国际精密(00929) - 2024 - 中期财报

Company Information and Structure Company Information This section provides the basic company information for International Precision Group Limited, including the board of directors and committee members, registered office, principal place of business, legal advisors, auditors, and listing information - The Chairman and Chief Executive Officer of the company is Mr. Zeng Guangsheng[9] - The company is registered in the Cayman Islands and listed on the Main Board of The Stock Exchange of Hong Kong with stock code 929[41][40] Company Profile International Precision Group primarily manufactures and sells precision metal parts for automotive, hydraulic, electronic equipment, and other instruments, serving top-tier multinational corporations and supporting new project development - The Group's principal business involves the manufacturing and sale of precision metal parts for applications in automotive, hydraulic equipment, and electronic devices[41] - The Group serves top-tier multinational corporations in the IT, hydraulic power, automotive, and electrical appliance industries, providing solutions for new project development[41] Company Milestones This section reviews the company's key development milestones, from its establishment in Singapore in 1990 to its expansion in Hong Kong, Thailand, and mainland China, culminating in its listing on the Hong Kong Main Board in 2004 - The company was listed on the Main Board of The Stock Exchange of Hong Kong on November 1, 2004[42] - In recent years, several of the company's subsidiaries (e.g., Guangzhou Huitong, Dongguan Keda, Guangzhou Xinhao) have been recognized as high-tech enterprises or 'specialized, refined, unique, and innovative' SMEs, and have received awards in hydraulic technology[42] Group Structure This section presents the organizational chart of International Precision Group Limited as of June 30, 2024, detailing its network of principal subsidiaries and associates across mainland China, Hong Kong, Thailand, and the British Virgin Islands - The Group manages its manufacturing and sales operations in mainland China and Thailand through multiple investment holding companies established in the British Virgin Islands and Hong Kong[43] - The Group has a deep presence in the hydraulic business sector, owning several related subsidiaries such as Guangzhou Huitong Precision Hydraulic and Jiangsu Kaimai Hydraulic Control System[43] Financial and Operational Analysis Financial Highlights This section provides an overview of the Group's key financial ratios, business segments, and geographical revenue composition, highlighting a gross profit margin recovery to 27.4% and hydraulic business becoming the largest revenue source Key Financial Ratios Analysis | Metric | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Current Ratio | 4.12 | 3.43 | | Gearing Ratio | 15.6% | 9.4% | | Gross Profit Margin | 27.4% | 24.8% | | Net Profit Margin | 2.5% | 1.7% | | Earnings Per Share | 0.2 HK cents | 0.54 HK cents | - By business segment, hydraulic business revenue of HK$252 million in H1 2024 surpassed automotive business revenue of HK$227 million for the first time, becoming the Group's largest revenue source[47][54] - By geographical region, revenue from mainland China, Macau, and Hong Kong markets increased from 45% in the prior period to 55% in H1 2024[48][49] Management Discussion and Analysis Management reviews H1 2024 performance, noting a 19.6% increase in total sales to HK$502 million and a 54.1% rise in net profit to HK$12.69 million, driven by hydraulic business acquisitions and automotive order recovery Business Review In H1 2024, the Group's total sales increased by 19.6% to HK$502 million, with hydraulic equipment parts sales surging by 39.8% due to acquisitions and organic growth, while electronic equipment parts sales continued to decline H1 2024 Sales by Business Segment | Business Segment | H1 2024 (HK$ '000) | Proportion (%) | H1 2023 (HK$ '000) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Automotive Parts | 226,890 | 45.2 | 207,303 | 49.4 | +9.4 | | Hydraulic Equipment Parts | 251,685 | 50.1 | 180,051 | 42.9 | +39.8 | | Electronic Equipment Parts | 14,327 | 2.9 | 22,130 | 5.3 | -35.3 | | Others | 9,247 | 1.8 | 10,277 | 2.4 | -10.0 | | Total | 502,149 | 100 | 419,761 | 100 | +19.6 | - The Group's net profit increased by 54.1% year-on-year to HK$12.69 million, primarily due to increased sales and a gross profit margin improvement from 23.0% to 27.4%[54][58] Financial Review The Group's gross profit increased by 42.5% to HK$137 million, with a 4.4 percentage point rise in gross profit margin to 27.4%, while sales, administrative, R&D, and finance costs all increased due to acquisitions and business expansion - Sales and distribution expenses increased by HK$5.5 million year-on-year, mainly due to expanded scale post-acquisition and increased marketing activities[56] - Administrative expenses increased by HK$7.88 million year-on-year, primarily due to patent amortization and increased salaries and benefits from acquisitions[56] - Finance costs increased by HK$4.41 million year-on-year to HK$8.78 million, mainly due to increased bank borrowings for acquisitions[58] Liquidity, Financial Resources, and Financial Ratios As of June 30, 2024, the Group's net cash decreased significantly to HK$254 million from HK$489 million at year-end, primarily due to acquisition payments and capital expenditures, necessitating new bank borrowings Condensed Cash Flow Statement (Six Months Ended June 30) | Item (HK$ '000) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net cash inflow from operating activities | 23,174 | 39,818 | | Net cash outflow from investing activities | (254,278) | (35,474) | | Net cash inflow/(outflow) from financing activities | 110,065 | (24,312) | - The Group's net cash decreased from HK$489 million at the end of 2023 to HK$254 million at the end of June 2024, a reduction of HK$233 million[60] Human Resources As of June 30, 2024, the Group employed 2,257 staff, an increase of 86 year-on-year, with total staff costs for the first half of the year amounting to approximately HK$120 million, up 9.5% - As of June 30, 2024, the Group's total number of employees was 2,257, compared to 2,171 in the prior period[63] - Total staff costs for H1 2024 were approximately HK$119.663 million, compared to HK$109.302 million in the prior period[63] Outlook Management anticipates future challenges including new energy vehicle impact on traditional fuel cars, unstable Sino-US relations, and intensified price competition in the domestic hydraulic industry, driving a strategic focus on sales breakthroughs, R&D, cost reduction, and transformation - External risks faced by the company include the impact of new energy vehicles on the traditional automotive market, unstable Sino-US relations, and intensified price competition in the domestic hydraulic industry[64] - Response strategies include developing new products and clients, increasing recruitment of key talent to enhance R&D, and promoting automation and lean production to improve efficiency[64] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss This statement presents the income, costs, expenses, and profit for the six months ended June 30, 2024, with profit for the period increasing by 54.1% to HK$12.69 million from HK$8.23 million in the prior year Condensed Consolidated Statement of Profit or Loss (Six Months Ended June 30) | Item (HK$ '000) | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 502,149 | 419,761 | | Gross Profit | 137,394 | 96,418 | | Operating Profit | 26,364 | 12,282 | | Profit Before Tax | 16,904 | 7,306 | | Profit for the Period | 12,688 | 8,231 | | Profit/(Loss) attributable to equity holders of the Company | 2,378 | (1,249) | | Basic earnings per share | 0.2 HK cents | -0.1 HK cents | Condensed Consolidated Statement of Comprehensive Income This statement shows that after accounting for a foreign exchange loss of HK$35.58 million, the total comprehensive loss for the six months ended June 30, 2024, amounted to HK$22.89 million Condensed Consolidated Statement of Comprehensive Income (Six Months Ended June 30) | Item (HK$ '000) | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Profit for the period | 12,688 | 8,231 | | Exchange differences on translation of foreign operations | (35,578) | (51,844) | | Total comprehensive (loss)/income for the period | (22,890) | (43,613) | Condensed Consolidated Statement of Financial Position This statement outlines the assets, liabilities, and equity as of June 30, 2024, showing net assets of HK$1.941 billion, a slight decrease from HK$1.964 billion at the end of 2023, with an increase in total bank and other borrowings Condensed Consolidated Statement of Financial Position Summary | Item (HK$ '000) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Non-current assets | 1,112,483 | 1,082,453 | | Current assets | 1,359,194 | 1,464,374 | | Current liabilities | 330,237 | 427,357 | | Non-current liabilities | 200,140 | 155,280 | | Net Assets | 1,941,300 | 1,964,190 | | Cash and bank balances | 556,885 | 674,400 | | Bank and other borrowings (current + non-current) | 302,467 | 185,546 | Condensed Consolidated Statement of Cash Flows This statement indicates a net decrease of HK$121 million in cash and cash equivalents for the six months ended June 30, 2024, with net cash generated from operating activities offset by significant outflows from investing activities and inflows from financing activities Condensed Consolidated Statement of Cash Flows (Six Months Ended June 30) | Item (HK$ '000) | 2024 (Unaudited) | 2023 (Unaudited) | | :--- | :--- | :--- | | Net cash generated from operating activities | 23,174 | 39,818 | | Net cash used in investing activities | (254,278) | (35,474) | | Net cash generated from/(used in) financing activities | 110,065 | (24,539) | | Net decrease in cash and cash equivalents | (121,039) | (20,195) | | Cash and cash equivalents at beginning of period | 674,400 | 729,058 | | Cash and cash equivalents at end of period | 556,885 | 705,552 | Condensed Consolidated Statement of Changes in Equity This statement shows a decrease in total equity from HK$1.964 billion at the beginning of the year to HK$1.941 billion at period-end, primarily due to a total comprehensive loss of HK$22.89 million for the period - As of January 1, 2024, total equity was HK$1,964,190 thousand[73] - Total comprehensive income for the period was negative HK$22,890 thousand, primarily comprising exchange difference losses of HK$35,578 thousand and profit for the period of HK$12,688 thousand[73] - As of June 30, 2024, total equity was HK$1,941,300 thousand[73] Notes to the Condensed Financial Statements Operating Segment Information (Note 4) This note discloses the Group's revenue and gross profit by customer location, with mainland China, Macau, and Hong Kong contributing the largest portion in H1 2024, followed by North America and Europe Revenue and Gross Profit by Geographical Region (H1 2024, HK$ '000) | Region | Revenue | Gross Profit | | :--- | :--- | :--- | | Mainland China, Macau, and Hong Kong | 275,248 | 75,311 | | North America | 102,037 | 27,919 | | Europe | 86,503 | 23,668 | | Malaysia | 14,068 | 3,849 | | Thailand | 9,562 | 2,616 | | Other Countries | 14,731 | 4,031 | | Total | 502,149 | 137,394 | Revenue and Other Income and Gains (Note 5) This note details revenue by product and other income sources, with hydraulic equipment parts sales being the highest at HK$252 million in H1 2024, and total other income amounting to HK$28.78 million Revenue by Product Category (Six Months Ended June 30, HK$ '000) | Product Category | 2024 | 2023 | | :--- | :--- | :--- | | Sales of automotive parts | 226,890 | 207,303 | | Sales of hydraulic equipment parts | 251,685 | 180,051 | | Sales of electronic parts | 14,327 | 22,130 | | Others | 9,247 | 10,277 | | Total | 502,149 | 419,761 | - Total other income and gains amounted to HK$28.78 million, including net exchange differences of HK$7.23 million and government grants of HK$6.28 million; the prior period included HK$7.8 million in fire insurance compensation, which is absent this period[84] Bank and Other Borrowings (Note 17) As of June 30, 2024, the Group's total bank borrowings significantly increased to HK$297 million from HK$166 million at the end of 2023, primarily secured by deposits, corporate guarantees, equity, and real estate, with interest rates ranging from 3.20% to 6.01% Bank and Other Borrowings (HK$ '000) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Bank loans - secured | 296,641 | 150,000 | | Bank loans - unsecured | – | 16,355 | | Other borrowings - unsecured | 5,826 | 19,191 | | Total | 302,467 | 185,546 | - Collateral for secured bank loans includes HK$20 million in deposits, corporate guarantees, equity interests in subsidiaries, and real estate[102] Other Information Major Shareholders' Interests This section discloses major shareholders holding over 5% interest in the company, with China Baoan Group Co., Ltd. holding 54.22% through Baoan Technology Co., Ltd. as the controlling shareholder, and Mr. Cui Shaoan and his spouse collectively holding 11.72% Major Shareholders' Shareholding (June 30, 2024) | Name of Major Shareholder | Capacity | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | Baoan Technology Co., Ltd. | Directly Beneficially Owned | 570,546,250 | 54.22% | | China Baoan Group Co., Ltd. | Through Controlled Corporation | 570,546,250 | 54.22% | | Tottenhill Limited | Directly Beneficially Owned | 109,206,975 | 10.38% | | Mr. Cui Shaoan | Through Controlled Corporation and Individually | 123,295,725 | 11.72% | Share Option Schemes The company maintains share option schemes to incentivize contributors, with details provided for the expired 2011 scheme and the current 2022 scheme, including terms, eligibility, limits, and changes in granted options, noting no new options were granted during the period - The '2011 Share Option Scheme' expired on May 17, 2021; as of June 30, 2024, 54,700,000 unexercised share options remain under this scheme[117][124][125] - The company adopted a new '2022 Share Option Scheme' on January 14, 2022; as of June 30, 2024, 50,700,000 unexercised share options remain under this scheme, with 54,225,413 shares available for future grants[117][128][138] - During the reporting period, the company did not grant, exercise, cancel, or cause any share options to lapse under any share option scheme[142][125][138] Interim Dividend The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2024 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2024 (2023: nil)[144][92] Corporate Governance The company is committed to high corporate governance standards, largely complying with the HKEX Corporate Governance Code, with the only deviation being the Chairman and CEO roles held by Mr. Zeng Guangsheng, which the Board believes provides strong leadership - The company complied with the principles and code provisions of the Corporate Governance Code, with the only deviation being the non-segregation of the roles of Chairman and Chief Executive Officer as per Code Provision C.2.1[148] - Mr. Zeng Guangsheng holds both the Chairman and Chief Executive Officer positions; the Board believes this structure provides strong and consistent leadership for the Group, benefiting shareholders as a whole[148]