海纳智能(01645) - 2024 - 中期财报

Company Information The company is led by Chairman and CEO Mr. Hong Yiyuan, with key offices located in Jinjiang and Hong Kong - The Board of Directors is chaired by Mr. Hong Yiyuan, who also serves as CEO, and the company secretary is Mr. Liu Weibiao; the auditor is Forvis Mazars CPA Limited[5] - The company's head office and principal place of business in China is in the Jinjiang Economic Development Zone, while its Hong Kong office is at the CRE Centre in North Point[5] Management Discussion and Analysis The Group's revenue grew significantly while net loss narrowed, driven by strategic capacity expansion and global market development Business Review The Group, a manufacturer of disposable hygiene product machinery, saw a 65% revenue increase and a 14% net loss reduction in H1 2024 Key Performance Indicators | Metric | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | Approx. RMB 182.4 million | Approx. RMB 110.5 million | +65% | | Total Machines Sold | 29 units | - | - | | Net Loss | Approx. RMB 13.6 million | Approx. RMB 15.8 million | -14% | - The Group primarily designs and manufactures automated machinery for disposable hygiene products, including baby/adult diapers and feminine hygiene napkins[8] - To expand capacity, the Group is building two new projects: a digital factory in Hangzhou expected to be completed by the end of 2024, and a new R&D and production center in Jinjiang expected to be completed in H2 2025[8][9] Future Outlook The Group's future strategy focuses on enhancing R&D, expanding production capacity, and deepening its global market presence - Enhance R&D capabilities: The Jinjiang R&D center, expected to be completed in H2 2025, will boost new product development efficiency; R&D expenses (including capitalization) were approximately RMB 13.9 million during the period[12] - Increase production capacity: The Hangzhou factory is expected to be completed by the end of 2024, and the Jinjiang R&D center in H2 2025; a new subsidiary will also increase the self-production rate of core components to enhance production flexibility and competitive advantage[13][14] - Globalization strategy: The Group is actively using platforms like Douyin and Alibaba for domestic and overseas marketing and participating in major exhibitions to enhance brand awareness and achieve dual growth in domestic and overseas business[15] Financial Review In H1 2024, the Group's financial performance improved significantly, with revenue up 65% and gross profit margin rising to 16.7% Revenue Revenue grew 65% year-on-year to approximately RMB 182.4 million, driven by strong sales of baby and adult diaper machines Revenue by Product Type | Product Category | H1 2024 Revenue (RMB in thousands) | H1 2023 Revenue (RMB in thousands) | Change | | :--- | :--- | :--- | :--- | | Baby Diaper Machines | 78,121 | 45,390 | +72.1% | | Adult Diaper Machines | 61,031 | 25,744 | +137.1% | | Feminine Hygiene Napkin Machines | 20,605 | 13,592 | +51.6% | | Components and Parts | 19,166 | 14,690 | +30.5% | | Total | 182,391 | 110,535 | +65.0% | - As of June 30, 2024, the Group had signed sales contracts valued at approximately RMB 267 million for 40 machines, scheduled for delivery in 2024 and 2025[17] Gross Profit and Gross Profit Margin Gross profit increased by 138% to RMB 30.5 million, with the gross profit margin rising from 11.6% to 16.7% due to higher sales and lower material costs - Gross profit increased from approximately RMB 12.8 million in the prior-year period to approximately RMB 30.5 million in the current period[18] - Gross profit margin increased by 5.1 percentage points to 16.7% from 11.6% in the prior-year period[18] Other Income Other income decreased by 36.3% year-on-year to approximately RMB 5.1 million, primarily due to a reduction in foreign exchange gains - Other income decreased from RMB 8.0 million in the prior-year period to RMB 5.1 million, mainly due to lower foreign exchange gains[20] Selling and Distribution Costs Selling and distribution costs rose by 45.3% year-on-year to approximately RMB 7.7 million, driven by higher transportation, advertising, and salary expenses - Selling and distribution costs increased by 45.3% from RMB 5.3 million in the prior-year period to RMB 7.7 million[21] Administrative and Other Operating Expenses Administrative and other operating expenses increased by 23.4% year-on-year to approximately RMB 33.2 million, mainly due to higher salary and training costs - Administrative and other operating expenses increased by 23.4% from RMB 26.9 million in the prior-year period to RMB 33.2 million[22] Finance Costs Finance costs decreased by 12.5% year-on-year to approximately RMB 0.7 million, primarily due to lower capitalized interest on bank borrowings - Finance costs decreased from RMB 0.8 million in the prior-year period to RMB 0.7 million[23] Income Tax Expense Income tax expense fell sharply by 90.9% year-on-year to approximately RMB 0.1 million due to lower taxable profits from Chinese subsidiaries - Income tax expense decreased from RMB 1.1 million in the prior-year period to RMB 0.1 million[24] Loss Attributable to Owners of the Company The loss attributable to owners of the Company narrowed from RMB 15.4 million to RMB 11.6 million, mainly due to a significant increase in gross profit - The loss attributable to owners of the Company was approximately RMB 11.6 million, a reduction from RMB 15.4 million in the prior-year period[25] Liquidity, Financial Resources, and Capital Structure The Group's financial position shows higher leverage, with the gearing ratio rising to 78.1% and the current ratio declining to 0.9 Use of Proceeds from Listing Net proceeds from the listing were reallocated to fund the new R&D center and manufacturing workshop in Jinjiang, which are now fully utilized - On April 28, 2023, the Group announced the reallocation of unutilized net proceeds to establish a new R&D center, manufacturing workshop, and other office buildings in Jinjiang[30] - As of June 30, 2024, the funds allocated for the new R&D center (RMB 24.1 million) and the new manufacturing workshop (RMB 22.2 million) were fully utilized[29] Liquidity and Financial Resources The Group's current ratio decreased from 1.3 to 0.9, indicating tighter short-term liquidity, with operations funded by internal resources and borrowings - The current ratio decreased from approximately 1.3 times as of December 31, 2023, to approximately 0.9 times as of June 30, 2024[31] Capital Structure and Borrowings The Group's bank borrowings increased significantly by 176% to RMB 212.7 million, altering its capital structure Capital Structure Summary | Item | June 30, 2024 (RMB in millions) | December 31, 2023 (RMB in millions) | | :--- | :--- | :--- | | Equity | 291.5 | 305.0 | | Bank Borrowings | 212.7 | 77.0 | Gearing Ratio The Group's gearing ratio surged from 30.9% to 78.1%, reflecting a significant increase in financial leverage - The gearing ratio increased sharply from 30.9% as of December 31, 2023, to 78.1% as of June 30, 2024[36] Capital Commitments As of June 30, 2024, the Group's capital commitments totaled RMB 217 million, a decrease from RMB 355 million at year-end 2023 Capital Commitments Breakdown | Capital Commitment | June 30, 2024 (RMB in thousands) | December 31, 2023 (RMB in thousands) | | :--- | :--- | :--- | | Construction in progress | 189,329 | 327,083 | | Development of intangible assets* | 27,679 | 27,679 | | Total | 217,008 | 354,762 | Risk Management and Human Resources The Group monitors foreign exchange risk without using derivatives and increased its headcount and corresponding staff costs during the period Contingent Liabilities As of June 30, 2024, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities as at 30 June 2024[39] Foreign Exchange Risk Management The Group's transactions are mainly in RMB, HKD, and USD, with foreign exchange risk reviewed periodically but unhedged during the period - The Group did not enter into any foreign exchange derivative contracts during the period and will continue to review its foreign exchange risk regularly[40] Human Resources The Group's total number of employees increased to 529, with staff costs rising by 25% to approximately RMB 31 million - The total number of employees increased to 529 from 467 in the prior-year period[41] - Staff costs, including directors' remuneration, increased to RMB 31.0 million from RMB 24.8 million in the prior-year period[41] Significant Events and Future Plans The Group had no major investments or disposals, with future plans centered on the construction of its Jinjiang and Hangzhou facilities Pledge of Group's Assets As of June 30, 2024, the Group had no pledged assets other than those disclosed in note 15 to secure bank loans - Save as disclosed in note 15, the Group did not pledge or charge any of its assets as at 30 June 2024[42] Material Investments, Acquisitions, and Disposals During the reporting period, the Group did not undertake any material investments, acquisitions, or disposals - The Group had no material investments, acquisitions, or disposals during the period[42] Future Plans for Material Investments and Capital Assets Future investment plans are focused on the construction of the previously announced R&D and production center in Jinjiang and the Hangzhou production base - The Group's future plans primarily involve the construction of the Jinjiang R&D and production center and the development of the Hangzhou production base[43] Post Reporting Period Events No significant events affecting the Group occurred between the end of the reporting period and the date of this report - No significant events affecting the Group occurred after the reporting period and up to the date of this report[45] Corporate Governance and Other Information The Group maintained high corporate governance standards, with the Audit Committee having reviewed the interim financial information Corporate Governance Practices The Group complied with the Corporate Governance Code, except for the deviation where the roles of Chairman and CEO are held by the same individual - The company deviated from the Corporate Governance Code as the roles of Chairman and CEO are not separate and are both held by Mr. Hong Yiyuan, which the Board believes ensures consistent leadership and efficiency[47] - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial information for the period and considers that adequate disclosures have been made[49] Directors' and Shareholders' Interests As of June 30, 2024, the controlling shareholders collectively held 61.92% of the company's shares through Well Fame International Limited - The controlling shareholders hold 349,188,000 shares, representing 61.92% of the issued shares, through Well Fame International Limited[51][52] - The five controlling shareholders and Well Fame International are parties acting in concert under a Concert Party Confirmation Deed[52][54] Share Option Scheme No share options were granted or exercised during the period, with 32,400,000 options remaining available for grant under the 2020 scheme - During the period, no share options were granted or exercised[57] - As of June 30, 2024, the number of share options available for grant under the scheme was 32,400,000[57] Unaudited Condensed Consolidated Financial Statements The financial statements show increased revenue and narrowed losses, alongside a significant rise in liabilities and a shift in asset composition Unaudited Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2024, the Group's revenue was RMB 182.4 million, with a net loss of RMB 13.6 million Statement of Profit or Loss Summary | Item (RMB in thousands) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Revenue | 182,391 | 110,535 | | Gross Profit | 30,533 | 12,784 | | Loss before tax | (13,438) | (14,689) | | Loss for the period | (13,555) | (15,819) | | Loss attributable to owners of the Company | (11,627) | (15,363) | | Basic and diluted loss per share (RMB cents) | (2.06) | (2.72) | Unaudited Condensed Consolidated Statement of Financial Position As of June 30, 2024, the Group had total assets of RMB 793.6 million and net assets of RMB 291.5 million, with a net current liability position Statement of Financial Position Summary | Item (RMB in thousands) | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | | :--- | :--- | :--- | | Non-current assets | 354,314 | 213,032 | | Current assets | 439,240 | 464,525 | | Total assets | 793,554 | 677,557 | | Current liabilities | 490,884 | 360,692 | | Non-current liabilities | 11,209 | 11,828 | | Total liabilities | 502,093 | 372,520 | | Net assets | 291,461 | 305,037 | | Net current (liabilities) assets | (51,644) | 103,833 | Unaudited Condensed Consolidated Statement of Changes in Equity Total equity decreased from RMB 305.0 million to RMB 291.5 million, primarily due to a total comprehensive loss of RMB 13.9 million for the period - Total equity at the beginning of the period was RMB 305,037 thousand, and total equity at the end of the period was RMB 291,461 thousand[62] - The change in equity was mainly affected by the total comprehensive loss for the period of RMB 13,856 thousand, of which the comprehensive loss attributable to the owners of the Company was RMB 11,928 thousand[62] Unaudited Condensed Consolidated Statement of Cash Flows In H1 2024, the Group had a net cash outflow from operating and investing activities, offset by a net inflow from financing activities Statement of Cash Flows Summary | Item (RMB in thousands) | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net cash from operating activities | (14,552) | 386 | | Net cash used in investing activities | (100,302) | (22,927) | | Net cash from financing activities | 127,969 | 19,498 | | Net increase (decrease) in cash and cash equivalents | 13,115 | (3,043) | | Cash and cash equivalents at end of period | 69,018 | 80,386 | Notes to the Unaudited Condensed Consolidated Financial Statements The financial statements are prepared under HKAS 34, with mainland China being the primary source of revenue and location of assets Basis of Preparation and Presentation The interim financial statements are prepared in accordance with HKAS 34 and presented in RMB, with accounting policies consistent with the prior year - The Company is incorporated in the Cayman Islands, its shares are listed on the Main Board of the Stock Exchange, and its principal activity is investment holding, while its subsidiaries are primarily engaged in the design and production of automated machinery for disposable hygiene products in China[65] - The interim financial statements have been prepared in accordance with Hong Kong Accounting Standard 34 "Interim Financial Reporting"[66] Segment Information The Group operates as a single reportable segment, with mainland China accounting for 60.2% of total revenue - The directors have determined that the Group has only a single operating segment, which is the design and production of automated machinery for disposable hygiene products[69] Revenue from External Customers by Location | Region | Revenue from External Customers (RMB in thousands) | | :--- | :--- | | China | 109,823 | | The Philippines | 34,240 | | Republic of Indonesia | 12,938 | | Uzbekistan | 10,649 | | Others | 14,731 | | Total | 182,391 | Revenue and Other Income All revenue was recognized at a point in time from the sale of machinery and components, with other income mainly comprising interest, forex gains, and subsidies - For the six months ended June 30, 2024, the amount of revenue recognized that was included in contract liabilities at the beginning of the reporting period was approximately RMB 50.5 million[73] Other Income Breakdown | Other Income Item (RMB in thousands) | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Bank interest income | 340 | 651 | | Interest income from debt instruments | 1,341 | 1,327 | | Net foreign exchange gain | 1,350 | 3,815 | | Government grants | 380 | 633 | | Total | 5,145 | 8,006 | Costs and Expenses During the period, staff costs totaled RMB 31.0 million and R&D expenses were RMB 13.9 million, with RMB 2.0 million of interest capitalized - Interest on bank borrowings during the period was RMB 2,334 thousand, of which RMB 1,982 thousand was capitalized to construction in progress[76] - Total staff costs were RMB 30,993 thousand, an increase from RMB 24,834 thousand in the prior-year period[77] - R&D expenses were RMB 13,920 thousand, an increase from RMB 12,781 thousand in the prior-year period[77] Taxation and Dividends The income tax expense for the period was RMB 117 thousand, and the Board resolved not to declare an interim dividend - Jinjiang Haina and Hangzhou Haina were recognized as High and New Technology Enterprises, qualifying for a preferential tax rate of 15%[78] - The Board of Directors has resolved not to declare an interim dividend for the six months ended 30 June 2024[80] Loss Per Share Basic loss per share for H1 2024 was RMB 2.06 cents, narrowed from RMB 2.72 cents in the prior year, with diluted loss per share being the same Loss Per Share Calculation | Item | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Loss attributable to owners of the Company (RMB in thousands) | (11,627) | (15,363) | | Weighted average number of ordinary shares (in thousands) | 563,976 | 563,976 | | Basic loss per share (RMB cents) | (2.06) | (2.72) | Asset Analysis The Group's asset structure changed significantly with property purchases of RMB 149 million and an impairment provision of RMB 1.72 million - During the period, the Group purchased property, plant and equipment of approximately RMB 149 million and recognized an impairment loss of approximately RMB 1.71 million on property, plant and equipment and RMB 16 thousand on intangible assets for its Hangzhou production facilities[83] - Within trade receivables, amounts overdue for more than 365 days increased from RMB 11.94 million to RMB 12.70 million[86] - The Group holds a bond with an original principal of HKD 40 million, of which HKD 35 million (approx. RMB 32.71 million) remains outstanding, with an expected credit loss provision of RMB 27.62 million recognized[89][90] Liability and Equity Analysis The Group's liabilities increased significantly, with interest-bearing bank borrowings surging to RMB 212.7 million while share capital remained stable - Total interest-bearing borrowings surged from RMB 77.03 million at the end of 2023 to RMB 212.7 million, of which RMB 176.7 million was secured bank loans[93][97] - The total number of shares in issue was 563,976,000, with no change during the period[98] - As of the period end, there were 14,000,000 outstanding share options with an exercise price of HKD 1.14; related expenses of approximately RMB 280 thousand were recognized during the period[102][104] Related Party Transactions Key management personnel compensation totaled RMB 1.44 million, and the Group purchased materials worth RMB 4.53 million from three related parties Related Party Purchases | Related Party | Nature of Transaction | Amount (RMB in thousands) | | :--- | :--- | :--- | | Hengqin Machinery | Purchase of materials | 2,817 | | Shengrong Machinery | Purchase of materials | 653 | | Guangdong Aimeigao | Purchase of materials | 1,062 | - The total remuneration for the Group's key management personnel (including directors) was approximately RMB 1.44 million, a decrease from RMB 1.70 million in the prior-year period[106] Post Reporting Period Events No significant events with a material impact on the Group have occurred since June 30, 2024 - No significant events affecting the Group have occurred from 30 June 2024 up to the date of this report[109]