中电华大科技(00085) - 2025 - 中期业绩

Company Information and Report Statement This section provides the company's identification details and confirms the report's scope as the unaudited condensed consolidated interim results for the six months ended June 30, 2025 - The company's name is CHINA ELECTRONICS HUADA TECHNOLOGY COMPANY LIMITED, with stock code 00085[2] - This report is the unaudited condensed consolidated interim results announcement for the six months ended June 30, 2025[2][3] Condensed Consolidated Financial Statements This section presents the company's condensed consolidated financial statements, including the statement of profit or loss, comprehensive income, and financial position Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2025, the Group's revenue decreased by 18.2% to HK$1,112,346 thousand, with profit for the period falling 54.6% due to a significant reduction in operating profit Condensed Consolidated Statement of Profit or Loss Key Data (For the six months ended June 30) | Indicator | 2025 (HK$ '000) | 2024 (HK$ '000) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,112,346 | 1,360,635 | -18.2% | | Cost of sales | (698,249) | (793,267) | -12.0% | | Gross profit | 414,097 | 567,368 | -27.0% | | Operating profit | 151,391 | 354,569 | -57.3% | | Profit before tax | 145,586 | 343,015 | -57.5% | | Profit for the period | 140,108 | 308,772 | -54.6% | | Profit attributable to equity holders of the Company | 138,560 | 309,545 | -55.2% | | Basic earnings per share (HK cents) | 6.83 | 15.25 | -55.2% | Condensed Consolidated Statement of Comprehensive Income For the six months ended June 30, 2025, total comprehensive income decreased by 38.7% to HK$179,708 thousand, primarily due to reduced profit for the period and exchange differences Condensed Consolidated Statement of Comprehensive Income Key Data (For the six months ended June 30) | Indicator | 2025 (HK$ '000) | 2024 (HK$ '000) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Profit for the period | 140,108 | 308,772 | -54.6% | | Exchange differences on translation of financial statements | 31,568 | (12,116) | N/A | | Exchange differences on translation of the Company's financial statements | 8,032 | (3,528) | N/A | | Total comprehensive income for the period | 179,708 | 293,128 | -38.7% | Condensed Consolidated Statement of Financial Position As of June 30, 2025, total assets were HK$4,232,865 thousand, with net current assets of HK$1,593,900 thousand, maintaining a net cash position, and total equity of HK$2,468,046 thousand Condensed Consolidated Statement of Financial Position Key Data (As of June 30) | Indicator | June 30, 2025 (HK$ '000) | December 31, 2024 (HK$ '000) | Change (%) | | :--- | :--- | :--- | :--- | | Total assets | 4,232,865 | 4,174,001 | +1.4% | | Non-current assets | 944,204 | 1,067,587 | -11.6% | | Current assets | 3,288,661 | 3,106,414 | +5.9% | | Cash and cash equivalents | 1,027,579 | 743,036 | +38.3% | | Trade and other receivables (current) | 695,140 | 525,949 | +32.2% | | Total equity | 2,468,046 | 2,471,026 | -0.1% | | Total liabilities | 1,764,819 | 1,702,975 | +3.6% | | Current liabilities | 1,694,713 | 1,542,805 | +9.8% | | Trade and other payables (current) | 1,195,731 | 979,438 | +22.1% | Notes to the Financial Statements This section details the basis of preparation, accounting policies, and specific notes for various financial statement items, including revenue, expenses, and receivables Basis of Preparation and Principal Accounting Policies The condensed consolidated interim financial statements comply with HKFRS and Listing Rules, adopting consistent accounting policies with no significant impact from new or revised standards - The condensed consolidated interim financial statements comply with all applicable disclosure requirements of HKFRS and Appendix D2 of the Listing Rules[9] - The accounting policies adopted are consistent with those used in the preparation of the Group's annual consolidated financial statements for the year ended December 31, 2024[10] - The adoption of new or revised HKFRS has no significant impact on the Group's results or financial position[10] Revenue and Segment Information The Group's revenue primarily derives from integrated circuit product sales and services, operating as a single segment with nearly 100% of revenue and over 90% of non-current assets in Mainland China - The Group's revenue primarily comes from the sale of integrated circuit products and provision of services, totaling HK$1,112,346 thousand in the first half of 2025[11] - The Board considers the Group operates and is managed as a single segment, thus no segment information is disclosed[12] - Nearly 100% of the Group's revenue and over 90% of its non-current assets are located in Mainland China, hence no geographical information is disclosed[12] Other Income - Net Other income, net, for the six months ended June 30, 2025, decreased to HK$36,496 thousand from HK$52,327 thousand in the prior year, mainly due to reduced government grants and fair value changes of investment properties Other Income - Net (For the six months ended June 30) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Government grants from ordinary activities | 16,539 | 36,650 | | Fair value changes of investment properties | (121) | (5,352) | | Interest income | 18,617 | 19,652 | | Rental income | 1,223 | – | | Others | 238 | 1,377 | | Total | 36,496 | 52,327 | Finance Costs - Net Net finance costs for the six months ended June 30, 2025, significantly decreased to HK$5,696 thousand from HK$10,928 thousand in the prior year, primarily due to lower interest expenses on borrowings and deposits received Finance Costs - Net (For the six months ended June 30) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Interest expense on borrowings | 7,389 | 9,774 | | Interest expense on lease liabilities | 699 | 943 | | Interest expense on deposits received | 3,873 | 8,813 | | Total finance costs | 11,961 | 19,530 | | Interest income from cash and cash equivalents | (2,723) | (4,337) | | Interest income from deposits paid | (3,542) | (4,265) | | Total finance income | (6,265) | (8,602) | | Finance costs - net | 5,696 | 10,928 | Profit Before Tax Profit before tax is stated after deducting various expenses, notably a significant increase in research and development costs to HK$222,909 thousand and higher employee benefit expenses Profit Before Tax Deductions (For the six months ended June 30) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Depreciation of property, plant and equipment | 10,962 | 6,525 | | Depreciation of right-of-use assets | 11,475 | 11,515 | | Amortisation of intangible assets | 23,071 | 18,854 | | Inventories (reversal of provision) / provision | (9,132) | 10,288 | | Employee benefit expenses | 187,575 | 162,506 | | Research and development costs | 222,909 | 183,250 | - Research and development costs for the six months ended June 30, 2025, increased to HK$222,909 thousand from HK$183,250 thousand in the prior year, primarily comprising employee and material costs[15] Taxation Taxation expense for the six months ended June 30, 2025, significantly decreased to HK$5,478 thousand from HK$34,243 thousand in the prior year, benefiting from preferential corporate income tax rates in China Taxation Components (For the six months ended June 30) | Item | 2025 (HK$ '000) | 2024 (HK$ '000) | | :--- | :--- | :--- | | Current period tax - China corporate income tax | (5,594) | 22,442 | | Deferred tax - origination and reversal of temporary differences | 6,279 | 366 | | Deferred tax - withholding income tax on undistributed profits | 4,793 | 11,435 | | Total taxation | 5,478 | 34,243 | - Beijing CE Huada Electronic Design Co, Ltd and Shanghai Huahong Integrated Circuit Co, Ltd enjoy preferential corporate income tax rates of 10% and 15% respectively[18] - The Group's foreign-invested enterprises are subject to a 10% withholding income tax on dividends distributed to shareholders outside Mainland China[18] Dividends The Board of Directors has resolved not to declare any dividends for the six months ended June 30, 2025 - The Board resolved not to declare any dividends for the six months ended June 30, 2025[17] Earnings Per Share Basic earnings per share for the six months ended June 30, 2025, significantly decreased to 6.83 HK cents from 15.25 HK cents in the prior year, primarily due to reduced profit attributable to equity holders Earnings Per Share Calculation (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | Profit for the period attributable to equity holders of the Company (HK$ '000) | 138,560 | 309,545 | | Weighted average number of ordinary shares in issue (thousand shares) | 2,029,872 | 2,029,872 | | Basic earnings per share (HK cents) | 6.83 | 15.25 | - Diluted earnings per share is not presented as the Company has no unissued potential dilutive ordinary shares[20] Trade and Other Receivables As of June 30, 2025, total trade receivables significantly increased to HK$512,836 thousand from HK$350,166 thousand at the end of 2024, with the largest increase in the 61-180 day aging category Trade Receivables Aging Analysis (HK$ '000) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 30 days | 160,636 | 120,825 | | 31 to 60 days | 44,221 | 117,591 | | 61 to 180 days | 306,032 | 108,846 | | Over 180 days and within 1 year | 831 | 93 | | Over 1 year | 1,116 | 2,811 | | Total | 512,836 | 350,166 | - The Group's credit period for most sales ranges from 30 to 180 days[21] Trade and Other Payables As of June 30, 2025, total trade payables increased to HK$560,599 thousand from HK$416,869 thousand at the end of 2024, with a notable increase in payables aged over 60 days Trade Payables Aging Analysis (HK$ '000) | Aging | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Within 30 days | 138,781 | 182,969 | | 31 to 60 days | 54,102 | 130,117 | | Over 60 days | 367,716 | 103,783 | | Total | 560,599 | 416,869 | Business and Financial Review This section provides an overview of the Group's business performance, financial position, operating expenses, and future outlook for the period Performance Overview For the six months ended June 30, 2025, revenue decreased by 18.2% to HK$1,112.3 million, profit attributable to equity holders fell 55.2% to HK$138.6 million, and basic EPS was 6.83 HK cents 2025 First Half Performance Overview | Indicator | 2025 First Half (HK$ Million) | 2024 First Half (HK$ Million) | Year-on-year Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,112.3 | 1,360.6 | -18.2% | | Profit attributable to equity holders of the Company | 138.6 | 309.5 | -55.2% | | Basic earnings per share (HK cents) | 6.83 | 15.25 | -55.2% | Integrated Circuit Design Business The Group's integrated circuit design business faced a sluggish global market and intense competition, leading to decreased revenue and gross margin, despite stable overall sales volume and new intellectual property registrations - The Group's integrated circuit design business covers smart card and security chip design and application system development, primarily for identity recognition, financial payment, government public services, telecommunications, IoT, and IoV sectors[25] - In the first half of 2025, global smart card and security chip market demand was sluggish, domestic and international competition remained fierce, and product selling prices significantly declined[25] - Sales volumes of security SE chips and financial card chips decreased, with a significant drop in third-generation social security card chips; however, sales volumes of security master control chips and identity recognition products substantially increased, resulting in overall sales volume similar to the prior year[25] - During the period, 8 new patents, 4 new software copyrights, and 1 new integrated circuit layout design were registered[25] Operating Expense Analysis The Group experienced a decline in revenue and overall gross margin due to weak market demand and heightened industry competition, with administrative expenses rising significantly due to increased R&D investment - The decline in revenue and overall gross margin primarily reflects sluggish smart card and security chip market demand, intense industry competition, and continuous decline in product selling prices[26] Selling and Marketing Costs Selling and marketing costs for the six months ended June 30, 2025, decreased to HK$23.1 million, representing 2.1% of revenue, indicating stable cost control amidst increased marketing efforts Selling and Marketing Costs (For the six months ended June 30) | Indicator | 2025 (HK$ Million) | 2024 (HK$ Million) | | :--- | :--- | :--- | | Selling and marketing costs | 23.1 | 26.8 | | As a percentage of revenue | 2.1% | 2.0% | Administrative Expenses and Research and Development Costs Administrative expenses rose 14.3% to HK$272.2 million for the six months ended June 30, 2025, driven by increased R&D costs of HK$222.9 million, focusing on security chips, smart card performance, and IoT/IoV applications Administrative Expenses and Research and Development Costs (For the six months ended June 30) | Indicator | 2025 (HK$ Million) | 2024 (HK$ Million) | | :--- | :--- | :--- | | Administrative expenses | 272.2 | 238.0 | | As a percentage of revenue | 24.5% | 17.5% | | Research and development costs | 222.9 | 183.3 | | As a percentage of revenue | 20.0% | 13.5% | - R&D primarily focuses on security SE chip products, security master control chip products, enhancing smart card product performance and security certification levels, and developing security chips and application system solutions for IoT and IoV fields[27] Outlook The global smart card and security chip market is expected to continue its downturn with intensified competition and declining prices, but rising demand for intelligent device security and eSIM applications present new opportunities for the Group to strengthen its market leadership - Global smart card and security chip market demand is expected to remain in a downward cycle, with intensifying domestic competition and continued decline in product selling prices[28] - While security SE chip business growth has slowed, increased demand for intelligent device security and the promotion of eSIM applications will broaden application areas, creating new market opportunities[28] - The Group will continue to closely monitor domestic market demand, seize market opportunities, and actively expand its customer base to consolidate its leading position in the smart card and security chip sectors[28] Dividend Policy The Board of Directors has resolved not to declare any dividends for the six months ended June 30, 2025 - The Board has resolved not to declare any dividends for the six months ended June 30, 2025[29] Financial Position Review The Group maintains a prudent treasury policy, with HK$1,027.6 million in cash and cash equivalents and HK$383.8 million in bank borrowings as of June 30, 2025, indicating a net cash position with no significant capital commitments or contingent liabilities - As of June 30, 2025, the Group held cash and cash equivalents of HK$1,027.6 million (December 31, 2024: HK$743.0 million), with 94.5% held in RMB[30] - Bank and other borrowings amounted to HK$383.8 million, all due within one year, unsecured, and at fixed interest rates[31] - The Group's net current assets were HK$1,593.9 million, maintaining a net cash position with no significant outstanding capital commitments or contingent liabilities[32] Employees and Remuneration Policy As of June 30, 2025, the Group employed approximately 450 staff with employee benefit expenses of HK$187.6 million, implementing stringent recruitment, performance evaluation, and multi-level training programs with market-aligned remuneration - As of June 30, 2025, the Group employed approximately 450 staff, with employee benefit expenses totaling HK$187.6 million[33] - The Group has stringent recruitment policies and performance appraisal plans, with remuneration policies generally aligned with industry practices, determined by performance and experience, and regularly reviewed[33] - Employee training is structured into company-level, department-level, and individual-level programs, focusing on cross-departmental general training, knowledge and skill enhancement, and individual supplementary development[33] Other Information This section covers subsequent events, securities transactions, corporate governance, audit committee review, and the publication details of the interim report Subsequent Events As of August 29, 2025, the Board is unaware of any significant events affecting the Group since June 30, 2025 - As of August 29, 2025, the Board is unaware of any significant events affecting the Group since June 30, 2025[34] Securities Transactions Neither the Company nor its subsidiaries repurchased, sold, or redeemed any of the Company's securities during the six months ended June 30, 2025 - Neither the Company nor any of its subsidiaries repurchased, sold, or redeemed any of the Company's securities during the six months ended June 30, 2025[35] Corporate Governance The Company is committed to the highest standards of corporate governance and complied with all applicable code provisions of the Corporate Governance Code in Appendix C1 of the Listing Rules for the six months ended June 30, 2025 - The Company complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2025[36] Audit Committee The Audit Committee under the Board of Directors has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025 - The Audit Committee under the Board of Directors has reviewed the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025[37] Publication of Interim Report The 2025 Interim Report will be published later on the Company's website (www.cecht.com.cn) and HKEXnews website (www.hkexnews.hk) - The 2025 Interim Report will be published on the Company's website (www.cecht.com.cn) and the HKEXnews website (www.hkexnews.hk)[38](index=38&type=chunk)