Financial Performance - The Group's gross profit decreased by approximately 16.9% to approximately RMB154,701,000, with a gross profit margin dropping by approximately 0.6 percentage points to approximately 18.8% due to rising raw material costs and currency fluctuations [1][2] - Total revenue for the Review Period dropped by approximately 14.2% to approximately RMB821,476,000, primarily due to weaker demand in export markets, particularly in the European Union, countered by higher average selling prices and new product launches [13][14] - Profit for the Review Period was approximately RMB67,500,000, representing a decline of approximately 20.1% compared to RMB84,439,000 for the same period last year [40] - Profit attributable to owners of the parent was approximately RMB67,549,000, down approximately 18.1% from RMB82,494,000 in the previous year [42] - Income tax expense for the Review Period was approximately RMB20,984,000, with an effective tax rate of approximately 23.7%, down from 27.8% in the previous year [39] - Revenue decreased by approximately 14.2% to approximately RMB821,476,000 for the six months ended 30 June 2023 from approximately RMB957,058,000 for the same period in 2022, mainly due to lower demand from export markets, particularly in the European Union [59] - Profit for the Review Period dropped by approximately 20.1% to RMB67,500,000 for the six months ended 30 June 2023 from approximately RMB84,439,000 for the same period in 2022 [62] - Profit attributable to the owners of the parent decreased by approximately 18.1% to RMB67,549,000 for the six months ended 30 June 2023 from approximately RMB82,494,000 for the same period in 2022 [62] Sales and Market Performance - Domestic sales in China grew by 10.2%, while export sales to the European Union and non-European Union regions decreased by approximately 29.2% and 22.4%, respectively [13][14] - The quantity of linen yarn sold during the Review Period was 7,275 tonnes, which is 31.2% fewer than the 10,572 tonnes sold during the same period in 2022 [66] - Domestic sales reached RMB344,603,000, contributing approximately 41.9% to total revenue, an increase of approximately 10.2% year-on-year [73] - Overseas sales amounted to RMB476,873,000, contributing approximately 58.1% to total revenue, a decrease of approximately 26.0% year-on-year [73] - Sales to European Union countries decreased by 29.2% year-on-year, while sales to non-European Union countries decreased by 22.4% year-on-year due to weak demand [73] Cost Management and Expenses - Administrative expenses decreased by approximately 17.9% to approximately RMB49,361,000, attributed to lower staff costs, research and development expenses, and reduced provisions for bad debts [6][7] - Selling and distribution expenses amounted to approximately RMB13,957,000, accounting for approximately 1.7% of total revenue, down from approximately 2.4% in the previous period [4] - Total finance costs for the Review Period were approximately RMB15,326,000, lower than the previous year's RMB17,624,000, due to a reduced average loan balance [9] - The total employee cost during the Review Period was approximately RMB80,261,000, a decrease from RMB97,418,000 in the same period last year [120] - Total staff costs for the review period amounted to approximately RMB80,261,000, down from RMB97,418,000 for the six months ended June 30, 2022 [139] Assets and Liabilities - The Group's total assets as of 30 June 2023 were approximately RMB3,088,772,000, an increase from RMB2,904,922,000 as of 31 December 2022 [12] - As of June 30, 2023, total equity was approximately RMB1,504,247,000, an increase from approximately RMB1,487,990,000 as of December 31, 2022 [18] - The Group's total borrowings repayable within 12 months increased to approximately RMB786,642,000 from approximately RMB696,344,000 as of December 31, 2022, resulting in a gross debt gearing ratio of approximately 56.0% compared to 50.6% previously [18] - Net current assets as of June 30, 2023, were approximately RMB433,541,000, up from approximately RMB417,334,000 as of December 31, 2022 [49] - Cash and cash equivalents decreased to approximately RMB168,180,000 as of June 30, 2023, from approximately RMB467,469,000 as of December 31, 2022 [50] - The liquidity ratio as of June 30, 2023, was approximately 129.1%, slightly down from 131.6% as of December 31, 2022 [50] Production and Operations - The Ethiopia factory has resumed normal production and is ramping up its production capacity during the Review Period [75] - The Group procured approximately 19,419 tonnes of raw materials during the Review Period, a year-on-year decrease of approximately 13.4% from 22,426 tonnes [81] - The average procurement unit price surged approximately 64.3% to RMB 44,658 per tonne, up from RMB 27,177 in the corresponding period last year due to supply shortages [81] - As of June 30, 2023, the Group had five production bases with an annual capacity of 7,000 tonnes (90% utilization), 6,000 tonnes (90% utilization), and 5,000 tonnes (80% utilization) among others [84] - A total of 194 tonnes of hemp yarn were produced during the Review Period, marking the Group's first venture into the hemp yarn market with a 75.34% equity interest in Heilongjiang Kingdom Enterprise Co., Ltd. [87] - The weaving and fabric factory in China is under construction and is expected to start trial production in the fourth quarter of 2023 [103] Strategic Initiatives - The Group is committed to investing in Ethiopia to reduce costs and benefit from the European Union's Everything but Arms initiative, which provides duty-free access to products made in least developed countries [102] - The Group aims to establish a scaled hemp yarn production within three years to meet market demand [148] - The Group has partnered with COTTONCONNECT to develop the REEL Linen Code of Conduct, promoting sustainability in the flax industry [149] - The Group's strategy includes developing proprietary intellectual property rights and pursuing advanced management practices to enhance long-term shareholder value [175] - The Group aims to become one of the largest linen yarn manufacturers globally, focusing on sustainable development and technical innovation [175] Corporate Governance and Shareholder Matters - The Company has not declared any interim dividend for the six months ended June 30, 2023, consistent with the previous year [190] - The Group's primary objective is to enhance long-term total return for shareholders through solid financial fundamentals [175] - The Company has adopted a share award plan to incentivize and retain personnel, aligning their interests with those of shareholders [193] - No Shares have been awarded pursuant to the Share Award Plan during the Review Period [198] - As of June 30, 2023, there were 13,230,750 Shares held by the Trustee, representing approximately 2.1% of the issued Shares of the Company [198] - All Directors have confirmed compliance with the required standards regarding securities transactions during the Review Period [199] - The Company has established its own code of conduct for Directors' securities transactions, which meets or exceeds the Model Code standards [199]
金达控股(00528) - 2023 - 中期财报