BHCC(SH:600800)2018-08-28 16:00Financial Performance - The company's operating revenue for the first half of 2018 was ¥78,026,352.60, representing a 22.76% increase compared to ¥63,558,535.12 in the same period last year[19]. - The net profit attributable to shareholders was -¥29,578,576.03, an improvement from -¥33,032,809.95 in the previous year[19]. - The net cash flow from operating activities was -¥12,506,046.13, showing a significant reduction in cash outflow compared to -¥41,864,578.98 in the same period last year[19]. - The total assets decreased by 10.03% to ¥499,277,761.80 from ¥554,943,042.69 at the end of the previous year[19]. - The net assets attributable to shareholders dropped by 66.16% to ¥28,795,304.59 from ¥85,093,505.00 at the end of the previous year[19]. - The basic earnings per share for the first half of 2018 was -¥0.05, slightly improved from -¥0.0540 in the same period last year[20]. - The weighted average return on equity decreased by 35.17 percentage points to -67.66% from -32.49% in the previous year[20]. - The company's operating costs increased by 29.62% to ¥63,950,672.71 from ¥49,337,042.22 in the previous year, primarily due to increased main business costs[19]. - Investment income decreased by 51.72% to -6,219,083.31 RMB compared to the previous period[21]. - Operating income increased significantly by 5,746.30% to 228,296.30 RMB, mainly due to increased social security subsidies received[21]. - Cash received from operating activities rose by 129.35% to 27,441,075.48 RMB, primarily from Tianjin Residential Group[21]. - Cash paid to employees decreased by 31.31% to 33,980,800.84 RMB, reflecting reduced compensation and salaries[21]. - Tax expenses decreased by 31.66%, amounting to 5,421,967.48 RMB, indicating a reduction in various tax payments[21]. Market and Product Development - The average daily active users of "Cloud Flash Pay" reached four times that of last June, with total users nearing 70 million[29]. - The issuance of interconnectivity cards increased steadily, with over 80 cities and 6 projects joining the interconnectivity card platform[29]. - The company’s "QR code payment-based city card special reading and writing machine" won the "Golden Ant Award" for innovation, marking ten consecutive years of recognition[32]. - The mobile payment market transaction scale reached 403,645.1 billion RMB in the first half of 2018, with a quarter-on-quarter growth of 6.99%[27]. - The company’s investment in green printing technologies has enhanced product quality and accelerated the achievement of green printing goals[32]. - The company has established multiple R&D projects, including a new generation of resident ID card readers and 3D magnetic ink, all of which are progressing smoothly[34]. - The company’s social security IC card product maintained relative stability, with an increase in the task volume of the second-generation ID card compared to last year[38]. - The company’s mobile payment solutions, including QR code and NFC technologies, have been implemented in 39 cities, significantly increasing the usage of scan-to-pay services[39]. - The company has received funding support for the "Intelligent Public Transport Cloud Payment Platform and Supporting Terminal" project, which is part of the Tianjin Municipal Industrial Technology Development Special Fund[34]. - The company has made significant improvements to its vehicle-mounted payment terminal, which now supports multiple payment methods and has been well received in the market[35]. Financial Risks and Challenges - The company faces financial risks, market competition risks, and fluctuations in material and labor costs, as detailed in the report[7]. - The company faces risks from domestic economic slowdown, intensified market competition, and rising labor costs, which may impact new business and market expansion efforts[49]. - The company plans to enhance its core competitiveness through technological innovation and the integration of its R&D team, aiming to meet the rapid development needs of the industry[50]. - The company aims to expand its market presence by leveraging its experience in urban card systems and mobile payment solutions, targeting a larger market share[51]. - The company is undergoing a significant asset restructuring with Tianjin Bohai Chemical Group, which has led to a temporary suspension of its stock trading since May 21, 2018[53]. - The company is undergoing a major asset restructuring, requiring approval from the Tianjin State-owned Assets Supervision and Administration Commission, with a planned stock resumption date no later than October 20, 2018[54]. - The company has applied for a stock suspension extension due to the complexity of the restructuring process, which is expected to take more than three months from the initial suspension date[54]. - The company is involved in a legal dispute regarding a capital reduction case, which has been accepted by the Tianjin Binhai New Area People's Court[61]. Shareholder and Equity Information - The total number of ordinary shareholders reached 63,113 by the end of the reporting period[71]. - Tianjin Global Magnetic Card Group Co., Ltd. holds 27.71% of shares, totaling 169,394,723 shares, with 15,000,000 shares frozen[72]. - The company reported no significant changes in its share capital structure during the reporting period[70]. - There were no disclosed major related party transactions during the reporting period[63]. - The company has not disclosed any significant accounting errors that require retrospective restatement[69]. - The company has implemented changes in accounting policies due to new regulations effective from May 28, 2017[66]. - The company reported zero asset disposal gains for both the first quarter of 2017 and 2018[68]. - There were no updates on employee stock ownership plans or other incentive measures during the reporting period[64]. - The company did not disclose any major contracts or their performance during the reporting period[70]. - The total current assets decreased from CNY 225,526,176.55 to CNY 212,031,780.23, a decline of approximately 6%[82]. - The company has a total of 169,394,723 shares held by Tianjin Global Magnetic Card Group Co., Ltd., making it the largest unrestricted shareholder[73]. - The company has a total of 5,185,687 shares that were paid on behalf of shareholders who did not agree to the equity reform compensation arrangement[76]. - The company appointed Zhang Yao as the new secretary of the board, replacing Li Jinhong[78]. - The company has not undergone any changes in controlling shareholders or actual controllers during the reporting period[77]. Accounting and Financial Management - The financial statements are prepared based on the assumption of going concern, which is deemed appropriate by the management[119]. - The company adheres to the accounting standards and principles, ensuring that the financial statements reflect a true and complete picture of its financial status[120]. - The accounting period for the company runs from January 1 to December 31 each year[121]. - The company utilizes the Chinese Yuan (RMB) as its accounting currency[123]. - The company follows specific accounting treatments for mergers and acquisitions, distinguishing between mergers under common control and those not under common control[124][125]. - The company will reassess its control over subsidiaries if relevant facts and circumstances change, impacting the consolidation scope[129]. - The company adjusts the financial statements of subsidiaries to align with its accounting policies and periods, ensuring accurate consolidation[130]. - Minority interests and losses are separately presented in the consolidated financial statements, reflecting the portion not owned by the company[130]. - Upon losing control of a subsidiary, the remaining equity is remeasured at fair value, impacting the investment income for the period[131]. - The company follows specific accounting standards for long-term equity investments and financial instruments, ensuring compliance with relevant regulations[132]. - Cash equivalents are defined as short-term, highly liquid investments that are easily convertible to known amounts of cash[134]. - Foreign currency transactions are converted at the spot rate on the transaction date, with exchange differences recognized in the current period's profit or loss[135]. - Financial assets and liabilities are initially recognized at fair value, with subsequent measurement based on their classification[136]. - The company categorizes financial assets into various classes, including those measured at fair value with changes recognized in profit or loss[137]. - Loans and receivables are measured at amortized cost using the effective interest method, with gains or losses recognized in the current period[138]. - Available-for-sale financial assets are designated at initial recognition and are not classified as other financial asset categories[138]. - The company assesses impairment for significant financial assets individually, while non-significant assets may be tested individually or grouped by similar credit risk characteristics[140]. - For receivables over RMB 2 million, the company applies individual recognition for impairment testing[145]. - The company uses an aging analysis method to determine the provision for bad debts, with specific percentages for different aging categories, such as 0.5% for accounts under 1 year and 100% for accounts over 5 years[148]. - Impairment losses for available-for-sale financial assets are recognized when there is a significant or prolonged decline in fair value[141]. - The company recognizes impairment losses in profit or loss for available-for-sale debt instruments, while reversals are recognized in other comprehensive income[141]. - Financial assets are derecognized when the contractual rights to cash flows have expired or when the risks and rewards of ownership have been transferred[142]. - The company measures financial liabilities at fair value upon initial recognition, with transaction costs accounted for differently based on the classification of the liability[144]. - The company applies the effective interest method for subsequent measurement of other financial liabilities, recognizing gains or losses in profit or loss upon derecognition[144]. - The company conducts impairment testing for receivables based on the present value of expected future cash flows[145]. - The company recognizes cumulative losses from fair value declines of available-for-sale financial assets in profit or loss upon impairment[141]. - The company uses a perpetual inventory system for inventory management[12]. - Inventory is measured at the lower of cost and net realizable value, with provisions for inventory write-downs recognized when net realizable value is less than cost[12]. - Long-term equity investments are accounted for using the equity method when the company has significant influence or joint control over the investee[151]. - The initial investment cost for long-term equity investments is determined based on the fair value of identifiable net assets at the acquisition date[152]. - Depreciation for fixed assets is calculated using the straight-line method, with useful lives ranging from 5 to 40 years depending on the asset category[157]. - The company recognizes construction in progress costs based on actual expenditures incurred during the construction period[158]. - Borrowing costs are applicable and recognized in accordance with relevant accounting standards[159]. - The company capitalizes borrowing costs directly attributable to qualifying assets during the construction or production phase, ceasing capitalization once the asset is ready for use or sale[160]. - If there is an abnormal interruption in the construction or production of qualifying assets lasting more than 3 months, capitalization of borrowing costs is suspended until activities resume[161]. - Intangible assets are initially measured at cost, with related expenditures recognized as intangible assets if they are likely to generate future economic benefits and can be reliably measured[162]. - Research phase expenditures are recognized as expenses when incurred, while development phase expenditures are capitalized if specific criteria are met, including technical feasibility and intention to complete the asset[164]. - The company conducts impairment tests for long-term assets, including fixed assets and finite-lived intangible assets, at the balance sheet date to determine if impairment indicators exist[166]. - If the recoverable amount of an asset is less than its carrying amount, an impairment loss is recognized, calculated as the difference between the carrying amount and the recoverable amount[167]. - Long-term prepaid expenses are amortized on a straight-line basis over the expected benefit period, which exceeds one year[169]. - Short-term employee benefits, including wages and bonuses, are recognized as liabilities and expensed in the period they are incurred[170]. - The company recognizes provisions for expected liabilities when there is a present obligation that is likely to result in an outflow of economic benefits and can be reliably measured[174]. - The company recognizes revenue from product sales when the ownership risks and rewards are transferred to the buyer, and the revenue amount can be reliably measured[175]. - Service revenue is recognized based on the percentage of completion method, provided that the outcome can be reliably estimated[176]. - Government grants related to assets are recognized as deferred income and amortized over the useful life of the related assets[178]. - The company applies a 15% corporate income tax rate for its high-tech enterprises, as certified by the relevant authorities[187]. - The company has subsidiaries that are subject to a 25% corporate income tax rate[186]. - The company confirms deferred tax assets and liabilities based on temporary differences between the carrying amount of assets and liabilities and their tax bases[180]. - The company uses a straight-line method to account for operating lease expenses over the lease term[183]. - The company has made changes to its accounting policies in accordance with new regulations regarding non-current assets held for sale[184]. - The company has a tax rate of 16% to 17% for value-added tax based on taxable income[185]. Cash Flow and Asset Management - Cash and cash equivalents at the end of the period totaled ¥35,109,614.35, down from ¥44,157,726.00 at the beginning of the period, representing a decrease of approximately 20.5%[189]. - The company reported a provision for bad debts of ¥7,856,061.08 for the current period, with no recoveries or reversals recorded[196]. - The total accounts receivable at the end of the period amounted to ¥249,024,817.57, with a bad debt provision of ¥117,420,719.79, indicating a provision ratio of approximately 47.15%[195]. - The company has significant accounts receivable from non-related parties, with the largest being ¥24,189,410.70, accounting for 8.93% of the total accounts receivable[197]. - Prepayments at the end of the period were ¥8,015,602.32, an increase from ¥6,603,402.90 at the beginning of the period, reflecting a growth of approximately 21.3%[199]. - The company has no financial assets measured at fair value with changes recognized in profit or loss, indicating a conservative approach to financial asset management[190]. - The total cash deposits decreased significantly from ¥43,308,003.39 to ¥29,421,025.84, a decline of about 32%[189]. - The company has no significant overdue accounts receivable, with all major receivables being within three years[197]. - The provision for bad debts for accounts over three years old is 100%, indicating a high level of caution regarding older receivables[195]. - The company has not recognized any financial assets transferred and derecognized accounts receivable, suggesting no significant asset transfers during the period[198].