山东墨龙(00568) - 2023 - 中期财报

Important Notice, Table of Contents and Definitions The board, supervisory board, and senior management guarantee the report's truthfulness, accuracy, and completeness, with all directors attending the review meeting - Company board, supervisory board, and senior management guarantee the report content's truthfulness, accuracy, and completeness, assuming legal responsibility; all directors attended the board meeting reviewing this semi-annual report[41][42] - Company head, chief accountant, and accounting department head declare the financial report in this semi-annual report is true, accurate, and complete[36] - The company plans no cash dividends, bonus shares, or capital increase from capital reserves for the 2023 semi-annual period[38] Company Profile and Key Financial Indicators This section provides an overview of the company and its key financial performance metrics for the reporting period Company Profile Shandong Molong Petroleum Machinery Company Limited is a dual-listed company on the Shenzhen Stock Exchange (002490) and Hong Kong Stock Exchange (00568), primarily engaged in petroleum machinery business | Item | Content | | :--- | :--- | | Company Chinese Name | 山東墨龍石油機械股份有限公司 | | Company English Name | Shandong Molong Petroleum Machinery Company Limited | | Stock Abbreviation | Shandong Molong | | Stock Code | 002490 (SZSE), 00568 (HKEX) | | Legal Representative | Yuan Rui | Key Accounting Data and Financial Indicators During the reporting period, the company's operating revenue significantly decreased by 49.18% year-on-year, while net loss attributable to shareholders narrowed by 8.38%; net cash flow from operating activities turned negative, decreasing by 141.77% year-on-year 2023 Half-Year Key Financial Indicators | Indicator | Current Reporting Period | Prior Year Period | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (Yuan) | 798,419,015.10 | 1,570,941,941.65 | -49.18% | | Net Profit Attributable to Listed Company Shareholders (Yuan) | (158,242,397.13) | (172,717,715.72) | 8.38% | | Net Cash Flow from Operating Activities (Yuan) | (23,770,597.65) | 56,906,850.11 | -141.77% | | Basic Earnings Per Share (Yuan/share) | (0.1983) | (0.2165) | 8.41% | | Weighted Average Return on Net Assets | (17.42%) | (13.02%) | –4.40% | | Total Assets (Yuan) | 3,721,541,449.42 | 4,038,605,559.51 | -7.85% (vs. end of prior year) | | Net Assets Attributable to Listed Company Shareholders (Yuan) | 829,910,098.20 | 987,960,842.88 | -16.00% (vs. end of prior year) | Non-recurring Gains and Losses and Amounts The company's non-recurring gains and losses totaled 1.47 million Yuan during the reporting period, primarily from non-repayable accounts payable, partially offset by asset disposal losses Non-recurring Gains and Losses Items | Item | Amount (Yuan) | Explanation | | :--- | :--- | :--- | | Losses from disposal of non-current assets | (131,293.77) | Primarily losses from disposal and scrapping of certain company assets | | Government grants included in current profit/loss | 132,723.59 | Primarily cross-border e-commerce subsidies and individual income tax withholding fee refunds received in the current period | | Other non-operating income and expenses | 1,759,208.98 | Primarily non-repayable accounts payable transferred in the current period | | Total | 1,473,184.30 | - | Management Discussion and Analysis This section provides a detailed analysis of the company's operations, financial performance, core competencies, and risks during the reporting period Main Business Activities During the Reporting Period The company primarily engages in R&D, manufacturing, and sales of energy equipment, with pipe products for oil and gas drilling accounting for nearly 90% of revenue; despite growth in oilfield-related business, overall production and sales volumes declined due to poor market conditions for general pipes and castings/forgings, leading to a loss and a decrease in total assets and net assets - The company operates on a "production based on sales" model, with pipe products accounting for nearly 90% of operating revenue, and a significant increase in export sales proportion[81] Financial Status at Report End | Indicator | Amount (Yuan) | Change from Beginning of Year | | :--- | :--- | :--- | | Total Assets | 3.72 Billion | -7.85% | | Net Assets Attributable to Listed Company Shareholders | 830 Million | -16.00% | Operating Performance During Reporting Period | Indicator | Amount (Yuan) | Year-on-Year Change | | :--- | :--- | :--- | | Operating Revenue | 798 Million | -49.18% | | Net Profit Attributable to Listed Company Shareholders | (158 Million) | - | Analysis of Core Competencies The company's core competencies include leading HIsmelt technology, strong R&D, continuous new product development, strict quality management, robust market networks, and a strong brand reputation - The company possesses internationally leading HIsmelt molten reduction metallurgy technology, with authorized projects becoming new profit growth points[86] - The company operates provincial-level enterprise technology centers and a national accredited laboratory (CNAS), recognized as a high-tech enterprise[87] - During the reporting period, the company successfully developed new products, including special connection threaded oil casing, special pumps, and anti-corrosion sucker rods, with bulk shipments to the Middle East market[89] - In the first half of 2023, the company developed 4 new market regions and 11 new clients overseas, demonstrating strong market expansion capabilities[91] Analysis of Main Business Operating revenue decreased by 49.18% year-on-year due to lower sales of general pipes and castings/forgings; pipe product revenue grew 20.62% to 89.73% of total, while castings/forgings revenue plummeted 98.31%; domestic revenue fell 57.83%, but international revenue surged 156.48% with improved gross margins Operating Revenue Composition and Changes | Category | Amount in Current Reporting Period (Yuan) | Proportion | Year-on-Year Change | | :--- | :--- | :--- | :--- | | By Product | | | | | Pipe Products | 716,389,280.84 | 89.73% | +20.62% | | Castings and Forgings | 14,860,414.01 | 1.86% | -98.31% | | By Region | | | | | Domestic Region | 635,768,739.52 | 79.63% | -57.83% | | International Region | 162,650,275.58 | 20.37% | +156.48% | Key Financial Data Year-on-Year Changes | Item | Current Reporting Period | Prior Year Period | Year-on-Year Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 798 Million Yuan | 1.57 Billion Yuan | -49.18% | Decrease in sales volume of general pipes and castings/forgings | | Operating Cost | 746 Million Yuan | 1.52 Billion Yuan | -50.86% | Decrease in sales volume of general pipes and castings/forgings | | Net Cash Flow from Operating Activities | (23.77 Million Yuan) | 56.91 Million Yuan | -141.77% | Decrease in VAT refund received compared to last year | | Net Cash Flow from Financing Activities | 40.21 Million Yuan | 16.62 Million Yuan | +141.92% | Decrease in repayment of matured financing | Analysis of Non-Main Business Non-main business activities negatively impacted profit, primarily due to credit impairment losses of (2.12 million Yuan) and asset impairment losses of (1.47 million Yuan) from accounts receivable and inventory, while non-operating income from non-repayable accounts payable was unsustainable Non-Main Business Gains and Losses Items | Item | Amount (Yuan) | Reason for Formation | Sustainability | | :--- | :--- | :--- | :--- | | Non-operating income | 2,044,943.45 | Primarily non-repayable accounts payable transferred in the current period | No | | Non-operating expenses | 742,741.22 | Primarily losses from disposal of certain assets in the current period | No | | Asset impairment losses | (1,465,146.60) | Primarily inventory impairment losses recognized in the current period | No | | Credit impairment losses | (2,115,579.66) | Primarily impairment losses recognized on accounts receivable in the current period | No | Analysis of Assets and Liabilities As of the reporting period end, total assets were 3.72 billion Yuan, a 7.85% decrease from the beginning of the year; accounts receivable increased due to higher oilfield business volume, while inventory decreased from sales; short-term borrowings increased as a proportion of total assets; over 1 billion Yuan in assets were restricted, mainly for guarantees, frozen litigation funds, and mortgage loans - At the end of the reporting period, accounts receivable increased by 2.5 percentage points from the beginning of the year, primarily due to increased oilfield business volume; inventory proportion decreased by 2.92 percentage points due to sales of existing products[110] Restricted Asset Rights at Report End | Item | Book Value at Period End (Yuan) | Reason for Restriction | | :--- | :--- | :--- | | Monetary Funds | 433,131,291.60 | Guarantees and litigation freezes | | Notes Receivable | 7,558,071.96 | Notes pledged | | Fixed Assets | 342,981,934.52 | Mortgage loans | | Intangible Assets | 195,998,183.84 | Mortgage loans / Seizure | | Accounts Receivable | 23,004,870.47 | Factoring financing | | Total | 1,002,674,352.39 | - | Analysis of Investment Status The company made a significant non-equity investment of 400 million Yuan during the reporting period, increasing capital in its wholly-owned subsidiary Shouguang Maolong through debt-to-equity conversion, with no other major non-equity, securities, or derivative investments Major Equity Investment During Reporting Period | Investee Company Name | Main Business | Investment Method | Investment Amount (Ten Thousand Yuan) | | :--- | :--- | :--- | :--- | | Shouguang Maolong | Research, production, and sales of new energy equipment materials | Capital Increase | 40,000 | - The company had no use of raised funds, no ongoing significant non-equity investments, and no securities or derivative investments during the reporting period[18][127][31][32] Analysis of Major Holding and Participating Companies Both major subsidiaries, Shouguang Baolong and Shouguang Maolong, experienced severe losses and significant revenue declines; Shouguang Baolong's revenue fell 95.60% with a loss of 24.05 million Yuan, while Shouguang Maolong's revenue dropped 93.83% with a loss of 72.48 million Yuan due to reduced demand and high raw material prices Major Subsidiary Operating Performance (Unit: Yuan) | Company Name | Operating Revenue | Operating Revenue Year-on-Year Change | Net Profit | | :--- | :--- | :--- | :--- | | Shouguang Baolong | 16,769,187.92 | -95.60% | (24,054,167.99) | | Shouguang Maolong | 59,130,557.05 | -93.83% | (72,477,719.93) | Risks Faced by the Company and Countermeasures The company faces market, raw material price, policy, exchange rate, and interest rate risks, stemming from energy industry cycles, cost pressures, tightening environmental regulations, and macroeconomic financial changes, which it addresses through product structure adjustments, price locking, increased environmental investment, and financial market monitoring - The company faces risks including: - Market risk: Energy industry prosperity and oil price fluctuations directly impact company operations - Raw material price fluctuation risk: Directly affects product manufacturing costs - Policy risk: Increasingly stringent safety and environmental policies may increase environmental compliance costs - Exchange rate risk: RMB exchange rate changes affect operating performance - Interest rate risk: Market interest rate changes affect the fair value or future cash flows of financial instruments[23][24][25][26][27] Disclosures Under HKEX Listing Rules As per HKEX rules, the company's total operating revenue for H1 2023 was 798.42 million Yuan (down year-on-year), with a net loss of 163.93 million Yuan (narrowed from prior year); total assets were 3.72 billion Yuan, total liabilities 2.97 billion Yuan, and a debt-to-asset ratio of approximately 79.94%; no interim dividend was recommended, and the company complied with corporate governance code Financial Summary (RMB Thousand Yuan) | Item | 2023 Half-Year | 2022 Half-Year | | :--- | :--- | :--- | | Total Operating Revenue | 798,419 | 1,570,942 | | Net Loss | (163,934) | (183,171) | | Total Assets | 3,721,541 | 5,047,428 | | Total Liabilities | 2,974,997 | 3,871,015 | - As of June 30, 2023, the Group's asset-liability ratio was approximately 79.94%, an increase from 77.46% at the end of 2022[168] - The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2023[179] - The company has fully adopted all code provisions of the HKEX Corporate Governance Code, with no deviations during the reporting period[147][155] Corporate Governance This section details changes in the company's board, supervisory board, and senior management, as well as profit distribution plans Changes in Directors, Supervisors, and Senior Management During the reporting period, significant personnel changes occurred, with former Chairman Yang Yunlong and Director Liu Jilu resigning for personal work arrangements, and Mr. Yuan Rui elected as the new Chairman, alongside Mr. Zhao Xiaotong and Ms. Zhang Min as new directors Senior Management Changes | Name | Position Held | Type | Date | Reason | | :--- | :--- | :--- | :--- | :--- | | Yang Yunlong | Chairman, Director | Resigned | February 24, 2023 | Resigned due to personal work arrangements | | Yuan Rui | Chairman | Elected | February 24, 2023 | Elected by the Board of Directors | | Liu Jilu | Director | Resigned | April 7, 2023 | Resigned due to personal work arrangements | | Zhao Xiaotong | Director | Elected | May 19, 2023 | Elected by the Shareholders' Meeting and Board of Directors | | Zhang Min | Director | Elected | May 19, 2023 | Elected by the Shareholders' Meeting and Board of Directors | Profit Distribution and Capital Reserve Conversion to Share Capital in the Reporting Period The company plans no profit distribution for the 2023 semi-annual period, meaning no cash dividends, bonus shares, or capital increase from capital reserves - The company plans no cash dividends, bonus shares, or capital increase from capital reserves for the semi-annual period[192] Environmental and Social Responsibility This section outlines the company's environmental protection efforts as a key polluter and its commitment to social responsibility, including employee welfare and community engagement Significant Environmental Issues The company and its subsidiaries are key polluting units, strictly adhering to environmental policies, investing 1.65 million Yuan in environmental governance, paying 19,600 Yuan in environmental taxes, maintaining comprehensive wastewater and exhaust gas treatment facilities, and having emergency plans, with no administrative penalties for environmental issues during the period - The company and its subsidiaries are designated as key polluting units and hold valid pollutant discharge permits[196][197] Environmental Investment and Taxes During Reporting Period | Item | Amount (Ten Thousand Yuan) | | :--- | :--- | | Environmental Governance and Protection Investment | 164.73 | | Environmental Protection Tax Paid | 1.96 | - During the reporting period, the company received no administrative penalties for environmental issues[4] Social Responsibility The company fulfills its social responsibilities by improving governance, safeguarding shareholder rights, caring for employees, and actively participating in public welfare, including providing 52,000 Yuan in aid to employees and organizing blood donation drives - The company protects shareholder rights by establishing a sound governance structure and internal control system, and by holding general meetings with a combination of on-site and online voting[8] - The company values employee rights, provides social insurance, and established a hardship assistance fund, distributing 52,000 Yuan in 2023[9] - In 2023, the company organized 1 voluntary blood donation public welfare activity, actively participating in social welfare undertakings[118] Significant Matters This section covers commitments, significant related party transactions, major contracts, and important matters concerning company subsidiaries Commitments During the reporting period, there were no unfulfilled or overdue commitments from the actual controller, shareholders, related parties, acquirers, or the company - The company had no significant commitments requiring disclosure during the reporting period[14] Significant Related Party Transactions No significant related party transactions related to daily operations occurred, but there were related party debt and credit transactions; the company received interest-free financial assistance from Shouguang Jinxin, the controlling shareholder's controlling shareholder, with an outstanding balance of 80 million Yuan at period-end - The company had no related party transactions related to daily operations, nor related party transactions involving asset or equity acquisitions/disposals during the reporting period[371][372] Related Party Debt and Credit Transactions | Related Party | Relationship | Reason for Formation | Beginning Balance (Ten Thousand Yuan) | New Additions in Current Period (Ten Thousand Yuan) | Repayments in Current Period (Ten Thousand Yuan) | Ending Balance (Ten Thousand Yuan) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Shouguang Jinxin | Controlling shareholder's controlling shareholder | Financial assistance | 0 | 23,700 | 15,700 | 8,000 | - The company accepted interest-free loans of up to 500 million Yuan from related party Shouguang Jinxin, with a term not exceeding 1 year[399] Significant Contracts and Their Performance The company had no trusteeship or contracting arrangements; it engaged in two sale-and-leaseback financing lease transactions for up to 60 million Yuan and 85 million Yuan respectively, and newly leased an office building for business operations - The company engaged in sale-and-leaseback transactions with Changjiang United Financial Leasing Co., Ltd. and Zhejiang Zhongda Yuantong Financial Leasing Co., Ltd., using some production equipment as collateral for financing[390][401] Significant Matters Concerning Company Subsidiaries During the reporting period, the company significantly increased capital in its wholly-owned subsidiary Shouguang Maolong by 400 million Yuan through debt-to-equity conversion, with the relevant industrial and commercial changes completed on May 22, 2023 - The company increased capital in its wholly-owned subsidiary Shouguang Maolong by 400 million Yuan through debt-to-equity conversion[419] Share Changes and Shareholder Information This section details the company's share capital structure and major shareholder information as of the reporting period end Share Change Information As of the reporting period end, the company's total share capital was 797,848,400 shares, with unrestricted shares accounting for 99.99% and restricted shares for 0.01%; no changes occurred in total share capital or structure during the period Share Structure | Share Type | Quantity (Shares) | Proportion | | :--- | :--- | :--- | | I. Restricted Shares | 104,625 | 0.01% | | II. Unrestricted Shares | 797,743,775 | 99.99% | | Of which: RMB Ordinary Shares | 541,617,375 | 67.88% | | Overseas Listed Foreign Shares | 256,126,400 | 32.10% | | III. Total Shares | 797,848,400 | 100.00% | Number of Shareholders and Shareholding Information As of the reporting period end, the company had 39,651 common shareholders; the top three were Shouguang Molong Holding Co., Ltd. (29.53%), HKSCC Nominees Limited (13.19%), and Shandong Zhimeng Holding Co., Ltd. (8.23%), with some shareholders having concerted action relationships - At the end of the reporting period, the total number of common shareholders was 39,651, comprising 39,609 A-share holders and 42 H-share holders[412] - Shareholders Shandong Zhimeng Holding Co., Ltd., Shouguang Hongsen Logistics Co., Ltd., Shouguang Panjin Real Estate Co., Ltd., and Shouguang Ruisen New Building Materials Co., Ltd. are parties acting in concert[413][425] Information on Preferred Shares This section confirms the absence of preferred shares during the reporting period Preferred Shares The company had no preferred shares during the reporting period - The company had no preferred shares during the reporting period[455] Information on Bonds This section confirms the absence of bond-related situations during the reporting period Bonds The company had no bond-related situations during the reporting period - The company had no bond-related matters during the reporting period[434] Financial Report This section presents the company's unaudited semi-annual financial statements, including the consolidated balance sheet, income statement, and cash flow statement, along with detailed notes and risk disclosures Financial Statements The company's 2023 semi-annual financial report is unaudited; the consolidated balance sheet as of June 30, 2023, shows total assets of 3.72 billion Yuan, total liabilities of 2.97 billion Yuan, and equity attributable to parent company owners of 830 million Yuan; the consolidated income statement shows operating revenue of 798 million Yuan and a net loss of 164 million Yuan (158 million Yuan attributable to parent company) for the half-year; the consolidated cash flow statement shows net cash flow from operating activities of (23.77 million Yuan) - The company's semi-annual financial report is unaudited[435] Key Data from Consolidated Balance Sheet (June 30, 2023) | Item | Amount (Yuan) | | :--- | :--- | | Total Current Assets | 1,428,910,478.13 | | Total Non-current Assets | 2,292,630,971.29 | | Total Assets | 3,721,541,449.42 | | Total Current Liabilities | 2,844,140,833.18 | | Total Non-current Liabilities | 130,856,348.80 | | Total Liabilities | 2,974,997,181.98 | | Total Equity Attributable to Parent Company Owners | 829,910,098.20 | | Total Owners' Equity | 746,544,267.44 | Key Data from Consolidated Income Statement (2023 Half-Year) | Item | Amount (Yuan) | | :--- | :--- | | Total Operating Revenue | 798,419,015.10 | | Total Operating Costs | 959,074,308.28 | | Operating Profit | (163,777,582.87) | | Total Profit | (162,475,380.64) | | Net Profit | (163,933,635.03) | | Net Profit Attributable to Parent Company Shareholders | (158,242,397.13) | Key Data from Consolidated Cash Flow Statement (2023 Half-Year) | Item | Amount (Yuan) | | :--- | :--- | | Net Cash Flow from Operating Activities | (23,770,597.65) | | Net Cash Flow from Investing Activities | (4,053,463.91) | | Net Cash Flow from Financing Activities | 40,211,252.36 | | Net Increase in Cash and Cash Equivalents | 14,160,456.10 | Notes to Consolidated Financial Statements Financial statement notes detail account compositions and changes; 433.13 million Yuan of monetary funds were restricted at period-end; accounts receivable and notes receivable had impairment provisions based on expected credit loss model; inventory had a book value of 509 million Yuan with 18.61 million Yuan in impairment; short-term borrowings of 2.06 billion Yuan were the main liability; government grants related to assets were recognized, and impairment provisions were made for subsidiary investments - As of the period end, the company's monetary funds totaled 454 million Yuan, of which 433.13 million Yuan were restricted due to guarantees, litigation freezes, and other reasons[800][801] - Accounts receivable had a book balance of 470 million Yuan at period-end, with 105 million Yuan in bad debt provisions, resulting in a book value of 364 million Yuan[807] - Inventory had a book value of 509 million Yuan at period-end, with raw materials being the largest component, and 18.61 million Yuan in inventory impairment provisions recognized[847][242] - Short-term borrowings at period-end amounted to 2.06 billion Yuan, an increase from the beginning of the period, representing the company's most significant liability item[864] Risks Related to Financial Instruments The company faces market risks (exchange rate, interest rate, price), credit risk, and liquidity risk, managed by adjusting sales policies, maintaining appropriate fixed/floating rate borrowing ratios, monitoring customer credit, and ensuring sufficient bank credit lines; sensitivity analysis shows a 5% RMB appreciation would increase net profit by 5.04 million Yuan, while a 1% interest rate rise would decrease net profit by 1.41 million Yuan - The company's exchange rate risk primarily relates to USD, HKD, and EUR, managed by favorable settlement terms in contracts and adjusting sales policies[1021] - The company's interest rate risk stems from financial institution borrowings, managed by maintaining an appropriate proportion of fixed and floating rate contracts; at period-end, floating rate borrowings were 445 million Yuan, and fixed rate borrowings were 1.70 billion Yuan[929] - The company manages liquidity risk by ensuring sufficient cash flow; at period-end, unused financial institution credit lines totaled 459 million Yuan[1028] Related Parties and Related Party Transactions The company's ultimate controlling party is Shouguang State-owned Assets Supervision and Administration Bureau; related party transactions primarily involved intercompany loans and guarantees, with Shouguang Jinxin providing interest-free financial assistance (80 million Yuan outstanding) and guarantees for financing lease, and the company providing mortgage guarantees for Shouguang Maolong's financial services - The company's controlling shareholder is Shouguang Molong Holding Co., Ltd., and the actual controller is Shouguang State-owned Assets Supervision and Administration Bureau[1051] - Related party Shouguang Jinxin provided interest-free loans of up to 500 million Yuan to the company, with multiple borrowings during the reporting period and an outstanding balance of 80 million Yuan at period-end[967][1105] - Related party Shouguang Jinxin provided a joint liability guarantee for the company's 60 million Yuan financing lease; concurrently, the company provided a mortgage guarantee for its subsidiary Shouguang Maolong's financial services of up to 200 million Yuan[1059][1060]