中国金石(01380) - 2024 - 中期财报

Corporate Information Corporate Information This section details the company's corporate structure, key personnel, and official contact information - The Board of Directors comprises four executive directors and three independent non-executive directors, with all committee chairmanships held by independent directors[2] - The company's principal place of business in China is the Zhangjiaba Mine in Jiangyou, Sichuan, while its Hong Kong office is at Concordia Plaza, Kowloon[3] Management Discussion and Analysis Business Review The Group's two main segments, marble slag in China and food brands in the UK, both experienced significant revenue growth in H1 2024 Marble Slag The marble slag business saw revenue grow 91.7% to RMB 27.7 million in H1 2024, driven by increased domestic demand in China - The Group owns and operates the Zhangjiaba Mine in China, producing marble slag, a raw material for Ground Calcium Carbonate (GCC) used in various daily products[5][6][8] Marble Slag Business Revenue Performance (HY2024 vs HY2023) | Period | Revenue (Approx. RMB) | Y-o-Y Change | | :--- | :--- | :--- | | H1 2024 | 27.7 million | +91.7% | | H1 2023 | 14.4 million | - | Food Brand Business The UK food brand business grew substantially after shifting its model to producing and selling pre-packaged meal kits - The Group pivoted its UK food business from a franchise restaurant model to producing pre-packaged meal kits in its own central kitchen for online and offline distribution[10][12] Food Brand Business Sales (HY2024 vs HY2023) | Period | Sales (Approx. RMB) | Y-o-Y Change | | :--- | :--- | :--- | | H1 2024 | 3.1 million | +416.7% | | H1 2023 | 0.6 million | - | Mine Exploration, Development and Production Activities The Group focused on stripping waste materials at the Zhangjiaba Mine in H1 2024, with no timeline for resuming marble block production due to weak demand - The mining permit for the Zhangjiaba Mine, which holds 44.2 million cubic meters of marble resources per a 2011 report, is valid until February 21, 2026[11] - Due to weak demand for marble blocks, the Group has no intention to forecast a timeline for resuming their production[14][17] Mining Operations Expenses (HY2024 vs HY2023) | Item | H1 2024 (Approx. RMB) | H1 2023 (Approx. RMB) | | :--- | :--- | :--- | | Total Mining Expenses | 18.1 million | 8.4 million | | Of which: Stripping Subcontracting Costs | 18.0 million | 8.3 million | Prospects The Group will remain vigilant amid economic challenges and focus on strengthening operations while exploring new business opportunities - The company anticipates that China's economy is entering an era of slow growth, facing persistent challenges from geopolitical tensions and weak domestic demand[16][18] - The Group's strategy will focus on consolidating existing production operations, expanding its customer base, and continuously exploring new business opportunities[16][18] Financial Review Total revenue grew 104.6% to RMB 30.8 million in H1 2024, but the period's loss widened to RMB 16.6 million due to higher costs and impairment losses Revenue Total revenue increased by 104.6% to RMB 30.8 million, driven by strong growth in both marble slag and food sales Revenue by Product (HY2024 vs HY2023) | Product | H1 2024 (RMB'000) | H1 2023 (RMB'000) | Change | | :--- | :--- | :--- | :--- | | Marble slag | 27,676 | 14,439 | +91.7% | | Sale of food | 3,096 | 604 | +412.6% | | Total | 30,772 | 15,043 | +104.6% | Marble Business Sales Volume and Price | Metric | H1 2024 | H1 2023 | Change | | :--- | :--- | :--- | :--- | | Sales Volume (tonnes) | 1,064,477 | 555,337 | +91.7% | | Average Selling Price (RMB/tonne) | 26.0 | 26.0 | – | Gross Profit and Gross Profit Margin Gross profit rose 76.4% to RMB 10.9 million, but the gross profit margin declined by 5.7 percentage points to 35.4% due to higher stripping costs Gross Profit and Margin Performance (HY2024 vs HY2023) | Metric | H1 2024 (Approx. RMB) | H1 2023 (Approx. RMB) | Change | | :--- | :--- | :--- | :--- | | Gross Profit | 10.9 million | 6.2 million | +76.4% | | Gross Profit Margin | 35.4% | 41.1% | -5.7pp | Expenses and Loss for the period The loss for the period widened to RMB 16.6 million, primarily due to a significant RMB 10.5 million impairment loss on other receivables - Selling and distribution expenses rose due to higher direct sales tax on marble slag sales, while administrative expenses increased from higher legal and professional fees[25] - A significant increase in impairment losses under the ECL model was mainly due to a RMB 10.5 million provision against the recoverability of a supplier refund (other receivables)[26] Loss for the Period (HY2024 vs HY2023) | Metric | H1 2024 (Approx. RMB) | H1 2023 (Approx. RMB) | | :--- | :--- | :--- | | Loss for the period | 16.6 million | 9.0 million | Liquidity and Capital Resources The Group's gearing ratio improved to 0.06, and it maintains sufficient financial resources to meet its future liquidity needs Liquidity and Capital Position (Jun 30, 2024 vs Dec 31, 2023) | Metric | Jun 30, 2024 (Approx. RMB) | Dec 31, 2023 (Approx. RMB) | | :--- | :--- | :--- | | Total Equity | 139.9 million | 150.9 million | | Cash and Bank Balances | 3.8 million | 4.7 million | | Total Borrowings | 8.1 million | 16.2 million | | Gearing Ratio | 0.06 | 0.09 | Conversion of convertible notes During H1 2024, the company issued 40,853,177 conversion shares from four separate conversions of convertible notes totaling HKD 6.5 million in principal - The company completed four conversions of convertible notes in February, March, April, and June 2024, issuing a total of 40,853,177 new shares[32][38][39][40] Other Information This section covers compliance with corporate governance, director's securities dealings, the share option scheme, and dividend policy Corporate Governance The company complied with most Corporate Governance Code provisions in H1 2024 but had three deviations related to role separation, insurance, and AGM attendance - The company had three deviations from the Corporate Governance Code: - C.2.1: The roles of Chairman and CEO were not separate, and the CEO's duties were assumed by executive directors after his resignation - C.1.8: No liability insurance was arranged for directors against legal actions - F.2.2: Some directors and committee chairmen were unable to attend the AGM due to other commitments[42][43][44][45] Share Option Scheme No new share options were granted under the current scheme, while over 10.3 million options from a terminated 2011 scheme remain outstanding - No share options have been granted since the adoption of the new scheme in 2020[68][69] Changes in 2011 Share Option Scheme (HY2024) | Status | Quantity | | :--- | :--- | | Outstanding at beginning of period | 10,613,607 | | Lapsed/Cancelled during the period | (303,039) | | Outstanding at end of period | 10,310,568 | Interim Dividend The Board of Directors does not recommend the payment of any interim dividend for the first half of 2024 - The Board does not recommend an interim dividend for H1 2024[72] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income The statement shows a net loss attributable to owners of RMB 16.6 million for H1 2024, an increase from the prior year's loss Condensed Consolidated Statement of Profit or Loss Summary (HY2024 vs HY2023) | Metric (RMB'000) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 30,772 | 15,043 | | Gross profit | 10,903 | 6,181 | | Loss before tax | (16,487) | (8,986) | | Loss for the period | (16,592) | (8,986) | | Basic loss per share (RMB cents) | (8.57) | (6.19) | Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group had net assets of RMB 139.9 million but reported net current liabilities of RMB 3.8 million Condensed Consolidated Statement of Financial Position Summary (Jun 30, 2024 vs Dec 31, 2023) | Metric (RMB'000) | Jun 30, 2024 (Unaudited) | Dec 31, 2023 (Audited) | | :--- | :--- | :--- | | Non-current assets | 146,740 | 149,015 | | Current assets | 65,707 | 63,326 | | Total assets | 212,447 | 212,341 | | Current liabilities | 69,480 | 58,327 | | Non-current liabilities | 3,115 | 3,113 | | Total liabilities | 72,595 | 61,440 | | Net assets | 139,852 | 150,901 | | Total equity | 139,852 | 150,901 | Condensed Consolidated Statement of Changes in Equity Total equity decreased to RMB 139.9 million, primarily due to a period loss of RMB 17.0 million, partially offset by the conversion of convertible notes Summary of Changes in Total Equity (HY2024) | Item (RMB'000) | Amount | | :--- | :--- | | Total equity at Jan 1, 2024 | 150,901 | | Total comprehensive loss for the period | (16,950) | | Lapse of share options | – | | Conversion of convertible notes | 5,901 | | Total equity at Jun 30, 2024 | 139,852 | Condensed Consolidated Statement of Cash Flows The Group generated positive cash from operations, but net cash decreased due to outflows from financing activities, primarily loan repayments Condensed Statement of Cash Flows Summary (HY2024 vs HY2023) | Item (RMB'000) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net cash from operating activities | 2,196 | (721) | | Net cash from/(used in) investing activities | 1 | (225) | | Net cash (used in)/from financing activities | (2,767) | 903 | | Net decrease in cash and cash equivalents | (570) | (43) | | Cash and cash equivalents at end of period | 3,798 | 2,386 | Notes to the Condensed Consolidated Interim Financial Statements 2. BASIS OF PREPARATION The financial statements were prepared on a going concern basis despite a net loss and net current liabilities, due to management's mitigating actions - A material uncertainty exists that may cast significant doubt on the Group's ability to continue as a going concern, due to: - A net loss of RMB 16,592,000 for the six months ended June 30, 2024 - Net current liabilities of RMB 3,773,000 as of June 30, 2024[85] - Management has implemented several measures, including active collection of receivables, loan renewals, seeking new financing, and cost control, and believes the Group can continue as a going concern[85] 4. SEGMENT INFORMATION The Group operates two segments, with the marble slag segment generating most of the revenue and the food brand segment reporting a loss Segment Revenue and Results (HY2024) | Segment (RMB'000) | Revenue | Results | | :--- | :--- | :--- | | Marble slag | 27,676 | 307 | | Food brand | 3,096 | (2,207) | | Total | 30,772 | (1,900) | Revenue from External Customers by Location (HY2024) | Location (RMB'000) | Revenue | | :--- | :--- | | The PRC | 27,676 | | The UK | 3,096 | | Hong Kong | – | | Total | 30,772 | 9. LOSS FOR THE PERIOD An impairment loss of RMB 10.5 million on other receivables was a key driver of the increased loss for the period Major Items Deducted from Loss for the Period (HY2024) | Item (RMB'000) | Amount | | :--- | :--- | | Cost of inventories sold | 1,714 | | Depreciation of property, plant and equipment | 640 | | Impairment loss recognised on trade receivables | 1,740 | | Impairment loss recognised on other receivables | 10,524 | 13. TRADE RECEIVABLES Net trade receivables increased significantly to RMB 43.3 million, with approximately 99% of the balance aged within 180 days Ageing Analysis of Trade Receivables (Net) | Ageing (RMB'000) | Jun 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | 0 to 90 days | 28,212 | 23,028 | | 91 to 180 days | 15,054 | 980 | | 181 to 360 days | – | – | | 361 to 720 days | – | – | | Total | 43,266 | 24,008 | 15. CONVERTIBLE NOTES The carrying value of convertible notes decreased to RMB 3.2 million after partial conversion during the first half of 2024 - The first tranche of convertible notes with a principal of HKD 10 million and a 2% annual interest rate was issued on December 28, 2023[125][126][127] Movement of Convertible Notes (HY2024) | Item (RMB'000) | Amount | | :--- | :--- | | At Jan 1, 2024 | 9,062 | | Conversion of convertible notes | (5,900) | | Exchange realignment | 32 | | At Jun 30, 2024 | 3,194 | 18. LITIGATION UPDATE One major lawsuit was terminated by consent in June 2024, while another concerning HKD 61.4 million remains in its early stages - The lawsuit initiated by Plaintiff A (Mr. Li Jiaju) against the company was terminated by a court order on June 28, 2024[135] - Litigation from Plaintiff B (Zhongtai International Finance Limited) regarding approximately HKD 61.4 million is ongoing, but the company believes a liability is unlikely and has made no provision[136][137][138]