凌雄科技(02436) - 2024 - 中期财报

Company Information and Definitions This section provides essential corporate details and defines key terms used throughout the report for clarity Company Information This section provides basic corporate information for Lingxiong Technology Group Co., Ltd., including board members, committee structures, registered office, principal place of business, share registrar, auditor, principal bankers, and company website - The company's Chairman is Mr. Hu Zuoxiong, who also serves as Chief Executive Officer[20] - The company's Hong Kong stock code is 2436[21] Definitions This section defines key terms used in the report, such as DaaS (Device as a Service), the Group, and the Reporting Period (six months ended June 30, 2024), providing a foundation for understanding the report's content - The reporting period is defined as the six months ended June 30, 2024[26] - DaaS refers to Device as a Service[23] Chairman's Report Chairman Hu Zuoxiong reviews the first half of 2024 performance, highlighting significant growth in revenue and gross profit driven by enhanced sales and marketing capabilities, while outlining future strategies including AI integration and continued investment - In the first half of 2024, the Group achieved significant growth in both revenue and gross profit, primarily attributed to strengthened sales and marketing functions[29] - Industry trends indicate that new technologies like AI and IoT will drive increased demand for efficient and sustainable device full lifecycle management solutions, with Chengdu, Wuhan, Nanjing, and Hangzhou emerging as potential second growth poles for the DaaS market[29] - Future strategic priorities include continuous investment in sales and marketing capabilities, leveraging synergies from print equipment integration, and incorporating emerging technologies like AI into service offerings[30] Management Discussion and Analysis This section provides an in-depth review of the company's operational performance, financial results, and future strategic outlook for the reporting period Business Review and Outlook In the first half of 2024, the company achieved record half-year revenue of approximately RMB 942.6 million, a 14.6% year-on-year increase, with device recycling business turning profitable and future plans focusing on AI integration - Revenue in the first half of 2024 reached approximately RMB 942.6 million, a year-on-year increase of 14.6%[32] - The device recycling business significantly improved, turning from a gross loss of approximately RMB 11.2 million in the same period last year to a gross profit of approximately RMB 7.7 million in the current period[32] - Future focus will be on investing in AI technology to systematically manage increasing contracts, orders, and inquiries, streamlining processes, and enhancing response speed and service quality[41] Device Recycling Business The device recycling business generated approximately RMB 681.9 million in revenue during the reporting period, a 17.0% year-on-year increase, with significant growth in devices sold and customer numbers despite a decrease in average revenue per customer Device Recycling Business Key Operating Data | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | Growth Rate | | :--- | :--- | :--- | :--- | | Number of Devices Sold (units) | 449,029 | 341,957 | 31.3% | | Number of Device Recycling Customers | 1,309 | 766 | 70.9% | | Average Revenue per Device Recycling Customer (RMB) | 520,896 | 760,579 | -31.5% | | Average Sales Value (RMB/per device) | 1,472.3 | 1,377.4 | 6.9% | Device Subscription Services Device subscription services revenue reached approximately RMB 183.7 million, a 13.0% year-on-year increase, with growth in both new and used equipment subscriptions, and steady increases in total subscribed devices and available devices Device Subscription Services Key Operating Data | Metric | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | Growth Rate | | :--- | :--- | :--- | :--- | | Revenue from Device Subscription Services (RMB thousand) | 183,730 | 162,561 | 13.0% | | — New Devices | 151,551 | 134,876 | 12.4% | | — Used Devices | 32,179 | 27,685 | 16.2% | | Total Device Subscriptions (units) | 3,112,036 | 2,700,602 | 15.2% | | Total Devices Available for Subscription | 610,557 | 533,660 | 14.4% | IT Technical Subscription Services IT technical subscription services revenue was approximately RMB 77.0 million, a slight decrease of 0.3% year-on-year, with long-term subscription revenue increasing while short-term subscription revenue declined IT Technical Subscription Services Revenue Breakdown | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | Growth Rate | | :--- | :--- | :--- | :--- | | Revenue from IT Technical Subscription Services | 77,015 | 77,227 | -0.3% | | — Long-term Subscriptions | 58,685 | 57,332 | 2.4% | | — Short-term Subscriptions | 18,330 | 19,895 | -7.9% | Financial Review During the reporting period, the Group's total revenue increased by 14.6% to RMB 942.6 million, gross profit significantly grew by 32.9% to RMB 92.9 million with margin improving from 8.5% to 9.9%, and adjusted EBITDA increased by 4.5% to RMB 140.2 million Financial Summary | Metric | 2024 H1 (RMB thousand) | 2023 H1 (RMB thousand) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 942,598 | 822,391 | +14.6% | | Gross Profit | 92,880 | 69,907 | +32.9% | | Gross Profit Margin | 9.9% | 8.5% | +1.4pp | | Loss Attributable to Owners of the Company | (39,792) | (42,359) | Loss narrowed | | Adjusted Loss (Non-IFRS) | (22,304) | (11,365) | Loss widened | | Adjusted EBITDA (Non-IFRS) | 140,159 | 134,146 | +4.5% | - Distribution and selling expenses significantly increased by 48.2% year-on-year to RMB 77.3 million, primarily due to expanding the sales and marketing team and conducting more aggressive marketing activities[54] - As of June 30, 2024, the capital gearing ratio was 117.0%, an increase from 93.6% at the end of 2023[66] Revenue Analysis Total revenue increased by 14.6%, primarily driven by growth in device recycling business (+17.0%) and device subscription services (+13.0%), with Shenzhen contributing 82.9% of revenue as the core market Revenue by Business Segment | Business Segment | 2024 H1 (RMB thousand) | Proportion | 2023 H1 (RMB thousand) | Proportion | Growth Rate | | :--- | :--- | :--- | :--- | :--- | :--- | | Device Recycling Revenue | 681,853 | 72.3% | 582,603 | 70.8% | 17.0% | | Device Subscription Services | 183,730 | 19.5% | 162,561 | 19.8% | 13.0% | | IT Technical Subscription Services | 77,015 | 8.2% | 77,227 | 9.4% | -0.3% | | Total | 942,598 | 100% | 822,391 | 100.0% | 14.6% | Gross Profit Analysis Total gross profit increased by 32.9%, with the gross profit margin improving from 8.5% to 9.9%, driven by the device recycling business turning profitable and an increase in device subscription services gross margin, despite a decrease in IT technical subscription services margin Gross Profit and Gross Profit Margin by Business Segment | Business Segment | 2024 H1 Gross Profit (RMB thousand) | 2024 H1 Gross Profit Margin | 2023 H1 Gross Profit (RMB thousand) | 2023 H1 Gross Profit Margin | | :--- | :--- | :--- | :--- | :--- | | Device Recycling Revenue | 7,677 | 1.1% | (11,179) | (1.9)% | | Device Subscription Services | 39,746 | 21.6% | 29,298 | 18.0% | | IT Technical Subscription Services | 45,457 | 59.0% | 51,788 | 67.1% | | Total | 92,880 | 9.9% | 69,907 | 8.5% | Non-IFRS Measures To provide additional financial insights, the company disclosed non-IFRS measures, with adjusted loss at RMB 22.3 million and adjusted EBITDA increasing by 4.5% to RMB 140.2 million, primarily adjusted for share-based payments, foreign exchange, and one-off professional fees Reconciliation of Loss for the Period to Adjusted Loss | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Loss for the Period | (40,583) | (42,359) | | Add: Share-based Payment Expenses | 18,332 | 35,721 | | Add: Foreign Exchange Gain | (53) | (8,382) | | Add: One-off Professional Fees | — | 3,655 | | Adjusted Loss | (22,304) | (11,365) | Reconciliation of Loss for the Period to Adjusted EBITDA | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Loss for the Period | (40,583) | (42,359) | | Add: Income Tax Credit | (3,539) | (743) | | Add: Finance Costs | 23,613 | 19,840 | | Add: Depreciation and Amortization | 142,722 | 128,739 | | Add: Other Adjustments | 18,279 | 29,994 | | Adjusted EBITDA | 140,159 | 134,146 | Corporate Governance and Other Information This section details the company's corporate governance practices, dividend policy, equity incentive plans, interests of directors and major shareholders, and the utilization of IPO proceeds Corporate Governance and Compliance The Group is committed to high standards of corporate governance, complying with all code provisions of the Corporate Governance Code during the reporting period, except for the combined roles of Chairman and CEO, which the Board deems beneficial for continuity - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Hu Zuoxiong, which deviates from code provision C.2.1 of the Corporate Governance Code, but the Board believes this arrangement is in the best interests of the company and its shareholders[74] Dividends and Equity Incentives The Board resolved not to declare an interim dividend for 2024, and while no new share options were granted under the LX Brothers plan, 3,251,389 restricted share awards were granted under the Beauty Bear plan on January 12, 2024 - The Board resolved not to declare any interim dividend for the six months ended June 30, 2024[75] - On January 12, 2024, 3,251,389 awards were granted to 245 employees, including two directors, under the Restricted Share Award Scheme, entitling them to subscribe for an equivalent number of shares[83] Interests of Directors, Chief Executives, and Major Shareholders This section details the interests of the company's directors, chief executives, and major shareholders in the company's shares, related shares, and debentures as of June 30, 2024, with Chairman Hu Zuoxiong holding approximately 39.36% of the total share interest - Chairman Mr. Hu Zuoxiong collectively holds approximately 39.36% of the company's share interests through controlled corporations and beneficial ownership[90] - Major shareholders (holding over 5%) include Bear Family (21.26%), Hunan TV & Broadcast Intermediary Co., Ltd. (13.12%), UBS Trustees (B.V.I.) Limited (11.21%, on behalf of Mr. Liu Qiangdong), Shenzhen Oriental Fortune Capital Investment Management Co., Ltd. (10.44%), Shanghai Tongyun (9.32%), Beauty Bear (7.64%), Little Bear (5.40%), Mr. Hua (total 6.94%), and LX Brothers (5.06%)[98] Use of Proceeds from Listing The company utilized approximately RMB 91.8 million of its RMB 307.9 million net listing proceeds as of June 30, 2024, with RMB 216.1 million remaining unutilized, all in line with the prospectus plan Summary of Use of Proceeds from Listing (As of June 30, 2024) | Planned Use | Net Allocation (RMB million) | Utilized During Reporting Period (RMB million) | Cumulative Unutilized (RMB million) | | :--- | :--- | :--- | :--- | | Enhance Customer Experience | 138.55 | 26.98 | 65.51 | | Expand Customer Base and Market Share | 76.98 | 16.91 | 46.84 | | System Upgrades and Product Development | 46.18 | 0.90 | 43.66 | | Strengthen Risk Management Capabilities | 15.40 | 0.25 | 15.05 | | Working Capital and General Corporate Purposes | 30.79 | 0.00 | 0.00 | | Total | 307.90 | 45.04 | 171.06 | Condensed Consolidated Financial Statements This section presents the Group's condensed consolidated financial performance, position, and cash flows for the reporting period, along with explanatory notes Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, the Group reported revenue of RMB 942.6 million, a 14.6% increase, with gross profit of RMB 92.9 million, and a narrowed loss for the period of RMB 40.6 million Statement of Profit or Loss Summary | Item (RMB thousand) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Revenue | 942,598 | 822,391 | | Gross Profit | 92,880 | 69,907 | | Loss Before Tax | (44,122) | (43,102) | | Loss for the Period | (40,583) | (42,359) | | Loss Attributable to Owners of the Company | (39,792) | (42,359) | | Basic Loss Per Share (RMB) | (0.13) | (0.14) | Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets were RMB 1.753 billion, total liabilities RMB 1.036 billion, and net assets RMB 718 million, with a current ratio of approximately 1.2 times and cash and cash equivalents of RMB 456 million Statement of Financial Position Summary | Item (RMB thousand) | As of June 30, 2024 | As of December 31, 2023 | | :--- | :--- | :--- | | Total Non-current Assets | 838,184 | 872,361 | | Total Current Assets | 915,463 | 808,735 | | Total Assets | 1,753,647 | 1,681,096 | | Total Current Liabilities | 753,443 | 645,173 | | Total Non-current Liabilities | 282,619 | 296,114 | | Total Liabilities | 1,036,062 | 941,287 | | Net Assets | 717,585 | 739,809 | Condensed Consolidated Statement of Cash Flows During the reporting period, net cash generated from operating activities was RMB 50.25 million, with net cash outflow from investing activities of RMB 103.1 million and net cash inflow from financing activities of RMB 118.6 million, resulting in period-end cash and cash equivalents of RMB 456.4 million Cash Flow Statement Summary | Item (RMB thousand) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net Cash Generated from Operating Activities | 50,252 | 53,242 | | Net Cash (Used in)/Generated from Investing Activities | (103,063) | 144,112 | | Net Cash Generated from Financing Activities | 118,589 | 31,157 | | Net Increase in Cash and Cash Equivalents | 65,778 | 228,511 | | Cash and Cash Equivalents at Beginning of Period | 390,658 | 156,274 | | Cash and Cash Equivalents at End of Period | 456,436 | 386,808 | Notes to the Condensed Consolidated Financial Statements The financial statement notes provide detailed explanations, including revenue breakdown by business segment and type, the 15% preferential tax rate for Lingxiong (Shenzhen), basic and diluted loss per share calculations, and disclosures on related party transactions and share-based payment expenses - Revenue primarily originates from China and is categorized into two main business segments: device recycling business and device subscription services, with customer contract revenue at RMB 783 million and lease income from device subscription services at RMB 160 million[142][145] - The principal operating entity, Lingxiong (Shenzhen), benefits from a 15% preferential corporate income tax rate for high-tech enterprises, valid until the 2025 fiscal year[150] - During the reporting period, total expenses related to share-based payment transactions were approximately RMB 18.33 million, with approximately RMB 7.94 million recognized under the LX Brothers scheme and approximately RMB 10.39 million under the Beauty Bear scheme[172][176][178]