宏信建发(09930) - 2025 - 中期业绩

Performance Overview Operating Performance and Profitability The company's total revenue decreased to RMB 4.35 billion, with gross profit falling to RMB 940 million and profit attributable to ordinary equity holders significantly declining to RMB 35.49 million, resulting in a basic EPS of RMB 0.011 Key Operating Results for the Six Months Ended June 30, 2025 | Metric | First Half 2025 (Thousands of RMB) | First Half 2024 (Thousands of RMB) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | 4,350,062 | 4,872,421 | -10.7% | | Gross Profit | 940,667 | 1,559,325 | -39.7% | | Gross Margin | 21.6% | 32.0% | -10.4pp | | Profit Before Tax | 50,276 | 406,890 | -87.6% | | Profit Attributable to Ordinary Equity Holders of the Company | 35,490 | 268,228 | -86.8% | | Basic Earnings Per Share (RMB) | 0.011 | 0.084 | -86.9% | Gross Profit and Gross Margin by Business Segment | Business Segment | Gross Profit First Half 2025 (Thousands of RMB) | Gross Margin First Half 2025 | Gross Margin First Half 2024 | | :--- | :--- | :--- | :--- | | Operating Lease Services | 621,196 | 27.4% | 37.1% | | Engineering Technical Services | 171,407 | 15.1% | 27.0% | | Asset Management and Other Services | 148,064 | 15.7% | 32.1% | - Profitability metrics significantly declined, with Return on Average Equity (ROAE) decreasing from 4.9% in the prior year period to 0.6%[11] Balance Sheet Position As of June 30, 2025, the Group's total assets remained stable at RMB 36.58 billion, while total liabilities slightly increased to RMB 25.25 billion, and total equity decreased to RMB 11.33 billion Summary of Balance Sheet as of June 30, 2025 | Metric | June 30, 2025 (Thousands of RMB) | December 31, 2024 (Thousands of RMB) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 36,581,356 | 36,434,181 | +0.4% | | Total Liabilities | 25,253,610 | 24,975,831 | +1.1% | | Total Equity | 11,327,746 | 11,458,350 | -1.1% | | Gearing Ratio | 69.0% | 68.6% | +0.4pp | | Net Asset Value Per Share (RMB) | 3.62 | 3.66 | -1.1% | Management Discussion and Analysis Industry Environment and Company Response The company adopted a dual-track strategy of domestic lean operations and aggressive overseas expansion, optimizing asset structure and reducing costs domestically while accelerating global presence through acquisitions and tiered resource allocation abroad - Domestic Market: In the first half of 2025, China's GDP grew 5.3% YoY, but the construction sector was generally sluggish, with real estate development construction area decreasing 9.1% YoY; however, infrastructure investment and manufacturing investment grew 4.6% and 7.5% respectively, supporting engineering machinery leasing[15] - Overseas Markets: Emerging markets like Southeast Asia, the Middle East, and Africa show strong infrastructure demand, with the construction sector and GDP in several countries where the company operates (e.g., Malaysia, Indonesia, Vietnam, Saudi Arabia) exhibiting good growth trends[17][18][19] - Company Response Strategy: Domestically, shifting from investment-driven to lean operations, optimizing asset structure, and expanding into diversified scenarios like mining and marine engineering; overseas, firmly executing the '3+3+3' strategy, consolidating Southeast Asia, deeply exploring Middle East potential, and completing the acquisition of a leading Malaysian leasing company[24][25] - As of the first half of 2025, the Group's global service network reached 567 locations, with 63 overseas, covering 7 countries[25] Income Statement Analysis In the first half of 2025, total revenue decreased 10.7% to RMB 4.35 billion, gross margin fell to 21.6%, and profit for the period plummeted 86.8% to RMB 35.49 million, with overseas business profitability being a key highlight Income Statement Overview In the first half of 2025, revenue decreased 10.7%, profit before tax sharply declined 87.6% to RMB 50.28 million, while selling and administrative expenses and finance costs increased, though adjusted EBITDA saw only a slight 1.7% decrease Summary of Income Statement for the First Half of 2025 | Item | For the Six Months Ended June 30 (2025) (Thousands of RMB) | For the Six Months Ended June 30 (2024) (Thousands of RMB) | Change % | | :--- | :--- | :--- | :--- | | Revenue | 4,350,062 | 4,872,421 | -10.7% | | Gross Profit | 940,667 | 1,559,325 | -39.7% | | Profit Before Tax | 50,276 | 406,890 | -87.6% | | Profit for the Period | 35,490 | 268,228 | -86.8% | EBITDA (Non-HKFRS Measure) | Item | For the Six Months Ended June 30 (2025) (Thousands of RMB) | For the Six Months Ended June 30 (2024) (Thousands of RMB) | Change % | | :--- | :--- | :--- | :--- | | EBITDA | 1,968,638 | 2,003,614 | -1.7% | | Depreciation and Amortization | 1,521,215 | 1,224,653 | 24.2% | Revenue Analysis Total revenue decreased 10.7% to RMB 4.35 billion, driven by domestic rental declines and engineering services contraction, while operating lease services revenue grew 19.5% and overseas revenue surged 719.8% to RMB 597 million, becoming a key growth driver Revenue by Business Segment | Business Segment | First Half 2025 Revenue (Thousands of RMB) | Revenue Share | YoY Change % | | :--- | :--- | :--- | :--- | | Operating Lease Services | 2,265,244 | 52.1% | +19.5% | | Engineering Technical Services | 1,138,882 | 26.2% | -41.5% | | Asset Management and Other Services | 945,936 | 21.7% | -8.2% | | Total | 4,350,062 | 100.0% | -10.7% | Revenue by Geographical Segment | Geographical Segment | First Half 2025 Revenue (Thousands of RMB) | Revenue Share | YoY Change % | | :--- | :--- | :--- | :--- | | Domestic Regions (including Hong Kong and Macau) | 3,752,682 | 86.3% | -21.8% | | Overseas Regions | 597,380 | 13.7% | +719.8% | | Total | 4,350,062 | 100.0% | -10.7% | Key Product Line Operating Data | Product Line | Metric | First Half 2025 | First Half 2024 | | :--- | :--- | :--- | :--- | | Aerial Work Platforms | Equipment Under Management (Thousands of Units) | 202.6 | 204.8 | | | Utilization Rate | 64.0% | 65.6% | | New Support Systems | Equipment Under Management (Thousands of Tons) | 1,371.1 | 1,613.2 | | | Utilization Rate | 70.4% | 66.9% | | New Formwork and Scaffolding Systems | Equipment Under Management (Thousands of Tons) | 638.3 | 748.4 | | | Utilization Rate | 66.3% | 75.6% | Gross Profit and Gross Margin Analysis Gross profit decreased 39.7% to RMB 941 million, with overall gross margin falling 10.4 percentage points to 21.6% due to market price fluctuations, while overseas business gross profit contribution significantly increased to 28.8% Gross Profit and Gross Margin by Business Segment | Business Segment | Gross Profit First Half 2025 (Thousands of RMB) | Gross Margin % | YoY Change in Gross Profit Amount % | | :--- | :--- | :--- | :--- | | Operating Lease Services | 621,196 | 27.4% | -11.6% | | Engineering Technical Services | 171,407 | 15.1% | -67.4% | | Asset Management and Other Services | 148,064 | 15.7% | -55.3% | | Total Gross Profit | 940,667 | 21.6% | -39.7% | - Operating lease services gross margin decreased 9.7 percentage points to 27.4%, primarily impacted by utilization rates and rental price fluctuations of aerial work platforms and new formwork and scaffolding systems[45] - Overseas regions' gross profit surged 2,638.8% YoY to RMB 271 million, significantly increasing its share of total gross profit from 0.6% to 28.8%[48] Cost and Expense Analysis In the first half of 2025, total cost of sales and selling & administrative expenses increased 4.0% to RMB 4.17 billion, driven by higher depreciation and trading costs, while staff and transportation costs were effectively controlled Cost of Sales and Selling and Administrative Expenses (by Nature) | Item | First Half 2025 (Thousands of RMB) | % of Revenue | YoY Change % | | :--- | :--- | :--- | :--- | | Depreciation and Amortization | 1,486,981 | 34.2% | +24.3% | | Staff and Subcontracting Costs | 944,183 | 21.7% | -6.9% | | Trading and Sub-lease Costs | 658,887 | 15.1% | +15.2% | | Transportation and Hoisting Fees | 304,439 | 7.0% | -32.1% | | Research and Development (R&D) Expenses | 106,442 | 2.4% | +50.1% | | Total | 4,167,726 | 95.8% | +4.0% | - Depreciation and amortization significantly increased by 24.3%, primarily due to the combined effect of increased equipment scale compared to the prior year period and changes in accounting policies (extending the useful life of some scaffolding)[50][51] - Transportation and hoisting fees significantly decreased by 32.1%, benefiting from lower asset rental volume and a logistics cost reduction management system, with logistics unit prices decreasing 4.2% YoY[51] Finance Costs Analysis Finance costs increased 5.0% to RMB 401 million due to higher borrowing interest, but the average financing rate decreased from 3.99% to 3.69%, effectively mitigating the growth of interest expenses Interest Expense on Interest-bearing Bank and Other Borrowings | Metric | First Half 2025 | First Half 2024 | | :--- | :--- | :--- | | Average Balance (Thousands of RMB) | 21,063,794 | 18,382,079 | | Interest Expense (Thousands of RMB) | 388,992 | 367,027 | | Average Financing Rate (Annualized) | 3.69% | 3.99% | - The average financing rate decreased by 0.30 percentage points, primarily due to central bank interest rate cuts and preferential rates obtained by the company[60] Profit for the Period and Earnings Per Share The Group's profit for the first half of 2025 significantly decreased 86.8% to RMB 35.49 million, with domestic regions incurring a loss while overseas regions achieved a profit of RMB 113 million, and basic EPS fell to RMB 0.011 Net Profit After Tax by Geographical Segment | Geographical Segment | First Half 2025 (Thousands of RMB) | First Half 2024 (Thousands of RMB) | | :--- | :--- | :--- | | Domestic Regions (including Hong Kong and Macau) | -77,861 | 296,955 | | Overseas Regions | 113,351 | -28,727 | | Total | 35,490 | 268,228 | - Basic earnings per share was RMB 0.011, a 86.9% decrease from RMB 0.084 in the prior year period[64][65] Financial Position Analysis As of June 30, 2025, total assets remained stable at RMB 36.58 billion, with PPE slightly decreasing, receivables increasing but with longer DSO, total liabilities rising to RMB 25.25 billion, and overseas assets significantly growing 52.8% Asset Analysis Total assets slightly increased 0.4% to RMB 36.58 billion, with PPE decreasing, receivables growing but with longer DSO, cash and bank balances increasing 38.1% to RMB 2.48 billion, and overseas assets significantly growing 52.8% to RMB 5.42 billion Asset Structure | Asset Item | June 30, 2025 (Thousands of RMB) | % of Total | Change from Beginning of Year % | | :--- | :--- | :--- | :--- | | Property, Plant and Equipment | 21,720,292 | 59.4% | -2.4% | | Receivables and Contract Assets | 6,810,439 | 18.6% | +2.8% | | Cash and Bank Balances | 2,476,599 | 6.8% | +38.1% | | Other Assets | 5,573,926 | 15.2% | -5.1% | | Total Assets | 36,581,356 | 100.0% | +0.4% | - Days sales outstanding for receivables increased from 193 days in the prior year period to 248 days, primarily due to stable net receivables despite a decrease in revenue[78][79] - Goodwill increased from zero to RMB 174 million due to the acquisition of the Malaysian company[86] - Total overseas assets reached RMB 5.42 billion, a 52.8% increase from the beginning of the year, raising their share of total assets from 9.7% to 14.8%[67] Liability Analysis Total liabilities slightly increased 1.1% to RMB 25.25 billion, with interest-bearing borrowings at RMB 21.22 billion, accounting for 84.0%; debt structure optimized with unsecured borrowings increasing to 66.6%, while payables decreased 6.3% Liability Structure | Liability Item | June 30, 2025 (Thousands of RMB) | % of Total | Change from Beginning of Year % | | :--- | :--- | :--- | :--- | | Interest-bearing Bank and Other Borrowings | 21,224,692 | 84.0% | +1.5% | | Payables and Bills Payable | 2,244,433 | 8.9% | -6.3% | | Other Payables and Accrued Expenses | 1,001,932 | 4.0% | +13.0% | | Total Liabilities | 25,253,610 | 100.0% | +1.1% | - The proportion of unsecured interest-bearing bank and other borrowings increased from 61.6% at the beginning of the year to 66.6%, with a corresponding decrease in the secured portion, indicating optimized financing structure[92] Shareholders' Equity As of June 30, 2025, total equity decreased 1.1% to RMB 11.33 billion, primarily due to dividend distribution and other equity changes, partially offset by profit for the period Changes in Equity | Item | Amount (Thousands of RMB) | | :--- | :--- | | As of December 31, 2024 | 11,458,350 | | Profit for the Period | 35,490 | | Dividend Distribution | -132,874 | | Other Equity Changes | -33,220 | | As of June 30, 2025 | 11,327,746 | - The company distributed the final dividend for the year 2024 of HKD 0.045 per share on July 2, 2025[101] Capital Management, Capital Expenditure, and Risk Management The company maintains prudent capital management, despite profitability metrics deteriorating with ROAE at 0.6%, while the gearing ratio remains stable at 69.0%; net capital expenditure significantly decreased 90.3% to RMB 384 million, and risk management focuses on foreign exchange and liquidity Key Financial Ratios | Metric | First Half 2025 | First Half 2024 | | :--- | :--- | :--- | | Return on Average Equity | 0.6% | 4.9% | | Return on Average Assets | 0.2% | 1.6% | | Gearing Ratio (Period-end) | 69.0% | 68.7% | - Capital expenditure in the first half was RMB 825 million, a significant 81.1% YoY decrease; net capital expenditure after deducting second-hand equipment sales was RMB 384 million, a 90.3% YoY decrease[109] - The company hedges foreign exchange risk through derivative financial instruments and manages liquidity risk by optimizing financing structure and maintaining cash positions[111][112] Significant Investments and Human Resources The Group's key strategic move was acquiring an 80% stake in TH Tong Heng Machinery Sdn. Bhd. in Malaysia, deepening overseas expansion, while total employees decreased, and the 2024 equity incentive plan continued to retain core talent - In May 2025, the Group completed the acquisition of an 80% equity stake in TH Tong Heng Machinery Sdn. Bhd. in Malaysia for approximately MYR 171 million (approximately RMB 290 million), which constitutes a discloseable transaction[116][117][118] - As of June 30, 2025, the Group's total number of employees was 4,317, a decrease from 5,346 in the prior year period[127] - During the reporting period, the company did not grant new options or shares under the 2024 Share Option Scheme and Restricted Share Award Scheme, but some lapsed due to employee departures and other reasons[129][131][132] Future Outlook For the second half of 2025, the Group will continue its dual-track strategy, focusing on lean operations, customer marketing, and asset optimization domestically, while pursuing a 'deepen existing, expand emerging' approach overseas, cautiously exploring new markets in Africa, South America, and Asia to expand its international footprint - Domestic Strategy: Focus on lean operations, enhancing asset full lifecycle value through deepened customer marketing, industry solution development, and optimized asset allocation[135] - Overseas Strategy: Adopt a dual-driven model of 'deepening existing countries' and 'expanding into emerging markets', implementing the '3+3+3' overseas development strategy[135] - New Market Expansion: The next step will focus on evaluating and deploying in regions with development potential, such as Africa, South America, and Asia[135] Other Significant Matters Disclosure of Interests The report details the shareholdings of directors, chief executives, and major shareholders as of June 30, 2025, with controlling shareholder Far East Horizon holding approximately 47.22% of total interests, and several directors holding shares via in-specie distributions or equity incentive plans - Controlling shareholder Far East Horizon Limited directly holds 1,333,247,413 shares (41.70%) and indirectly holds 176,600,000 shares (5.52%) through controlled corporations, totaling approximately 47.22% of interests[145] - Several directors and chief executives, including Kong Fanxing, Zhan Jing, and Tang Li, hold shares or related interests in the company, with some interests derived from Far East Horizon's in-specie distribution and the company's equity incentive plan[136][138] Corporate Governance The company largely complied with the Corporate Governance Code, with one deviation where the Chairman and several committee chairmen were absent from the AGM due to work commitments, and directors confirmed compliance with the standard code for securities transactions - The company deviated from Rule F.2.2 of the Corporate Governance Code, as the Chairman of the Board and several committee chairmen were unable to attend the Annual General Meeting due to other work commitments[148][149] - The company has established an Audit Committee, which reviewed this interim report[153][154] Dividends and Related Party Transactions The Board recommended no interim dividend for the six months ended June 30, 2025, and the company entered into a three-year cooperation framework agreement with controlling shareholder Far East Horizon for mutual services, constituting continuing connected transactions - The Board recommended no interim dividend for 2025 (prior year period: HKD 0.05 per share)[156] - The company entered into a cooperation framework agreement with controlling shareholder Far East Horizon, involving the Group providing engineering technical and leasing services to Far East Horizon (annual cap RMB 141 million) and Far East Horizon providing consulting services to the Group (annual cap RMB 25 million)[158] Condensed Interim Consolidated Financial Statements Independent Review Report Ernst & Young, the auditor, reviewed the Group's interim financial information for the six months ended June 30, 2025, concluding that it was prepared in all material respects according to HKAS 34 - Ernst & Young issued an unmodified review conclusion on the interim financial information[166] Principal Financial Statements The financial statements detail the Group's operating results, financial position, and cash flows, showing decreased revenue and profit, stable asset/liability sizes with structural changes like increased overseas assets, and net cash inflows from operations despite investment and financing outflows Summary of Condensed Interim Consolidated Cash Flow Statement | Item | For the Six Months Ended June 30, 2025 (Thousands of RMB) | | :--- | :--- | | Net Cash Flows from Operating Activities | 1,780,366 | | Net Cash Flows Used in Investing Activities | (861,560) | | Net Cash Flows Used in Financing Activities | (519,592) | | Net Increase in Cash and Cash Equivalents | 399,214 | | Cash and Cash Equivalents at End of Period | 2,176,580 | Summary of Notes to the Financial Statements The notes provide detailed explanations for key financial statement items, including business combinations (TH Tong Heng Machinery acquisition and goodwill), segment reporting (overseas growth), financial instruments (receivables, borrowings, derivatives), and related party transactions - Note 32 discloses that the acquisition of TH Tong Heng Machinery Sdn. Bhd. generated RMB 174 million in goodwill and recognized a contingent consideration financial liability of RMB 73.94 million[283][285] - Note 4 discloses that total overseas assets reached RMB 5.42 billion, accounting for 14.82% of total assets, a significant increase from 9.74% at the beginning of the year[190] - Note 26 discloses that the Group's total interest-bearing bank and other borrowings amounted to RMB 21.22 billion, of which RMB 6.77 billion (31.9%) were secured borrowings[259][92] - Notes 19 and 21 disclose that the expected credit loss provision rates for trade receivables and contract assets were 14.06% and 9.17% respectively[240][248]