应星控股(01440) - 2024 - 中期财报

Corporate Information This section provides essential company details and contact information Key Financial Highlights The company achieved significant revenue growth and a substantial reduction in net loss for the six months ended June 30 Financial Highlights for the Six Months Ended June 30 | Metric | 2024 (Unaudited) | 2023 (Unaudited) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue (RMB thousands) | 273,397 | 47,065 | +480.9% | | Gross Profit/(Loss) (RMB thousands) | 28,158 | (1,432) | Turned to Profit | | Loss Before Income Tax (RMB thousands) | (631) | (5,555) | Loss narrowed by 88.6% | | Loss for the Period Attributable to Owners of the Company (RMB thousands) | (948) | (5,552) | Loss narrowed by 82.9% | | Loss Per Share - Basic and Diluted (RMB cents) | (0.08) | (0.44) | Loss narrowed | Management Discussion and Analysis This section provides an in-depth review of the company's operational performance, financial results, and strategic outlook Business Review and Outlook The Group, a lace manufacturer and dyeing and finishing service provider, also engages in footwear business, with footwear revenue experiencing explosive growth, driving a 480.9% increase in total revenue and an 82.9% reduction in net loss, leading to a strategic shift towards the footwear segment - Strategic focus shifts: Due to the uncertain outlook for traditional lace manufacturing and dyeing and finishing businesses and the explosive growth in footwear, the Group will gradually reduce resource allocation to the former, redirecting its focus to the footwear business[9] - Future operational strategy: The company will adopt a prudent approach to existing operations while actively seeking new business opportunities, continuously improving production efficiency, reducing operating costs, and strengthening R&D and quality control[10] Financial Review The Group's financial performance significantly improved, with total revenue increasing from RMB 47.1 million to RMB 273.4 million, primarily driven by footwear, leading to a gross profit turnaround and a substantial reduction in net loss to RMB 0.9 million Revenue Analysis The Group's total revenue increased by 480.9% to RMB 273 million, primarily driven by a significant surge in footwear business revenue to RMB 234 million, while dyeing and finishing services grew and lace business declined Revenue by Product Category (RMB thousands) | Product Category | H1 2024 | % of Total Revenue | H1 2023 | % of Total Revenue | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | :--- | | Dyeing and Finishing | 31,656 | 11.6% | 21,803 | 46.4% | +45.2% | | Lace | 7,342 | 2.7% | 11,876 | 25.2% | -38.2% | | Footwear | 234,399 | 85.7% | 13,386 | 28.4% | +1651.1% | | Total | 273,397 | 100.0% | 47,065 | 100.0% | +480.9% | - The explosive growth in footwear business revenue was primarily attributable to the contribution from a new customer[16] - All revenue was derived from Mainland China and Hong Kong[16] Profitability Analysis The Group's profitability significantly improved, with gross profit turning from a RMB 1.4 million loss to a RMB 28.2 million profit, driven by footwear business growth, despite increased selling and administrative expenses, leading to an 82.9% reduction in net loss to RMB 0.9 million - The Group's gross profit position turned from a gross loss of RMB 1.4 million in the prior period to a gross profit of RMB 28.2 million, achieving a turnaround primarily due to the strong growth in the footwear business[17] - Selling and distribution expenses and administrative expenses significantly increased to RMB 16.2 million and RMB 16.1 million, respectively, primarily matching the revenue growth and increased headcount in the footwear business[17][18] - Considering all factors, the Group's net loss for the period significantly decreased by 82.9% from RMB 5.5 million in the prior period to RMB 0.9 million[18] Liquidity, Capital Resources and Gearing The Group maintained a robust financial position as of June 30, 2024, with net current assets increasing to RMB 195.2 million, a liquidity ratio of 2.6 times, and a low gearing ratio of 0.1 Key Capital and Liquidity Ratios | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Net Current Assets (RMB) | approx. RMB 195.2 million | approx. RMB 191.4 million | | Current Ratio | approx. 2.6 times | approx. 2.1 times | | Cash and Cash Equivalents (RMB) | approx. RMB 212.4 million | approx. RMB 269.0 million | | Borrowings (RMB) | approx. RMB 37.2 million | approx. RMB 36.9 million | | Gearing Ratio | 0.1 | 0.1 | - The Group's assets and liabilities are primarily denominated in RMB, USD, and HKD; foreign exchange risk was not hedged during the period but is regularly monitored, with hedging considered as needed[22] Human Resources As of June 30, 2024, the Group had 472 employees, a decrease from 527 at the end of 2023, with total employee benefit expenses significantly increasing to RMB 26.1 million Employees and Staff Costs | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Number of Employees | 472 | 527 | | Metric | H1 2024 | H1 2023 | | Total Employee Benefit Expenses (RMB) | approx. RMB 26.1 million | approx. RMB 13.5 million | Change in Use of Proceeds from IPO The Board resolved to reallocate approximately HKD 16.9 million of unutilized IPO net proceeds from expanding dyeing and finishing capacity to repaying interest-bearing borrowings by December 31, 2024, due to weak market demand and sufficient existing capacity - The Board resolved to reallocate approximately HKD 16.9 million of unutilized net proceeds from the IPO to repay interest-bearing borrowings[29] - Reasons for the change in use include: weak market demand and unstable orders for dyeing and finishing and lace businesses; low utilization of existing production lines, sufficient to meet anticipated orders, making expansion not urgent; and existing boiler systems being adequate for production, without the need for further capacity enhancement[32][33] - The Board believes that reallocating funds to repay borrowings will help reduce financial costs, improve the debt position, and align with the overall interests of the company and its shareholders[35] Corporate Governance and Other Information This section details the company's governance structure, director and shareholder interests, and securities-related information Directors' and Shareholders' Interests As of June 30, 2024, Executive Director Mr. Cai Rongxing held a 35.99% stake, while other key shareholders included Mr. Lin Minqiang with 4.0% and Glorious Way Investments Limited with 34.01% Major Directors' and Shareholders' Interests (as of June 30, 2024) | Name/Entity | Capacity/Nature | Shareholding Percentage (Approx.) | | :--- | :--- | :--- | | Mr. Cai Rongxing | Interests in controlled corporations and beneficial owner | 35.99% | | Mr. Lin Minqiang | Interests in controlled corporations | 4.0% | | Glorious Way Investments Limited | Beneficial owner | 34.01% | | Ms. Hu Qiuxia | Spouse's interest (spouse of Mr. Cai Rongxing) | 35.99% | Share Option Scheme and Securities The company adopted a share option scheme on December 16, 2020, but no options have been granted as of June 30, 2024, and no listed securities were purchased, sold, or redeemed during the period - As of the end of the reporting period, the company had not granted any share options under its share option scheme[53][56] - During the reporting period, the company did not conduct any repurchase, sale, or redemption of its listed securities, nor did it issue any new equity securities[54][55][57] Report on Review of Interim Financial Information The company's interim financial information has been reviewed by its auditor, Freema & Mazars CPA Limited, who found no material non-compliance with HKAS 34 - The company's auditor, Freema & Mazars CPA Limited, has reviewed the interim financial information in accordance with Hong Kong Review Engagements Standards and concluded that nothing has come to their attention to suggest that the interim financial information is not prepared, in all material respects, in accordance with Hong Kong Accounting Standard 34 'Interim Financial Reporting'[67] Condensed Consolidated Financial Statements This section presents the Group's condensed consolidated financial statements, including income, comprehensive income, financial position, equity changes, and cash flows Condensed Consolidated Income Statement For the six months ended June 30, 2024, the Group reported RMB 273 million in revenue, RMB 28.16 million in gross profit, an operating loss of RMB 0.574 million, a pre-tax loss of RMB 0.631 million, and a loss attributable to owners of RMB 0.948 million Condensed Consolidated Statement of Comprehensive Income After accounting for an exchange difference loss of RMB 0.17 million, the total comprehensive loss attributable to owners for the six months ended June 30, 2024, was RMB 1.118 million Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets were RMB 443 million, total liabilities RMB 128 million, and total equity RMB 315 million, with non-current assets primarily property, plant, and equipment, and current assets mainly cash and trade receivables Condensed Consolidated Statement of Changes in Equity As of June 30, 2024, the Group's total equity was RMB 315 million, a slight decrease from RMB 316 million at the beginning of the year, primarily reflecting the total comprehensive loss of RMB 1.118 million for the period Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2024, the Group experienced net cash outflows of RMB 53.06 million from operating activities, RMB 1.43 million from investing activities, and RMB 2.12 million from financing activities, resulting in a net decrease of RMB 56.61 million in cash and cash equivalents Notes to the Condensed Consolidated Interim Financial Information This section provides detailed explanatory notes to the condensed consolidated interim financial information, offering further context and breakdown of reported figures