今海医疗科技(02225) - 2024 - 中期财报

Company Overview and Strategic Focus Company Profile and Business Changes Jinhai Medical Technology (formerly Jinhai International Group) is a Singapore-headquartered service provider with core businesses including manpower secondment and dormitory services; the company officially changed its name in December 2023 to reflect its strategic transformation towards the healthcare sector, shifting its business focus to providing minimally invasive surgical solutions and related medical products - The company's principal businesses include Singapore's manpower secondment, dormitory, IT, and construction support services, as well as minimally invasive surgical solutions and medical products in China[11][46] - To reflect its strategic direction towards developing medical businesses, the company changed its name to "Jinhai Medical Technology Co., Ltd." on December 20, 2023, and adopted a new logo[47] Key Operating Highlights In the first half of 2024, the company achieved high-speed performance growth, with total revenue increasing by 116.4% year-on-year to SGD 25.9 million and gross profit growing to SGD 7.4 million, primarily driven by the strong performance of its minimally invasive surgical solutions and medical products business Key Performance Indicators for H1 2024 (vs H1 2023) | Indicator | H1 2024 (Thousand SGD) | H1 2023 (Thousand SGD) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 25,937 | 11,983 | +116.4% | | Gross Profit | 7,422 | 5,049 | +47.0% | Financial Performance Analysis Consolidated Income Statement Analysis In the first half of 2024, the company turned from profit to loss, recording a net loss attributable to owners of SGD 6 million, compared to a profit of SGD 0.94 million in the same period last year, primarily due to a significant increase in administrative expenses, especially SGD 6.5 million in equity-settled share-based payment expenses from share option grants, while the gross profit margin decreased from 42.1% to 28.6% due to the expanded revenue contribution from lower-margin medical businesses Condensed Consolidated Income Statement Key Data | Indicator (Thousand SGD) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Revenue | 25,937 | 11,983 | | Gross Profit | 7,422 | 5,049 | | Administrative Expenses | (13,675) | (4,801) | | (Loss)/Profit Before Tax | (5,941) | 592 | | (Loss)/Profit Attributable to Owners of the Company | (6,043) | 940 | | Basic (Loss)/Earnings Per Share (Singapore cents) | (0.47) | 0.08 | - Administrative expenses increased from SGD 4.8 million to SGD 13.7 million, primarily due to an increase of SGD 6.5 million in equity-settled share-based payments related to the grant of share options[54] - Gross profit margin decreased from 42.1% in the same period last year to 28.6%, mainly due to the increased revenue contribution from the minimally invasive surgical solutions business, which has a relatively lower gross profit margin[52] Segment Revenue Analysis During the reporting period, the medical business became the core growth engine, with revenue from the minimally invasive surgical solutions and medical products segment soaring over 30 times year-on-year to SGD 12.3 million, accounting for 47.4% of total revenue, while dormitory services revenue also achieved a significant 53.8% growth, and traditional manpower secondment business revenue remained stable Revenue Breakdown by Business Segment (Thousand SGD) | Business Segment | H1 2024 | H1 2023 | YoY Growth | | :--- | :--- | :--- | :--- | | Minimally Invasive Surgical Solutions and Medical Products | 12,302 | 396 | +3,006.6% | | Manpower Secondment and Support Services | 7,634 | 7,540 | +1.2% | | Dormitory Services | 5,611 | 3,649 | +53.8% | | Construction Support Services | 140 | 171 | -18.1% | | IT Services | 250 | 227 | +10.1% | | Total | 25,937 | 11,983 | +116.4% | - The significant growth in medical business was primarily driven by the launch of new products and active expansion of distribution channels in the Chinese market[51] - Dormitory services revenue growth was mainly due to strong market demand and increased fee rates[51] Financial Position and Cash Flow As of June 30, 2024, the company's total assets increased to SGD 64.85 million, with the gearing ratio slightly rising to 30.0%; operating cash flow turned positive, recording a net inflow of SGD 0.844 million, and cash and cash equivalents at period-end stood at SGD 13.17 million, maintaining a stable financial position Key Financial Position Indicators (Thousand SGD) | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Assets | 64,851 | 62,220 | | Total Liabilities | 27,154 | 24,730 | | Total Equity | 37,697 | 37,490 | Cash Flow Statement Summary (Thousand SGD) | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | 844 | (846) | | Net Cash from Investing Activities | (7,592) | (120) | | Net Cash from Financing Activities | (178) | (1,443) | | Cash and Cash Equivalents at End of Period | 13,173 | 12,937 | - The gearing ratio (total borrowings/total equity) increased from 26.9% to 30.0%[67] Management Discussion and Analysis Business Review and Outlook Management emphasizes that the company's strategic focus has shifted to the minimally invasive surgical solutions business in China, a market projected to grow at a CAGR of 9.45% between 2024 and 2029; going forward, the company will continue to strengthen its position in the medical industry by enhancing R&D, expanding distribution networks, developing new products, and integrating resources, while also considering capital market financing to support business development - Management believes the Chinese minimally invasive surgical instruments market has significant potential, with an estimated market size of USD 2.45 billion by 2029, growing at a CAGR of 9.45%[48] - The company will enhance its competitiveness in the medical business through four initiatives: (a) strengthening development capabilities; (b) expanding distribution networks; (c) developing new products; and (d) promoting resource integration[48] - The Board is considering exploring various fundraising methods in Hong Kong or other capital markets to support business development[48] Liquidity, Financial Resources, and Gearing Ratio The company meets its operational needs through internal funds, listing proceeds, and placement proceeds; the October 2023 placement raised net proceeds of HKD 99 million, of which approximately HKD 69 million was planned for expanding the medical industry business, and as of June 30, 2024, HKD 41.1 million of these funds had been utilized Use of Proceeds from 2023 Placement (Million HKD) | Proposed Use | Planned Amount | Utilized Amount | Unutilized Amount | | :--- | :--- | :--- | :--- | | Expansion of Medical Industry Business | 69.0 | 41.1 | 27.9 | | Expansion of Manpower Secondment and Support Services Business | 15.0 | 1.2 | 13.8 | | General Working Capital | 15.0 | 15.0 | – | | Total | 99.0 | 57.3 | 41.7 | - As of June 30, 2024, the company held cash and cash equivalents of SGD 13.2 million, primarily denominated in Renminbi (71.1%) and Hong Kong Dollars (27.5%)[66] Significant Investments, Acquisitions, and Disposals of Subsidiaries, Associates, and Joint Ventures During the reporting period, the company completed a significant property acquisition, with a wholly-owned subsidiary acquiring a property in Singapore for SGD 10.18 million, a transaction completed on January 31, 2024; additionally, the company holds listed equity and fund investments valued at SGD 4.5 million - The company's wholly-owned subsidiary acquired a property in Singapore for SGD 10.18 million, with the transaction completed on January 31, 2024[71] - On November 30, 2023, the company completed the acquisition of 100% equity in Neuhaus Engineering Pte. Ltd., making it an indirect wholly-owned subsidiary[71] - As of June 30, 2024, the Group held listed equity and fund investments valued at SGD 4.5 million, aiming for dividend income and capital appreciation[72] Quantitative and Qualitative Disclosures About Market Risk The company faces primary market risks including interest rate risk, foreign exchange risk, credit risk, liquidity risk, and equity price risk; foreign exchange risk is relatively low as most operations are denominated in the entities' functional currencies, but holding Hong Kong Dollar and Renminbi cash introduces some exchange rate volatility; the company manages equity price risk through diversified investment portfolios and has credit approval procedures to mitigate credit risk - Foreign exchange risk primarily arises from placement proceeds denominated in Hong Kong Dollars and Renminbi funds from operations in China, resulting in a currency translation difference of SGD 0.3 million and an exchange gain of SGD 0.4 million during the reporting period[68][76] - To mitigate credit risk, the company conducts credit assessments for new customers and regularly reviews the recoverability of accounts receivable[77] - To manage equity price risk, the company adopts a diversified investment portfolio strategy[79] Corporate Governance and Other Information Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares, and Debentures of the Company and its Associated Corporations As of June 30, 2024, Mr. Chan Kwok Po, the company's Chairman and Executive Director, beneficially held 632,500,000 shares, representing 48.94% of the issued share capital, through his wholly-owned Baolai International Limited, making him the controlling shareholder of the company - Chairman Mr. Chan Kwok Po is deemed to have an interest in 632,500,000 shares held by Baolai International Limited, representing 48.94% of the company's total share capital[81][83] Share Option Scheme The company adopted a share option scheme in December 2023; on January 9, 2024, a total of approximately 128.6 million share options were granted under the scheme with an exercise price of HKD 2.54 per share, which will vest in three tranches contingent on performance targets, and this grant was the primary reason for the significant increase in administrative expenses and net loss during the period - On January 9, 2024, the company granted 128,603,750 share options with an exercise price of HKD 2.54 and a validity period of 10 years[86][87] - The share options will vest in three tranches between 2025 and 2027, with vesting percentages of 20%, 30%, and 50% respectively, contingent upon achieving performance targets set by the Board[88] - The granted share options resulted in approximately SGD 6.5 million in equity-settled share-based payment expenses recognized under administrative expenses during the reporting period[30][54]