兴业控股(00132) - 2024 - 中期财报

Corporate Information The report details key corporate information, including management, board members, registered office, and principal business locations - The report provides a list of key management personnel, including executive and non-executive directors, committee members, as well as core corporate information such as the company's registered office, principal place of business, principal bankers, and auditors[2][3] Management Discussion and Analysis Overall Performance Review The Group's H1 2024 total revenue grew 12.2% to HK$411 million, with operating profit from continuing operations up 45% to HK$111 million, and net profit significantly increased to HK$107 million driven by business growth and a HK$49.03 million gain from subsidiary disposal Key Financial Indicators for H1 2024 | Indicator | H1 2024 (HK$ Million) | YoY Change | | :--- | :--- | :--- | | Total Revenue | 411 | +12.2% | | Operating Profit from Continuing Operations | 111 | +45% | | Special Gain from Disposal of Subsidiary | 49 | N/A | | Net Profit | 107 | +109.1% | - The Group adheres to its '1+X' industrial system, with wellness elderly care as its core business, supported by technology, finance leasing, and civil explosives businesses[5] Segment Business Review During the reporting period, key business segments showed mixed performance, with wellness elderly care and civil explosives achieving strong operating profit growth of 264% and 106.9% respectively, finance leasing growing 23.5%, and hotel business turning profitable, while technology business faced declining revenue and increased losses, and property investment saw reduced rental income due to market weakness Wellness Elderly Care Business Wellness elderly care revenue grew 31.5% to HK$96.9 million, turning profitable with HK$7.68 million operating profit (up 264%), driven by a 23% increase in beds and 88% occupancy Key Indicators for Wellness Elderly Care Business | Indicator | H1 2024 | YoY Change | | :--- | :--- | :--- | | Operating Revenue | HK$96.9 million | +31.5% | | Operating Profit | HK$7.68 million | +264% (Turned Profitable) | | Institutional Care Beds | 2,708 | +23% | | Institutional Occupancy Rate | 88% | Improved | | Medical Care Beds | 461 | +54% | | Medical Care Occupancy Rate | 72% | Improved | Finance Leasing Business Despite headwinds, finance leasing grew steadily, with profit up 23.5% to HK$87.61 million, by focusing on municipal environmental protection Key Indicators for Finance Leasing Business | Indicator | H1 2024 | YoY Change | | :--- | :--- | :--- | | Profit for the Period | HK$87.61 million | +23.5% | - The company's strategy focuses on becoming a leading domestic environmental specialized finance leasing company, continuously deepening its presence in the municipal environmental protection sector[12] Technology Business Technology business faced challenges, with operating revenue down 37.2% to HK$3.08 million and operating loss increasing 16.2 times to HK$5.3 million, due to weak market conditions and delayed subsidies Key Indicators for Technology Business | Indicator | H1 2024 | YoY Change | | :--- | :--- | :--- | | Operating Revenue | HK$3.08 million | -37.2% | | Operating Loss | HK$5.3 million | Loss expanded by 16.2 times | - The company is actively expanding into industrial internet and medical-elderly care technology industries, strengthening government-enterprise cooperation, and has secured the Foshan SME Digitalization Assessment Project[14][17] Civil Explosives Business Civil explosives business achieved counter-cyclical growth, with operating revenue up 9.3% to HK$112 million and operating profit surging 106.9% to HK$22 million, driven by market expansion and innovation Key Indicators for Civil Explosives Business | Indicator | H1 2024 | YoY Change | | :--- | :--- | :--- | | Operating Revenue | HK$111.72 million | +9.3% | | Operating Profit | HK$21.99 million | +106.9% | Investments in Properties and Industrial Parks The Group disposed of 72% of Zhongyan Taike, realizing a HK$49.03 million gain, while other property rental income fell 26.8% to HK$3.63 million due to market weakness, with occupancy rates declining - Completed the disposal of a 72% equity stake in Zhongyan Taike, generating a special gain of approximately HK$49.03 million, with this business reclassified as discontinued operations[21] - Affected by market weakness, total rental income from other properties decreased by 26.8% YoY, and Zhongkong Building's occupancy rate declined from 93.0% to approximately 81.9%[22] Hotel Business Hotel business transitioned to a full-lease model, securing stable rental income; despite a 10.6% revenue contraction, it turned profitable with HK$2.57 million profit, up 273.9% YoY Key Indicators for Hotel Business | Indicator | H1 2024 | YoY Change | | :--- | :--- | :--- | | Revenue | Decreased by approx. HK$0.782 million | -10.6% | | Profit for the Period | HK$2.57 million | +273.9% (Turned Profitable) | Profit from Investments in an Associate Associate company's operating performance was comparable to prior period, contributing HK$26.52 million profit to the Group, a slight 2.7% YoY decrease Profit from Investments in an Associate | Indicator | H1 2024 | YoY Change | | :--- | :--- | :--- | | Profit Contribution | HK$26.52 million | -2.7% | Financial Position Analysis As of June 30, 2024, total assets were HK$7.75 billion, liabilities HK$5.93 billion, and debt-to-asset ratio decreased to 76.5%; cash increased to HK$1.1 billion due to subsidiary disposal, enhancing liquidity, and a HK$166 million convertible bond maturity was extended Financial Position Summary (As of June 30, 2024) | Indicator | June 30, 2024 (HK$ Billion) | December 31, 2023 (HK$ Billion) | | :--- | :--- | :--- | | Total Assets | 7.749 | 9.756 | | Total Liabilities | 5.927 | 7.636 | | Debt-to-Asset Ratio | 76.5% | 78.3% | | Net Assets | 1.823 | 2.119 | | Bank Balances and Cash | 1.103 | 0.592 | | Current Ratio | 1.04 times | 1.15 times | - The Group has extended the maturity date of its outstanding convertible bonds with a principal amount of HK$166 million by three years to October 13, 2027, which helps maintain future liquidity[28] - During the period, a foreign exchange loss of approximately HK$4.61 million was recorded due to the depreciation of RMB against HKD; the Board believes RMB will remain stable in the long term despite short-term depreciation pressure, thus no hedging is currently required[29][30] - As of June 30, 2024, the Group's total pledged assets amounted to approximately HK$4.39 billion, primarily finance lease receivables, used as collateral for bank borrowings[29] Outlook Facing global uncertainties, the Group will deepen its '1+X' industrial structure to become a leading technology-driven wellness and elderly care service provider in the Greater Bay Area, with strategic plans for each business segment - Overall Strategy: Adhere to the '1+X' industrial structure, with wellness elderly care as the core business, supported by technology, finance leasing, and civil explosives, aiming to become a leading technology-driven wellness and elderly care service provider in the Greater Bay Area[31] - Wellness Elderly Care Business: Aims to achieve 5,000 beds by the end of the '14th Five-Year Plan' period, actively pursuing investments in Hong Kong institutional elderly care, and expanding into the mainland elderly care market for Hong Kong and Macau seniors[33][34] - Technology Business: Focus on industrial internet and health technology, identifying investment and M&A targets[35] - Finance Leasing Business: Deepen municipal environmental finance leasing and plan to seize opportunities in large-scale medical equipment upgrades to expand into medical equipment finance leasing[36][37] - Civil Explosives Business: Promote the implementation of bulk explosive production capacity to achieve parallel sales of packaged and bulk explosives, and enhance energy efficiency, cost reduction, and overall efficiency through technological transformation[39] Disclosure of Interests and Other Information Directors' and Major Shareholders' Interests The report discloses directors' and major shareholders' interests, with Chairman Mr. He Xiangming holding 0.08% and major shareholders collectively holding approximately 84.18% of the company's shares - Director Mr. He Xiangming holds 1,441,000 ordinary shares of the company, representing approximately 0.08% of the total share capital[42][43] - Major shareholders Glories Holdings (HK) Limited, Prize Rich Inc., and Guangdong Nanhai Holding Group Co., Ltd. are deemed to hold 1,441,439,842 shares/underlying shares of the company, representing approximately 84.18% of the total share capital[45] Dividend Policy The Board resolved not to declare an interim dividend for H1 2024, but the company approved and paid a special dividend of HK$0.42 cents per share on July 24, 2024 - The Board resolved not to declare an interim dividend for 2024[49] - The company paid a special dividend of HK$0.42 cents per share on July 24, 2024[50] Connected Transaction A key connected transaction involved extending the maturity of HK$166 million convertible bonds with major shareholder Prize Rich by three years to October 13, 2027 - The company reached an agreement with controlling shareholder Prize Rich to extend the maturity date of HK$166 million convertible bonds from October 13, 2024, by three years to October 13, 2027[57] Additional Information on the Group's Finance Leasing Business Business Model and Client Base Finance leasing operates in China, offering sale-and-leaseback and direct leases, primarily targeting the environmental protection sector, with 77 enterprise clients, 61 of which are environmental firms contributing 66% of segment revenue - Business models include sale-and-leaseback and direct leases[59] - Key target clients are in the environmental protection sector (wastewater treatment, waste incineration, new energy power generation, etc.), with plans to focus on state-owned municipal environmental projects in Foshan and the Greater Bay Area[59] - As of June 30, 2024, transactions were conducted with 77 enterprises, of which approximately 61 are environmental sector companies, contributing about 66% of the segment's operating revenue (approximately HK$189.1 million)[59] Risk Management and Internal Controls Facing strong regulation, the Group established a professional finance leasing team and a stringent risk management system covering the entire project lifecycle, with detailed credit risk assessment and internal controls to mitigate bad debt risk - Established a seven-step, full-lifecycle risk assessment and review process, including project initiation, investigation and evaluation, review and decision-making, project implementation, loan disbursement, post-lease monitoring, and risk early warning[63] - Implemented continuous post-lending monitoring, including monthly off-site checks and quarterly on-site inspections, to monitor lessees' operational and financial conditions[65] - Established a three-tier risk early warning mechanism (general, medium, significant risk) and formulated response plans for different risk signals, including adjusting credit arrangements, demanding rent repayment, or even taking legal action[67] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income In H1 2024, revenue was HK$411 million (up 12.2%), profit before tax rose to HK$134.1 million due to a HK$49.03 million gain from subsidiary disposal, and profit for the period was HK$107.1 million (up 109.1%), with basic EPS of HK$3.68 cents Condensed Consolidated Statement of Profit or Loss Summary (For the Six Months Ended June 30, 2024) | Item (HK$ Million) | H1 2024 | H1 2023 (Restated) | | :--- | :--- | :--- | | Revenue (Continuing Operations) | 411.0 | 366.2 | | Gross Profit | 178.8 | 134.4 | | Gain on Disposal of Subsidiary | 49.0 | - | | Profit Before Tax (Continuing Operations) | 134.1 | 61.5 | | Profit for the Period (Continuing Operations) | 114.8 | 41.5 | | (Loss)/Profit from Discontinued Operations | (7.7) | 9.7 | | Profit for the Period | 107.1 | 51.2 | | Profit Attributable to Owners of the Company | 62.9 | 8.9 | | Basic Earnings Per Share | 3.68 HK cents | 0.52 HK cents | Condensed Consolidated Statement of Financial Position As of June 30, 2024, total assets were HK$7.75 billion, liabilities HK$5.93 billion, and debt-to-asset ratio decreased to 76.5%; cash increased to HK$1.1 billion due to subsidiary disposal, enhancing liquidity, and a HK$166 million convertible bond maturity was extended Condensed Consolidated Statement of Financial Position Summary | Item (HK$ Million) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Non-current Assets | 4,948.9 | 4,800.4 | | Current Assets | 2,800.4 | 4,955.3 | | Assets Held for Sale | 0 | 2,772.8 | | Total Assets | 7,749.3 | 9,755.7 | | Current Liabilities | 2,683.4 | 4,310.3 | | Liabilities Held for Sale | 0 | 1,807.6 | | Non-current Liabilities | 3,243.3 | 3,326.1 | | Total Liabilities | 5,926.7 | 7,636.4 | | Total Equity | 1,822.6 | 2,119.3 | Condensed Consolidated Statement of Cash Flows In H1 2024, operating activities had a HK$168.2 million net cash outflow, investing activities a HK$498.6 million net inflow (including HK$564.6 million from subsidiary disposal), and financing activities a HK$75.64 million net inflow, leading to a HK$406 million increase in cash to HK$956 million Condensed Consolidated Statement of Cash Flows Summary (For the Six Months Ended June 30, 2024) | Item (HK$ Million) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Cash Outflow from Operating Activities | (168.2) | (373.6) | | Net Cash Inflow/(Outflow) from Investing Activities | 498.6 | (262.4) | | Of which: Net Cash Inflow from Disposal of Subsidiaries | 564.6 | N/A | | Net Cash Inflow from Financing Activities | 75.6 | 923.9 | | Net Increase in Cash and Bank Balances | 406.0 | 287.9 | | Cash and Bank Balances at Beginning of Period | 567.6 | 999.3 | | Cash and Bank Balances at End of Period | 956.0 | 1,179.2 | Notes to the Condensed Consolidated Financial Statements Segment Information The Group operates six segments, with finance leasing as the largest contributor (HK$189.1 million revenue, HK$87.61 million results), followed by civil explosives (HK$111.7 million revenue, HK$21.99 million results), while wellness elderly care turned profitable, and technology business incurred losses Segment Results (For the Six Months Ended June 30, 2024) | Segment | Revenue (HK$ Million) | Segment Results (HK$ Million) | | :--- | :--- | :--- | | Finance Leasing Business | 189.1 | 87.6 | | Civil Explosives Business | 111.7 | 22.0 | | Wellness Elderly Care Business | 96.9 | 7.7 | | Hotel Business | 6.6 | 2.6 | | Property Investment | 3.6 | (3.2) | | Technology Business | 3.1 | (5.3) | | Total | 411.0 | 111.4 | Discontinued Operations The Group completed the disposal of 72% of Zhongyan Taike on March 1, 2024, reclassifying it as discontinued operations, which incurred a HK$7.66 million loss pre-disposal, with related assets and liabilities totaling HK$2.77 billion and HK$1.81 billion respectively - The Group completed the disposal of a 72% equity stake in Zhongyan Taike on March 1, 2024, with this business (industrial park and property development) classified as discontinued operations[137][139] Profit or Loss from Discontinued Operations (For the Six Months Ended June 30, 2024) | Item (HK$ Million) | Amount | | :--- | :--- | | Revenue | 16.1 | | Loss Before Tax | (7.1) | | Loss for the Period | (7.7) | Borrowings As of June 30, 2024, total borrowings slightly increased to HK$5.29 billion (from HK$5.15 billion), with bank loans at HK$5.1 billion and HK$4.14 billion secured, primarily by finance lease receivables, with most borrowings in RMB Borrowings Structure (As of June 30, 2024) | Item (HK$ Million) | Amount | | :--- | :--- | | Bank Loans | 5,103.9 | | Loans from Direct Holding Company | 136.0 | | Other Loans | 49.4 | | Total Borrowings | 5,289.3 | | Of which: Secured | 4,137.2 | | Of which: Unsecured | 1,152.1 | Disposal of Subsidiaries The Group completed the disposal of 72% of Zhongyan Taike Group on March 1, 2024, for HK$1.058 billion, resulting in a HK$49.03 million gain and HK$565 million net cash inflow, after accounting for net assets disposed of (HK$1.268 billion) and other adjustments Gain/Loss Calculation on Disposal of Subsidiaries | Item (HK$ Million) | Amount | | :--- | :--- | | Cash Consideration | 1,057.5 | | Net Proceeds from Disposal | 1,027.8 | | Net Assets Disposed Of | (1,268.4) | | De-recognition of Non-controlling Interests | 355.1 | | Reclassification Adjustment on Reserves | (65.5) | | Gain on Disposal of Subsidiaries | 49.0 | - This disposal generated a net cash inflow of HK$565 million[240] Events After Reporting Period Post-reporting period, Lujin Leasing signed new finance lease agreements exceeding RMB265 million in environmental and public utility sectors, and entered a debt disposal agreement to resolve RMB362 million in overdue lease payments by taking over pledged assets - Since July 2024, Lujin Leasing has signed multiple new finance lease agreements totaling over RMB265 million, primarily with clients in industries such as heating, wastewater treatment, and water supply[249][250][251][253] - On July 31, 2024, Lujin Leasing entered into a debt disposal framework agreement to offset approximately RMB362 million in outstanding principal and interest from two lessees by taking over pledged assets[250]