香江电器(02619) - 2025 - 中期业绩

Company Information and Financial Highlights Financial Highlights Hubei Xiangjiang Electrical Appliance Co., Ltd. (Stock Code: 2619) reported significant declines in revenue, gross profit, and net profit for the six months ended June 30, 2025 Key Financial Data for H1 2025 (RMB thousand) | Metric | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 542,800 | 614,400 | | Gross Profit | 107,600 | 137,400 | | Net Profit | 25,300 | 60,500 | - For the six months ended June 30, 2025, revenue decreased by 11.7% year-on-year, gross profit decreased by 21.7% year-on-year, and net profit significantly decreased by 58.2% year-on-year[4] Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the company reported a profit of RMB 25,313 thousand, a significant decrease from the prior year, with basic and diluted earnings per share at RMB 0.12 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (RMB thousand) | Metric | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 542,816 | 614,423 | | Cost of Sales | (435,249) | (477,013) | | Gross Profit | 107,567 | 137,410 | | Other Income | 12,747 | 8,762 | | Selling Expenses | (12,355) | (14,900) | | Administrative Expenses | (55,377) | (45,819) | | Research and Development Expenses | (14,740) | (16,455) | | Finance Costs | (8,083) | (5,561) | | Profit Before Tax | 30,750 | 70,927 | | Income Tax Expense | (5,437) | (10,388) | | Profit for the Period | 25,313 | 60,539 | | Earnings Per Share (RMB) | 0.12 | 0.30 | Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets less current liabilities increased to RMB 1,247,314 thousand, with net assets rising to RMB 1,097,054 thousand, driven by share issuance and profit accumulation Condensed Consolidated Statement of Financial Position (RMB thousand) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current Assets | 688,378 | 734,637 | | Current Assets | 1,018,601 | 1,161,331 | | Current Liabilities | 629,994 | 648,654 | | Net Current Assets | 388,607 | 512,677 | | Total Assets Less Current Liabilities | 1,076,985 | 1,247,314 | | Non-current Liabilities | 150,260 | 150,774 | | Net Assets | 1,097,054 | 926,211 | | Share Capital | 272,880 | 204,660 | | Reserves | 824,174 | 721,551 | | Total Equity | 1,097,054 | 926,211 | Notes to the Condensed Consolidated Financial Statements This section details the basis of preparation, accounting policies, and specific components of the interim financial statements, including revenue by product, income tax, dividends, EPS, trade receivables/payables, borrowings, and share capital changes General Information and Basis of Preparation Hubei Xiangjiang Electrical Appliance Co., Ltd., a China-registered company, listed on the HKEX on June 25, 2025, focuses on home appliance R&D, manufacturing, and sales, with interim financials prepared under IAS 34 and HKEX Listing Rules - The company primarily engages in the research, design, manufacturing, and sale of electrical and non-electrical home furnishings[8] - The company's shares were listed on the Main Board of the Hong Kong Stock Exchange on June 25, 2025[8] - The condensed consolidated financial statements are prepared in accordance with International Accounting Standard 34 and the HKEX Listing Rules, with the first-time application of IFRS amendments having no significant impact on financial position[9][10] Revenue Segment Information Revenue is segmented into electrical and non-electrical home furnishings, with both categories experiencing declines for the six months ended June 30, 2025, totaling RMB 438,537 thousand and RMB 104,279 thousand respectively Revenue by Product Category (RMB thousand) | Product Category | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Electrical Home Appliances | 438,537 | 467,538 | | - Heating Appliances | 275,694 | 296,238 | | - Motorized Appliances | 111,458 | 127,415 | | - Electronic Appliances | 51,385 | 43,885 | | Non-electrical Home Furnishings | 104,279 | 146,885 | | - Garden Hoses | 97,628 | 135,033 | | - Others | 6,651 | 11,852 | | Total Revenue | 542,816 | 614,423 | - The company's primary operating decision-makers allocate resources and assess performance based on revenue analysis by product category, with no other separate financial information provided[13] Income Tax Expense Income tax expense for the six months ended June 30, 2025, decreased to RMB 5,437 thousand, primarily comprising China, Hong Kong, and US taxes, with Chinese subsidiaries benefiting from a 15% high-tech enterprise tax rate Income Tax Expense Details (RMB thousand) | Tax Category | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current Tax | 6,088 | 9,582 | | - China Corporate Income Tax | 5,615 | 9,319 | | - Hong Kong | 473 | 97 | | - United States | – | 166 | | Over-provision in Prior Years | (1,944) | – | | Deferred Tax | 1,293 | 806 | | Total Income Tax Expense | 5,437 | 10,388 | - Chinese subsidiaries are recognized as high-tech enterprises, enjoying a preferential corporate income tax rate of 15%[16] - Hong Kong profits tax operates under a two-tiered tax rate system, with eligible entities taxed at 8.25% on the first HKD 2 million of profits and 16.5% on the excess[17] - US subsidiaries pay corporate income tax at a federal rate of 21% and a maximum state rate of 8.84%[18] Dividends and Earnings Per Share No dividends were paid or proposed during the reporting period, and basic earnings per share significantly decreased to RMB 0.12 for the six months ended June 30, 2025 - No dividends were paid, declared, or proposed by the company during the reporting period or prior reporting periods[19][69] Earnings Per Share Calculation (RMB thousand) | Metric | Six Months Ended June 30, 2025 (RMB thousand) | Six Months Ended June 30, 2024 (RMB thousand) | | :--- | :--- | :--- | | Profit for the Period Attributable to Owners of the Company for Basic EPS Calculation | 25,313 | 60,539 | | Weighted Average Number of Ordinary Shares (thousand shares) for Basic and Diluted EPS Calculation | 206,921 | 204,660 | | Basic and Diluted Earnings Per Share (RMB) | 0.12 | 0.30 | Trade and Other Receivables and Payables As of June 30, 2025, net trade receivables decreased to RMB 181,647 thousand, while trade receivables at fair value through OCI increased to RMB 9,218 thousand, and total trade payables and bills payable were RMB 274,301 thousand Trade Receivables (RMB thousand) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Receivables | 186,913 | 241,286 | | Less: Provision for Expected Credit Losses | (5,266) | (5,646) | | Net Amount | 181,647 | 235,640 | Trade Receivables Aging Analysis (RMB thousand) | Aging | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Within 1 year | 182,845 | 236,440 | | 1 to 2 years | 819 | 776 | | 2 to 3 years | 68 | 840 | | Over 3 years | 3,181 | 3,230 | | Total | 186,913 | 241,286 | - Trade receivables at fair value through other comprehensive income increased to RMB 9,218 thousand, primarily representing trade receivables held under a "hold to collect and sell" business model, achieved through collecting contractual cash flows and non-recourse factoring[23] Trade Payables and Bills Payable (RMB thousand) | Metric | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Trade Payables | 249,478 | 264,457 | | Bills Payable | 24,823 | 28,017 | | Total | 274,301 | 292,474 | - The credit period for trade payables is typically within 120 days, and all bills payable are due within one year[25] Borrowings and Share Capital For the six months ended June 30, 2025, the company secured RMB 382,273 thousand in new bank loans and repaid RMB 315,335 thousand, with share capital increasing due to the issuance of 68,220,000 H-shares - For the six months ended June 30, 2025, the company obtained new bank loans of RMB 382,273 thousand, an increase from RMB 262,459 thousand in the prior year[26] - New loans bear fixed market interest rates ranging from 2.55% to 5.00% and are repayable in installments over a period of six months to three years[26] - The company's share capital increased due to the listing and issuance of 68,220,000 H-shares on June 25, 2025, bringing the total share capital to 272,879,509 shares, with gross proceeds of approximately RMB 178,092 thousand[27][28] Management Discussion and Analysis This section reviews H1 2025 operating performance, analyzes revenue, gross profit, and net profit declines, outlines future strategies including overseas capacity, automation, R&D, and discusses financial position, liquidity, market risks, and employee matters Business Overview and Review As a Chinese home furnishings manufacturer, the company experienced declines in sales, revenue, and gross margin in H1 2025 due to US trade policy uncertainties, leading to a 58.2% drop in net profit - The company is a Chinese home furnishings manufacturer, with products categorized into heating, motorized, electronic appliances, and non-electrical home furnishings (e.g., garden hoses, cookware)[29] - In H1 2025, sales decreased by 15.4% to 9.0 million units and revenue decreased by 11.7% to RMB 542.8 million due to uncertainties from US trade policies[30] - Gross margin declined from 22.4% to 19.8%, gross profit decreased by 21.7% to RMB 107.6 million, and net profit fell by 58.2%[31] - Administrative expenses increased by 20.9% to RMB 55.4 million due to the gradual operation of production facilities in China and Indonesia, while exchange gains decreased by 49.2% to RMB 4.5 million[31] Business Outlook and Strategy Facing a complex operating environment, the company will pursue sustainable growth by expanding overseas production, enhancing automation and digitalization, and increasing R&D investment to build core competitiveness - The company will advance overseas capacity expansion, having established its first overseas plant in Indonesia and investing in a second production base in Thailand, aiming to build a global production layout, mitigate trade risks, and reduce tariff impacts[32] - The company launched a smart manufacturing initiative, establishing the Xiangjiang Smart Factory in Huizhou, China, procuring advanced automation equipment, and planning to implement a computerized manufacturing execution system to enhance automation and digitalization[33] - The company will increase R&D investment, planning to build a new R&D center in Qichun County, Hubei Province, and collaborate with universities and research institutions to explore new technologies, processes, and materials in home furnishings manufacturing, enhancing product technological content and added value[34] Financial Performance Analysis This section analyzes financial metric changes, attributing revenue and gross profit declines to US tariffs and reduced sales, while administrative expenses rose due to new facility staffing, and finance costs increased as interest capitalization ceased Revenue and Gross Profit For the six months ended June 30, 2025, revenue decreased by 11.7% to RMB 542,800 thousand due to US tariffs, and gross profit fell 21.7% to RMB 107,600 thousand, with gross margin declining to 19.8% - Revenue decreased by 11.7% to RMB 542,800 thousand year-on-year, primarily attributed to a decline in sales volume caused by uncertainties arising from US tariff policies[35] - Gross profit decreased by 21.7% to RMB 107,600 thousand year-on-year, with gross margin declining by 2.6% to 19.8% from 22.4%, mainly due to lower sales volume and a decrease in overall gross margin[36] Cost of Sales and Other Income/Gains Cost of sales decreased by 8.8% to RMB 435,200 thousand due to lower sales, while other income rose to RMB 12,700 thousand from increased government grants, and other net gains/losses declined to RMB 2,500 thousand due to exchange rate fluctuations - Cost of sales decreased by 8.8% to RMB 435,200 thousand year-on-year, primarily due to a decrease in sales volume caused by ongoing uncertainties from US trade policies[37] - Other income increased to RMB 12,700 thousand year-on-year, mainly due to government grants increasing by 190.5% from RMB 1,400 thousand to RMB 4,100 thousand[38] - Other net gains and losses decreased to RMB 2,500 thousand, primarily attributable to a reduction in exchange gains/losses due to exchange rate fluctuations[39] Operating Expenses Selling expenses decreased by 17.1% to RMB 12,400 thousand due to reduced sales, administrative expenses increased by 20.9% to RMB 55,400 thousand from increased staffing, and R&D expenses fell 10.4% to RMB 14,700 thousand due to fewer projects - Selling expenses decreased by 17.1% to RMB 12,400 thousand year-on-year, primarily due to a reduction in sales personnel salaries resulting from decreased sales volume[40] - Administrative expenses increased by 20.9% to RMB 55,400 thousand year-on-year, mainly due to an increase in management personnel at the Group's production facilities in China and Indonesia[41] - Research and development expenses decreased by 10.4% to RMB 14,700 thousand year-on-year, primarily due to a reduction in the number of R&D projects during the reporting period[42] - Other expenses were zero, compared to RMB 1,800 thousand in the prior year, mainly due to reduced donations and the termination of the previous A-share listing plan[43] Finance Costs and Income Tax Finance costs increased to RMB 8,100 thousand as interest capitalization ceased, while income tax expense decreased to RMB 5,400 thousand due to lower pre-tax profit, though the effective tax rate rose from 14.6% to 17.7% - Finance costs increased to RMB 8,100 thousand year-on-year, primarily due to the cessation of interest capitalization upon completion of the Xiangjiang Smart Factory construction[44] - Income tax expense decreased to RMB 5,400 thousand year-on-year, mainly due to a reduction in profit before tax during the reporting period compared to the same period in 2024, with the effective tax rate increasing from 14.6% to 17.7%[45] Net Profit For the six months ended June 30, 2025, the company reported a net profit of RMB 25,300 thousand, a significant decrease from RMB 60,500 thousand in the prior year - For the six months ended June 30, 2025, the company recorded a net profit of RMB 25,300 thousand, compared to RMB 60,500 thousand in the prior year[46] Financial Position and Liquidity As of June 30, 2025, shareholders' equity increased to RMB 1,097,100 thousand, driven by share issuance and retained earnings, with cash and bank balances totaling RMB 657,100 thousand, and the gearing ratio improving from 45.7% to 42.1% - Shareholders' equity increased from RMB 926,200 thousand as of December 31, 2024, to RMB 1,097,100 thousand as of June 30, 2025, primarily due to the issuance of share capital from the listing and an increase in reserves from profit recorded during the reporting period[47] - Bank balances and cash, pledged and restricted bank deposits totaled RMB 657,100 thousand, mainly due to proceeds from the listing and an increase in bank borrowings[48] - The gearing ratio (total liabilities divided by total assets) decreased from 45.7% as of December 31, 2024, to 42.1% as of June 30, 2025[50] - The company adopts a prudent financial management strategy, mitigating credit risk through continuous credit assessment and evaluation of debtors' financial positions, while closely monitoring liquidity[51] Market Risks The company faces interest rate, industry policy, and foreign exchange risks, managing interest rate exposure through fixed/floating instruments without swaps, monitoring policy changes, and reviewing FX risk for potential hedging with derivatives - The company is exposed to interest rate fluctuations, changes in industry policies, and foreign exchange risks[52] - Interest rate risk is primarily managed through fixed or floating rate cash, bank deposits, and borrowings, with no interest rate swaps used for hedging during the reporting period[53][54] - Changes in laws and regulations within the global home furnishings, small appliances, and garden hose industries could significantly impact the company's production and operations[55] - The company's revenue is denominated in USD and RMB, and proceeds from the initial public offering are denominated in HKD, creating foreign exchange risk; the company will regularly review foreign exchange risk and may use derivative financial instruments for hedging when necessary[56] Employee Information As of June 30, 2025, the company employed 2,380 staff with total employee costs of approximately RMB 103.3 million, a decrease from the prior year, emphasizing competitive compensation, training, and social security participation - As of June 30, 2025, the company had 2,380 employees; total employee costs were approximately RMB 103.3 million, a decrease from RMB 111.1 million in the prior year[58] - The company prioritizes employee recruitment, training, and retention, offering competitive remuneration packages (including basic salary, bonuses, and medical insurance) and on-the-job training, while participating in various social security schemes in China[59] Use of Proceeds from Global Offering The company's global offering on the HKEX on June 25, 2025, yielded net proceeds of approximately HKD 155.6 million, which remained unutilized as of June 30, 2025, and will be used as disclosed in the prospectus - The company was listed on the Stock Exchange on June 25, 2025, with net proceeds from the global offering amounting to approximately HKD 155,600,000[60] - As of June 30, 2025, the net proceeds remained unutilized and will be used according to the purposes and timetable disclosed in the prospectus, with no changes currently anticipated[60] Significant Investments and Acquisitions As of June 30, 2025, the company held no significant equity investments, had no major investment or capital asset plans, and undertook no significant acquisitions or disposals of subsidiaries, associates, or joint ventures - As of June 30, 2025, the company did not hold any significant equity investments in other companies, nor did it have any major investment or capital asset plans[61][62] - During the reporting period, the company did not undertake any significant acquisitions or disposals of subsidiaries, associates, or joint ventures[63] Other Information This section covers the company's continuing disclosure obligations under the Listing Rules, compliance with the Model Code for Securities Transactions, corporate governance practices (including the combined Chairman and CEO roles), interim dividend policy, post-reporting period events, and the Audit Committee's review of interim results and announcement publication Continuing Disclosure and Securities Trading Beyond this announcement, the company has no other continuing disclosure obligations under the Listing Rules, and neither the company nor its subsidiaries purchased, sold, or redeemed any listed securities since listing, holding no treasury shares as of June 30, 2025 - Except as disclosed in this announcement, the company has no other continuing disclosure obligations under Rules 13.20, 13.21, and 13.22 of the Listing Rules[64] - From the listing date to the announcement date, neither the company nor any of its subsidiaries purchased, sold, or redeemed any listed securities, and no treasury shares were held as of June 30, 2025[65] Corporate Governance The company adopted and complied with the Model Code for Securities Transactions by Directors and the Corporate Governance Code, with the Chairman and CEO roles combined by Mr. Pan Yun, which the Board deems in the Group's best interest, balanced by three independent non-executive directors - The company has adopted the Model Code for Securities Transactions by Directors as set out in Appendix C3 of the Listing Rules and confirms that all Directors and Supervisors have fully complied with it from the listing date to June 30, 2025[66] - The company has adopted the Corporate Governance Code and complied with all applicable code provisions from the listing date to June 30, 2025, except for the combined roles of Chairman and Chief Executive Officer held by Mr. Pan Yun[67][68] - The Board believes that Mr. Pan Yun's combined role as Chairman and Chief Executive Officer is in the best interest of the Group, and the three independent non-executive directors ensure a balance of power and authority[68] Events After Reporting Period and Review No significant post-reporting period events affecting business or financial performance occurred, and the Audit Committee reviewed and approved the unaudited interim financial information for H1 2025, confirming compliance with accounting standards and Listing Rules - No significant events related to the business or financial performance of the company occurred from the end of the reporting period to the date of this announcement[70] - The Audit Committee has reviewed the accounting principles and practices adopted by the Group and the unaudited interim financial information, deeming its preparation to be in compliance with applicable accounting standards, Listing Rules, and other relevant legal requirements[71][72] - This results announcement has been published on the HKEX website www.hkexnews.hk and the company's website www.xjgroup.com, and the interim report will be published in due course[73]