Revenue and Profit Performance - Revenue decreased by 15.3% to RMB 448.04 million in FY2024 compared to RMB 528.92 million in FY2023[1] - Gross profit declined by 4.1% to RMB 79.72 million, with gross margin improving to 17.8% from 15.7% in the previous year[1] - Net loss narrowed significantly by 64.8% to RMB 18.60 million, with the loss ratio improving to -4.2% from -10.0%[1] - Basic and diluted loss per share improved to RMB 0.016 from RMB 0.044 in FY2023[1] - Operating loss reduced to RMB 18.23 million from RMB 38.24 million, a 52.3% improvement[2] - The group recorded a loss of approximately RMB 18.6 million for the year ended June 30, 2024, a decrease of RMB 34.2 million compared to the same period last year[65] - Revenue for the year ended June 30, 2024, decreased by 15.3% to RMB 448.0 million, and gross profit decreased by 4.1% to RMB 79.7 million[65] - Revenue decreased by 15.3% from RMB 528.9 million in FY2023 to RMB 448.0 million in FY2024, while gross margin increased from 15.7% to 17.8% due to cost control efforts[72] - Net loss decreased by 64.8% from RMB 52.8 million in FY2023 to RMB 18.6 million in FY2024, with the net loss ratio improving from 10.0% to 4.2%[84] Segment Performance - The company operates in four reportable segments: Industrial Products, Project Contracting Services, Environmental Products, and Support Services[14] - Total revenue for the year ending June 30, 2024, was RMB 448,044,777, with industrial products contributing RMB 288,329,929, project contracting services contributing RMB 102,612,145, environmental products contributing RMB 5,635,900, and support services contributing RMB 51,466,803[15] - The company reported a gross profit of RMB 79,719,708, with industrial products contributing RMB 50,367,656, project contracting services contributing RMB 15,343,962, environmental products contributing RMB 3,076,238, and support services contributing RMB 10,931,852[15] - Industrial product sales remained stable, decreasing slightly by 0.4% from RMB 289.6 million in FY2023 to RMB 288.3 million in FY2024, with gross margin dropping from 20.3% to 17.5%[73] - Project contracting service revenue decreased by 42.5% from RMB 178.5 million in FY2023 to RMB 102.6 million in FY2024, but gross margin improved from 5.0% to 15.0% due to enhanced cost control[74] - Environmental product sales decreased by 44.6% from RMB 10.1 million in FY2023 to RMB 5.6 million in FY2024, while gross margin significantly increased from 27.4% to 54.6%[75] - Support service revenue increased slightly by 1.4% from RMB 50.8 million in FY2023 to RMB 51.5 million in FY2024, with gross margin decreasing from 24.8% to 21.2%[76] Financial Position and Liquidity - Total assets increased slightly to RMB 982.95 million from RMB 972.31 million, indicating stable financial position[4] - Cash and cash equivalents more than doubled to RMB 96.45 million from RMB 43.98 million, showing improved liquidity[4] - Total liabilities decreased to RMB 558,070,555 in 2024 from RMB 620,706,409 in 2023, reflecting a reduction of RMB 62,635,854[5] - Net assets increased to RMB 424,877,436 in 2024 from RMB 351,600,246 in 2023, showing growth of RMB 73,277,190[5] - Cash and cash equivalents increased to RMB 96.5 million as of June 30, 2024, compared to RMB 44.0 million in the previous year[85] - The asset-to-liability ratio improved to 14.7% as of June 30, 2024, from 16.4% in the previous year, reflecting better financial health[87] - The company maintained a strong liquidity position with sufficient cash and bank financing to support trade activities[94] Costs and Expenses - Finance costs net decreased to RMB 1.12 million from RMB 1.87 million, reflecting better financial management[2] - Administrative expenses decreased by 5.0% from RMB 80.0 million in FY2023 to RMB 76.0 million in FY2024, mainly due to reduced professional fees and employee costs[78] - R&D expenses decreased by 10.1% from RMB 28.6 million in FY2023 to RMB 25.7 million in FY2024, with the company aiming to improve paper equipment technology to international standards[79] - Financial and contract asset impairment losses decreased by 50.6% from RMB 16.4 million in FY2023 to RMB 8.1 million in FY2024[80] - Net financing costs decreased from RMB 1.9 million in FY2023 to RMB 1.1 million in FY2024, primarily due to reduced interest on other payables[82] - Total employee cost for the year ending June 30, 2024 was RMB 62.5 million, a decrease from RMB 72.6 million in the previous year[97] Contracts and Liabilities - Contract liabilities increased to RMB 152,879,736 in 2024 from RMB 123,064,299 in 2023, showing growth of RMB 29,815,437[5] - Contract liabilities increased to RMB 152,879,736 in 2024 from RMB 123,064,299 in 2023, driven by new contracts signed during the year[23][24] - Revenue recognized from contract liabilities was RMB 73,488,926 in 2024, compared to RMB 81,213,540 in 2023[26] - The remaining performance obligations for sales and project contracts totaled RMB 401,297,686 in 2024, with RMB 271,408,828 expected to be recognized within one year[26] - The court ruled that the plaintiff is entitled to a breach of contract compensation of RMB 32,994,295, which has been recognized in the consolidated financial statements[61] - The bank accounts of Zhejiang Huazhang were frozen for an amount of approximately RMB 37.6 million, effective from January 12, 2022, and extended for another year on December 20, 2023[61] Industry and Market Trends - China's GDP grew by 5% year-on-year in the first half of 2024, contributing to the recovery of the paper industry[62] - National production of machine-made paper and paperboard reached 76.613 million tons in the first half of 2024, an increase of 11.8% year-on-year[62] - Revenue for the paper and paper products industry above designated size reached RMB 699.21 billion, a year-on-year increase of 6.0%, with total profits of RMB 22.79 billion, up 104.9% year-on-year[62] - The paper equipment industry is moving towards technological innovation, environmental sustainability, and automation[63] - The non-woven fabric industry in China is experiencing rapid growth, driven by advancements in production technology and strong downstream market demand[64] - The company expects the domestic paper market to transition from off-season to peak season, with potential strengthening of terminal demand[98] Business Development and Projects - The company signed a series of influential orders, including a contract with Yadu Paper for the main drive control system, main drive motor, and MCS system for a 6800/1000 T-paper machine[66] - The company provided the main drive control system and DCS for a 5260/950 corrugated paper production line for Pingfeng Paper[66] - The company signed a contract with Zhaolong Paper for the drive control system, main drive motor, and MCS system for a 5480/850 high-strength corrugated paper machine[66] - The company provided a 3300/600 multifunctional paper production line with main drive control system, DCS, intelligent MCC system, and other automation equipment for Jiangxi Zhengguan Environmental Protection[66] - The company signed a contract with Fengsheng Paper for a 150,000-ton special paper drive project[66] - The company won a bid for a 5600/900 card production line project for Jintianhe Paper's food-grade packaging materials[66] - The company signed a total package contract with Sun Paper for a PM464860/600 special paper machine[66] - The company achieved a breakthrough with the Jilin Shanying PM61 corrugated paper project, reaching a speed of 1000m/min[68] - The company successfully launched two non-woven fabric projects, including the Sateri Tongling flushable wet wipes project and the Xiezhuo Medical flushable production line[70] - The company is actively expanding its global waste recycling business, leveraging over 20 years of industry experience and seeking investment opportunities overseas[71] Corporate Governance and Compliance - The amendments to the accounting policies have no significant impact on the company's financial position and performance, but have affected the disclosure of accounting policies in the consolidated financial statements[11] - The company has not early adopted the following new and revised Hong Kong Financial Reporting Standards (HKFRS) that have been issued but are not yet effective: HKFRS 10, HKAS 28, HKFRS 16, HKAS 1, HKAS 7, HKFRS 7, and HKAS 21[12] - HKFRS 18, which introduces new requirements for the presentation and disclosure of financial statements, will become effective for annual periods beginning on or after January 1, 2027[13] - The company has complied with the corporate governance code, except for deviations related to the separation of the chairman and CEO roles, which were temporarily handled by executive directors until the appointment of a new chairman on May 3, 2024[112] - The company's chairman did not attend the 2023 annual general meeting due to the vacancy in the chairman position until May 3, 2024[113] - All directors confirmed full compliance with the standard code regarding securities transactions as of June 30, 2024[114] - The company's audit committee, established on May 6, 2013, consists of three independent non-executive directors: Mr. Xing Kaineng, Mr. Yao Yangyang, and Ms. Zhang Dongfang, with Mr. Xing Kaineng serving as the current chairman[116] - The audit committee reviewed the company's financial system, accounting policies, financial status, and reporting procedures, including the consolidated financial statements for the fiscal year ending June 30, 2024[116] - The financial data for the fiscal year ending June 30, 2024, has been agreed upon by the company's auditor, He Xin Certified Public Accountants Co., Ltd., and matches the amounts in the audited consolidated financial statements[117] - The company and its subsidiaries did not purchase, sell, or redeem any listed securities during the fiscal year ending June 30, 2024[118] - The 2024 Annual General Meeting (AGM) will be held on November 29, 2024, with details to be provided in a circular and notice of AGM to be issued in accordance with the listing rules[119] - The board of directors does not recommend the payment of a final dividend for the fiscal year ending June 30, 2024 (2023: none)[120] - The annual results announcement and annual report are available on the Hong Kong Exchanges and Clearing Limited (HKEX) website and the company's website, with the 2024 annual report to be published and mailed to shareholders as required[120] - The executive directors as of the announcement date are Mr. Fang Hui (Chairman), Mr. Chen Hongwei, and Mr. Cai Haifeng, with independent non-executive directors being Mr. Xing Kaineng, Mr. Yao Yangyang, and Ms. Zhang Dongfang[121] Share Issuance and Capital Management - The company issued 532,044,689 new shares at HKD 0.20 per share, raising approximately HKD 104,500,000 (RMB 95,786,749) after deducting transaction costs of HKD 1,500,000 (RMB 1,374,929)[59] - The company's share capital and share premium increased to RMB 767,839,957 in 2024 from RMB 672,053,208 in 2023, with share capital rising to RMB 13,824,333 from RMB 8,907,761[59] - The company plans to issue 532,044,689 new shares at HKD 0.20 per share, raising approximately HKD 104.5 million net proceeds for business expansion and loan repayment[99] - The company has allocated HKD 3.8 million from the 2021 share subscription proceeds for working capital to purchase and process waste materials, with HKD 96.2 million remaining for potential acquisitions[101] - The company raised HKD 48.1 million net proceeds from its listing on the Hong Kong Stock Exchange in 2013[102] - The company's share subscription in 2021 raised HKD 100 million net proceeds, initially intended for a Dubai recycling project but later used for working capital[100] - The company has utilized approximately RMB 26.3 million from the net proceeds since the listing date until December 31, 2021, with RMB 21.8 million remaining unused as of December 31, 2021[103] - The board has decided to reallocate the unused net proceeds of approximately RMB 21.8 million, originally intended for capacity expansion, cost-saving construction, and market awareness, to repay bank loans (RMB 8 million), R&D expenses (RMB 5 million), and administrative and management expenses (RMB 8.8 million)[103] - As of June 30, 2024, the actual use of net proceeds includes RMB 18.299 million for capacity expansion, RMB 5.208 million for product development and innovation, and RMB 8 million for bank loan repayment[104] - The company raised approximately HKD 106.0 million through a public offering, with net proceeds of HKD 104.5 million allocated for repaying bank loans, expanding industrial automation and related businesses, and general working capital[106] - As of June 30, 2024, HKD 40.88 million of the net proceeds from the public offering has been used for bank loan repayment, while HKD 31.38 million remains unused for business expansion and support services[106] - The company has utilized approximately HKD 45.4 million from the proceeds of the public offering, with an unused balance of HKD 59.1 million currently deposited in deposits and/or money market instruments[107] - No share options were granted or exercised under the share option plan as of June 30, 2024[108] Legal and Regulatory Matters - The company's subsidiary, Zhejiang Huazhang Technology, has appealed a court judgment and had RMB 37.6 million frozen in bank accounts, with a retrial of the case ongoing as of September 5, 2024[109][110] - The court ruled that the plaintiff is entitled to a breach of contract compensation of RMB 32,994,295, which has been recognized in the consolidated financial statements[110] Environmental and Sustainability Initiatives - The company is focusing on sustainable development by introducing permanent magnet motors and IE5 ultra-efficient motors to reduce carbon emissions in the paper industry[99] - The company aims to enhance its competitiveness through strategic partnerships with domestic and international suppliers and by optimizing its management system[99] - The company is exploring new business opportunities in the environmental protection sector to increase group revenue[99]
华章科技(01673) - 2024 - 年度业绩