中国金融发展(03623) - 2024 - 中期财报

Financial and Performance Highlights The group's revenue surged by 1,763.0% to RMB 54.511 million in H1 2024, primarily due to new energy storage business, while loss for the period narrowed by 36.8% Financial Summary For the six months ended June 30, 2024, the group's revenue soared by 1,763.0% to RMB 54.511 million, mainly driven by the new energy storage business, despite which the group recorded a loss of RMB 22.063 million, a 36.8% reduction from the prior year, with total assets and equity slightly decreasing from year-end 2023 Key Financial Indicators for H1 2024 | Indicator | For the Six Months Ended June 30, 2024 (RMB thousands) | For the Six Months Ended June 30, 2023 (RMB thousands) | Percentage Change | | :--- | :--- | :--- | :--- | | Revenue | 54,511 | 2,926 | +1,763.0% | | Loss Before Tax | (19,144) | (31,041) | -38.3% | | Loss for the Period | (22,063) | (34,898) | -36.8% | | Basic Loss Per Share (RMB) | (0.02) | (0.05) | -60.0% | | | As of June 30, 2024 (RMB thousands) | As of December 31, 2023 (RMB thousands) | Percentage Change | | Total Assets | 608,496 | 644,936 | -5.7% | | Total Equity | 272,288 | 292,107 | -6.8% | Chairman's Report The Chairman's Report highlights the group's strategy of steady traditional business development alongside diversified exploration, particularly in "dual-chain linkage" supply chain finance, with energy storage showing strong performance - Facing a complex operating environment, the group strengthened risk control, steadily developed traditional businesses, and actively explored diversified business growth, especially in supply chain finance[5] - Traditional guarantee business adhered to a "risk first, business second" strategy, while financial leasing explored providing services to park-resident enterprises[6] - The group accelerated the potential of supply chain finance, forming a "dual-chain linkage" development model for hog farming and international energy storage, with the latter achieving remarkable results[7] - For the second half of the year, the group will continue to focus on its core business and diversified drivers, planning to expand into Australian and European energy storage markets and explore hog contract farming models to mitigate risks[8][9] Management Discussion and Analysis This section reviews the group's strategic shift towards cautious traditional business development and aggressive expansion into new ventures, particularly international energy storage, amidst economic uncertainties Industry and Business Review In H1 2024, the group prudently developed traditional financial services while vigorously advancing new businesses, with traditional guarantee services achieving good financial returns, hog supply chain sales recovering but facing cost pressures, and the new international energy storage business rapidly growing as a key revenue driver Traditional Business: Prudent and Steady Development Amidst insufficient credit demand, the group adopted a cautious strategy for its traditional guarantee and financial leasing businesses, with guarantee services providing customized solutions for transaction market product payments, benefiting approximately 10,000 customers and achieving good financial results - To address insufficient credit demand, the group adopted a prudent strategy for its traditional businesses, prioritizing "risk first, business second"[12] - During the reporting period, the group's customized guarantee services for payment links in transaction market product sales benefited approximately 10,000 customers and achieved good financial results[12] Emerging Business: Hog Supply Chain In H1 2024, the group's hog farming business sold approximately 2,800 hogs, generating revenue of approximately RMB 4.4 million, a 279% year-on-year increase, but high farming costs prevented profitability, leading to a shift to a more flexible production model since June Hog Supply Chain Business Performance | Indicator | H1 2024 | Year-on-Year Change | | :--- | :--- | :--- | | Quantity Sold | Approx. 2,800 hogs | - | | Revenue | Approx. RMB 4.4 million | +279% | Emerging Business: International Energy Storage The international energy storage business, operational since December 2023, continued its positive development during the reporting period, establishing a mature sales network and brand image in existing markets (South Africa), generating approximately RMB 35.3 million in revenue with strong growth potential due to safe, durable, and efficient products - The international energy storage business, operational since December 2023, recorded revenue of approximately RMB 35.3 million during the reporting period[15] - The group's industrial and commercial energy storage systems demonstrated excellent performance in safety and durability, with some products achieving IP67 or IP56 certification[15] Financial Review The group's financial performance significantly improved in H1 2024, with total revenue surging by 1,763.0% driven by new energy storage system sales and increased financing guarantee services, while operating expenses decreased by 17.1%, leading to a 38.4% reduction in loss before tax to RMB 19.144 million despite an RMB 15.613 million asset impairment from hog business strategy adjustments Revenue Analysis For the six months ended June 30, 2024, the group's total revenue reached RMB 54.511 million, a substantial 1,763.0% increase from RMB 2.926 million in the prior period, primarily due to RMB 35.30 million from new energy storage system sales and a 781.3% surge in net income from financing guarantee services to RMB 14.10 million Revenue Composition H1 2024 (RMB thousands) | Business Segment | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Net Income from Financing Guarantee Services | 14,131 | 1,600 | | Non-financing Guarantee Services | 40 | 100 | | Financial Advisory Services | 118 | 10 | | Financial Leasing Services | 647 | 0 | | Market Hog Sales | 4,362 | 1,151 | | Energy Storage System Sales | 35,253 | 0 | | Total Revenue | 54,511 | 2,926 | Impairment Loss on Assets Due to challenges in the hog farming industry, including virus mutations and rising costs, the group plans to adjust the operational strategy of its subsidiary, Green Lake Yangmian Mountain, to explore a contract farming model, leading to an impairment loss of approximately RMB 15.613 million on related non-current assets based on revised profitability forecasts - Due to operational strategy adjustments in the hog farming business, the group recognized an impairment loss provision of approximately RMB 15.6 million on related non-current assets[24] Operating Expenses During the reporting period, the group's total operating expenses were RMB 21.274 million, a 17.1% year-on-year decrease, primarily due to strict cost management, significant reductions in office, travel, and entertainment expenses, and decreased value of culled hogs, though intermediary and consulting fees increased due to the energy storage business Operating Expense Details (RMB thousands) | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Salaries and Wages | 8,253 | 10,492 | | Depreciation Expense | 5,691 | 2,657 | | Intermediary and Consulting Fees | 3,402 | 1,905 | | Office, Travel, and Entertainment Expenses | 772 | 3,144 | | Others | 2,259 | 7,037 | | Total | 21,274 | 25,719 | Loss Before Tax The group's loss before tax significantly narrowed by 38.4% to RMB 19.144 million from RMB 31.041 million in the prior period, primarily due to strong growth in guarantee services and energy storage system sales, effective control over operating expenses, and reduced interest expenses from lower convertible bond principal, partially offset by asset impairment losses in the hog farming business - Loss before tax decreased by 38.4% from approximately RMB 31.0 million in the prior period to approximately RMB 19.1 million in the current period[28] Liquidity and Capital Resources As of June 30, 2024, the group's cash and bank balances increased to RMB 178.4 million, while pledged bank deposits decreased, and the gearing ratio slightly rose to 123.5% due to a reduction in total equity from the loss for the period, with the group primarily operating in RMB and closely monitoring foreign exchange risks Liquidity and Capital Structure Indicators | Indicator | June 30, 2024 (RMB millions) | December 31, 2023 (RMB millions) | | :--- | :--- | :--- | | Cash and Bank Balances | 178.4 | 134.1 | | Pledged Bank Deposits | 53.0 | 72.7 | | Gearing Ratio | 123.5% | 120.8% | Prospects and Outlook Looking ahead to H2 2024, the group will maintain prudent operations amidst a complex macro environment, strategically developing traditional financial businesses, actively promoting integrated services in the Greater Bay Area, and focusing on adjusting and optimizing its two emerging supply chain businesses - Traditional businesses will continue to operate prudently, with flexible adjustments to operating strategies and exploration of diversified collaborations with FinTech[35] - The hog business maintains cautious optimism for its prospects, exploring contract farming partnerships with quality enterprises to introduce advanced technology and reduce farming risks[37] - To address international trade challenges, the energy storage business will actively expand local South African suppliers, increase local assembly proportions, and accelerate market expansion into Australia and Europe[38] Condensed Interim Financial Report This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2024, reviewed by independent auditor Fuyuan Mazars CPA Limited, which found no matters suggesting non-compliance with HKAS 34, showing total revenue of RMB 54.511 million and a loss for the period of RMB 22.063 million, with total assets of RMB 608 million, total liabilities of RMB 336 million, and net assets of RMB 272 million at period-end - The independent auditor reviewed the interim financial report and concluded that no matters were found to suggest the report was not prepared in all material respects in accordance with Hong Kong Accounting Standard 34[39][41] Condensed Consolidated Statement of Profit or Loss Summary (RMB thousands) | Item | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net Revenue | 54,511 | 2,926 | | Loss Before Tax | (19,144) | (31,041) | | Loss for the Period | (22,063) | (34,898) | | Loss Attributable to Owners of the Company | (9,630) | (28,896) | Condensed Consolidated Statement of Financial Position Summary (RMB thousands) | Item | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Total Assets | 608,496 | 644,936 | | Total Liabilities | 336,208 | 352,829 | | Net Assets | 272,288 | 292,107 | | Total Equity | 272,288 | 292,107 | Notes to the Financial Report This section provides detailed notes supporting the condensed interim financial report, covering revenue, segment performance, receivables, borrowings, and share option schemes Note 3: Revenue and Segment Reporting This note details the group's revenue sources and the performance of its three operating segments: financial services, hog sales, and energy storage, with financial services contributing RMB 14.9 million in revenue and RMB 6.35 million in profit before tax, hog sales generating RMB 4.36 million but incurring a significant loss of RMB 25.41 million due to costs and asset impairment, and the new energy storage segment performing strongly with RMB 35.25 million in revenue and near break-even results, while Mainland China remains the primary revenue source, and the new South African market (energy storage) contributes over 60% of total revenue Segment Performance Summary (RMB thousands) | Segment | Net Revenue | Reportable Segment Profit (Loss) Before Tax | | :--- | :--- | :--- | | Financial Services | 14,896 | 6,351 | | Hog Sales | 4,362 | (25,409) | | Energy Storage | 35,253 | (86) | | Total | 54,511 | (19,144) | Revenue by Customer Geographical Location (RMB thousands) | Region | H1 2024 | | :--- | :--- | | Mainland China | 19,258 | | South Africa | 35,253 | | Total | 54,511 | Note 11: Trade and Other Receivables As of June 30, 2024, the group's total trade and other receivables amounted to RMB 112 million, a decrease from RMB 136 million at the beginning of the year, with trade receivables (including receivables from defaulted guarantee payments) having a net book value of RMB 27.22 million and deposits and other receivables a net book value of RMB 42.24 million, and the vast majority of receivables from defaulted guarantee payments being over one year old Composition of Trade and Other Receivables (RMB thousands) | Item | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Trade Receivables (Net) | 27,223 | 20,734 | | Deposits and Other Receivables (Net) | 42,239 | 70,524 | | Other Items | 42,481 | 44,502 | | Total | 111,943 | 135,860 | Note 17: Interest-Bearing Borrowings As of June 30, 2024, the group's total secured bank borrowings were RMB 131 million, slightly lower than RMB 137 million at the beginning of the year, with RMB 119 million utilized from a total RMB 140 million bank facility secured by ordinary shares of a company subsidiary - As of June 30, 2024, the group's total secured bank borrowings amounted to RMB 131 million[84] - Of the total RMB 140 million bank facility, RMB 119 million has been utilized, secured by ordinary shares of a subsidiary[84] Note 19: Share Option Scheme This note discloses changes in the group's share option schemes, reporting 11,508,400 outstanding share options as of June 30, 2024, granted under the 2020 and 2023 schemes, with 5,100,000 granted to directors and 6,408,400 to employees, and no new options granted, exercised, or expired during the period, while a new "2024 Share Option Scheme" was adopted in June 2024 Outstanding Share Options (As of June 30, 2024) | Participant Category | Number Outstanding | | :--- | :--- | | Directors | 5,100,000 | | Employees | 6,408,400 | | Total | 11,508,400 | - The company adopted a new share option scheme ("2024 Share Option Scheme") on June 28, 2024, with no options granted under this scheme during the reporting period[110] Other Information This section covers additional disclosures including pledged shares by the controlling shareholder, significant post-reporting period events, and corporate governance and compliance matters Pledged Shares by Controlling Shareholder During the reporting period, Expert Depot Limited, wholly owned by Chairman and Executive Director Mr. Zhang Tiewei, pledged 110 million company shares to secure convertible bonds issued by the company, representing approximately 19.92% of the company's total issued share capital as of June 30, 2024 - Controlling shareholder Expert Depot Limited (owned by Chairman Mr. Zhang Tiewei) pledged 110 million company shares to secure convertible bonds[119] - As of June 30, 2024, the pledged shares represented approximately 19.92% of the company's total issued share capital[119] Post-Reporting Period Events A significant financing and debt repayment event occurred after the reporting period, where in July 2024, the company received an HKD 16 million shareholder loan from controlling shareholder Expert Depot Limited, which was used to fully redeem all remaining outstanding convertible bonds, leading to the cancellation of all convertible bonds and the release of related share pledges - In July 2024, the company received an HKD 16 million shareholder loan from the controlling shareholder, with an annual interest rate of 7.875%[120] - The company fully redeemed all outstanding convertible bonds on July 26, 2024, resulting in the cancellation of all bonds and the release of the related 110 million share pledge[120] Corporate Governance and Compliance The group complied with the Corporate Governance Code provisions of the Listing Rules during the reporting period, with the Audit Committee, comprising three independent non-executive directors, having reviewed this interim report, and the directors confirming compliance with the standard securities dealing code, while the company maintained the required public float as of the reporting date - The company has adopted and complied with the Corporate Governance Code provisions in Appendix C1 of the Listing Rules[114] - The Audit Committee, composed of three independent non-executive directors, has reviewed this interim report[115] - As of the date of this report, the company has maintained the public float required by the Hong Kong Listing Rules[118]