Financial Performance - For the six months ended June 30, 2024, the turnover was RMB 2,440,776, a decrease of 7.7% compared to RMB 2,645,133 in the same period of 2023[5]. - The profit for the period was RMB 5,556, representing a significant improvement of 136.2% from a loss of RMB 15,343 in the previous year[5]. - Profit attributable to owners of the Company was RMB 5,524, up 138.7% from a loss of RMB 14,290 in the same period last year[5]. - Basic and diluted earnings per share were RMB 0.51, a turnaround from a loss of RMB 1.31 per share in the previous year, reflecting an increase of 138.9%[5]. - The Group recorded a consolidated turnover of approximately RMB2,440.8 million, a decrease of approximately 7.7% compared to RMB2,645.1 million in the same period of 2023[29]. - Gross profit for the Group was approximately RMB156.2 million, a decrease of approximately 13.3% from RMB180.1 million in the same period of 2023[29]. - The Group achieved a net profit of approximately RMB5.6 million, a significant improvement from a net loss of RMB15.3 million in 2023, with basic and diluted earnings per share of RMB0.51 compared to a loss of RMB1.31 per share in 2023[31]. - Total comprehensive income for the period, net of tax, was RMB 3,424, compared to a loss of RMB 13,864 in the same period last year[60]. Business Operations and Market Trends - The Group is focusing on R&D and application of lithium-ion batteries, with plans to explore new markets for wearable device batteries, car batteries, and backup batteries[8]. - According to IDC, global smartphone shipments increased by 6.5% year-on-year in Q2 2024, reaching approximately 285.4 million units, marking four consecutive quarters of growth[8]. - IDC forecasts a 4% year-on-year increase in global smartphone shipments for 2024, projecting a total of approximately 1.21 billion units[8]. - The Group's ODM business primarily supplies lithium-ion batteries for mobile phones, tablets, notebooks, and power banks, adapting to the rising trend in battery shipments for emerging consumer electronics[8]. - The strategic adjustment aims to respond to market changes driven by the device update cycle and growth in demand from emerging markets[8]. - The global smartphone market is expected to recover with a growth rate of 2.3% in 2025, driven by the rapid penetration of AI technology[12]. - The backup battery market is expected to maintain rapid growth, driven by the large-scale application of 5G technology[20]. - The smartphone market is anticipated to remain a key platform for personal entertainment and social networking for the foreseeable future[19]. Sales and Revenue Insights - More than 90% of the Group's revenue during the first half of 2024 was derived from the ODM business, primarily from the smartphone and tablet segments[17]. - Despite an increase in overall sales volume of ODM battery products, sales revenue and gross profit from mobile phone batteries decreased due to declining sales volume and prices[17]. - The gross profit margin for mobile phone products and related accessories contracted due to overcapacity in the mobile phone industry and fierce domestic price competition[17]. - Sales from ODM business accounted for approximately 91.6% of total revenue, with a revenue decrease of 9.5% attributed to reduced demand for lithium batteries and lower sales prices[31]. - Sales from mobile phone batteries were approximately RMB1,517.1 million, representing 62.2% of consolidated turnover, down from 67.5% in 2023[32]. Cost Management and Efficiency - The Group focused on improving operational efficiency and reducing production costs through asset and labor optimization during the Review Period[24]. - The Group's consolidated cost of sales decreased by approximately 7.3% to RMB2,284.6 million from RMB2,465.0 million in 2023, influenced by lower market prices for key materials[32]. - Administrative expenses were approximately RMB111.6 million, accounting for 4.6% of consolidated turnover, down from 4.9% in 2023, mainly due to reduced office expenses and staff salaries[33]. - Selling and distribution expenses were RMB (34,046), a decrease from RMB (40,675) in the previous year, indicating improved cost management[58]. Research and Development - Continuous investment in research and development of new technologies, particularly in industrial design and AI applications, is a priority for the Group[20]. - Research and development costs for the six months ended June 30, 2024, were RMB 49,532, an increase of 15.4% compared to RMB 42,884 in 2023[98]. Financial Position and Cash Flow - Cash and cash equivalents as of June 30, 2024, amounted to approximately RMB255.4 million, an increase from RMB133.8 million at December 31, 2023[42]. - The Group recorded a net cash inflow from operating activities of approximately RMB20.1 million for the six months ended June 30, 2024, compared to a net cash outflow of RMB487.9 million in 2023[42]. - Outstanding borrowings as of June 30, 2024, amounted to approximately RMB1,283.4 million, a slight decrease from RMB1,299.8 million at December 31, 2023[44]. - The total debt to equity ratio was approximately 117.8% as of June 30, 2024, down from 119.7% at December 31, 2023[44]. - The Group's current ratio improved to approximately 1.2 times as of June 30, 2024, compared to 1.1 times at December 31, 2023[44]. - The Group's net current assets were approximately RMB 516.7 million, an increase of about 5.4% from RMB 490.2 million as of December 31, 2023[45]. Corporate Governance and Compliance - The Company complied with all code provisions set out in the Corporate Governance Code during the Review Period[144]. - The Audit Committee, comprising three independent non-executive Directors, reviewed the unaudited financial information for the six months ended 30 June 2024 before presenting it to the Board for approval[145]. - The Directors confirmed compliance with the Model Code for Securities Transactions throughout the review period[144]. Shareholder Information - The substantial shareholders include Swift Joy Holdings Limited with 423,770,000 shares (38.88%) and Right Grand Holdings Limited with 128,568,000 shares (11.79%) as of June 30, 2024[141]. - Fang Jin holds interests in controlled corporations with 552,338,000 shares, representing 50.67% of the issued voting shares[141]. - The Board has decided not to recommend the payment of an interim dividend for the six months ended 30 June 2024, consistent with the interim dividend of 2023, which was also Nil[144].
锐信控股(01399) - 2024 - 中期财报