航天控股(00031) - 2024 - 中期财报

Chairman's Report Performance Summary In the first half of 2024, the company's operating revenue increased by 5.26% year-on-year, but due to factors like fair value changes of investment properties, the company turned from profit to loss, with loss attributable to shareholders of HKD 28.58 million; the Board decided not to declare an interim dividend to meet future capital needs 2024 First Half Key Performance Indicators | Indicator | H1 2024 | H1 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Operating Revenue (HKD billion) | 1.825 | 1.734 | +5.26% | | Net (Loss)/Profit (HKD million) | (59.09) | 55.07 | Turned from profit to loss | | (Loss)/Profit Attributable to Shareholders (HKD million) | (28.58) | 45.51 | Turned from profit to loss | | Basic (Loss)/Earnings Per Share (HKD cents) | (0.93) | 1.48 | Turned from profit to loss | | Interim Dividend | None | None | Unchanged | Business Review and Project Progress Despite a decline in overseas markets, the company's technology industrial business significantly increased operating profit by expanding domestic and international markets, while property leasing maintained occupancy and pursued rent arrears litigation, with new capacity projects like Nantong Kangyuan, IPM, and Huizhou Industrial Park progressing orderly - The technology industrial business achieved a significant increase in operating profit by stabilizing existing customers and expanding into new markets[8] - Shenzhen Aerospace Hi-Tech Investment Management Co., Ltd. maintained a certain occupancy rate despite increased office supply challenges and actively pursued rent arrears through legal channels[8] - Three major new capacity construction projects are progressing orderly: civil works for Nantong Kangyuan Integrated Circuit Packaging Substrate Plant were completed by end of May 2024; Intelligent Power Module (IPM) continues product and technology R&D; Huizhou Industrial Park Phase V plant has been completed and put into operation[8] Outlook For the second half of 2024, the company anticipates challenges from rising protectionism due to trade wars and regional conflicts, and supply chain regional shifts, with the Board closely monitoring impacts on core businesses to drive high-quality development - In the second half of 2024, major economies are expected to lean towards protectionism, and supply chains and production lines will continue to shift regionally, posing challenges for enterprises[9] Management Discussion and Analysis Performance Overview In the first half of 2024, the company's operating revenue increased by 5.26% to HKD 1.825 billion; however, a HKD 200 million loss from fair value changes of investment properties resulted in a net loss of HKD 59.09 million, turning from a net profit in the prior year - The company's turn from profit to loss was primarily due to a HKD 200.457 million loss from fair value changes of investment properties due to revaluation decreases[13] 2024 First Half Performance Overview | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Operating Revenue (HKD thousand) | 1,824,756 | 1,733,548 | | Net (Loss)/Profit (HKD thousand) | (59,093) | 55,065 | | (Loss)/Profit Attributable to Shareholders (HKD thousand) | (28,578) | 45,506 | | Basic (Loss)/Earnings Per Share (HKD cents) | (0.93) | 1.48 | Performance of Major Businesses The company's main businesses are technology industrial and property operations; technology industrial, as the revenue cornerstone, saw growth in both revenue and profit in the first half, with injection molding and PCB businesses doubling profits, while Shenzhen Aerospace Science and Technology Plaza property operations turned from profit to loss due to significant fair value losses on investment properties Technology Industrial The technology industrial business's operating revenue increased by 5.77% year-on-year to HKD 1.725 billion in the first half, with segment profit significantly up 64.88% to HKD 59.69 million, driven by strong performance in injection molding and PCB businesses, which saw operating profits increase by 178.27% and 331.39% respectively, while LCD business revenue and profit sharply declined due to weak market demand Technology Industrial Segment Performance (H1 2024) | Business Segment | Operating Revenue (HKD thousand) | YoY Change (%) | Operating Profit/(Loss) (HKD thousand) | YoY Change (%) | | :--- | :--- | :--- | :--- | :--- | | Injection Molding Products | 794,838 | +20.10% | 36,832 | +178.27% | | Printed Circuit Boards (PCBs) | 456,418 | +8.27% | 19,335 | +331.39% | | Smart Chargers | 137,580 | +20.63% | (1,872) | Loss narrowed | | Liquid Crystal Displays (LCDs) | 323,594 | -24.00% | 29,015 | -34.12% | | Intelligent Power Modules (IPM) | 7,764 | +134.14% | (13,676) | Loss narrowed | | Total | 1,725,355 | +5.77% | 59,688 | +64.88% | - The injection molding products business achieved a significant increase in profit by expanding domestic and international markets and a substantial turnaround by Vietnam Zhiyuan[17] - Civil works for Nantong Kangyuan Phase I plant have been completed, with trial production expected to commence by year-end, and further financing needs are being studied[18] Shenzhen Aerospace Science and Technology Plaza In the first half, Shenzhen Aerospace Science and Technology Plaza recorded operating revenue of HKD 95.59 million, a slight year-on-year decrease, and was severely impacted by a HKD 185 million loss from fair value changes of investment properties, leading to a segment loss of HKD 127 million from a profit in the prior year, with office occupancy improving but commercial occupancy declining at period-end Shenzhen Aerospace Science and Technology Plaza Performance and Operational Data | Indicator | H1 2024 | H1 2023 | | :--- | :--- | :--- | | Operating Revenue (HKD million) | 95.59 | 99.26 | | Segment (Loss)/Profit (HKD million) | (127) | 48.80 | | Loss from Fair Value Change of Investment Properties (HKD million) | 185 | - | | Occupancy Rate (Period-End) | June 30, 2024 | December 31, 2023 | | Commercial Portion | 66.45% | 72.90% | | Office Portion | 50.87% | 41.00% | - Various lawsuits with major tenants Aerospace Houhai and Huabaorun have successively received first-instance judgments; the company has appealed parts not supported and will actively protect its rights and interests[19] Other Businesses The company's associate, Shenzhen Ruihuatai Film Technology Co., Ltd., in which it holds a 23.38% stake, did not declare dividends during the reporting period, whereas in the prior year, the company received approximately RMB 2.95 million in dividends - Associate company Ruihuatai did not declare dividends during the period, compared to dividend income in the prior year[21] Financial Position Analysis As of June 30, 2024, the company's total assets and total liabilities both slightly decreased from end of 2023, with the gearing ratio remaining largely stable; asset decrease was mainly due to lower investment property valuations and exchange rate effects, while liability decrease was primarily due to repayment of some related party loans, and finance costs decreased by nearly 20% year-on-year Asset Position As of June 30, 2024, the company's total assets were HKD 14.193 billion, a 2.68% decrease from the beginning of the year, primarily due to the decline in investment property valuations and reduced translation due to RMB exchange rate changes; shareholders' equity was HKD 7.230 billion, and net asset value per share was HKD 2.34 Changes in Asset Position | Asset Item (HKD thousand) | June 30, 2024 | December 31, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Assets | 11,058,616 | 11,319,869 | -2.31% | | Current Assets | 3,134,498 | 3,263,415 | -3.95% | | Total Assets | 14,193,114 | 14,583,284 | -2.68% | - Net asset value per share attributable to shareholders was HKD 2.34[22] Debt Position As of June 30, 2024, the company's total liabilities were HKD 4.981 billion, a 2.58% decrease from the beginning of the year; non-current liabilities decreased due to repayment of some related party loans and exchange rate effects, while current liabilities increased due to higher trade payables Changes in Debt Position | Liability Item (HKD thousand) | June 30, 2024 | December 31, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Non-current Liabilities | 3,501,222 | 3,684,676 | -4.98% | | Current Liabilities | 1,479,347 | 1,427,648 | +3.62% | | Total Liabilities | 4,980,569 | 5,112,324 | -2.58% | Operating Expenses In the first half of 2024, the company's administrative expenses were largely flat year-on-year at HKD 198 million; finance costs were HKD 26.51 million, a 19.57% year-on-year decrease - Administrative expenses were approximately HKD 198 million, similar to the prior year[25] - Finance costs were HKD 26.51 million, a 19.57% year-on-year decrease[25] Financial Ratios and Risk Management The company's gearing ratio remained stable at around 35%, but current and quick ratios decreased; the company faces litigation with former major tenant Aerospace Houhai, with related claims classified as contingent liabilities and no provision made; the company currently does not use derivative instruments to hedge financial risks Financial Ratios As of June 30, 2024, the company's gearing ratio was 35.09%, largely stable compared to the beginning of the year; gross profit margin slightly increased to 20.18%; current and quick ratios decreased to 2.12 and 1.76 respectively Key Financial Ratios | Ratio | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Gearing Ratio | 35.09% | 35.06% | | Current Ratio | 2.12 | 2.29 | | Quick Ratio | 1.76 | 1.95 | | Ratio | H1 2024 | H1 2023 | | Gross Profit Margin | 20.18% | 20.13% | Contingent Liabilities The company faces claims of approximately RMB 119 million from former tenant Aerospace Houhai due to litigation (Aerospace Houhai Litigation II); despite losing at first instance, the company has appealed, and based on lawyer assessment, believes it has a high probability of winning and can net off with other successful cases, thus disclosing it as a contingent liability without provision - Aerospace Hi-Tech is facing claims of approximately RMB 119 million from its former tenant Aerospace Houhai, and has appealed after losing at first instance[26] - Based on lawyer assessment, the company believes there is a high probability of winning the appeal, and the claims can be netted off with other successful judgments, thus no provision has been made, and it is disclosed as a contingent liability[26] Human Resources As of June 30, 2024, the company and its subsidiaries had approximately 7,100 employees across mainland China, Hong Kong, and Vietnam; the company's remuneration policy is based on employee qualifications, experience, performance, and market benchmarks, implementing a performance-centric appraisal system - As of June 30, 2024, the Group had approximately 7,100 employees in total, distributed across mainland China, Hong Kong, and Vietnam[31] Other Disclosures Major Shareholders As of June 30, 2024, China Aerospace Science and Technology Corporation, through its wholly-owned subsidiary Burhill Company Limited, held 38.37% of the company's issued share capital, making it the company's major controlling shareholder Major Shareholder Holdings | Shareholder Name | Capacity | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | :--- | | China Aerospace Science and Technology Corporation | Interests in controlled corporations | 1,183,598,636 | 38.37% | | Burhill Company Limited | Beneficial owner | 1,183,598,636 | 38.37% | Corporate Governance and Litigation During the reporting period, the company complied with the Corporate Governance Code; apart from the disclosed leasing litigation related to Aerospace Hi-Tech, the company had no other significant litigation, arbitration, or claims - The company has complied with the code provisions of Appendix C1 of the Listing Rules, the Corporate Governance Code, during the reporting period[37] - Apart from the publicly disclosed litigation between Aerospace Hi-Tech and its tenants, the company has no other significant litigation or arbitration[38] Condensed Consolidated Financial Statements Condensed Consolidated Statement of Profit or Loss In the first half of 2024, the company recorded revenue of HKD 1.825 billion, a 5.3% year-on-year increase; however, a HKD 200 million loss from fair value changes of investment properties led to a pre-tax loss of HKD 127 million, resulting in a net loss of HKD 59.09 million for the period, with loss attributable to shareholders of HKD 28.58 million Condensed Consolidated Statement of Profit or Loss Summary | Item | H1 2024 (Unaudited, HKD thousand) | H1 2023 (Unaudited, HKD thousand) | | :--- | :--- | :--- | | Revenue | 1,824,756 | 1,733,548 | | Gross Profit | 368,238 | 349,016 | | Fair Value Change of Investment Properties | (200,457) | - | | (Loss)/Profit Before Tax | (127,228) | 57,254 | | (Loss)/Profit for the Period | (59,093) | 55,065 | | (Loss) Attributable to Company Shareholders | (28,578) | 45,506 | Condensed Consolidated Statement of Financial Position As of June 30, 2024, the company's total assets were HKD 14.193 billion, and total liabilities were HKD 4.981 billion; shareholders' equity was HKD 7.230 billion, a 2.45% decrease from the beginning of the year, mainly due to a reduction in exchange fluctuation reserve caused by the depreciation of RMB during the period Condensed Consolidated Statement of Financial Position Summary | Item | June 30, 2024 (Unaudited, HKD thousand) | December 31, 2023 (Audited, HKD thousand) | | :--- | :--- | :--- | | Non-current Assets | 11,058,616 | 11,319,869 | | Current Assets | 3,134,498 | 3,263,415 | | Total Assets | 14,193,114 | 14,583,284 | | Current Liabilities | 1,479,347 | 1,427,648 | | Non-current Liabilities | 3,501,222 | 3,684,676 | | Total Liabilities | 4,980,569 | 5,112,324 | | Equity Attributable to Company Shareholders | 7,229,548 | 7,411,477 | Condensed Consolidated Statement of Cash Flows In the first half of 2024, the company generated HKD 138 million net cash from operating activities; net cash outflow from investing activities was HKD 468 million, primarily for property, plant, and equipment acquisition; net cash outflow from financing activities was HKD 54.57 million; cash and cash equivalents decreased to HKD 1.115 billion at period-end Condensed Consolidated Statement of Cash Flows Summary | Item | H1 2024 (Unaudited, HKD thousand) | H1 2023 (Unaudited, HKD thousand) | | :--- | :--- | :--- | | Net Cash from Operating Activities | 138,011 | 150,961 | | Net Cash Used in Investing Activities | (468,015) | (207,782) | | Net Cash Used in Financing Activities | (54,570) | (54,768) | | Net Decrease in Cash and Cash Equivalents | (384,574) | (111,589) | | Cash and Cash Equivalents at Period-End | 1,115,049 | 1,491,421 | Summary of Notes to Financial Statements The notes to the financial statements detail accounting policies and data, highlighting that technology industrial business dominates segment revenue, a HKD 200 million fair value decrease in investment properties caused the loss, ongoing litigation with former tenants led to significant impairment provisions for lease receivables but contingent liability classification for counterclaims due to high probability of success, and significant related party loan transactions with major shareholder China Aerospace and its subsidiaries - Segment information shows that the technology industrial business contributed the vast majority of external sales revenue (HKD 1.725 billion), while aerospace services (Science and Technology Plaza) contributed HKD 95.59 million[63] - A HKD 200.457 million decrease in the fair value of investment properties, recognized directly in the statement of profit or loss, was a key factor contributing to the loss for the period[90] - As of June 30, 2024, total lease receivables were HKD 298 million, with a credit loss provision of HKD 272 million, primarily related to litigation with Aerospace Houhai and Huabaorun[92][96] - The company has significant loans with related parties (major shareholder China Aerospace and its subsidiary Aerospace Finance), including a HKD 107 million long-term loan and a HKD 1.092 billion drawn financing facility[109]