正大企业国际(03839) - 2025 - 中期业绩

Unaudited Consolidated Results This section presents the company's unaudited financial performance and position for the first half of 2025, highlighting significant revenue growth and changes in assets and liabilities Unaudited Consolidated Statement of Comprehensive Income The company's revenue nearly doubled in the first half of 2025, with significant increases in profit for the period and profit attributable to shareholders, though gross margin declined; basic and diluted earnings per share rose to 6.70 US cents Key Unaudited Financial Data for H1 2025 (USD thousands) | Metric | 2025 (USD thousands) | 2024 (USD thousands) | | :--- | :--- | :--- | | Revenue | 323,328 | 107,979 | | Cost of sales | (281,545) | (89,990) | | Gross profit | 41,783 | 17,989 | | Profit before tax | 24,206 | 3,557 | | Profit for the period | 19,989 | 2,733 | | Profit attributable to equity holders of the Company | 17,046 | 1,963 | | Basic and diluted earnings per share (US cents) | 6.70 | 0.80 | - Total comprehensive income for the period shifted from a negative USD 1,731 thousand in H1 2024 to positive USD 24,393 thousand in H1 2025, primarily due to foreign currency translation differences from overseas operations and positive other comprehensive income from joint ventures and associates[4] Consolidated Statement of Financial Position As of June 30, 2025, the company's total assets and shareholders' equity both increased, net current assets rose, current liabilities slightly increased, and non-current liabilities decreased Unaudited Consolidated Financial Position as of June 30, 2025 (USD thousands) | Metric | June 30, 2025 (USD thousands) | December 31, 2024 (USD thousands) | | :--- | :--- | :--- | | Total non-current assets | 226,970 | 224,182 | | Total current assets | 221,560 | 198,032 | | Total current liabilities | 147,039 | 144,208 | | Net current assets | 74,521 | 53,824 | | Total assets less current liabilities | 301,491 | 278,006 | | Total non-current liabilities | 16,586 | 17,494 | | Net assets | 284,905 | 260,512 | | Total equity | 284,905 | 260,512 | Notes to the Unaudited Consolidated Financial Statements This section details the basis of preparation, changes in accounting policies, operating segment information, and specific financial statement line items for the interim period Basis of Preparation This unaudited interim financial report is prepared in accordance with IAS 34 and the Listing Rules, consistent with the accounting policies of the 2024 annual financial statements, and presented in USD - The financial report is prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[7] - Accounting policies and basis of preparation are consistent with those adopted in the annual financial statements for the year ended December 31, 2024[7] - This interim financial information is presented in USD, with all amounts rounded to the nearest thousand USD[8] Changes in Accounting Policies and Disclosures The Group applied amendments to IAS 21, which had no significant impact on the interim financial report due to the absence of transactions in non-exchangeable currencies, and no other new standards not yet in effect were adopted - The Group has applied the amendments to IAS 21 "The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability" issued by the IASB to the interim financial report for the current accounting period[9] - As the Group did not enter into any foreign currency transactions that are not exchangeable into other currencies, the amendments had no significant impact on this interim financial report[9] - The Group has not early adopted any new standards or interpretations that are not yet effective for the current accounting period[10] Operating Segment Information The Group's operations are divided into two reportable segments, Biochemical and Industrial, with management independently monitoring their performance; the Biochemical segment contributes all consolidated revenue, while the Industrial segment operates through joint ventures and associates - The Group's operations are divided into two reportable operating segments based on products and services: the Biochemical segment (manufacturing and/or sales of animal health pharmaceutical products and aureomycin) and the Industrial segment (trading of machinery and equipment, and manufacturing and sales of automotive parts)[11][13] - Segment performance is assessed based on the profit of reportable segments, calculated as adjusted profit before tax, excluding bank interest income, finance costs, and items not attributable to individual segments[11] - All revenue from contracts with customers is recognized when control over the promised products is transferred to the customer, either upon delivery to the customer's premises (domestic sales) or according to sales terms and conditions (export sales)[11] Reportable Operating Segments The Biochemical segment achieved significant revenue growth in H1 2025, contributing all external group revenue, while the Industrial segment primarily contributed profit through joint ventures and associates, with segment assets and liabilities allocated between the two businesses Reportable Operating Segment Performance for H1 2025 (USD thousands) | Metric | Biochemical Business | Industrial Business | Total | | :--- | :--- | :--- | :--- | | Segment revenue (sales to external customers) | 323,328 | – | 323,328 | | Group segment results | 24,465 | (424) | 24,041 | | Share of profit of joint ventures | – | 1,350 | 1,350 | | Share of profit of associates | – | 783 | 783 | | Profit before tax | | | 24,206 | | Depreciation and amortization | 4,478 | – | 4,478 | | Capital expenditure | 1,150 | – | 1,150 | Reportable Operating Segment Assets and Liabilities as of June 30, 2025 (USD thousands) | Metric | Biochemical Business | Industrial Business | Total | | :--- | :--- | :--- | :--- | | Segment assets | 285,765 | 127,260 | 413,025 | | Total assets | | | 448,530 | | Segment liabilities | 94,142 | – | 94,142 | | Total liabilities | | | 163,625 | | Investment in joint ventures | – | 102,068 | 102,068 | | Investment in associates | – | 22,581 | 22,581 | Reportable Operating Segment Performance for H1 2024 (USD thousands) | Metric | Biochemical Business | Industrial Business | Total | | :--- | :--- | :--- | :--- | | Segment revenue (sales to external customers) | 107,979 | – | 107,979 | | Group segment results | 4,954 | (973) | 3,981 | | Share of profit of joint ventures | – | 114 | 114 | | Share of profit of associates | – | 1,161 | 1,161 | | Profit before tax | | | 3,557 | | Depreciation and amortization | 3,938 | – | 3,938 | | Capital expenditure | 8,950 | – | 8,950 | Reportable Operating Segment Assets and Liabilities as of December 31, 2024 (USD thousands) | Metric | Biochemical Business | Industrial Business | Total | | :--- | :--- | :--- | :--- | | Segment assets | 266,009 | 123,783 | 389,792 | | Total assets | | | 422,214 | | Segment liabilities | 83,044 | 60 | 83,104 | | Total liabilities | | | 161,702 | | Investment in joint ventures | – | 98,717 | 98,717 | | Investment in associates | – | 21,383 | 21,383 | Geographical Information In H1 2025, Mainland China was the primary source of group revenue with a significant increase in contribution, while revenue from Asia Pacific, Americas, Europe, and other regions also grew; the vast majority of the Group's non-current assets are located in Mainland China Revenue from External Customers by Location (USD thousands) | Region | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Mainland China | 267,093 | 74,072 | | Asia Pacific (excluding Mainland China) | 21,382 | 11,245 | | Americas | 20,977 | 15,097 | | Europe and other regions | 13,876 | 7,565 | | Total | 323,328 | 107,979 | - As of June 30, 2025, 99% (December 31, 2024: 99%) of the Group's non-current assets were located in Mainland China[22] Revenue Revenue represents the net invoiced amount of sales after deducting VAT, government surcharges, returns, and trade discounts, recognized under IFRS 15, and entirely derived from the Biochemical business - Revenue represents the net cumulative invoiced amount of sales after deducting VAT and government surcharges, and after deducting returns and trade discounts, recognized within the scope of IFRS 15[23] - All of the Group's revenue is derived from the Biochemical business[23] Other Net Income Other net income for H1 2025 was USD 1,788 thousand, a decrease from the prior period, mainly due to losses on disposal of property, plant and equipment and reduced government grants, though foreign currency translation differences turned into net income Analysis of Other Net Income (USD thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Bank interest income | 439 | 694 | | Government grants | 731 | 1,066 | | Net loss/(income) on disposal of property, plant and equipment | (537) | 929 | | Net foreign currency translation differences | 881 | (521) | | Service income | – | 987 | | Others | 274 | 152 | | Total | 1,788 | 3,307 | Finance Costs Finance costs for H1 2025 were USD 1,059 thousand, a decrease from the prior period, primarily due to reduced interest expenses on bank borrowings and adjustments in interest capitalization rates Analysis of Finance Costs (USD thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Interest expense on bank borrowings | 1,245 | 1,604 | | Less: Interest expense capitalized | (186) | (355) | | Total | 1,059 | 1,249 | - Interest expense capitalized is calculated at annual interest rates ranging from 2.6% to 4.2% (six months ended June 30, 2024: 3.2% to 5.1%) for each loan agreement[25] Profit Before Tax Profit before tax for H1 2025 was USD 24,206 thousand, primarily after deducting cost of inventories sold, depreciation of property, plant and equipment, and amortization of prepaid land lease payments Deductions from Profit Before Tax (USD thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Cost of inventories sold | 281,545 | 89,990 | | Depreciation of property, plant and equipment | 4,419 | 3,877 | | Amortization of prepaid land lease payments | 59 | 61 | Income Tax The Group had no assessable income in Hong Kong, while its PRC subsidiaries are subject to income tax at a 25% rate, with some enjoying tax concessions; total income tax expense for H1 2025 was USD 4,217 thousand - The Group did not earn any assessable income in Hong Kong during the period, thus no provision for Hong Kong profits tax was made[27] - Subsidiaries operating in the People's Republic of China are subject to income tax at a rate of 25% on their assessable income, with certain subsidiaries enjoying exemptions or reductions in income tax[27] Analysis of Income Tax Expense (USD thousands) | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Current period – PRC current expense | 4,121 | 691 | | Over-provision in prior years | (896) | – | | Deferred | 992 | 133 | | Total tax expense for the period | 4,217 | 824 | Interim Dividend The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[29] Earnings Per Share Attributable to Equity Holders of the Company Basic earnings per share are calculated based on profit attributable to equity holders of the Company and the weighted average number of ordinary shares outstanding, amounting to 6.70 US cents for H1 2025, with no potential dilutive ordinary shares - Basic earnings per share are calculated based on the profit for the period attributable to equity holders of the Company and the weighted average number of ordinary shares and convertible preference shares in issue during the period[30] Basic Earnings Per Share Calculation Data | Item | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Profit for the period attributable to equity holders of the Company used in the calculation of basic earnings per share (USD thousands) | 17,046 | 1,963 | | Weighted average number of ordinary shares and convertible preference shares in issue during the period used in the calculation of basic earnings per share | 253,329,087 | 253,329,087 | - There were no potential dilutive ordinary shares for the six months ended June 30, 2025 and 2024, thus diluted earnings per share were equal to basic earnings per share[32] Trade and Bills Receivables As of June 30, 2025, total trade and bills receivables amounted to USD 138,134 thousand, an increase from the end of 2024, with the largest portion aged 60 days or less; the Group maintains strict control over credit risk - The Group maintains strict control over outstanding balances, with management regularly reviewing overdue balances and potentially charging overdue interest at rates determined by the Group with reference to market practice[34] - In the opinion of the Directors, the Group does not have significant concentrations of credit risk[34] Aging Analysis of Trade and Bills Receivables (USD thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Trade receivables: | | | | 60 days or less | 89,832 | 79,002 | | 61 to 180 days | 40,828 | 30,755 | | More than 180 days | 4,948 | 5,064 | | Subtotal | 135,608 | 114,821 | | Bills receivables: | | | | 60 days or less | 1,573 | 353 | | 61 to 180 days | 953 | 655 | | Subtotal | 2,526 | 1,008 | | Total | 138,134 | 115,829 | Trade Payables As of June 30, 2025, total trade payables amounted to USD 78,238 thousand, an increase from the end of 2024, with the largest portion aged 60 days or less Aging Analysis of Trade Payables (USD thousands) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | 60 days or less | 56,030 | 48,908 | | 61 to 180 days | 15,288 | 13,481 | | More than 180 days | 6,920 | 5,132 | | Total | 78,238 | 67,521 | Management Discussion and Analysis This section provides an overview of the Group's financial performance, business operations, liquidity, and outlook for the period, highlighting key drivers and strategic initiatives Group Performance In H1 2025, Group revenue significantly increased by approximately 2 times to USD 323.3 million, primarily driven by the Biochemical business, with a substantial rise in profit attributable to equity holders of the Company, though gross margin declined due to increased sales of lower-margin products - The Group is engaged in Biochemical and Industrial businesses, with the Biochemical business being the source of all consolidated revenue, and the Industrial business contributing profit through joint ventures and associates[36] - Revenue for H1 2025 increased by approximately 2 times to USD 323.3 million (H1 2024: USD 108 million), primarily reflecting the successful implementation and ongoing execution of key strategies to develop major customer sales[36] - Overall gross margin decreased from 16.7% in H1 2024 to 12.9% in H1 2025, mainly due to increased sales of lower-margin animal health pharmaceutical products[36] - Profit attributable to equity holders of the Company was USD 17 million (H1 2024: USD 2 million), with basic and diluted earnings per share at 6.7 US cents (H1 2024: 0.8 US cents)[37] Business Review Biochemical business revenue grew by approximately 2 times, with an increased proportion of animal health pharmaceutical products leading to a decline in overall gross margin; in the Industrial business, ECI Metro's machinery equipment sales increased, raising its share of profit, while Zhanjiang Deli's automotive parts sales and profit margin decreased, reducing its share of profit - Biochemical business revenue increased by approximately 2 times to USD 323.3 million, with animal health pharmaceutical products' revenue contribution rising from 67% to 84%, while aureomycin products' contribution decreased to 16%[38] - The Industrial business operates through ECI Metro and Zhanjiang Deli; ECI Metro's sales of excavators, generators, and parts grew by 37.7%, and its share of profit from joint ventures increased to USD 1.4 million[40] - Zhanjiang Deli's motorcycle parts sales increased, but automotive parts sales and profit margin declined due to intense market competition, with its share of profit from associates decreasing from USD 1.2 million to USD 0.8 million[40] Biochemical Business Biochemical business revenue grew by approximately 2 times, primarily from the manufacturing and sales of animal health pharmaceutical products and aureomycin products; the significant increase in animal health pharmaceutical products' share, despite their lower profit margins, led to a decline in overall gross margin - Revenue primarily derives from the manufacturing and/or sales of animal health pharmaceutical products and aureomycin products, with a strategic expansion of the product portfolio to include related veterinary pharmaceutical products[38] - Biochemical business revenue increased by approximately 2 times to USD 323.3 million in H1 2025[38] - The revenue contribution from animal health pharmaceutical products increased from 67% in H1 2024 to 84% in H1 2025, while that from aureomycin products decreased from 33% to 16%[38] - The lower average profit margin of animal health pharmaceutical products led to a decrease in overall gross margin from 16.7% in H1 2024 to 12.9% in H1 2025[39] Industrial Business The Industrial business operates through ECI Metro and Zhanjiang Deli; ECI Metro's machinery equipment sales grew by 37.7%, with its share of profit increasing to USD 1.4 million, though overall profit margins were affected by domestic brand competition; Zhanjiang Deli saw increased motorcycle parts sales, but automotive parts sales and profit margins declined, reducing its share of profit to USD 0.8 million - ECI Metro primarily engages in the sales, leasing, and maintenance services of Caterpillar machinery and equipment in Western China, with sales of excavators, generators, and parts increasing by 37.7% in H1 2025 compared to H1 2024[40] - ECI Metro's share of profit from joint ventures increased from USD 0.1 million in H1 2024 to USD 1.4 million in H1 2025[40] - Zhanjiang Deli primarily manufactures and sells automotive parts; motorcycle parts sales increased, but automotive parts sales and profit margins declined due to intense market competition[40] - Zhanjiang Deli's share of profit from associates decreased from USD 1.2 million in H1 2024 to USD 0.8 million in H1 2025[40] Outlook With China's economy expected to continue its steady recovery, the Group maintains a cautiously optimistic outlook for the remainder of 2025 - China's economy is expected to continue its steady recovery, and the Group maintains a cautiously optimistic outlook for its performance for the remainder of 2025[41] Liquidity and Financial Resources As of June 30, 2025, the Group's total assets grew by 6.2% to USD 448.5 million; the net debt-to-equity ratio decreased to 0.08, indicating reduced financial leverage, and all borrowings are denominated in RMB - As of June 30, 2025, the Group's total assets were USD 448.5 million, an increase of 6.2% from USD 422.2 million as of December 31, 2024[42] - The net debt-to-equity ratio (defined as bank borrowings less cash and deposits divided by total equity) was 0.08, compared to 0.14 as of December 31, 2024, indicating reduced financial leverage[42] - All of the Group's borrowings as of June 30, 2025, and December 31, 2024, were denominated in RMB[43] - The Group monitors foreign exchange fluctuations and considers appropriate hedging activities when necessary[43] Capital Structure The Group meets its liquidity requirements through working capital and borrowings; as of June 30, 2025, cash and cash equivalents increased by USD 3.1 million to USD 35.5 million - The Group meets its liquidity requirements through working capital and borrowings[44] - As of June 30, 2025, the Group held cash and cash equivalents of USD 35.5 million (December 31, 2024: USD 32.4 million), an increase of USD 3.1 million[44] Pledge of Group Assets As of June 30, 2025, the Group's total borrowings were USD 59.1 million, of which USD 16.6 million (28.2% of total borrowings) were secured by assets, primarily property, plant and equipment and prepaid land lease payments - As of June 30, 2025, the Group's total borrowings were USD 59.1 million (December 31, 2024: USD 69.2 million)[45] - Of these, USD 16.6 million (December 31, 2024: USD 18.8 million) of borrowings were secured by assets, representing 28.2% (December 31, 2024: 27.1%) of total borrowings[45] - Certain of the Group's property, plant and equipment and prepaid land lease payments with a combined net book value of USD 23.6 million (December 31, 2024: USD 24.0 million) have been pledged as security[45] Contingent Liabilities As of June 30, 2025, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities as of June 30, 2025[46] Employees and Remuneration Policy As of June 30, 2025, the Group employed approximately 900 staff in Mainland China and Hong Kong, with remuneration policies based on performance, experience, and market levels, offering benefits such as medical insurance and training - As of June 30, 2025, the Group employed approximately 900 staff in Mainland China and Hong Kong[47] - The Group determines staff remuneration based on employee performance, experience, and prevailing market levels, with discretionary bonuses awarded[47] - Other employee benefits include, for example, medical insurance and training[47] Interim Dividend The Board resolved not to declare an interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 (six months ended June 30, 2024: nil)[48] Other Information This section covers corporate governance, directors' securities transactions, review of interim results, and any purchase, sale, or redemption of the company's listed securities Corporate Governance Code The Company is committed to maintaining high corporate governance standards and complies with the Corporate Governance Code in Appendix C1 of the Listing Rules, with only a minor deviation due to the Chairman's absence from the Annual General Meeting - The Company is committed to maintaining high corporate governance standards, with principles aimed at upholding high levels of ethics, transparency, accountability, and integrity across all aspects of its business[49] - The Board believes that for the six months ended June 30, 2025, the Company has applied the principles and complied with all code provisions of the Corporate Governance Code set out in Appendix C1 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[49] - However, the Company's Chairman was unable to attend the Annual General Meeting held on June 10, 2025, due to other business engagements, resulting in a deviation from code provision F.2.2[49] Directors' Securities Transactions The Company has adopted a code of conduct for securities transactions, and all Directors confirmed compliance with the required standards of this code during the reporting period - The Company has adopted a code of conduct for securities transactions, which is based on the required standards set out in the Model Code for Securities Transactions by Directors of Listed Issuers in Appendix C3 of the Listing Rules[50] - All Directors have responded to specific inquiries from the Company and confirmed their compliance with the required standards set out in the code of conduct for securities transactions for the six months ended June 30, 2025[50] Review of Interim Results The interim results for the six months ended June 30, 2025, are unaudited but have been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410, resulting in an unmodified review report, and also reviewed by the Audit Committee - The interim results for the six months ended June 30, 2025, are unaudited but have been reviewed by KPMG in accordance with Hong Kong Standard on Review Engagements 2410 issued by the Hong Kong Institute of Certified Public Accountants[51] - KPMG's unmodified review report is included in the interim report to be submitted to the Company's shareholders[51] - The Company's Audit Committee has also reviewed the interim results for the six months ended June 30, 2025[52] Purchase, Sale or Redemption of the Company's Listed Securities Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025 - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the six months ended June 30, 2025[53]