Market Overview - The company is a leading testing and certification service provider in Guangdong, China, offering over 3,446 parameters across 42 categories of testing services [16]. - The independent testing and inspection service market in western Guangdong has grown from approximately RMB 2.3 billion in 2019 to about RMB 3.6 billion in 2023, with a compound annual growth rate (CAGR) of 11.3% [17]. - The market size is projected to reach approximately RMB 6.5 billion by 2028, with a CAGR of 12.7% [17]. Company Qualifications and Services - The company has obtained qualifications for 42 categories of testing services approved by the Guangdong Provincial Market Supervision Administration [16]. - The company has expanded its main business to include water conservancy engineering testing services, providing comprehensive and high-quality testing services across various fields, including construction engineering and food testing [28]. - The company has obtained qualifications for 42 different categories of construction engineering testing services, demonstrating its high professional level and strong market competitiveness [28]. - The company has obtained testing qualifications for 851 parameters across five categories in the food and agricultural testing sector, indicating a strategic focus on this business area [38]. Technological Advancements - The company has successfully developed the first nationwide unmanned intelligent building laboratory in 2023, achieving automation in inspection and testing [24]. - The company has upgraded its intelligent management system to version 2.0 in early 2024, enhancing real-time management capabilities [24]. - Advanced testing equipment, including gas and liquid chromatography systems, has been acquired to enhance the precision and efficiency of food safety testing [35]. - The company has established a strong technical team and advanced testing equipment for indoor air quality assessments, ensuring compliance with relevant standards [31]. Business Expansion and Diversification - The company plans to expand its service offerings in response to increasing demand in lower-tier cities [17]. - The company plans to continue deepening its environmental and food testing markets while actively expanding into new areas such as transportation engineering and water conservancy engineering [27]. - The company has diversified its services by officially launching its food and agricultural product testing department in May 2024, creating new revenue streams [27]. - The company aims to diversify its testing services into food and agriculture, transportation, and fire safety sectors [95]. Financial Performance - The revenue from construction engineering testing services decreased by 10.98% to RMB 16.68 million for the six months ended June 30, 2025, compared to RMB 18.74 million for the same period in 2024 [43]. - Revenue from food and agricultural testing services increased by 83.42% to RMB 5.13 million for the six months ended June 30, 2025, compared to RMB 2.80 million for the same period in 2024, primarily due to the launch of agricultural food services in May 2024 [43]. - The overall gross profit margin decreased to 51.4% for the six months ended June 30, 2025, down from 70.8% for the same period in 2024, attributed to increased employee compensation and depreciation expenses [46]. - The company recorded a total revenue of RMB 24.96 million for the six months ended June 30, 2025, compared to RMB 22.83 million for the same period in 2024 [41]. Corporate Governance - The company is committed to maintaining high standards of corporate governance and transparency in its operations [8]. - The company emphasizes the importance of effective corporate governance to enhance shareholder value [99]. - The company has adopted the principles and provisions of the corporate governance code, ensuring that business activities and decision-making processes are appropriately regulated [100]. - The roles of the chairman and CEO are held by the same executive director, which the board believes enhances responsiveness and efficiency in business strategy formulation [100]. Strategic Partnerships and Acquisitions - The company signed a capital increase agreement to acquire 51% of Maoming Yue Water Engineering Testing Co., Ltd. for RMB 9.33 million, enhancing market share and competitiveness in water engineering testing services [33]. - The group has identified potential acquisition opportunities for further development and will make timely announcements as required by GEM listing rules [76]. - The group acquired a 51% stake in Guangdong Water Engineering Testing Co., Ltd. for RMB 9,330,000, completed on April 16, 2025, to expand its business network and customer base [146]. Employee and Management - The group has 115 employees as of June 30, 2025, an increase from 94 employees as of June 30, 2024, with total employee benefits expenses amounting to approximately RMB 8.66 million for the six months ended June 30, 2025, compared to RMB 6.76 million for the same period in 2024 [78]. - The total compensation for key management personnel increased to RMB 1,167,000 for the six months ended June 30, 2025, up from RMB 948,000 in the same period of 2024, marking a 23.1% increase [157]. Risk Management - The group has established a dedicated response department to monitor regulatory policies and enhance risk management capabilities, including ongoing training in various testing fields [86]. - The majority of the group's operations are concentrated in Maoming, Guangdong Province, with plans to expand into the Pearl River Delta and other cities to mitigate regional risks [88]. Shareholder Information - The controlling shareholder, Xinyi City Quality Assurance Center, holds 19,000,000 shares, representing approximately 56.00% of the total share capital [107]. - The independent non-executive directors have confirmed that the controlling shareholder has complied with the non-competition commitments [101]. - The audit committee, composed of three independent non-executive directors, has reviewed the unaudited interim results for the six months ended June 30, 2025, and found them compliant with applicable accounting standards [113].
集信国控(08629) - 2025 - 中期财报