Company Information This section provides fundamental details about Weili Holdings Limited, an investment holding company primarily engaged in manufacturing and selling cigarette packaging paper in China Company Basic Information Weili Holdings Limited is an investment holding company incorporated in the Cayman Islands, listed on the Main Board of the Hong Kong Stock Exchange (Stock Code: 2372), primarily engaged in the manufacturing and sale of cigarette packaging paper in China - The Company is an investment holding company, with its subsidiaries primarily engaged in the manufacturing and sale of cigarette packaging paper in the People's Republic of China46 - The Company's shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since June 30, 2022, under stock code 23724623 Interim Condensed Consolidated Financial Statements This section presents the Group's interim financial performance, financial position, and cash flows for the period, along with detailed notes on key accounting items Interim Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2024, the company reported revenue of RMB 57.061 million, a 10.2% decrease year-on-year, while net loss narrowed from RMB 3.864 million to RMB 2.263 million due to reduced administrative expenses, resulting in a basic loss per share of RMB 0.3 cents Interim Condensed Consolidated Statement of Profit or Loss | Indicator | H1 2024 (Unaudited) | H1 2023 (Unaudited) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 57,061 Thousand RMB | 63,631 Thousand RMB | -10.2% | | Gross Profit | 5,027 Thousand RMB | 5,202 Thousand RMB | -3.4% | | Operating Loss | (3,273) Thousand RMB | (4,765) Thousand RMB | Loss narrowed | | Loss for the Period | (2,263) Thousand RMB | (3,864) Thousand RMB | Loss narrowed | | Basic and Diluted Loss Per Share | (0.3) Cents RMB | (0.5) Cents RMB | Loss narrowed | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2024, total assets were RMB 309.6 million, a 15.2% decrease from year-end 2023, while total liabilities significantly decreased by 36.7% to RMB 91.7 million, with total equity remaining stable at RMB 217.9 million and net current assets at RMB 173.6 million Interim Condensed Consolidated Statement of Financial Position | Balance Sheet Item | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 309,645 Thousand RMB | 365,136 Thousand RMB | -15.2% | | Non-current Assets | 45,916 Thousand RMB | 46,045 Thousand RMB | -0.3% | | Current Assets | 263,729 Thousand RMB | 319,091 Thousand RMB | -17.4% | | Total Liabilities | 91,698 Thousand RMB | 144,926 Thousand RMB | -36.7% | | Current Liabilities | 90,136 Thousand RMB | 143,342 Thousand RMB | -37.1% | | Total Equity | 217,947 Thousand RMB | 220,210 Thousand RMB | -1.0% | Interim Condensed Consolidated Statement of Cash Flows In H1 2024, net cash used in operating activities expanded to RMB 16.485 million, net cash used in investing activities was RMB 0.844 million, and net cash used in financing activities was RMB 10.65 million primarily due to bank loan repayments, leading to a decrease in period-end cash and cash equivalents to RMB 67.168 million Interim Condensed Consolidated Statement of Cash Flows | Cash Flow Item | H1 2024 (Unaudited) | H1 2023 (Unaudited) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (16,485) Thousand RMB | (7,148) Thousand RMB | | Net Cash Used in Investing Activities | (844) Thousand RMB | (419) Thousand RMB | | Net Cash Used in Financing Activities | (10,650) Thousand RMB | - | | Net Decrease in Cash and Cash Equivalents | (27,979) Thousand RMB | (7,567) Thousand RMB | | Cash and Cash Equivalents at End of Period | 67,168 Thousand RMB | 102,897 Thousand RMB | Notes to the Interim Condensed Consolidated Financial Information The financial notes detail accounting policies, financial risk management, segment information, and specific components and changes of financial statement items, highlighting the company's single business segment with all revenue from China, high customer concentration, extended trade receivables aging, and disclosures on asset pledges and related party transactions Revenue and Segment Information The Group's business is considered a single operating segment, manufacturing and selling cigarette packaging paper in China, with all revenue derived from external customers in China and high customer concentration, as the top two customers contributed 60% of revenue - Management considers the business as a single segment for resource allocation and performance assessment, with all operations and revenue generated in China6263 Customer Revenue Contribution | Customer | H1 2024 Revenue Contribution | H1 2023 Revenue Contribution | | :--- | :--- | :--- | | Customer 1 | 41% | 17% | | Customer 2 | 19% | 23% | | Customer 3 | * | 15% | | Customer 4 | * | 12% | *This customer contributed less than 10% of total revenue in the respective period. Trade Receivables As of June 30, 2024, net trade receivables decreased to RMB 105 million from RMB 132 million at year-end, yet the proportion of receivables over 180 days significantly increased from 24.5% to 36.5% based on aging analysis Trade Receivables Aging Analysis | Aging | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Within 30 days | 29,459 Thousand RMB | 58,064 Thousand RMB | | 31 to 90 days | 19,367 Thousand RMB | 24,871 Thousand RMB | | 91 to 180 days | 21,176 Thousand RMB | 21,037 Thousand RMB | | 181 days to 1 year | 35,996 Thousand RMB | 7,496 Thousand RMB | | Over 1 year | 4,192 Thousand RMB | 26,226 Thousand RMB | | Total | 110,190 Thousand RMB | 137,694 Thousand RMB | Bank Borrowings As of June 30, 2024, the Group's secured bank borrowings decreased to RMB 19.8 million from RMB 30 million at year-end, denominated in RMB, repayable within one year, with a weighted average effective annual interest rate of 3.56% - As of June 30, 2024, total bank borrowings amounted to RMB 19.8 million, all of which were secured, representing a decrease from RMB 30 million at December 31, 2023116 - The weighted average effective annual interest rate for bank borrowings was 3.56%, lower than 3.65% at December 31, 2023116 Dividends The Board did not recommend the declaration of any interim dividend for the six months ended June 30, 2024, consistent with the prior period - The company did not declare any interim dividend for the six months ended June 30, 2024120 Management Discussion and Analysis This section provides an overview of the Group's operational performance, financial results, liquidity, and capital structure, along with future outlook and human resources information Business Review and Future Outlook The Group, a cigarette packaging paper manufacturer in China, experienced revenue decline and loss due to temporary order reductions from key customers, which the Board expects to recover in H2 2024, maintaining an optimistic outlook for the industry driven by inelastic demand for tobacco products and growth in mid-to-high-end cigarette markets - During the reporting period, temporary order reductions from certain major customers led to a decrease in the Group's revenue and a recorded loss; the Board anticipates orders to recover in the second half of 2024122 - The Board expects a favorable near-term outlook for the cigarette packaging paper industry, driven by inelastic demand for tobacco products, increased demand for mid-to-high-end cigarettes, and enhanced purchasing power of Chinese citizens122 Financial Review The Group's H1 2024 revenue decreased by 10.2% year-on-year to RMB 57.1 million, primarily due to reduced key customer orders, while sales costs decreased by 11.0%, gross margin slightly rose from 8.2% to 8.8%, and significantly lower administrative expenses, coupled with income tax credits, narrowed net loss from RMB 3.9 million to RMB 2.3 million Financial Review Summary | Item | H1 2024 | H1 2023 | Reason for Change | | :--- | :--- | :--- | :--- | | Revenue | 57.1 Million RMB | 63.6 Million RMB | Temporary reduction in key customer orders | | Gross Profit | 5.0 Million RMB | 5.2 Million RMB | Decrease in sales orders | | Gross Margin | 8.8% | 8.2% | Sales costs decreased proportionally with revenue | | Administrative Expenses | 7.3 Million RMB | 8.8 Million RMB | Decrease in product development, staff, and consultant fees | | Loss for the Period | 2.3 Million RMB | 3.9 Million RMB | Reduced administrative expenses and relatively stable gross profit | Liquidity, Financial Resources and Capital Structure As of June 30, 2024, the Group held cash and cash equivalents of approximately RMB 67.2 million and bank borrowings of RMB 19.8 million, with the gearing ratio (total borrowings/total equity) decreasing from 13.6% at year-end 2023 to approximately 9.1%, indicating reduced financial leverage Liquidity and Capital Structure | Indicator | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and Cash Equivalents | 67.2 Million RMB | 95.1 Million RMB | | Bank Borrowings | 19.8 Million RMB | 30.0 Million RMB | | Gearing Ratio | 9.1% | 13.6% | Use of Proceeds Net IPO proceeds were approximately HKD 90.3 million, with HKD 36.9 million utilized and HKD 53.4 million remaining unutilized as of June 30, 2024; due to temporary customer order reductions, some capacity expansion plans are delayed, with remaining funds expected to be utilized by December 31, 2025 Use of IPO Proceeds | Item | Total Allocation (Million HKD) | Utilized (Million HKD) | Unutilized (Million HKD) | | :--- | :--- | :--- | :--- | | Enhance production capacity and expand product portfolio | 33.3 | 1.3 | 32.0 | | Strengthen R&D capabilities | 17.6 | 0.9 | 16.7 | | Acquire printing and cross-cutting machines | 22.9 | 20.6 | 2.3 | | Others | 16.5 | 14.1 | 2.4 | | Total | 90.3 | 36.9 | 53.4 | - Due to temporary reductions in customer orders and revisions to QR code packaging, the company was unable to expand production capacity as originally planned, with the remaining unutilized proceeds expected to be used by the end of 2025133 Employees and Remuneration Policy As of June 30, 2024, the Group had 109 employees, a decrease from 117 in the prior period, with total staff costs of approximately RMB 5.6 million, slightly lower than RMB 5.8 million in the prior period, while providing on-the-job training and participating in retirement schemes as required - As of June 30, 2024, the Group's total number of employees was 109, a decrease of 8 employees compared to the prior period134 - Total staff costs for the reporting period were approximately RMB 5.6 million, representing a year-on-year decrease of approximately 3.4%134 Corporate Governance and Other Information This section covers the company's adherence to corporate governance standards, details on directors' and major shareholders' interests, share option schemes, and the audit committee's review of financial information Corporate Governance and Compliance During the reporting period, the company complied with applicable provisions of the Corporate Governance Code, all directors confirmed adherence to the Model Code for securities transactions, and neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities - The company has complied with the applicable code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules during the reporting period135 - All directors confirmed compliance with the Model Code for Securities Transactions by Directors of Listed Issuers136 - During the period, neither the company nor its subsidiaries purchased, sold, or redeemed any of the company's listed securities137 Directors', Chief Executive's and Major Shareholders' Interests As of June 30, 2024, Chairman Mr. Chan Wai Chong and CEO Mr. Yu Tianbing indirectly held 42.38% and 12.00% of the company's shares respectively, with major shareholders including City Ease Limited and Kai Tung Limited controlled by Mr. Chan, and the company maintained sufficient public float Directors', Chief Executive's and Major Shareholders' Interests | Name/Entity | Capacity/Nature of Interest | Number of Shares Held | Percentage of Interest | | :--- | :--- | :--- | :--- | | Mr. Chan Wai Chong | Interest in controlled corporation | 339,040,000 (L) | 42.38% | | Mr. Yu Tianbing | Interest in controlled corporation | 96,000,000 (L) | 12.00% | | City Ease Limited | Beneficial owner | 339,040,000 (L) | 42.38% | | Kai Tung Limited | Beneficial owner | 146,960,000 (L) | 18.37% | | Wing Ning Limited | Beneficial owner | 96,000,000 (L) | 12.00% | Share Option Scheme The company adopted a share option scheme on June 2, 2022, and no share options have been granted under the scheme since its adoption, resulting in no outstanding share options as of the end of the reporting period - No share options have been granted under the share option scheme since its adoption145 Review by Audit Committee The interim financial information, though unaudited by external auditors, has been reviewed by the Audit Committee, comprising three independent non-executive directors, who concurred with the accounting treatments adopted and deemed the financial information prepared and disclosed in compliance with relevant standards and requirements - The unaudited interim consolidated financial information for the six months ended June 30, 2024, has been reviewed by the Audit Committee150 - The Audit Committee believes that the financial information has been prepared in compliance with applicable accounting standards and requirements and is adequately disclosed150
伟立控股(02372) - 2024 - 中期财报