HARSON(SH:603958)2018-08-27 16:00Financial Performance - The company's operating revenue for the first half of 2018 was ¥724,952,428.77, a decrease of 6.48% compared to ¥775,197,330.45 in the same period last year[19]. - The net profit attributable to shareholders for the first half of 2018 was ¥38,001,699.11, down 13.06% from ¥43,709,819.63 in the previous year[19]. - The net cash flow from operating activities decreased by 35.58% to ¥56,774,890.58, compared to ¥88,132,560.08 in the same period last year[19]. - The basic earnings per share for the first half of 2018 was ¥0.17, a decline of 15.00% from ¥0.20 in the same period last year[20]. - The company reported a significant decrease of 74.09% in net profit after deducting non-recurring gains and losses, amounting to ¥5,829,086.27 compared to ¥22,495,263.40 in the previous year[19]. - The company achieved operating revenue of 724.95 million RMB, a decrease of 6.48% compared to the same period last year[35]. - The net profit attributable to the parent company was 38.00 million RMB, down 13.06% year-on-year[35]. - Domestic sales revenue was 669.98 million RMB, a decline of 2.48%, while foreign sales revenue was 54.97 million RMB, down 37.65%[35]. - The company reported a significant decline in external sales revenue, primarily due to clients shifting orders to Southeast Asia and Central America[44]. Assets and Liabilities - The total assets at the end of the reporting period were ¥1,354,725,292.00, representing a decrease of 5.77% from ¥1,437,751,945.99 at the end of the previous year[19]. - The net assets attributable to shareholders decreased by 1.51% to ¥1,115,156,577.15 from ¥1,132,271,305.25 at the end of the previous year[19]. - Total assets at the end of the reporting period amounted to 1,354,000,000 RMB, with a decrease of 25.85% in cash and cash equivalents compared to the previous period[39]. - The company's accounts payable decreased by 31.15% to 134,807,547.57 RMB, attributed to reduced procurement[39]. - The total current assets decreased from CNY 1,208,308,379.76 to CNY 1,134,259,387.95, a reduction of approximately 6.1%[81]. - Cash and cash equivalents decreased from CNY 107,175,377.61 to CNY 79,474,986.63, a decline of about 26.0%[81]. - Accounts receivable decreased from CNY 133,500,720.15 to CNY 123,954,013.04, a decrease of approximately 7.5%[81]. - Inventory decreased from CNY 595,902,912.55 to CNY 521,411,122.33, a reduction of about 12.5%[81]. - Total liabilities decreased from CNY 293,930,156.07 to CNY 229,289,116.99, a reduction of about 22%[83]. Cash Flow - The net cash flow from operating activities for the current period is RMB 56,774,890.58, a decrease of 35.5% compared to RMB 88,132,560.08 in the previous period[93]. - Cash inflow from operating activities totaled RMB 849,986,027.85, down 4.0% from RMB 885,558,511.87 in the previous period[93]. - Cash outflow from operating activities was RMB 793,211,137.27, slightly decreased from RMB 797,425,951.79 in the previous period[93]. - The net cash flow from investment activities was negative at RMB -44,147,334.15, an improvement from RMB -127,990,170.80 in the previous period[94]. - Cash inflow from financing activities was RMB 18,081,215.09, compared to RMB 2,466,272.46 in the previous period[94]. - The net cash flow from financing activities was negative at RMB -38,432,384.91, an improvement from RMB -56,484,599.26 in the previous period[94]. Shareholder Information - The company has 21,178 common stock shareholders as of the end of the reporting period[68]. - The largest shareholder, Zhenxing International Co., holds 148,359,935 shares, representing 67.46% of total shares[70]. - The total number of shares held by the top ten shareholders is 158,360,805, which constitutes 71.67% of the total shares[70]. - The report highlights that the largest shareholder, Zhenxing International, is fully owned by Harrison (BVI), which holds 52.74% of the shares[70]. - The report does not indicate any major changes in shareholding percentages among the top shareholders during the reporting period[70]. Corporate Governance - The company appointed Da Hua Accounting Firm as the auditor for the 2018 financial report and internal control report[52]. - There were no significant lawsuits or arbitration matters during the reporting period[53]. - The company has not faced any penalties or corrective actions from regulatory bodies during the reporting period[53]. - The company has established a plan for potential share repurchases if market conditions warrant, ensuring compliance with relevant regulations[49]. - The company has committed to not transferring or entrusting the management of its shares for 36 months from the date of listing, with a lock-up period ending on June 29, 2019[48]. Strategic Initiatives - The company is actively expanding its retail channels to include shopping centers and online platforms to mitigate competition from various sales channels[43]. - The company has plans for market expansion and new product development, although specific details were not disclosed in the earnings call[90]. - The company is focused on maintaining shareholder value through strategic commitments and compliance with market regulations[49]. - The company has established a multi-brand operation model, with its own brands including HARSON, KADINA, and COVER, among others[31]. Risk Management - The company has identified risks related to inventory control, with low turnover rates impacting operations, and plans to implement stricter inventory management measures[43]. - The company plans to enhance credit evaluations and contract management to mitigate risks associated with accounts receivable[43]. Accounting Policies - The financial statements are prepared in accordance with the accounting standards issued by the Ministry of Finance, ensuring a true and complete reflection of the company's financial status[119]. - The company follows specific accounting policies for mergers and acquisitions, treating transactions as a single package when they are interdependent[125]. - The company recognizes goodwill when the acquisition cost exceeds the fair value of identifiable net assets acquired[125]. - The company consolidates financial statements based on control, ensuring all subsidiaries are included[128]. Inventory Management - The company uses a weighted average method for inventory valuation and assesses net realizable value to determine inventory impairment provisions[162][163]. - The company conducts a comprehensive inventory check at the end of the period to adjust inventory impairment provisions accordingly[163]. - The company has a perpetual inventory system in place for tracking inventory[164].