中国汽车内饰(00048) - 2024 - 中期财报

Interim Results Announcement Overview of the unaudited condensed consolidated interim results for the six months ended June 30, 2024 Announcement of Unaudited Condensed Consolidated Interim Results The Board of China Automotive Interior Group Holdings Limited announces the unaudited condensed consolidated interim results for the six months ended June 30, 2024, with comparative data for 2023 - The company's results for the six months ended June 30, 2024, are unaudited condensed consolidated interim results[2][3] Unaudited Condensed Consolidated Financial Statements This section presents the unaudited condensed consolidated financial statements, including profit or loss, financial position, equity changes, and cash flows Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, the Group's revenue decreased by 17.2% to RMB 49.46 million, turning to a loss of RMB 16.02 million due to significantly increased other losses Key Data from Statement of Profit or Loss and Other Comprehensive Income (Six Months Ended June 30) | Indicator | 2024 (RMB thousand) | 2023 (RMB thousand) | Year-on-year change (%) | | :--- | :--- | :--- | :--- | | Revenue | 49,456 | 59,742 | -17.2% | | Cost of sales | (41,192) | (45,858) | -10.2% | | Gross profit | 8,264 | 13,884 | -40.5% | | Other losses | (12,745) | (575) | +2116.5% | | Operating (loss)/profit | (14,876) | 35 | Turned to loss | | Loss before tax | (16,003) | (1,101) | +1353.5% | | Loss for the period attributable to owners of the Company | (16,024) | (1,125) | +1324.4% | | Loss per share (basic and diluted) | (9.15) cents | (0.64) cents | +1329.7% | - Total other comprehensive income for the period significantly increased to RMB 6,946 thousand from RMB 3,459 thousand in the prior period, primarily due to exchange differences on translation of overseas operations[4] Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group's total assets decreased by 5.87% to RMB 249.87 million, with declines in net current assets and total equity indicating financial pressure Key Data from Statement of Financial Position (As of June 30) | Indicator | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 249,869 | 265,434 | -5.87% | | Non-current assets | 90,119 | 93,139 | -3.24% | | Current assets | 159,750 | 172,295 | -7.28% | | Total equity | 143,114 | 152,192 | -5.97% | | Total liabilities | 106,755 | 113,242 | -5.73% | | Net current assets | 54,983 | 61,605 | -10.75% | - Trade and bills receivables significantly decreased by 38.55% from RMB 73.31 million at the end of 2023 to RMB 45.05 million as of June 30, 2024[5] - Prepayments, deposits, and other receivables increased by 126.32% from RMB 24.13 million at the end of 2023 to RMB 54.61 million as of June 30, 2024[5] Unaudited Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2024, total equity attributable to owners decreased from RMB 152.19 million to RMB 143.11 million, primarily due to loss for the period and lapse of share options Key Data from Statement of Changes in Equity (Six Months Ended June 30) | Indicator | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Total equity at beginning of period | 152,192 | 121,666 | | Loss for the period | (16,024) | (1,125) | | Total other comprehensive income for the period | 6,946 | 3,459 | | Lapse of share options | – | – | | Total equity at end of period | 143,114 | 124,000 | - In the first half of 2024, accumulated losses increased from RMB 237.84 million at the beginning of the period to RMB 251.00 million[7] Unaudited Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2024, net cash used in operating activities significantly decreased, investment activities turned to net cash inflow, and cash and bank balances increased Key Data from Statement of Cash Flows (Six Months Ended June 30) | Indicator | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Net cash used in operating activities | (3,443) | (9,393) | | Net cash used in investing activities | 57 | (1,050) | | Net cash used in financing activities | (2,076) | (2,797) | | Net decrease in cash and cash equivalents | (5,462) | (13,240) | | Cash and cash equivalents at end of period | 27,728 | 15,104 | - Changes in foreign exchange rates had a positive impact of RMB 7,147 thousand on cash and cash equivalents, a significant increase from RMB 3,020 thousand in the prior period[9] Notes to the Unaudited Condensed Consolidated Interim Financial Statements This section provides detailed notes to the unaudited condensed consolidated interim financial statements, covering general information, accounting policies, and specific financial items General Information The Company, incorporated in the Cayman Islands, primarily engages in investment holding, with the Group's main businesses including manufacturing and selling automotive non-woven products, and trading rubber and food - The Company was incorporated in the Cayman Islands on December 9, 2009[10] - The Group's principal activities include manufacturing and selling non-woven products for automotive interiors, and trading rubber and food[10] Basis of Preparation The interim financial statements are prepared in accordance with HKAS 34 and Appendix D2 of the Listing Rules, adopting consistent accounting policies with 2023, with changes expected in the 2024 annual financial statements - The interim financial statements comply with HKAS 34 'Interim Financial Reporting' and the disclosure requirements of Appendix D2 of the Listing Rules[10] - Accounting policies are consistent with the 2023 annual financial statements, but changes are expected in the 2024 annual financial statements[10] Application of New and Amendments to HKFRSs The Group has adopted several new and amended HKFRSs for the first time, with no significant impact on the financial position or performance for the current and prior periods - Amendments to HKFRS 17 (Insurance Contracts), HKAS 8 (Definition of Accounting Estimates), and HKAS 12 (Deferred Tax related to Assets and Liabilities arising from a Single Transaction, International Tax Reform – Pillar Two Model Rules) were applied in the current period[11] - The application of these new and amended standards had no significant impact on the Group's financial position and performance[11] Revenue For the six months ended June 30, 2024, the Group's revenue, entirely from non-woven products for automotive use, totaled RMB 49.46 million, a 17.2% decrease from RMB 59.74 million in the prior period Revenue Sources (Six Months Ended June 30) | Revenue source | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Non-woven related products for automotive use | 49,456 | 59,742 | - The Group primarily engages in manufacturing and selling non-woven products for automotive interior parts and other components, as well as trading rubber and food[11] Other Losses For the six months ended June 30, 2024, the Group's other losses significantly increased to RMB 12.75 million, mainly due to a substantial increase in fair value losses on financial assets at fair value through profit or loss Details of Other Losses (Six Months Ended June 30) | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Interest income | 21 | 16 | | Fair value loss on financial assets at fair value through profit or loss | (15,694) | (3,889) | | Net (loss)/gain on disposal of property, plant and equipment | (33) | 1,486 | | Gain on disposal of a deconsolidated subsidiary | 923 | – | | Rental income | 2,005 | 1,795 | | Others | 33 | 17 | | Total | (12,745) | (575) | - Fair value loss on financial assets at fair value through profit or loss increased from RMB 3.89 million in 2023 to RMB 15.69 million in 2024, being the primary driver for the significant increase in other losses[13] Segment Information The Group's operating segments include manufacturing and selling non-woven products and supply and procurement businesses, with the non-woven segment being the primary revenue source but experiencing declines in both revenue and segment results - The Group has two main operating segments: (i) manufacturing and selling non-woven related products for automotive interior parts and other components; and (ii) supply and procurement business (including trading of food and rubber)[14][15] Segment Revenue and Results (Six Months Ended June 30) | Segment | 2024 Revenue (RMB thousand) | 2023 Revenue (RMB thousand) | 2024 Segment Results (RMB thousand) | 2023 Segment Results (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Supply and procurement business | – | – | (39) | (166) | | Manufacturing and sales of non-woven related products | 49,456 | 59,742 | (548) | 8,443 | | Total | 49,456 | 59,742 | (587) | 8,277 | - Revenue from the non-woven related products segment decreased by 17.2%, with segment results turning from profit to loss[17] - Unallocated corporate expenses increased from RMB 8.28 million in 2023 to RMB 17.24 million in 2024, contributing to the expanded operating loss[17] Segment Assets and Liabilities (As of June 30) | Indicator | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Segment assets | 229,575 | 229,713 | | Unallocated corporate assets | 20,294 | 35,721 | | Total assets | 249,869 | 265,434 | | Segment liabilities | 69,155 | 76,161 | | Unallocated corporate liabilities | 37,600 | 37,081 | | Total liabilities | 106,755 | 113,242 | Loss from Operations For the six months ended June 30, 2024, the Group's operating loss was RMB 14.88 million, influenced by depreciation of property, plant and equipment, right-of-use assets, and inventory costs recognized as cost of sales Key Components of Operating Loss (Six Months Ended June 30) | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 645 | 1,488 | | Depreciation of right-of-use assets | 858 | 1,520 | | Directors' emoluments | 234 | 421 | | Cost of inventories recognized as cost of sales | 9,199 | 19,295 | | Staff costs (including directors' emoluments) | 4,859 | 5,240 | - Cost of inventories recognized as cost of sales decreased from RMB 19.30 million in 2023 to RMB 9.20 million in 2024[24] Finance Costs For the six months ended June 30, 2024, the Group's finance costs totaled RMB 1.13 million, remaining largely stable compared to the prior period, primarily comprising interest expenses on bank borrowings Details of Finance Costs (Six Months Ended June 30) | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Interest expense on bank borrowings repayable wholly within five years | 1,023 | 975 | | Interest expense on lease liabilities | 104 | 161 | | Total | 1,127 | 1,136 | Income Tax Expense For the six months ended June 30, 2024, the Group's income tax expense was primarily RMB 21 thousand for China corporate income tax, with no Hong Kong profits tax provision due to no taxable profits Details of Income Tax Expense (Six Months Ended June 30) | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | China corporate income tax | 21 | 24 | - The Group is not subject to any income tax in the Cayman Islands and British Virgin Islands[29] - The corporate income tax rate applicable to the Group's PRC subsidiaries is 25%[29] - No provision for Hong Kong profits tax was made for both periods as no assessable profits arose in Hong Kong[29] Loss Per Share For the six months ended June 30, 2024, basic and diluted loss per share attributable to owners was RMB 9.15 cents, a significant increase from RMB 0.64 cents in the prior period, mainly due to expanded loss for the period Loss Per Share (Six Months Ended June 30) | Indicator | 2024 | 2023 | | :--- | :--- | :--- | | Basic and diluted loss per share | (9.15) cents | (0.64) cents | | Loss for the period attributable to owners of the Company | RMB 16,024,000 | RMB 1,125,000 | | Weighted average number of ordinary shares in issue | 175,115,104 shares | 175,115,104 shares | - As there were no potential dilutive ordinary shares in issue for both periods, diluted loss per share was the same as basic loss per share[30][33] Dividend The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2024 (2023: nil)[31][34] Trade and Bills Receivables As of June 30, 2024, the Group's trade and bills receivables totaled RMB 45.05 million, a 38.55% decrease from RMB 73.31 million at the end of 2023, mainly due to reduced receivables aged 0 to 90 days Details of Trade and Bills Receivables (As of June 30) | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Trade receivables | 42,534 | 70,154 | | Bills receivables | 2,520 | 3,156 | | Total | 45,054 | 73,310 | Ageing Analysis of Trade Receivables (As of June 30) | Ageing | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | 0 to 90 days | 36,237 | 55,634 | | 91 to 180 days | 434 | 5,229 | | 181 to 365 days | 5,863 | 9,291 | | Total | 42,534 | 70,154 | - The Group generally grants credit periods of 30 to 120 days to customers and closely monitors overdue receivables[38] Share Capital As of June 30, 2024, the Company's authorized and issued share capital remained unchanged, consisting of ordinary shares with a par value of HKD 0.025 each Share Capital Structure (As of June 30) | Item | Number of shares | Amount (HKD thousand) | Amount (RMB thousand) | | :--- | :--- | :--- | :--- | | Authorized share capital (ordinary shares of HKD 0.025 each) | 40,000,000,000 | 1,000,000 | 863,495 | | Issued and fully paid share capital (ordinary shares of HKD 0.025 each) | 175,115,104 | 4,378 | 3,643 | - The share capital structure has remained unchanged since January 1, 2024[39] Trade Payables As of June 30, 2024, the Group's total trade payables were RMB 26.11 million, a 14.26% decrease from RMB 30.45 million at the end of 2023 Ageing Analysis of Trade Payables (As of June 30) | Ageing | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | 0 to 90 days | 12,469 | 14,791 | | 91 to 180 days | 1,589 | 3,744 | | 181 to 365 days | 534 | 423 | | Over 365 days | 11,515 | 11,489 | | Total | 26,107 | 30,447 | - Trade payables aged 0 to 90 days decreased, while those over 365 days remained stable[41] Bank Borrowings As of June 30, 2024, the Group's total bank borrowings were RMB 25.00 million, all secured bank loans classified as current liabilities Details of Bank Borrowings (As of June 30) | Item | June 30, 2024 (RMB thousand) | December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | | Bank loans, secured | 25,000 | 25,000 | | Less: Amount classified as current liabilities | (25,000) | (25,000) | | Amount classified as non-current liabilities | – | – | - Short-term bank loans are subject to floating interest rates, exposing the Group to cash flow interest rate risk[44] Material Related Party Transactions For the six months ended June 30, 2024, the Group's material related party transactions primarily involved key management personnel remuneration, totaling RMB 234 thousand, a decrease from the prior period Key Management Personnel Remuneration (Six Months Ended June 30) | Item | 2024 (RMB thousand) | 2023 (RMB thousand) | | :--- | :--- | :--- | | Salaries and other short-term benefits | 234 | 422 | | Employer's retirement benefit scheme contributions | – | 3 | | Total | 234 | 425 | Management Discussion and Analysis This section provides management's discussion and analysis of the Group's business and financial performance, outlook, and key resources Business Review The Group engages in manufacturing and selling automotive non-woven products, trading rubber and food, and securities investment, with non-woven revenue declining due to market competition and rubber trading adopting a back-to-back model - The Group's principal businesses include manufacturing and selling non-woven products for automotive interiors, trading rubber and food, and engaging in securities investment and financial services[47][48] - Non-woven products are primarily supplied to PRC automotive parts manufacturers for producing main carpet fabrics and headliner fabrics for vehicles[49] - For the six months ended June 30, 2024, China's passenger vehicle production and sales increased by 5.4% and 6.3% respectively, but intense competition in the automotive industry led to a decrease in the Group's non-woven business revenue[49] - Rubber trading, commenced in 2012, primarily operates on a back-to-back basis to manage price fluctuation risks, accepting only orders with lower default risk[49] - The Company indirectly holds a 42% equity interest in Smart Orient Securities Limited through a joint venture, which holds Type 1, 4, and 9 regulated activity licenses under the SFO, with the Group's share of loss being approximately RMB 0.16 million[50][51] Financial Review For the six months ended June 30, 2024, the Group's revenue decreased by 17.2%, gross profit by 40.5%, and other losses surged by 2116.5%, leading to an expanded loss attributable to owners of RMB 16.0 million Financial Performance Summary (Six Months Ended June 30) | Indicator | 2024 (RMB million) | 2023 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 49.4 | 59.7 | -17.2% | | Gross profit | 8.3 | 13.9 | -40.5% | | Other losses | 12.7 | 0.6 | +2116.5% | | Administrative expenses | 8.7 | 7.9 | +10.1% | | Loss attributable to owners of the Company | 16.0 | 1.1 | +1354.5% | - The decrease in revenue was primarily attributable to lower revenue from the manufacturing and sales of non-woven related products business[53] - The decline in gross profit was mainly due to reduced profit margins in the manufacturing and sales of non-woven related products business[54][56] - The significant increase in other losses was mainly due to an increase of approximately RMB 11.8 million in fair value losses on financial assets at fair value through profit or loss[55][57] Prospect and Outlook The Board anticipates challenges for the non-woven business in 2024, planning production line upgrades, R&D, quality control, and new client acquisition, while cautiously managing rubber and food trading and exploring investment opportunities - The manufacturing and sales of non-woven related products business is expected to face challenges in 2024 due to continuous increases in production costs and higher safety requirements in the automotive industry[60][62] - To maintain revenue streams, the Group will: - Upgrade production lines to enhance efficiency - Install new machinery to meet customer demand for high-end products - Conduct research and development to keep pace with the latest technological trends - Strengthen quality control systems to solidify reputation and customer loyalty - Identify new customers to diversify the customer base[60][62][64] - Rubber trading will adopt a cautious approach to order acceptance to mitigate risks from crude oil price fluctuations[62][64] - The food trading business will continue to seek new customers to strengthen its customer base[62][64] - The Group will continue to prudently manage its money lending business, seek expansion opportunities, and identify potential investment opportunities to diversify its business scope[62][63][64] Significant Investments As of June 30, 2024, the Group held shares in four Hong Kong-listed companies, collectively termed "significant investments," which incurred substantial fair value losses this period, with future values subject to overall market conditions - The Group holds shares in China Investment and Finance Group Limited (1.9%), Fullshare Holdings Limited (2.6%), Ronsen Financial Holdings Limited (4.8%), and Tai Kam Holdings Limited (1.8%)[65][66] Fair Value and Losses of Significant Investments (As of June 30) | Company name | Fair value loss as of June 30, 2024 (RMB thousand) | Fair value as of June 30, 2024 (RMB thousand) | Approximate percentage of total assets (%) | Fair value as of December 31, 2023 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | China Investment and Finance | 5,774 | 2,151 | 0.86% | 7,762 | | Fullshare | 2,377 | 784 | 0.31% | 3,109 | | Ronsen Financial | 508 | 2,249 | 0.90% | 2,700 | | Tai Kam | 1,217 | 831 | 0.49% | 2,011 | - As of June 30, 2024, financial assets at fair value through profit or loss included 17 Hong Kong-listed equity securities, with no single investment exceeding 1% of the Group's total assets[68] - The future value of significant investments may be affected by overall stock market conditions[69][70] Liquidity and Financial Resources The Group primarily funds operations through internal cash and bank financing; as of June 30, 2024, cash and bank balances increased, while the liquidity ratio slightly decreased and the gearing ratio remained stable - The Group's working capital is primarily sourced from internal cash resources and bank financing[71] Liquidity and Financial Ratios (As of June 30) | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and bank balances (RMB million) | 27.7 | 26.0 | | Current ratio (current assets/current liabilities) | 1.52 | 1.56 | | Gearing ratio (total liabilities/total assets) | 0.43 | 0.43 | - Approximately RMB 10.8 million (December 31, 2023: RMB 10.3 million) of cash and bank balances are denominated in HKD and USD[71] Foreign Exchange Exposure Most of the Group's assets and liabilities are denominated in RMB, USD, and HKD, with no significant foreign exchange contract, interest, currency swap, or other financial derivative risks as of June 30, 2024 - Most of the Group's assets and liabilities are denominated in RMB, USD, and HKD[71] - As of June 30, 2024, the Group was not exposed to significant risks from foreign exchange contracts, interest, currency swaps, or other financial derivative instruments[71] Capital Structure There have been no significant changes to the Group's capital structure since December 31, 2023 - There have been no significant changes to the Group's capital structure since December 31, 2023[71] Suspension of Trading The Company's shares were suspended from trading on April 2, 2024, due to a disclaimer of opinion from the auditor, with the Stock Exchange setting an 18-month deadline until October 1, 2025, to resume trading or face delisting - The Company's shares have been suspended from trading on the Stock Exchange since April 2, 2024, due to the auditor's disclaimer of opinion on the Company's financial statements[71] - The Stock Exchange has issued resumption guidance and set an 18-month deadline until October 1, 2025, under Listing Rule 6.01A(1), after which the Company may be delisted if trading does not resume[71] - The Company is taking appropriate measures to comply with the resumption guidance and relevant Listing Rules[71] Other Information This section provides other relevant information, including directors' and substantial shareholders' interests, share option scheme, corporate governance, and employee details Directors' and Chief Executives' Interests in Shares, Underlying Shares and Debentures As of June 30, 2024, Directors Zhuang Yuejin, Xiao Suni, and Zhu Chunyan held long positions in the Company's shares, with Mr. Zhuang Yuejin holding the largest percentage Directors' Long Positions in Shares and Underlying Shares of the Company (As of June 30) | Name | Capacity and nature of interest | Number of ordinary shares held | Approximate percentage of the Company's shareholding (%) | | :--- | :--- | :--- | :--- | | Zhuang Yuejin | Beneficial owner | 15,164,800 | 8.66% | | Xiao Suni | Beneficial owner | 790,000 | 0.45% | | Zhu Chunyan | Beneficial owner | 790,000 | 0.45% | - Save as disclosed above, no other director or chief executive had any other interests or short positions in the shares or debentures of the Company or its associated corporations[73][75] Substantial Shareholders' and Other Persons' Interests or Short Positions in the Shares or Underlying Shares of the Company As of June 30, 2024, the Board was unaware of any other persons, apart from the directors, holding interests or short positions in the Company's shares or underlying shares requiring disclosure under the SFO - Save for the directors' interests, the Board was not aware of any other persons holding interests or short positions in the shares or underlying shares of the Company required to be disclosed under Part XV of the Securities and Futures Ordinance[76] Share Option Scheme The Company adopted a share option scheme on June 5, 2015, valid until June 4, 2025; as of June 30, 2024, 4,800,000 share options remained unexercised, with 15,030,000 options lapsing during the period - The share option scheme was adopted on June 5, 2015, for a period of ten years, expiring on June 4, 2025[76] - Under the scheme, the maximum number of shares subject to options granted shall not exceed 10% of the Company's issued share capital, with exercise prices determined by the Directors[76] Movements of Share Options (Six Months Ended June 30) | Category | Outstanding as of January 1, 2024 | Granted during the period | Exercised during the period | Cancelled during the period | Lapsed during the period | Outstanding as of June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Directors | 3,340,000 | - | - | - | (3,340,000) | - | | Employees | 16,490,000 | - | - | - | (11,690,000) | 4,800,000 | | Total | 19,830,000 | - | - | - | (15,030,000) | 4,800,000 | - As of June 30, 2024, 4,800,000 share options remained unexercised, with a total of 17,511,510 shares available for issue[76] Purchase, Sale or Redemption of the Listed Securities of the Company For the six months ended June 30, 2024, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities for the six months ended June 30, 2024[79][84] Director's Interest in Competing Interests For the six months ended June 30, 2024, the Directors were unaware of any business or interest of the Directors, controlling shareholders, or their associates that competed or potentially conflicted with the Group's business - For the six months ended June 30, 2024, the Directors were unaware of any competing business or conflicts of interest[80][85] Code of Conduct Regarding Securities Transactions by Directors The Company has adopted a code of conduct for directors' securities transactions, no less exacting than the Model Code, and all directors confirmed compliance for the six months ended June 30, 2024 - The Company has adopted a code of conduct for directors' securities transactions no less exacting than the Model Code[81][86] - All Directors confirmed compliance with the code for the six months ended June 30, 2024[81][86] Corporate Governance The Company has complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, except for the combined roles of Chairman and Chief Executive, which the Board believes provides strong and consistent leadership with adequate checks and balances - The Company has complied with the Corporate Governance Code in Appendix C1 of the Listing Rules, except for code provision C.2.1 (roles of Chairman and Chief Executive should be separate)[82][87] - Mr. Zhuang Yuejin serves as both Chairman and Chief Executive Officer, an arrangement the Board believes enhances efficiency and provides strong, consistent leadership[83][88] - The Board believes that the operation by experienced Board members, including two independent non-executive directors, ensures adequate checks and balances[83][88] Material Acquisitions or Disposals For the six months ended June 30, 2024, the Group made no material acquisitions or disposals of subsidiaries and associated companies - For the six months ended June 30, 2024, the Group made no material acquisitions or disposals of subsidiaries and associated companies[89] Pledge on Assets As of June 30, 2024, the Group's bank loans were secured by buildings with a carrying value of approximately RMB 3.6 million and leasehold land of approximately RMB 2.2 million - The Group's bank loans are secured by buildings with a carrying value of approximately RMB 3.6 million and leasehold land of approximately RMB 2.2 million[89] Employees and Remuneration Policy As of June 30, 2024, the Group employed 82 staff, a decrease from the prior period, with remuneration based on experience, qualifications, and ability, including statutory MPF, social insurance, and housing provident fund benefits Number of Employees (As of June 30) | Date | Number of employees | | :--- | :--- | | June 30, 2024 | 82 | | June 30, 2023 | 95 | - Remuneration policy is determined by the Board based on employees' experience, qualifications, and abilities[89] - Employee benefits include statutory Mandatory Provident Fund contributions, social insurance, and housing provident fund[89] Events After the Reporting Period No significant events occurred after the six months ended June 30, 2024, up to the date of this report - No significant events occurred after the six months ended June 30, 2024, and up to the date of this report[89] Nomination Committee The Nomination Committee, established on September 13, 2010, comprises an executive director (Chairman Mr. Zhuang Yuejin) and two independent non-executive directors - The Nomination Committee was established on September 13, 2010, in compliance with the Corporate Governance Code[89] - The Committee comprises Mr. Zhuang Yuejin (Executive Director and Chairman), Mr. Yuan Weiqiang, and Ms. Wu Lina (Independent Non-executive Directors)[89] Remuneration Committee The Remuneration Committee, established on September 13, 2010, consists of an executive director and two independent non-executive directors, with Mr. Yuan Weiqiang serving as Chairman - The Remuneration Committee was established on September 13, 2010, in compliance with the Corporate Governance Code[89] - The Committee comprises Mr. Zhuang Yuejin (Executive Director), Mr. Yuan Weiqiang (Independent Non-executive Director and Chairman), and Ms. Zhu Chunyan (Independent Non-executive Director)[89] Audit Committee The Audit Committee, established on September 13, 2010, consists of three independent non-executive directors, with Mr. Yuan Weiqiang as Chairman, and has reviewed the unaudited condensed consolidated interim results, deeming them compliant with applicable accounting standards - The Audit Committee was established on September 13, 2010, in compliance with the Corporate Governance Code[91][93] - The Committee comprises Mr. Yuan Weiqiang (Chairman), Ms. Wu Lina, and Ms. Zhu Chunyan (all Independent Non-executive Directors)[91][93] - The Committee has reviewed the unaudited condensed consolidated interim results for the six months ended June 30, 2024, and considers them to be in compliance with applicable accounting standards and requirements[91][93] Board of Directors As of June 30, 2024, the Board of Directors comprised three executive directors and two independent non-executive directors, with Mr. Zhuang Yuejin serving as Chairman - As of June 30, 2024, the Board of Directors comprised three executive directors (Mr. Zhuang Yuejin, Mr. Wu Zhonghao, Ms. Xiao Suni) and two independent non-executive directors (Ms. Wu Lina, Ms. Zhu Chunyan)[92][94] - Mr. Zhuang Yuejin serves as the Chairman of the Board[92][94]