瑞和数智(03680) - 2025 - 中期业绩

Performance Overview Financial Performance Overview The company's revenue significantly decreased by 33.5% year-on-year due to business restructuring, but achieved a net profit turnaround through cost-efficiency measures and fair value gains on financial assets Financial Performance Summary | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Y-o-Y Change | Change Rate | Primary Reasons | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 120,392 | 181,011 | (60,619) | -33.5% | Strategic business structure adjustment, reduced revenue from data solutions, integrated services, IT maintenance and support | | Gross Profit | 9,111 | 14,577 | (5,466) | -37.5% | Revenue structure adjustment, increased proportion of commodity trading | | Net Profit | 41,098 | (38,635) | 79,733 | N/A (Turnaround to Profit) | Fair value gain on Tokyo Chuo Auction shares, cost-reduction and efficiency-improvement measures | | Basic EPS | 6.28 cents | (5.48 cents) | N/A (Turnaround to Profit) | N/A (Turnaround to Profit) | Increase in Net Profit | - The company strategically adjusted its business composition, leading to a reduction in data solutions business revenue by approximately 54.4% (RMB 37,251,000), integrated services revenue (selling software, hardware, and related services) by approximately 39.1% (RMB 18,376,000), and IT maintenance and support services revenue by approximately 88.9% (RMB 3,406,000)[2] - During the reporting period, the company recognized a fair value gain of approximately RMB 63,015,000 from holding 15,000,000 shares of Tokyo Chuo Auction Holdings Limited, a key factor in achieving profitability[4] - The Group vigorously implemented cost-reduction and efficiency-improvement measures, resulting in decreased R&D expenses, administrative expenses, finance costs, and selling expenses compared to the same period last year[4] Interim Condensed Consolidated Financial Statements Interim Condensed Consolidated Statement of Comprehensive Income For H1 2025, the company reported a net profit of RMB 41,098 thousand, reversing a prior-year loss, driven by fair value gains and reduced expenses Consolidated Statement of Comprehensive Income Summary | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Revenue | 120,392 | 181,011 | (60,619) | | Cost of Sales | (111,281) | (166,434) | 55,153 | | Gross Profit | 9,111 | 14,577 | (5,466) | | Selling Expenses | (2,586) | (5,528) | 2,942 | | Administrative Expenses | (20,983) | (24,053) | 3,070 | | R&D Expenses | (7,385) | (19,449) | 12,064 | | Operating Loss | (18,170) | (32,320) | 14,150 | | Fair value gain on financial assets at FVTPL | 63,015 | - | 63,015 | | Profit/(Loss) for the period | 41,098 | (38,635) | 79,733 | | Profit/(Loss) for the period attributable to owners of the Company | 43,186 | (36,040) | 79,226 | | Basic EPS/(Loss) (RMB cents) | 6.28 | (5.48) | N/A | - Selling expenses, administrative expenses, and R&D expenses all significantly decreased by 53.2%, 12.8%, and 62% respectively, reflecting the company's efforts in cost reduction and efficiency improvement[5] - Fair value gain on financial assets was a key factor in the period's turnaround to profit, contributing RMB 63,015 thousand in income[5] Interim Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets reached RMB 343,872 thousand and total equity grew to RMB 117,634 thousand, driven by reduced accumulated losses and increased share capital Consolidated Statement of Financial Position Summary | Metric | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 343,872 | 298,852 | 45,020 | | Non-current Assets | 163,982 | 105,900 | 58,082 | | Current Assets | 179,890 | 192,952 | (13,062) | | Total Equity | 117,634 | 42,881 | 74,753 | | Total Liabilities | 226,238 | 255,971 | (29,733) | | Net Current Liabilities | (45,765) | (50,851) | 5,086 | - Financial assets at fair value through profit or loss increased from zero to RMB 67,700 thousand, representing a significant component of total asset growth[7] - Accumulated losses decreased from RMB (400,508) thousand as of December 31, 2024, to RMB (357,322) thousand, reflecting the positive impact of current period's profit on equity[8] - Share capital increased to RMB 7,149 thousand, and other reserves also significantly grew, collectively driving the increase in total equity[8] Notes to the Interim Condensed Consolidated Financial Statements General Information and Basis of Preparation The company, an investment holding entity registered in the Cayman Islands, operates in data solutions, integrated IT services, and commodity trading, with interim financials prepared under IAS 34 in RMB - The Group is primarily engaged in providing data solutions, integrated services for selling software, hardware, and related services, IT maintenance and support services, and commodity trading[9] - The interim condensed financial information is prepared in accordance with International Accounting Standard 34 'Interim Financial Reporting' and presented in RMB[10] Revenue and Segment Information Total revenue for the period was RMB 120,392 thousand, down 33.5% year-on-year, primarily due to a significant decline in integrated data technology services, with all revenue from mainland China Revenue by Source | Revenue Source | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Y-o-Y Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Data Solutions | 31,240 | 68,491 | (37,251) | -54.4% | | Integrated Services for Software, Hardware & Related Services | 28,592 | 46,968 | (18,376) | -39.1% | | IT Maintenance & Support Services | 426 | 3,832 | (3,406) | -88.9% | | Subtotal: Integrated Data Technology Services | 60,258 | 119,291 | (59,033) | -49.5% | | Commodity Trading | 60,134 | 61,720 | (1,586) | -2.6% | | Total Revenue | 120,392 | 181,011 | (60,619) | -33.5% | - The chief operating decision maker segments the Group's business into two reportable segments: integrated data technology services and commodity trading[12] - All of the Group's revenue and non-current assets are primarily located in mainland China[16] Components of Profit/(Loss) Before Income Tax The company achieved a profit before income tax of RMB 40,931 thousand, reversing a prior-year loss, mainly due to a RMB 63,015 thousand fair value gain on financial assets and reduced operating expenses Profit/(Loss) Before Income Tax Components | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Employee Benefit Expenses | 31,237 | 56,944 | (25,707) | | Amortization of Intangible Assets | 7,152 | 8,142 | (990) | | Depreciation of Right-of-Use Assets | 502 | 2,631 | (2,129) | | Depreciation of Property and Equipment | 2,346 | 3,370 | (1,024) | | Depreciation of Investment Property | 363 | - | 363 | | (Reversal of expected credit losses)/Expected credit losses on trade receivables | (2,221) | 1,898 | (4,119) | | Reversal of expected credit losses on contract assets | (713) | (498) | (215) | | Fair value gain on financial assets at FVTPL | (63,015) | - | (63,015) | - Employee benefit expenses significantly decreased from RMB 56,944 thousand to RMB 31,237 thousand, representing a key achievement in cost control[17] - Provisions for expected credit losses on trade receivables and contract assets both shifted from an increase to a reversal, indicating an improvement in asset quality[17] Finance Costs and Income Tax Net finance costs decreased to RMB (3,914) thousand, and income tax credit was RMB 167 thousand, with Chinese subsidiaries benefiting from preferential high-tech enterprise tax rates Finance Costs and Income Tax Summary | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Interest income from bank deposits | 29 | 128 | (99) | | Interest expense on bank and other borrowings | (3,423) | (6,236) | 2,813 | | Net finance costs | (3,914) | (6,801) | 2,887 | | Income tax credit | 167 | 473 | (306) | - The reduction in net finance costs was primarily due to a decrease in interest expenses on bank and other borrowings[19] - Subsidiaries including Shenzhen Suoxinda, Ruihe Zhizhi (Beijing) Technology, and Shenzhen Yinxing are subject to a preferential enterprise income tax rate of 15% due to their recognition as National High-Tech Enterprises[21] Earnings/(Loss) Per Share Basic and diluted earnings per share both reached RMB 6.28 cents, reversing a prior-year loss of RMB 5.48 cents, reflecting significant net profit improvement Earnings/(Loss) Per Share Summary | Metric | H1 2025 (RMB cents) | H1 2024 (RMB cents) | Change | | :--- | :--- | :--- | :--- | | Basic EPS/(Loss) | 6.28 | (5.48) | Turnaround to Profit | | Diluted EPS/(Loss) | 6.28 | (5.48) | Turnaround to Profit | - The weighted average number of ordinary shares used to calculate basic and diluted earnings per share increased from 657,948 thousand shares to 687,544 thousand shares[22] Notes to Key Balance Sheet Items This section details key balance sheet item changes, noting reduced expected credit loss provisions for trade receivables and contract assets, declining bank borrowings and trade payables, and some bank deposits frozen due to litigation Key Balance Sheet Items | Item | June 30, 2025 (RMB thousands) | Dec 31, 2024 (RMB thousands) | Change | | :--- | :--- | :--- | :--- | | Property and Equipment | 1,335 | 3,047 | (1,712) | | Intangible Assets | 52,002 | 59,158 | (7,156) | | Trade Receivables (Net) | 80,662 | 90,660 | (9,998) | | Provision for ECL on Trade Receivables | (61,437) | (63,658) | 2,221 (Decrease) | | Contract Assets (Net) | 58,295 | 66,653 | (8,358) | | Provision for ECL on Contract Assets | (30,947) | (32,600) | 1,653 (Decrease) | | Trade Payables | 55,251 | 91,612 | (36,361) | | Bank and Other Borrowings (Total) | 127,449 | 108,660 | 18,789 | | Lease Liabilities (Total) | 3,356 | 5,340 | (1,984) | - The weighted average expected loss rate for trade receivables was adjusted across different aging buckets, with an expected loss rate of up to 89% for receivables over one year old[28] - Approximately RMB 3,034 thousand of bank deposits were frozen by Chinese courts due to employee labor contract compensation lawsuits[41] - The weighted average annual interest rate for bank borrowings increased from 4.2% as of December 31, 2024, to 4.5% as of June 30, 2025[32] - The company did not declare any interim dividends and was not involved in any material litigation or arbitration[40][42] Management Discussion and Analysis Industry Background Analysis China's economy saw steady growth in H1 2025, with the digital economy and IT services sector expanding significantly, driven by financial sector AI and big data investments and a growing banking IT solutions market - In H1 2025, China's GDP grew by 5.3% year-on-year, with the information transmission, software, and IT services sector growing by 11.1%, and the financial sector by 7.3%[43] - Financial regulators require commercial banks to increase technology investment to over 3% of operating revenue, focusing on core technologies like AI, big data, and blockchain[43] - IDC forecasts China's banking IT solutions market to reach RMB 103.939 billion by 2029, with a 2.9% year-on-year growth in 2024, and anticipates 65% of financial institutions leveraging AI large model platforms to enhance digital intelligence by the end of 2025[45] - China's big data industry is reshaping the digital economy landscape with an average annual growth rate of 20%, projected to exceed RMB 2.8 trillion by 2025 and RMB 6.5 trillion by 2030[46] Business Review The Group strengthened its market position in data intelligence and marketing technology through collaborations with major banks, expanded into new ventures like the 'Quanxinrong Platform,' and recognized fair value gains from strategic investments, while a share placement enhanced financing for debt repayment and working capital - The Group continuously signed cooperation projects with a major state-owned bank's head office and its Shenzhen and Macau branches, covering data warehouse application migration, credit corporate cards, basic platform upgrades, precision marketing, Xinchuang transformation, payroll systems, and operation and maintenance[47] - The Group secured a 'Model Development' project with a state-owned commercial bank in Southeast China, enhancing its AI analytical modeling capabilities for data-driven decision-making, and also secured 'Database' and 'Business System Xinchuang Transformation' projects[48] - A partnership was established with Quanzhou Data Group to jointly operate the 'Quanxinrong Platform,' exploring innovative cooperation models to provide convenient and efficient financial services to SMEs in Quanzhou[50] - The acquisition of 15,000,000 ordinary shares of Tokyo Chuo Auction Holdings Limited for HKD 6.6 million resulted in a recognized fair value gain of approximately HKD 67.65 million, marking the Group's diversification efforts[51] - A placement of 130,000,000 shares was completed, yielding net proceeds of approximately HKD 38.6 million, with 80% allocated to debt repayment and 20% to general working capital[53] Future Outlook The Group plans to strengthen core financial services, deepen data intelligence and marketing technology, and expand into digital assets, data element marketization, and IT integration. It will also explore Web3.0 and cryptocurrency assets, and partner with domestic GPU vendors to build integrated 'hardware+software+solution' capabilities for new growth - The Group will continue to deepen its presence in the FinTech sector, optimize client portfolio, expand its national market footprint, strengthen strategic relationships with key major clients, and actively broaden its client base across wider industries[55] - The Group will firmly focus on data intelligence and marketing technology, leveraging its end-to-end full-link data capabilities to strengthen its in-depth professional layout[56] - The Group plans to actively enter the Web3.0 and cryptocurrency asset sectors, investing in digital assets and fostering on-chain financial resources to accelerate the transformation of traditional financial services to on-chain, focusing on digital asset services in Greater China[57] - Plans include collaborating with domestic GPU hardware manufacturers to build integrated 'hardware + software + industry solution' capabilities centered on domestic GPUs, establishing an innovation business unit to cultivate cutting-edge technology applications such as AI, blockchain, software-hardware integration, and digital asset trading[58] - The Group will deepen its 'investment empowerment' model, continuously exploring value investment opportunities, integrating investment into a new growth paradigm, and achieving synergistic innovation and value enhancement through post-investment deep empowerment of enterprise development[58] Financial Performance Analysis Revenue declined 33.5% and gross profit 37.5% due to business restructuring, but significant reductions in selling, R&D, and administrative expenses, coupled with fair value gains, led to a profit of RMB 41,098 thousand for the period Financial Performance Metrics | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Y-o-Y Change | Change Rate | | :--- | :--- | :--- | :--- | :--- | | Revenue | 120,392 | 181,011 | (60,619) | -33.5% | | Gross Profit | 9,111 | 14,577 | (5,466) | -37.5% | | Gross Profit Margin | 7.6% | 8.1% | -0.5% | - | | Selling Expenses | 2,586 | 5,528 | (2,942) | -53.2% | | R&D Expenses | 7,385 | 19,449 | (12,064) | -62.0% | | Administrative Expenses | 20,983 | 24,053 | (3,070) | -12.8% | | Income Tax Credit | 167 | 473 | (306) | -64.7% | | Profit for the Period | 41,098 | (38,635) | 79,733 | Turnaround to Profit | | Profit for the Period Attributable to Owners of the Company | 43,186 | (36,040) | 79,226 | Turnaround to Profit | | Basic EPS (RMB cents) | 6.28 | (5.48) | Turnaround to Profit | - | - The decrease in selling expenses was primarily due to organizational restructuring and optimized remuneration incentive mechanisms[61] - The reduction in R&D expenses was mainly due to the increasing maturity of previously developed products, shifting focus to product promotion and application[62] - The decrease in administrative expenses was primarily due to the optimization of the administrative management team and reduced office expenses[63] Liquidity and Financial Resources Net cash outflow from operating activities decreased, while investing outflow increased due to an acquisition. Financing inflow significantly rose from share issuance, leading to a reduced gearing ratio of 110.9% and improved financial position Cash Flow Summary | Cash Flow Type | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Net cash from/(used in) operating activities | (30,650) | (32,104) | 1,454 (Decreased outflow) | | Net cash from/(used in) investing activities | (6,796) | (5,308) | (1,488) (Increased outflow) | | Net cash from/(used in) financing activities | 47,079 | (7,228) | 54,307 (Turned from outflow to inflow) | - The decrease in net cash used in operating activities was primarily due to reduced project procurement, payroll expenses, and other miscellaneous expenditures[69] - The increase in net cash used in investing activities was mainly due to the acquisition of shares in Tokyo Chuo Auction Holdings Limited, resulting in a cash outflow of approximately RMB 6,197 thousand[70] - Net cash generated from financing activities significantly increased, primarily due to proceeds from share issuance of approximately RMB 36,086 thousand during the reporting period[71] - The gearing ratio decreased from 277.9% as of December 31, 2024, to 110.9% as of June 30, 2025, primarily due to an increase in total equity of approximately RMB 74,753 thousand[76] Material Investments and Risk Management The company holds 15,000,000 ordinary shares of Tokyo Chuo Auction Holdings Limited, valued at approximately RMB 67.7 million, with no other material investments or capital commitments. Foreign exchange risks are managed, and no other significant investment plans exist - As of June 30, 2025, the company held 15,000,000 ordinary shares of Tokyo Chuo Auction Holdings Limited, with a carrying amount of approximately RMB 67.7 million[78] - The Group is exposed to certain foreign currency risks and implements management policies to closely monitor exchange rate fluctuations, regularly review foreign exchange risks, and consider hedging when necessary[81] - The Group currently has no other material investment or capital asset plans[82] Other Information Remuneration Policy and Employee Benefits As of June 30, 2025, the Group employed 183 staff, providing competitive remuneration and benefits, with no labor disputes or recruitment difficulties for experienced personnel - As of June 30, 2025, the Group had a total of 183 employees in mainland China and Hong Kong[83] - The Group provides employees with comprehensive and competitive remuneration, retirement plans, and benefits, along with discretionary bonuses based on employee performance[83] - During the reporting period, the Group did not encounter any serious issues with employees due to labor disputes or experience operational disruptions[83] Use of Proceeds from Share Placement A share placement on May 21, 2025, yielded net proceeds of approximately HKD 38.6 million, primarily used for debt repayment (HKD 29.6 million) and general working capital (HKD 7.7 million), with HKD 1.3 million unutilized - On May 21, 2025, the company completed a placement of 130,000,000 shares, with net proceeds of approximately HKD 38.6 million[86] Use of Share Placement Proceeds | Purpose | Allocation Ratio | Allocated Amount (HKD millions) | Utilized Amount (HKD millions) | Unutilized Amount (HKD millions) | | :--- | :--- | :--- | :--- | :--- | | Repayment of Group Borrowings | 80% | 30.9 | 29.6 | 1.3 | | Replenishment of General Working Capital | 20% | 7.7 | 7.7 | - | | Total | 100% | 38.6 | 37.3 | 1.3 | Corporate Governance and Compliance The company adheres to HKEX Corporate Governance Code, maintains consistent leadership with a combined Chairman/CEO role, and achieved full compliance with independent non-executive director requirements. It maintained sufficient public float and had no material litigation - The company has adopted the HKEX Corporate Governance Code and Model Code as the foundation for its corporate governance practices[88][91] - Mr. Xue Shouguang serves as both Chairman of the Board and Chief Executive Officer, a structure the Board believes ensures consistent leadership[88] - The company previously had non-compliance issues regarding the number of independent non-executive directors and audit committee members but achieved full compliance after the appointment of Ms. Chu Ji Jun on March 14, 2025[89][90] - The company has maintained a sufficient public float, with at least 25% of its issued shares held by the public as required by the Listing Rules[93] - During the reporting period, the company was not involved in any material litigation or arbitration[94] Review and Publication of Financial Information The Audit Committee reviewed the unaudited interim condensed consolidated financial information, confirming fair presentation under applicable accounting standards, with the interim results announcement and report to be published on HKEX and the company website - The Audit Committee has reviewed the Group's unaudited interim condensed consolidated financial information and is satisfied that it is prepared in accordance with applicable accounting standards and presents fairly[95] - The Group's interim condensed consolidated financial information for the reporting period has not been audited by the company's auditors[96] - This interim results announcement will be published on the HKEX website and the company's website, and the interim report will be dispatched to shareholders in due course[98]