reportable operating segment: the mining and beneficiation of gold, ultimately sold as gold ingots. All revenue is derived from operations in mainland China, and a single major customer contributes all revenue - The Group has one reportable operating segment: the mining and beneficiation of gold, ultimately sold as gold ingots[69] - The Group's revenue from external customers is solely derived from its operations in mainland China, and no non-current assets are located outside mainland China[69] - Revenue from a major customer (Customer A) was RMB 236,173,000, accounting for all revenue[69] 5. Revenue The Group's revenue from contracts with customers for the six months ended June 30, 2024, was RMB 236,173,000, with all revenue recognized at a point in time - Revenue from contracts with customers was RMB 236,173,000 (2023: RMB 196,659,000)[70] - All revenue is recognized at a point in time[71] 6. Finance Costs The Group's total finance costs amounted to RMB 1,397,000, primarily comprising interest on bank borrowings and the increase in the discounted amount of provisions and other long-term liabilities over time Analysis of Finance Costs | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Interest on bank borrowings | 314 | 717 | | Increase in discounted amount of provisions and other long-term liabilities due to passage of time | 1,083 | 940 | | Total | 1,397 | 1,657 | 7. Profit Before Tax The Group's profit before tax is achieved after deducting various expenses, including cost of inventories sold, depreciation of property, plant and equipment, depreciation of right-of-use assets, amortization of intangible assets, and research and development costs Profit Before Tax Adjustment Items | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Cost of inventories sold | 110,693 | 104,277 | | Depreciation of property, plant and equipment | 21,383 | 15,998 | | Depreciation of right-of-use assets | 5,160 | 4,477 | | Amortization of intangible assets | 3,652 | 3,980 | | Research and development costs | 4,169 | 3,229 | | Gain on disposal of items of property, plant and equipment | – | (59) | - Depreciation of property, plant and equipment, depreciation of right-of-use assets, and amortization of intangible assets for the period are included in "Cost of inventories sold", "Research and development costs", and "Administrative expenses" in the consolidated statement of profit or loss and other comprehensive income[74] 8. Income Tax Expense The Group's income tax expense primarily consists of China corporate income tax, levied at a rate of 25%. The reconciliation of income tax expense shows the impact of tax rate differences and withholding tax - The Group's subsidiaries operating in mainland China are generally subject to China corporate income tax at a rate of 25%[77] Analysis of Income Tax Expense | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Current tax: China corporate income tax | 33,615 | 22,458 | | Deferred tax | 2,295 | 4,271 | | Total tax expense for the period | 35,910 | 26,729 | Reconciliation of Income Tax Expense to Profit Before Tax | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Profit before tax | 114,777 | 79,498 | | Tax at statutory income tax rate of 25% | 28,694 | 19,875 | | Effect of tax rate differences in other jurisdictions | 410 | 1,268 | | Effect of withholding tax at 10% on distributable profits of the Group's PRC subsidiaries | 5,828 | 4,187 | | Expenses not deductible for tax purposes | 978 | 1,399 | | Total | 35,910 | 26,729 | 9. Dividends The Board declared an interim dividend of HKD 0.0295 per ordinary share, totaling approximately HKD 59,000,000, on August 30, 2024, which was not recognized as a liability at the end of the reporting period - On August 30, 2024, the Board declared an interim dividend of HKD 0.0295 per ordinary share, totaling approximately HKD 59,000,000[79] - The interim dividend was not recognized as a liability at the end of the reporting period[79] 10. Earnings Per Share Attributable to Ordinary Equity Holders of the Parent The Group's basic earnings per share for the six months ended June 30, 2024, was RMB 0.03, calculated based on profit attributable to ordinary equity holders of the parent and 2,000,000,000 weighted average ordinary shares - The basic earnings per share amount is calculated based on the profit attributable to ordinary equity holders of the parent for the period and the weighted average number of ordinary shares in issue during the period of 2,000,000,000 shares[80] Earnings Per Share Calculation Details | Metric | 2024 (Unaudited) | 2023 (Audited) | | :--- | :--- | :--- | | Profit attributable to ordinary equity holders of the parent used for basic earnings per share calculation (RMB thousand) | 57,284 | 37,261 | | Weighted average number of ordinary shares in issue during the period used for basic earnings per share calculation (Number of shares) | 2,000,000,000 | 1,500,000,000 | | Basic and diluted earnings per share | RMB 0.03 | RMB 0.02 (restated) | 11. Property, Plant and Equipment The Group acquired property, plant and equipment assets with a total cost of RMB 29,563,000 during the reporting period. As of June 30, 2024, certain property, plant and equipment with a net book value of RMB 2,010,000 had not yet obtained ownership certificates - During the six months ended June 30, 2024, the Group acquired property, plant and equipment assets with a total cost of RMB 29,563,000[81] - The net book value of assets disposed of by the Group during the six months ended June 30, 2024, was zero[81] - Certain property, plant and equipment with a total net book value of RMB 2,010,000 had not yet obtained ownership certificates as of June 30, 2024[81] 12. Trade Payables As of June 30, 2024, the Group's trade payables amounted to RMB 10,909,000, all due within one year, interest-free, and generally settled within 30 to 90 days Ageing Analysis of Trade Payables | Ageing | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 10,909 | 10,273 | - Trade payables are interest-free and generally settled within 30 to 90 days[82] 13. Share Capital The Company's issued and fully paid share capital consists of 2,000,000,000 ordinary shares with a par value of HKD 0.01 each, totaling RMB 18,172,000 - Issued and fully paid share capital consists of 2,000,000,000 shares (2023: 2,000,000,000 shares) of ordinary shares with a par value of HKD 0.01 each, totaling RMB 18,172,000[83] 14. Commitments As of June 30, 2024, the Group's total contractual capital commitments amounted to RMB 7,584,000, primarily for mining infrastructure, representing a significant increase from the previous period Contractual Capital Commitments | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Contracted but not provided for: Mining infrastructure | 7,584 | – | 15. Related Party Transactions This section discloses the Group's transactions with related parties, including payments and reimbursements by Majestic Gold Corp. on behalf of the Group, and capital contributions to Yantai Zhongjia Mining Co., Ltd. Additionally, key management personnel compensation is listed Related Party Transactions | Transaction Type | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Payments made by a related party on behalf of the Group: Majestic Gold Corp. | – | 456 | | Repayment of amounts due to a related party: Majestic Gold Corp. | – | 461 | - Yantai Dahedong Beneficiation Co., Ltd., Kong Fanzhong, Kong Fanbo, and Yantai Baiheng Gold Mine Co., Ltd. provided guarantees for certain bank borrowings of the Group totaling RMB 30,000,000 with other independent third parties[86] - In January 2024, the registered capital of Yantai Zhongjia Mining Co., Ltd. increased from RMB 188,705,500 to RMB 228,705,500, with Majestic Yantai Gold Ltd. contributing RMB 30,000,000 and Dahedong contributing RMB 10,000,000[86] Key Management Personnel Compensation | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Short-term employee benefits | 3,292 | 2,191 | | Contributions to retirement benefit plans | 110 | 94 | | Total compensation paid to key management personnel | 3,402 | 2,285 | 16. Fair Value and Fair Value Hierarchy of Financial Instruments Management assesses that the fair value of most financial instruments approximates their carrying amount, primarily due to their short-term maturity. The company's finance team is responsible for fair value measurement policies and procedures, reviewed annually by the Board - Management has assessed that the fair values of cash and cash equivalents, restricted and pledged deposits, financial assets, trade payables, financial liabilities, and interest-bearing bank and other borrowings approximate their carrying amounts, mainly due to their short-term maturity[87] - The fair values of other long-term assets and other long-term liabilities are calculated by discounting expected future cash flows[87] - The Company's finance team is responsible for determining the policies and procedures for fair value measurement of financial instruments, which are reviewed and approved by the Chief Financial Officer and discussed annually with the Board[87] 17. Events After the Reporting Period No significant subsequent events occurred for the Company or the Group after June 30, 2024 - No significant subsequent events occurred for the Company or the Group after June 30, 2024[88] 18. Approval of Condensed Consolidated Interim Financial Information The condensed consolidated interim financial information was approved and authorized for issue by the Board of Directors on August 30, 2024 - The financial statements were approved and authorized for issue by the Board of Directors on August 30, 2024[88]