惠生国际(01340) - 2025 - 中期财报

Condensed Consolidated Interim Financial Statements Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2025, the Group's revenue significantly decreased by 76.7% to RMB 7.39 million, but gross profit turned profitable at RMB 346 thousand, narrowing the period's loss to RMB 6.57 million and basic loss per share to RMB 0.72 cents | Metric | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 7,386 | 31,817 | | Cost of sales | (7,040) | (33,650) | | Gross profit / (loss) | 346 | (1,833) | | Other income | 1,803 | 3,506 | | Loss before tax | (6,573) | (8,599) | | Loss for the period | (6,573) | (8,599) | | Loss per share attributable to owners of the Company (RMB cents) | (0.72) | (0.97) | - Revenue for the period significantly decreased by 76.7% year-on-year, primarily due to reduced income from the live hog slaughtering and meat product trading business[5] - Gross profit turned from a loss in the prior period to a profit, indicating initial effectiveness in cost control and operational adjustments[5] Condensed Consolidated Statement of Financial Position As of June 30, 2025, the Group's total assets and liabilities slightly decreased, with net current assets at RMB 337.89 million, total assets less current liabilities at RMB 385.83 million, and net assets at RMB 385.59 million | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Non-current assets | 47,939 | 50,070 | | Current assets | 411,289 | 417,636 | | Current liabilities | 73,403 | 73,751 | | Net current assets | 337,886 | 343,885 | | Net assets | 385,587 | 393,704 | | Total equity | 385,587 | 393,704 | - Bank balances and cash decreased from approximately RMB 397.77 million as of December 31, 2024, to approximately RMB 315.98 million as of June 30, 2025[7] - Prepayments, deposits, and other receivables significantly increased, primarily due to prepayments for biological assets[7][12] Condensed Consolidated Statement of Changes in Equity For the six months ended June 30, 2025, equity attributable to owners of the Company decreased from RMB 397.04 million at the beginning of the period to RMB 390.24 million at the end, mainly due to the loss for the period and changes in exchange reserves | Metric | January 1, 2025 (RMB thousands) | June 30, 2025 (RMB thousands) | | :--- | :--- | :--- | | Equity attributable to owners of the Company | 397,040 | 390,238 | | Non-controlling interests | (3,336) | (4,651) | | Total equity | 393,704 | 385,587 | - Total comprehensive expense for the period was RMB 8.12 million, of which RMB 6.80 million was attributable to owners of the Company[10] Condensed Consolidated Statement of Cash Flows For the six months ended June 30, 2025, net cash from operating activities turned from an inflow to an outflow of RMB 81.57 million, net cash from investing activities decreased, and cash and cash equivalents at period-end were RMB 315.98 million | Metric | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Net cash (used in) / generated from operating activities | (81,572) | 1,867 | | Net cash generated from investing activities | 196 | 525 | | Net (decrease) / increase in cash and cash equivalents | (81,376) | 2,392 | | Cash and cash equivalents at end of period | 315,982 | 392,343 | - Significant increase in cash outflow from operating activities reflects changes in working capital requirements or efficiency[11] Notes to the Condensed Consolidated Interim Financial Statements 1. Basis of Preparation These condensed consolidated interim financial statements are prepared in accordance with HKAS 34 and Appendix 16 of the HKEX Listing Rules, using the historical cost convention except for certain financial instruments measured at fair value, with consistent accounting policies as the 2024 annual financial statements and no significant impact from new or revised standards - The financial statements are presented in RMB, with all figures rounded to the nearest thousand[12] - The application of new and revised HKFRSs (such as HKAS 21 (Amendment) Lack of Exchangeability) had no significant impact on the Group's financial position and performance[14][15] 2. Segment Information The Group primarily operates two segments: live hog slaughtering and meat product trading, and pipeline system products; in the first half of 2025, revenue from the live hog slaughtering and meat product trading segment significantly decreased, the pipeline system products segment generated no revenue, and all revenue originated from China - The Group is principally engaged in live hog slaughtering and meat product trading, and pipeline system products businesses[17] Segment Revenue and Results | Segment | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Live hog slaughtering and meat product trading revenue | 7,386 | 31,817 | | Live hog slaughtering and meat product trading results | (4,026) | (4,545) | | Pipeline system products revenue | – | – | | Pipeline system products results | – | (1) | - In the first half of 2025, one customer contributed over 10% of the Group's total revenue, compared to seven customers in the corresponding period of 2024[27][28] 3. Revenue and Other Income Revenue from contracts with customers for the period, primarily from pork product sales, significantly decreased year-on-year, and other income also declined, mainly due to lower interest income and dividend income from equity investments Details of Revenue and Other Income | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Sales of pork products | 7,386 | 31,817 | | Total interest income | 208 | 746 | | Dividend income from equity investments | 105 | 1,261 | | Rental income | 1,486 | 1,486 | | Total other income | 1,803 | 3,506 | - Sales of pork products revenue decreased by 76.7% year-on-year, which is the primary reason for the decline in total revenue[29] 4. Finance Costs For the six months ended June 30, 2025, the Group incurred finance costs of RMB 5 thousand, primarily from interest on lease liabilities, with no finance costs in the prior corresponding period | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on lease liabilities | 5 | – | 5. Taxation The Group incurred no income tax expense for the current or prior corresponding period, as Hunan Huisheng Meat Industry Co., Ltd. is exempt from PRC enterprise income tax due to its engagement in primary processing of agricultural products - The Group's agricultural business in China is exempt from enterprise income tax[32] - The effective statutory income tax rate for the Japan operations is approximately 30.6%[33] Income Tax Expense Reconciliation | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss before tax | (6,573) | (8,599) | | Income tax expense | – | – | 6. Loss for the Period The loss for the period is stated after deducting items such as directors' emoluments, staff costs, depreciation of property, plant and equipment, depreciation of right-of-use assets, and cost of inventories recognized as an expense, with a significant decrease in inventory costs Items Deducted in Loss for the Period | Item | Six Months Ended June 30, 2025 (RMB thousands) | Six Months Ended June 30, 2024 (RMB thousands) | | :--- | :--- | :--- | | Directors' emoluments | 137 | 180 | | Total staff costs | 397 | 662 | | Depreciation of property, plant and equipment | 2,011 | 2,776 | | Cost of inventories recognized as an expense | 7,040 | 33,031 | - Cost of inventories recognized as an expense significantly decreased from approximately RMB 33.03 million in the prior period to approximately RMB 7.04 million[35] 7. Loss Per Share Attributable to Owners of the Company For the six months ended June 30, 2025, basic loss per share attributable to owners of the Company was RMB 0.72 cents, narrowing from RMB 0.97 cents in the prior period, and diluted loss per share was the same as basic loss per share due to no potentially dilutive ordinary shares | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the Company (RMB thousands) | 6,667 | 8,551 | | Weighted average number of ordinary shares in issue | 922,838,000 | 884,069,000 | | Basic and diluted loss per share (RMB cents) | (0.72) | (0.97) | - The narrowing loss per share reflects a reduction in the loss for the period[37] 8. Dividends For the six months ended June 30, 2025, the Company neither paid nor declared any interim dividends, consistent with the prior corresponding period - The Company did not declare or pay interim dividends[39] 9. Movements in Property, Plant and Equipment and Right-of-Use Assets During the interim period, no additions to property, plant and equipment or right-of-use assets were recognized - No new property, plant and equipment or right-of-use assets were added during the period[40] 10. Financial Assets at Fair Value Through Profit or Loss As of June 30, 2025, the Group's financial assets at fair value through profit or loss primarily consisted of equity securities listed in Hong Kong, whose fair value slightly decreased | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Equity securities listed in Hong Kong | 4,617 | 5,379 | - The fair value of listed equity securities is determined by market bid prices on the Stock Exchange[41] 11. Trade Receivables As of June 30, 2025, net trade receivables were RMB 10.19 million, a decrease from December 31, 2024, with an increase in expected credit loss provision and a significant rise in receivables aged 61-90 days Trade Receivables and Ageing Analysis | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Gross trade receivables | 27,302 | 25,779 | | Less: Provision for expected credit losses | (17,111) | (12,763) | | Net trade receivables | 10,191 | 13,016 | | Ageing: 61 to 90 days | 7,750 | 180 | - The credit period for trade receivables ranges from 30 to 90 days[42] - Provision for expected credit losses increased from RMB 12.76 million to RMB 17.11 million[42] 12. Prepayments, Deposits and Other Receivables As of June 30, 2025, net prepayments, deposits, and other receivables significantly increased to RMB 80.50 million, primarily due to new prepayments for biological assets amounting to RMB 80.15 million Details of Prepayments, Deposits and Other Receivables | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Loans receivable | 2,624 | 2,699 | | Other receivables | 7,711 | 7,176 | | Deposits | 9,974 | 8,521 | | Prepayments | 80,155 | 1,299 | | Total | 100,464 | 19,695 | | Less: Provision for expected credit losses | (19,965) | (18,222) | | Net amount | 80,499 | 1,473 | - Prepayments primarily include approximately RMB 80.15 million for biological assets, with no such item in the prior corresponding period[44] 13. Trade Payables As of June 30, 2025, trade payables were RMB 9.88 million, a decrease from December 31, 2024, with a higher proportion of trade payables aged over 60 days Trade Payables and Ageing Analysis | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Gross trade payables | 9,878 | 12,383 | | Ageing: Within 30 days | 734 | 5,051 | | Ageing: Over 60 days | 9,144 | 7,332 | - The Group is granted a credit period of up to 60 days for purchases of goods[45] 14. Share Capital As of June 30, 2025, the Company had 922,838,000 ordinary shares in issue with a par value of HKD 0.01 each, with changes primarily due to the completion of a new share subscription in June 2024, issuing 42,000,000 ordinary shares Details of Share Capital Movements | Item | Number of Shares | Amount (RMB thousands) | | :--- | :--- | :--- | | As at January 1, 2024 | 880,838,000 | 7,308 | | Shares issued | 42,000,000 | 390 | | As at June 30, 2025 | 922,838,000 | 7,698 | - Proceeds from the new share subscription of approximately RMB 390 thousand were credited to share capital, and approximately RMB 1,674 thousand to share premium[47] 15. Significant Related Party Transactions The Group's significant related party transactions primarily involve key management personnel compensation, all conducted on normal commercial terms - The Company's directors are considered key management personnel of the Group, and their emoluments are disclosed in Note 6[48] 16. Events After the Reporting Period As of the date of this report, neither the Company nor the Group had any significant events after the reporting period - No significant events occurred after the reporting period[49] 17. Approval of Interim Financial Statements The Board of Directors approved and authorized for issue these condensed consolidated interim financial statements on August 29, 2025 - The interim financial statements have been approved by the Board of Directors[50] Management Discussion and Analysis Business Review The Group primarily engages in livestock slaughtering and pork product trading, and pipeline system products; in the first half of 2025, pork product trading revenue declined due to increased market competition, but gross profit margin turned positive through cost control, while the pipeline system products business was suspended due to significantly increased import costs - The Group maintains its position as a pork supplier in Changde City, Hunan Province, China, with its core business being the production and sale of pork products[52] - Increased price competition in the local pork market due to two new slaughterhouses near the plant led to a continuous decline in the Group's revenue[52] - The Group achieved positive gross profit margin growth through effective cost control and strict quality control, reversing last year's gross profit loss[52] - The pipeline system products business faced financial challenges due to significantly increased import costs from JPY depreciation and US tariffs, leading to the suspension of related projects and local sales orders[53] Financial Review As of June 30, 2025, the Group's revenue was approximately RMB 7.4 million, a 76.7% year-on-year decrease; despite this, gross profit for the period was RMB 346 thousand, reversing last year's gross loss, administrative expenses decreased by 35.1%, and net loss narrowed to RMB 6.6 million Key Financial Metrics Changes | Metric | Six Months Ended June 30, 2025 (RMB millions) | Six Months Ended June 30, 2024 (RMB millions) | Change Rate | | :--- | :--- | :--- | :--- | | Revenue | 7.4 | 31.8 | -76.7% | | Gross Profit | 0.346 | (1.833) | Turned from loss to profit | | Administrative Expenses | 4.8 | 7.4 | -35.1% | | Net Loss for the Period | 6.6 | 8.6 | -23.2% | - The decrease in administrative expenses was primarily attributable to stricter cost control[54] Liquidity, Financial Resources and Funding and Treasury Policies As of June 30, 2025, the Group's bank balances and cash were approximately RMB 316.0 million, with net current assets of approximately RMB 337.9 million; the Group maintains a sound financial position, primarily funded by operating income, internal resources, and bank financing, and adopts a conservative treasury policy to mitigate exchange rate risks Liquidity Position | Metric | June 30, 2025 (RMB millions) | December 31, 2024 (RMB millions) | | :--- | :--- | :--- | | Bank balances and cash | 316.0 | 397.8 | | Net current assets | 337.9 | 343.9 | - The Group does not hold any foreign exchange contracts, interest or currency swaps, or other financial derivative instruments for hedging purposes[56] Gearing Ratio As of June 30, 2025, the Group's gearing ratio was zero, consistent with December 31, 2024 - The Group's gearing ratio is zero, indicating no external borrowings[57] Foreign Exchange Risk The Group's assets, liabilities, and operating cash flows are primarily denominated in HKD, RMB, and JPY; the Group currently does not engage in foreign exchange hedging but monitors risks and considers hedging when necessary - The principal denominated currencies are HKD, RMB, and JPY[58] - The Group currently has no foreign exchange hedging strategy[58] Capital Commitments and Contingent Liabilities For the six months ended June 30, 2025, the Directors were not aware of any significant capital commitments or contingent liabilities - No significant capital commitments or contingent liabilities[59] Material Acquisitions and Disposals During the review period, the Group had no material acquisitions or disposals of subsidiaries, associates, or joint ventures - No material acquisition or disposal activities occurred during the period[60] Material Investments There were no other material investments during the review period - No other material investments were made during the period[61] Events After Reporting Period Except as disclosed, as of the date of this report, neither the Company nor the Group had any significant events after the reporting period - No significant events occurred after the reporting period[62] Interim Dividend The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025, consistent with the prior year - No interim dividend was declared for the period[63] Employees and Remuneration Policy As of June 30, 2025, the Group employed 30 staff, with remuneration determined by performance and experience, offering benefits such as social insurance, medical insurance, and retirement scheme contributions, and adopted a new share option scheme in 2023 to incentivize employees - The Group's total number of employees was 30, consistent with the end of last year[64] - Remuneration policy is based on employee performance and experience, providing comprehensive employee benefits[64] - A new share option scheme was adopted on June 30, 2023, aiming to incentivize employee contributions[64] Capital Structure As of June 30, 2025, the Company had 922,838,000 ordinary shares in issue with a par value of HKD 0.01 each, and no changes occurred in the capital structure during the period - The number of ordinary shares in issue was 922,838,000[65] - The capital structure remained stable during the period[66] Purchase, Sale or Redemption of the Company's Listed Securities For the six months ended June 30, 2025, neither the Company nor its subsidiaries purchased, sold, or redeemed any of the Company's listed securities - Neither the Company nor its subsidiaries engaged in the purchase, sale, or redemption of listed securities[67] Competing Interests of Directors and Controlling Shareholders No director, controlling shareholder, or substantial shareholder of the Company, or any of their respective close associates, is considered to have an interest in any business that competes or is likely to compete, directly or indirectly, with the Group's business - Directors and controlling shareholders have no competing interests[68] Directors' Interests in Contracts Except for service contracts and letters of appointment with individual directors, neither the Company nor any of its subsidiaries entered into any material contract in which a director had a direct or indirect material interest that was subsisting at the end of the reporting period or at any time during the period - Directors have no direct or indirect material interests in significant contracts[69] Outlook and Future Prospects Despite stabilizing pork prices, market uncertainties persist, and the Group will continue to monitor market dynamics and adjust strategies; the joint venture slaughterhouse's trial operation is progressing smoothly, expected to enhance production efficiency, expand product lines, and optimize cost structure, with management remaining optimistic about the long-term development prospects of its core business - The pork market remains susceptible to fluctuations influenced by regulatory policies, supply and demand, climate, and epidemics[70] - The joint venture slaughterhouse's trial operation is progressing smoothly and gradually becoming operational, expected to enhance production efficiency, expand product lines, and optimize cost structure[70] - The Group's management team is committed to integrating businesses such as live hog slaughtering, breeding, and farming, with the production and sale of pork products as its core strategy[70] Corporate Governance and Other Information Directors' and Chief Executive's Interests and Short Positions in Shares, Underlying Shares and Debentures of the Company and its Associated Corporations As of June 30, 2025, directors and the chief executive of the Company held interests and short positions in the shares, underlying shares, and debentures of the Company or its associated corporations that are required to be disclosed under the Securities and Futures Ordinance - Directors' and chief executive's interests and short positions have been disclosed in accordance with Part XV of the Securities and Futures Ordinance[71] Substantial Shareholders' Interests and Short Positions in Shares and Underlying Shares of the Company As of June 30, 2025, no person other than the Company's directors and chief executive held interests or short positions in the Company's shares and underlying shares that are required to be disclosed under the Securities and Futures Ordinance - No other substantial shareholders, apart from directors and the chief executive, held disclosable interests or short positions[72] Share Option Scheme The Company terminated the 2014 Share Option Scheme and adopted a new scheme in 2023; as of June 30, 2025, the total number of securities available for issue under the 2023 scheme was 88,083,800 shares, representing approximately 9.5% of the issued share capital, with no share options granted, lapsed, or cancelled, and no outstanding share options during the period - The 2014 Share Option Scheme has been terminated, and the 2023 Share Option Scheme has been adopted[73] - The 2023 Share Option Scheme aims to attract and retain talented individuals, provide additional incentives, and promote the Group's long-term financial success[74] - As of June 30, 2025, there were no outstanding share options, and no share options were granted, lapsed, or cancelled during the period[75] Compliance with the Model Code for Securities Transactions by Directors The Company adopted the Model Code as set out in Appendix C3 of the Listing Rules as its code of conduct for directors' securities transactions, and all directors complied with the Model Code for the six months ended June 30, 2025 - All directors have complied with the Model Code for Securities Transactions by Directors of Listed Issuers[76] Corporate Governance Code The Company has adopted the provisions of the Corporate Governance Code as set out in Appendix C1 of the Listing Rules and has complied with its provisions throughout the six months ended June 30, 2025 - The Company has complied with the Corporate Governance Code[78] Audit Committee and Review of Financial Statements The Audit Committee reviewed the Group's financial controls, risk management, and internal control systems, and discussed the unaudited condensed consolidated interim financial statements with management; the committee comprises three independent non-executive directors, with Mr. Luo Mingsheng serving as chairman - The Audit Committee is responsible for reviewing financial controls, risk management, and internal control systems, and overseeing the integrity of financial statements[79] - The Audit Committee consists of three independent non-executive directors, with Mr. Luo Mingsheng as chairman[79] By Order of the Board These condensed consolidated interim financial statements were signed by Executive Director Zhang Zhenghua on behalf of the Board of Directors on August 29, 2025 - The report was signed by Executive Director Zhang Zhenghua on behalf of the Board[80]