Workflow
华昱高速(01823) - 2025 - 中期业绩

Financial Summary The company experienced a significant decline in revenue and gross profit, turning from profit to loss for the six months ended June 30, 2025 | Indicator | 2025 (RMB) | 2024 (RMB) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue from continuing operations | 75,800,000 Yuan | 128,800,000 Yuan | -41.1% | | Gross Profit | 13,200,000 Yuan | 29,200,000 Yuan | -54.6% | | Loss / Profit attributable to owners of the Company | Loss 23,300,000 Yuan | Profit 11,900,000 Yuan | Turned from profit to loss | | Basic and diluted loss / earnings per share | Loss 5.65 cents | Profit 2.89 cents | Turned from profit to loss | | Interim Dividend | Not recommended for payment | None | No change | Unaudited Condensed Interim Results Condensed Statement of Profit or Loss The Group's revenue for the six months ended June 30, 2025, significantly decreased by 41.1%, resulting in a loss attributable to owners of the Company Condensed Statement of Profit or Loss Key Data (RMB Thousand) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Revenue | 75,832 | 128,824 | | Cost of Sales | (62,585) | (99,654) | | Gross Profit | 13,247 | 29,170 | | Other Income | 952 | 2,044 | | Other gains / (losses), net | 1,251 | (675) | | Administrative Expenses | (18,869) | (20,011) | | Selling and Distribution Costs | (5,222) | (5,531) | | Operating (Loss) / Profit | (8,641) | 4,997 | | Finance Costs | (3,013) | (1,167) | | Share of profit less loss of associates | (13,807) | 11,473 | | (Loss) / Profit before tax | (25,461) | 15,303 | | Income Tax | 102 | (1,309) | | (Loss) / Profit for the period | (25,359) | 13,994 | | (Loss) / Profit attributable to owners of the Company | (23,320) | 11,918 | | Basic and diluted (loss) / earnings per share (RMB cents) | (5.65) | 2.89 | Condensed Statement of Profit or Loss and Other Comprehensive Income The Group's total comprehensive income for the six months ended June 30, 2025, was a loss of RMB 26,004 thousand, primarily due to the loss for the period and exchange differences Condensed Statement of Profit or Loss and Other Comprehensive Income Key Data (RMB Thousand) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | (Loss) / Profit for the period | (25,359) | 13,994 | | Exchange differences on translation | (645) | 721 | | Total comprehensive income for the period | (26,004) | 14,715 | | Attributable to owners of the Company | (23,965) | 12,639 | | Attributable to non-controlling interests | (2,039) | 2,076 | Condensed Statement of Financial Position As of June 30, 2025, the Group's total assets less current liabilities slightly increased, while net assets decreased due to the period's loss Condensed Statement of Financial Position Key Data (RMB Thousand) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Non-current assets | | | | Property, plant and equipment | 480,377 | 428,974 | | Intangible assets - service concession arrangements | 35,034 | 49,134 | | Interests in associates | 144,440 | 163,579 | | Total non-current assets | 698,156 | 699,164 | | Current assets | | | | Inventories | 397,365 | 390,608 | | Cash and cash equivalents | 119,239 | 185,756 | | Total current assets | 695,668 | 713,645 | | Current liabilities | | | | Bank loans and other borrowings | 116,877 | 145,124 | | Total current liabilities | 201,806 | 234,371 | | Net current assets | 493,862 | 479,274 | | Non-current liabilities | | | | Bank loans | 139,493 | 99,469 | | Total non-current liabilities | 139,593 | 100,009 | | Net assets | 1,052,425 | 1,078,429 | | Total equity attributable to owners of the Company | 727,180 | 751,145 | Notes to the Unaudited Interim Financial Report Basis of Preparation and Changes in Accounting Policies This interim financial report is prepared in accordance with HKAS 34 and Listing Rules, reviewed by auditors, with no significant impact from accounting policy changes - The interim financial report is prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants11 - This interim financial report is unaudited but has been reviewed by Crowe (HK) CPA Limited in accordance with Hong Kong Standard on Review Engagements 241012 - The Group applied revised Hong Kong Financial Reporting Standards during the accounting period, but these developments did not have a significant impact on the results and financial position for the current or prior periods13 Revenue and Segment Reporting The Group's business comprises Qingping Expressway and liquor trading segments, with total revenue of RMB 75,832 thousand, showing a significant decline in liquor sales Revenue breakdown Revenue by Major Product or Service Line (RMB Thousand) | Product/Service Line | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Toll revenue | 31,052 | 34,052 | | Sales of liquor | 44,780 | 94,772 | | Total Revenue | 75,832 | 128,824 | - The Group's revenue is almost entirely derived from Mainland China, thus no geographical segment analysis is presented15 - The Group's principal activities include the construction, operation, and management of Qingping Expressway, and the distribution of Huamao liquor and Xijiu Shaofang liquor17 Segment results, assets and liabilities Segment results, measured by adjusted EBITDA, show Qingping Expressway remaining profitable while the liquor business turned to a loss Segment Results (Adjusted EBITDA) and Assets & Liabilities (RMB Thousand) | Indicator | Qingping Expressway (2025) | Liquor (2025) | Total (2025) | Qingping Expressway (2024) | Liquor (2024) | Total (2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Reportable segment revenue | 31,052 | 44,780 | 75,832 | 34,052 | 94,772 | 128,824 | | Reportable segment profit (adjusted EBITDA) | 12,852 | (11,879) | 973 | 15,086 | 24,825 | 39,911 | | Interest income from bank deposits | 35 | 56 | 91 | 137 | 825 | 962 | | Interest expense | – | (3,001) | (3,001) | – | (1,135) | (1,135) | | Depreciation and amortization | (14,602) | (3,479) | (18,081) | (15,887) | (869) | (16,756) | | Reportable segment assets | 169,502 | 1,233,810 | 1,403,312 | 176,415 | 1,170,246 | 1,346,661 | | Reportable segment liabilities | 6,645 | 380,239 | 386,884 | 7,313 | 286,125 | 293,438 | - Segment performance is assessed using "adjusted EBITDA," which is profit before interest, tax, depreciation, and amortization, adjusted for items not specifically attributable to individual segments18 Reconciliation of reportable segment profit or loss Reconciliation of Reportable Segment Profit or Loss (RMB Thousand) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Reportable segment profit | 973 | 39,911 | | Other income | 636 | 1,752 | | Other losses, net | 314 | (132) | | Depreciation and amortization | (18,413) | (16,756) | | Finance costs | (3,013) | (1,135) | | Unallocated head office and corporate expenses | (5,958) | (8,337) | | Consolidated (loss) / profit before tax | (25,461) | 15,303 | (Loss) / Profit before tax The Group incurred a pre-tax loss of RMB 25,461 thousand, primarily due to a significant increase in finance costs and a slight rise in staff costs (Loss) / Profit before Tax Components (RMB Thousand) | Item | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Finance Costs | | | | Interest on bank loans and other borrowings | 5,102 | 1,132 | | Less: Interest expenses capitalized into construction in progress | (2,141) | – | | Interest on lease liabilities | 52 | 35 | | Total Finance Costs | 3,013 | 1,167 | | Staff Costs | | | | Salaries, wages and other benefits | 14,729 | 15,800 | | Contributions to defined contribution retirement plans | 2,220 | 662 | | Total Staff Costs | 16,949 | 16,462 | | Other Items | | | | Depreciation expenses - owned property, plant and equipment | 3,089 | 1,061 | | Depreciation expenses - right-of-use assets | 1,224 | 568 | | Amortization | 14,100 | 15,455 | - Borrowing costs are capitalized at an annual interest rate of 3.65%22 Income Tax The Group's income tax for the period was a gain of RMB 102 thousand, mainly due to negative current tax for PRC enterprise income tax Income Tax Components (RMB Thousand) | Item | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Current tax - PRC enterprise income tax | (101) | 1,148 | | Deferred tax - origination and reversal of temporary differences | (1) | 161 | | Total Income Tax | (102) | 1,309 | - The Group is not subject to any income tax in the Cayman Islands and the British Virgin Islands26 - No provision has been made for Hong Kong profits tax as the Group had no assessable profits in Hong Kong26 - Subsidiaries in Mainland China are subject to PRC enterprise income tax at a rate of 25% on their assessable profits26 Loss / Earnings per share The Group reported a basic loss per share of RMB 5.65 cents for the six months ended June 30, 2025, shifting from earnings in the prior period Loss / Earnings per Share Calculation (RMB Thousand / Thousand Shares) | Indicator | For the six months ended June 30, 2025 | For the six months ended June 30, 2024 | | :--- | :--- | :--- | | Loss / Profit attributable to ordinary equity holders | (23,320) | 11,918 | | Weighted average number of ordinary shares in issue during the period | 412,608 | 412,608 | | Basic and diluted (loss) / earnings per share (RMB cents) | (5.65) | 2.89 | - There were no potential dilutive ordinary shares for the six months ended June 30, 2025 and 202425 Contingent consideration receivable As of June 30, 2025, contingent consideration receivable increased to RMB 21,524 thousand, related to the third installment of the Dao Yue disposal, expected to be recovered within one year Fair Value Changes and Analysis of Contingent Consideration Receivable (RMB Thousand) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | At beginning of period/year | 21,193 | 84,040 | | Repaid during period/year | – | (63,086) | | Fair value change | 331 | 239 | | At end of period/year | 21,524 | 21,193 | | Analysis for reporting purposes | | | | - Current | 21,524 | 545 | | - Non-current | – | 20,648 | - Contingent consideration receivable relates to the third installment of the disposal of Dao Yue, subject to estimated adjustments including land title registration fees and Dao Yue's net profit2728 - The contingent consideration receivable is measured at fair value using the discounted cash flow method, discounted at an effective annual interest rate of 3% (December 31, 2024: 3.1%), classified as "Level 3 valuation" under HKFRS 13 Fair Value Measurement2829 - Directors estimate that the third installment of the contingent consideration receivable will be recovered within one year29 Trade and other receivables and prepayments As of June 30, 2025, total trade and other receivables increased to RMB 14,121 thousand, while prepayments, mainly for liquor business suppliers and distillery construction, totaled RMB 90,797 thousand Trade and Other Receivables (RMB Thousand) | Item | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Trade receivables | 7,524 | 4,840 | | Other receivables | 6,597 | 5,553 | | Total | 14,121 | 10,393 | - All trade receivables are aged within three months30 Prepayments (RMB Thousand) | Item | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Prepayments for: | | | | - Suppliers | 52,759 | 48,145 | | - Subcontractors | 38,038 | 36,563 | | Total | 90,797 | 84,708 | - Prepayments to suppliers are primarily for the liquor business, and prepayments to subcontractors are for the construction of the distillery in Guizhou, China3132 Accruals and other payables As of June 30, 2025, total accruals and other payables decreased to RMB 52,933 thousand, mainly comprising construction payables and staff welfare payables Accruals and Other Payables (RMB Thousand) | Item | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Payables for construction work | 38,660 | 49,131 | | Salaries and other staff welfare payables | 2,944 | 6,976 | | Value-added tax and surcharges | 296 | 606 | | Other payables | 11,033 | 10,706 | | Total | 52,933 | 67,419 | - All accruals and other payables are expected to be settled or recognized as income within one year33 Dividends The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 - The Board of Directors resolved not to declare an interim dividend for the six months ended June 30, 2025 (for the six months ended June 30, 2024: none)34 Management Discussion and Analysis Financial Review The Group's revenue and gross profit significantly declined due to China's economic slowdown and weak consumer market, leading to a shift from profit to loss Revenue Revenue Composition and Year-on-Year Change (RMB Thousand) | Revenue Source | 2025 (approx.) | 2024 (approx.) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Total Revenue | 75,800 | 128,800 | -41.1% | | Qingping Expressway toll fees | 31,100 | 34,100 | -8.8% | | Liquor sales | 44,800 | 94,800 | -52.7% | - The significant decrease in revenue is primarily due to the slowdown in China's economic growth and weak purchasing power35 - Qingping Expressway's total traffic volume was approximately 10,300,000 vehicle trips, a decrease of approximately 9.7% year-on-year35 - The reduction in liquor sales revenue is mainly attributed to the economic slowdown, weak real estate market, and high youth unemployment rate suppressing discretionary spending in China35 Cost of Sales and Gross Profit Gross profit and overall gross profit margin decreased, consistent with the decline in total revenue, particularly in the Qingping Expressway segment Gross Profit and Gross Profit Margin Changes (RMB Thousand) | Indicator | 2025 (approx.) | 2024 (approx.) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Total Gross Profit | 13,200 | 29,200 | -54.8% | | Overall Gross Profit Margin | 17.5% | 22.6% | -5.1 percentage points | | Qingping Expressway Segment Gross Profit | 1,200 | 3,100 | Decrease | | Qingping Expressway Segment Gross Profit Margin | 3.9% | 9.3% | Decrease | | Liquor Trading Segment Gross Profit | 12,000 | N/A | N/A | | Liquor Trading Segment Gross Profit Margin | 26.9% | 27.5% | -0.6 percentage points | - The decrease in gross profit is consistent with the reduction in total revenue36 - The decline in Qingping Expressway segment gross profit and gross profit margin is primarily due to reduced toll revenue36 Other Income and Other Gains / (Losses), Net Other income primarily consists of expressway billboard rental and bank interest, while other gains/losses reflect exchange differences Other Income and Other Gains / (Losses), Net (RMB Thousand) | Indicator | 2025 (approx.) | 2024 (approx.) | | :--- | :--- | :--- | | Other Income | 1,000 | 2,000 | | Other Gains / (Losses), Net | 1,300 (Gain) | 700 (Loss) | - Other income mainly includes expressway billboard rental income and interest income from bank deposits37 - Other gains / (losses), net primarily reflect exchange gains and losses recorded during the period37 Administrative Expenses Administrative expenses decreased by 5.5% due to enhanced cost control measures implemented to mitigate the impact of declining sales Administrative Expenses (RMB Thousand) | Indicator | 2025 (approx.) | 2024 (approx.) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Administrative Expenses | 18,900 | 20,000 | -5.5% | - The decrease in administrative expenses is mainly due to enhanced cost control during the period to mitigate the adverse impact of declining sales38 Selling and Distribution Costs Selling and distribution costs decreased by 5.5%, primarily comprising advertising expenses and staff costs for the liquor trading business Selling and Distribution Costs (RMB Thousand) | Indicator | 2025 (approx.) | 2024 (approx.) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Selling and Distribution Costs | 5,200 | 5,500 | -5.5% | - Selling and distribution costs primarily include advertising expenses and staff costs for the liquor trading business39 Finance Costs Finance costs increased by 150%, mainly due to bank financing for the liquor and spirits trading business during the period Finance Costs (RMB Thousand) | Indicator | 2025 (approx.) | 2024 (approx.) | Year-on-Year Change (%) | | :--- | :--- | :--- | :--- | | Finance Costs | 3,000 | 1,200 | +150% | - The increase in finance costs is mainly attributable to bank financing provided for the liquor and spirits trading business during the period40 (Loss) / Profit for the period The Group shifted from profit to a loss of RMB 25,400 thousand for the period, primarily due to the significant decline in liquor sales amid a shrinking consumer market (Loss) / Profit for the Period (RMB Thousand) | Indicator | 2025 (approx.) | 2024 (approx.) | | :--- | :--- | :--- | | (Loss) / Profit for the period | Loss 25,400 | Profit 14,000 | - The shift from profit to loss for the period is mainly due to the significant reduction in liquor sales amidst a continuous contraction of the Chinese consumer market41 Liquidity and Financial Resources The Group funds operations through internal resources and bank loans, with increased bank borrowings and credit facilities, while cash and cash equivalents decreased Liquidity and Financial Resources Overview (RMB Thousand) | Indicator | As of June 30, 2025 (approx.) | As of December 31, 2024 (approx.) | | :--- | :--- | :--- | | Total bank loans and other borrowings drawn | 256,400 | 244,600 | | Total cash and cash equivalents | 119,200 | 185,800 | | Total bank credit facilities | 582,000 | 550,000 | | Ratio of total outstanding bank loans and other borrowings to total equity | 0.24 | 0.23 | - The Group's bank credit facilities are primarily utilized for working capital for the liquor business segment's trade43 - The Group's borrowings are mainly on a floating interest rate basis, with no hedging arrangements entered into during the period, and management continues to monitor interest rate risk43 Intangible Assets - Service Concession Arrangements Service concession arrangements grant the Group rights to operate Qingping Expressway and collect tolls, with no further impairment recognized during the period - Service concession arrangements grant the Group the right to operate Qingping Expressway and collect tolls44 - The amount of intangible assets is subject to regular impairment reviews, and no further impairment was recognized during the period44 Employees and Remuneration As of June 30, 2025, the Group employed 389 staff with total remuneration expenses of approximately RMB 16,900 thousand, based on performance-linked policies Number of Employees and Remuneration Expenses (RMB Thousand) | Indicator | As of June 30, 2025 | As of December 31, 2024 | | :--- | :--- | :--- | | Number of Employees | 389 | 387 | | Total Employee Remuneration Expenses | 16,900 | 16,500 | - The Group's remuneration policy is performance-based and includes provident fund schemes (Hong Kong), state-managed retirement schemes (China), and medical insurance45 - The Group may grant discretionary bonuses, restricted share award schemes, and employee share options based on individual performance assessments45 Foreign Exchange Risk The Group primarily operates in China with most transactions settled in RMB, while some cash and bank deposits are denominated in HKD, with no hedging arrangements in place - The Group primarily operates in China, with most transactions settled in RMB46 - A portion of the Group's cash and bank deposits are denominated in HKD46 - During the period, the Group did not enter into any hedging arrangements to hedge foreign currency risk, and management will continue to monitor and consider appropriate actions46 Pledge of Assets As of June 30, 2025, approximately RMB 38,000 thousand in long-term secured bank loans are guaranteed by directors and pledged with equity, while RMB 18,400 thousand in other borrowings are secured by inventories - Approximately RMB 38,000 thousand of long-term secured bank loans are guaranteed by the Company's and subsidiaries' directors and pledged with the entire equity interest in Shenzhen Huayu Expressway Investment Co., Ltd47 - Approximately RMB 18,400 thousand of other borrowings are secured by the Group's inventories with a carrying value of approximately RMB 92,000 thousand47 Business Review The Qingping Expressway business saw reduced toll revenue and traffic due to competition and economic slowdown, while the liquor trading business suffered a significant revenue decline and segment loss amid a shrinking consumer market Qingping Expressway - Qingping Expressway's total toll revenue was approximately RMB 31,100,000, a decrease of approximately 8.8% compared to the same period last year48 - Average traffic volume was approximately 1,700,000 vehicle trips per month, a decrease of approximately 10.5% compared to the same period last year48 - Qingping Expressway's performance was affected by competition from nearby routes, increased national holiday toll exemptions, and the slowdown in China's economic growth48 Liquor Trading - Liquor trading revenue was approximately RMB 44,800,000, a decrease of approximately 52.7% compared to the same period last year49 - The segment recorded a loss (adjusted EBITDA) of approximately RMB 11,900,000 for the period, compared to a profit of approximately RMB 24,800,000 in the same period last year49 - The shrinking Chinese consumer market severely impacted the liquor trading business, leading to inventory accumulation in distribution channels despite the Group's active promotions49 Integrated Production Base in Renhuai, Guizhou - The Group acquired three land parcels in Renhuai City, Guizhou Province, totaling no less than 150,000 square meters in 2023, for developing a distillery and integrated operations center50 - Structural engineering for the distillery and operations center was completed by June 30, 2025, with final decoration expected to be completed by the end of 202550 Prospects Despite economic slowdown, the Group anticipates accelerated growth from interest rate cuts and foreign demand recovery, with stable toll revenue and improved liquor business after inventory digestion - Growth momentum is expected to accelerate in the short term, driven by declining interest rates and a recovery in foreign demand51 - Qingping Expressway's toll revenue is expected to grow steadily, becoming one of the Group's main sources of stable cash inflow51 - The liquor trading business is expected to improve after digesting accumulated inventory, and the Group will continue to build the Huamao liquor brand and arrange more sales and marketing activities51 - Upon completion of the production facilities in Renhuai City, the Group can benefit from vertical integration of the liquor business, with trial production already completed51 - The Group will continue to seek opportunities for other infrastructure projects in China consistent with its overall business strategy, including acquiring abandoned, half-developed, or operational projects52 - The Group will also consider expanding its business into other promising commercial areas52 Other Information Purchase, Sale or Redemption of the Company's Securities Neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's securities during the period - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's shares during the period53 Corporate Governance The Company is committed to maintaining high standards of corporate governance, adhering to the Corporate Governance Code in Appendix C1 of the Listing Rules throughout the period - The Company is committed to maintaining a high level of corporate governance in the best interests of its shareholders54 - The Company has adopted the Corporate Governance Code set out in Appendix C1 of the Listing Rules and has complied with its provisions throughout the period54 Standard Code for Securities Transactions by Directors The Company adopted the Standard Code for Securities Transactions by Directors in Appendix C3 of the Listing Rules, with all directors confirming compliance during the period - The Company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix C3 of the Listing Rules55 - All Directors have confirmed their compliance with the required standards set out in the adopted Standard Code during the period55 Audit Committee The Audit Committee, comprising three independent non-executive directors, reviewed the unaudited interim results and confirmed compliance with accounting standards and regulations - The Audit Committee comprises three independent non-executive directors, with Mr. Zhu Jianhong, the chairman, possessing financial professional qualifications and experience56 - The primary responsibilities of the Audit Committee include reviewing and monitoring the Group's financial reporting process and internal control measures56 - The Audit Committee has reviewed the Group's unaudited condensed interim results for the period and is of the opinion that they comply with the relevant accounting standards, rules, and regulations, and that appropriate disclosures have been duly made56 Publication of Interim Results Announcement and Despatch of Interim Report This interim results announcement is published on the HKEX and Company websites, with the full interim report to be despatched to shareholders and published online in due course - This announcement has been published on the websites of HKEX (www.hkexnews.hk) and the Company (www.huayu.com.hk)[57](index=57&type=chunk) - The Company's 2025 interim report, containing all information required by the Listing Rules, will be despatched to the Company's shareholders and published on the respective websites of the Company and HKEX in due course57 Board of Directors This announcement was published on August 28, 2025, and the Board comprises three executive and three independent non-executive directors - This announcement was published on August 28, 202559 - The Board of Directors comprises three executive directors (Mr. Chen Yangnan, Mr. Fu Jiepin, and Ms. Liu Baohua) and three independent non-executive directors (Mr. Zhu Jianhong, Mr. Hu Liege, and Mr. Lin Hanquan)59