Financial Performance - The company's total revenue for 2022 was RMB 20.4 million, a decrease of RMB 12.3 million compared to 2021[6] - The company recorded a loss attributable to owners of RMB 19.9 million in 2022, an increase of RMB 1.3 million compared to 2021[6] - The company's gross profit for 2022 was RMB 3.232 million, a decrease from RMB 4.966 million in 2021[10] - Sales and distribution costs decreased by 21.4% to RMB 1.1 million in 2022, primarily due to reduced freight and warranty expenses[11] - Interest expenses for 2022 were RMB 22,000, a significant decrease from RMB 63,000 in 2021[12] - Other income, gains, and losses for the year ended December 31, 2022, decreased by approximately RMB 1.1 million to RMB 3.4 million compared to the previous year[20] - Administrative expenses for the year ended December 31, 2022, decreased by 4.4% to approximately RMB 19.7 million due to internal structural optimization[21] - Recoverable taxes for the year ended December 31, 2022, amounted to approximately RMB 1.4 million, a significant increase from RMB 0.2 million in the previous year[22] - The company did not recommend paying a final dividend for the year ended December 31, 2022[27] - The company's distributable reserves, including share premium and retained earnings, amounted to approximately RMB 157.7 million as of December 31, 2022[73] - The company did not declare any dividends for the year ended December 31, 2022, consistent with the previous year[71] - The company's financial statements are prepared in accordance with applicable accounting standards and regulations, ensuring accurate disclosure of financial status[196] - The Board of Directors considers various factors including actual and expected performance, retained earnings, and capital expenditure needs before declaring dividends[198] Business Operations - The company's supply chain management business generated revenue of RMB 16.8 million in 2022, accounting for 82.2% of total revenue[5][9] - The company's subsidiary, Shanghai Longhua Food Co., Ltd., obtained a food business license in early 2022 and operates under the brand "Longhuazhen"[5] - The company is expanding its supply chain services to include lithium battery recycling, circular technology, and energy-saving industries[8] - Automotive parts business sales revenue for the year ended December 31, 2022, was approximately RMB 3.6 million, with evaporator sales contributing approximately RMB 2.0 million[15] - The company plans to focus on iterating supply chain management models, expanding new energy and special vehicle businesses, and diversifying its supply chain operations in 2023[16] - The company will strengthen its food supply business through online and offline channels, promoting high-quality products under the "Longhuazhen" brand[17] - The company's HVAC parts business has over 20 years of industry experience and has established core advantages in technology, products, and customers[183] - The company has expanded its supply chain management business by entering the food supply sector to enhance its scale[183] - The company's cold storage area has built core competitiveness and brand influence in the cold chain logistics industry after nearly two years of continuous operation[183] - The company's factories are located in Shanghai's Fengxian District and Huangshan's Tunxi District in Anhui Province[183] Cash Flow and Leases - Total cash outflows for leases in 2022 were RMB 2,159 thousand, with RMB 1,259 thousand in operating activities and RMB 900 thousand in financing activities[2] - The company's lease liabilities are separately presented in the consolidated financial statements, with short-term leases for warehouses (up to 12 months) recognized as expenses on a straight-line basis[89] - As a lessor, the company classifies leases as operating or finance leases, with rental income recognized on a straight-line basis over the lease term and included in other income in the consolidated income statement[90] - The company recognizes lease liabilities for lease payments and right-of-use assets for the right to use the leased assets, with right-of-use assets depreciated over the shorter of the lease term or the asset's useful life, typically 2 years for office rentals and 48-50 years for prepaid land lease payments[114] - Lease liabilities are initially measured at the present value of lease payments, which include fixed payments, variable payments based on indices or rates, and expected payments under residual value guarantees[116] - The company assesses whether a contract is a lease based on whether it conveys the right to control the use of an identified asset for a period of time in exchange for consideration[112] Shareholder and Ownership Structure - Total issued shares of the company as of December 31, 2022, are 650,000,000 shares[76] - Mr. Zheng Ping holds 282,750,000 shares, representing 43.5% of the total issued shares[77][78] - Ms. Kong Xiaoling, spouse of Mr. Zheng Ping, is deemed to hold 282,750,000 shares, representing 43.5% of the total issued shares[77][78] - You Shen Group holds 282,750,000 shares, representing 43.5% of the total issued shares[80] - Ms. Zhou Shuxian holds 120,160,000 shares, representing 18.5% of the total issued shares[80] - Mr. Xu Zonglin holds 59,144,000 shares, representing 9.1% of the total issued shares[80] - Shareholders holding more than one-tenth of the company's paid-up capital can request a special general meeting within 21 days of submitting a written request[199] - The company maintains regular communication with shareholders through interim and annual reports, as well as shareholder meetings[200] Environmental, Social, and Governance (ESG) - The company is committed to environmental sustainability and promotes green measures in its daily operations[34] - The company's ESG report covers key environmental and social performance indicators, with a focus on quantifiable data and consistent reporting methods[177][178] - The company's ESG initiatives include energy-saving measures, emission control, and employee health and safety improvements[180] - The company's ESG report is aligned with the ESG Reporting Guide under Appendix 27 of the Listing Rules, emphasizing materiality, balance, and consistency[176][177][178] - The company's ESG report is accessible to the public via the Hong Kong Stock Exchange and the company's official website[175] - The company's total wastewater generated in the year was approximately 14,383 tons[190] - The company's automotive parts business did not generate any exhaust gases during the year[192] - The company has no environmental penalties from Chinese environmental protection authorities as of December 31, 2022[189] - The company's welding process generates minimal welding dust, with a post-treatment emission concentration of approximately 6.05 mg/m³ and a rate of 9.08*10^-3 kg/h, complying with national standards[192] - The company's wastewater treatment process includes oil separation, flocculation, sedimentation, and disinfection before discharge into municipal sewage pipelines[190] - Gasoline consumption decreased from 2,554 liters in 2021 to 1,532 liters in 2022, a reduction of 40%[195] - Electricity consumption increased from 3,043,716 kWh in 2021 to 8,184,458 kWh in 2022, a rise of 169%[195] - Water consumption decreased from 15,386 tons in 2021 to 14,383 tons in 2022, a reduction of 6.5%[195] - Packaging usage decreased from 5 tons in 2021 to 4 tons in 2022, a reduction of 20%[195] Corporate Governance and Board Structure - The Board of Directors includes three executive directors, one non-executive director, and three independent non-executive directors, all of whom attended all six board meetings held during the year[134] - The company held a meeting between the Chairman and independent non-executive directors without the presence of other directors during the year[139] - The company's risk management and internal control systems were effective and sufficient, with no major violations or risks identified as of December 31, 2022[142] - The company adopted a revised and restated organizational constitution on June 30, 2022, to comply with new listing rules and corporate governance codes effective from January 1, 2022[143] - The Chairman and CEO roles were not separated and were both held by Mr. Zheng Ping throughout the year[145] - All directors provided their annual training records, with participation in corporate governance, legal, and regulatory updates[149] - The company's internal control procedures aim to safeguard assets, ensure compliance, and provide reliable financial records[142] - The Board of Directors held at least four regular meetings annually, discussing overall strategy, financial performance, and major acquisitions[138] - The company's nomination committee, chaired by an independent non-executive director, follows a formal and transparent process for appointing new directors[146] - The company's internal control system is reviewed twice a year, covering financial, operational, and compliance controls[142] - Directors have access to board meeting materials at least three days before scheduled meetings to ensure informed decision-making[144] - The company did not purchase any management liability insurance for directors during the year, citing stable financial conditions and a well-established internal control system[150] - The company adopted a standard code of conduct for securities transactions by directors and employees with access to inside information, with all directors complying during the year[151] - The Board of Directors delegated specific responsibilities to management, including implementing corporate strategies, submitting management reports, and overseeing daily operations[153] - The Nomination Committee held two meetings during the year, with all members attending both sessions, to review board composition and make recommendations on director reappointments and committee member appointments[157] - The Nomination Committee evaluated potential director candidates based on factors such as character, qualifications, professional skills, and diversity, including gender, age, and educational background[160] - The company achieved measurable diversity goals, including having at least one-third of the board as independent non-executive directors and at least one director with accounting qualifications[163] - The company's employee gender ratio was approximately 60% male and 40% female as of December 31, 2022, with equal opportunities provided regardless of gender, race, age, or other diversity factors[163] - The Remuneration Committee was responsible for recommending remuneration policies and structures for directors and senior management, as well as reviewing and approving matters related to the company's share plans[164] - The company's external auditor fees for the year ended December 31, 2022, amounted to approximately RMB 720,000, with no non-audit services provided during the same period[170] - The company has implemented a whistleblowing policy, allowing employees and stakeholders to anonymously report concerns via email to the audit committee[171] - The company's audit committee held four meetings in the year to review financial reports, risk management, and internal control procedures[166][168] - The company's board of directors ensures strict compliance with regulatory requirements for information disclosure, ensuring equal access to information for all shareholders[173] - The company's audit committee reviewed the annual performance and confirmed compliance with applicable accounting standards[168] Financial Assets and Liabilities - Financial assets are initially classified and subsequently measured at amortized cost, fair value through other comprehensive income, or fair value through profit or loss, depending on contractual cash flow characteristics and business model[92] - The company's business model for managing financial assets determines whether cash flows are from collecting contractual cash flows, selling financial assets, or both, influencing the classification and measurement of financial assets[93] - Financial assets measured at amortized cost are subsequently measured using the effective interest method and may be subject to impairment, with gains and losses recognized in the consolidated income statement upon derecognition, modification, or impairment[94] - For debt instruments measured at fair value through other comprehensive income, interest income, foreign exchange revaluation, and impairment losses or reversals are recognized in the consolidated income statement, while other fair value changes are recognized in other comprehensive income[96] - The company may irrevocably classify equity investments as designated at fair value through other comprehensive income if they meet the definition of equity under HKAS 32 and are not held for trading, with gains and losses not reclassified to profit or loss[97] - Financial assets measured at fair value through profit or loss are recognized at fair value in the consolidated financial statements, with net changes in fair value recognized in the consolidated income statement, including dividends when the right to receive payment is established[98] - The company classifies assets and liabilities into three levels of fair value hierarchy based on the significance of inputs: Level 1 (quoted prices in active markets), Level 2 (observable inputs not meeting Level 1 criteria), and Level 3 (unobservable inputs)[105] - Impairment losses are recognized when the carrying amount of an asset exceeds its recoverable amount, calculated as the higher of its value in use or fair value less costs to sell[105][106] - The company uses straight-line depreciation for property, plant, and equipment with annual rates of 4.75% for buildings, 9.50% for machinery, 19.00% for computers and office equipment, and 23.75% for vehicles[109] - Construction in progress is recorded at cost less impairment and is reclassified to appropriate property, plant, and equipment categories upon completion and readiness for use[110] - The company reviews and adjusts residual values, useful lives, and depreciation methods at least once at each financial year-end[109] - Significant parts of property, plant, and equipment with different useful lives are depreciated separately[109] - Impairment losses (except for goodwill) are reversed only if estimates used to determine recoverable amount change, but not exceeding the carrying amount that would have been determined had no impairment been recognized[106] - The company assesses at each reporting date whether there are indications that previously recognized impairment losses may no longer exist or may have decreased[106] - Related parties include entities controlled by or significantly influenced by key management personnel or their close family members[108] - The company capitalizes major inspection costs as part of the carrying amount of property, plant, and equipment when recognition criteria are met[109] - Investment properties are held for rental income or capital appreciation, with depreciation calculated on a straight-line basis over their estimated useful lives, with main annual rates being 4.75% for buildings and 48-50 years for prepaid land lease payments[111] - Financial assets are derecognized when the company transfers the rights to receive cash flows from the asset or enters into a pass-through arrangement, with continued recognition if the company retains substantially all risks and rewards[121] - The company recognizes expected credit losses for all debt instruments not measured at fair value through profit or loss, based on the difference between contractual cash flows and expected cash flows, discounted at the original effective interest rate[122] - Under the general approach, the company recognizes expected credit losses in two stages: 12-month expected credit losses for exposures with no significant increase in credit risk, and lifetime expected credit losses for exposures with a significant increase in credit risk[123] - The company assesses credit risk for debt investments at fair value through other comprehensive income, considering external credit ratings and deems credit risk significantly increased if payments are overdue by more than 30 days[124] - A financial asset is considered in default when contract payments are overdue by 90 days, or if there is no reasonable expectation of recovering the contractual cash flows[124] - Business combinations are accounted for using the acquisition method, with consideration transferred measured at fair value at the acquisition date[125] - Goodwill is initially measured at cost, which includes the consideration transferred, non-controlling interests, and any previously held equity interest in the acquiree, less the net identifiable assets acquired and liabilities assumed[127] - Goodwill is subject to annual impairment testing, or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired[128] - The company measures financial assets and debt instruments at fair value at each reporting date, with fair value determined based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants[130] Risk Management - The company faces risks from global economic slowdown, market changes, and uncertainties such as COVID-19, which could reduce demand or prices for its products and services[46] - The company is exposed to policy and regulatory risks, including stricter environmental regulations and potential vehicle restrictions, which could negatively impact sales of automotive parts and supply chain management business[47] - The company's largest customer accounted for 11.7% of total sales, while the top five customers combined accounted for 48.6% of total sales[63] - The largest supplier accounted for 16.2% of total procurement, while the top five suppliers combined accounted for 27.8% of total procurement[64] Capital and Investments - The company has no asset mortgages as of December 31, 2022[13] - The company's 2022 Share Option Plan allows for the issuance of up to 65,000,000 shares, representing 10% of the company's issued shares as of the report date[25] - The company did not purchase, sell, or redeem any of its listed securities during the year ended December 31, 2022[26] - The company adopted a new share option plan in 2022, allowing the issuance of up to 65,000,000 shares, representing 10% of the issued shares as of the adoption date[43] - The company did not have any significant investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures during the year ended December 31, 2022[42] - No interest was capitalized by the group during the year[82] - No directors or their associates have interests in any business that directly or indirectly competes with the group[83] - Mr. Zheng Ping, the Executive Director, Chairman, and CEO, has been with the group since 2002 and is responsible for reviewing and executing the group's overall development strategy[84] - Ms. Kong Xiaoling, Non-Executive Director, has been with the group since 2007 and is responsible for overseeing the board and providing advice[86] - All independent non-executive directors have been confirmed as independent in accordance with Listing Rule 3.13, with annual independence confirmation letters obtained[100] - No rights to purchase shares or debentures were granted to directors, their spouses, or children under 18 during the year ended December 31, 2022, nor were any arrangements made by the company or its subsidiaries to enable such rights[101] Operational Efficiency - Average inventory turnover days decreased to 23 days in 2022 from 153 days in 2021, primarily due to business transformation[39] - Average accounts receivable and notes receivable turnover days decreased to 88 days in 2022 from 167 days in 2021, mainly due to shorter turnover periods in the
双桦控股(01241) - 2022 - 年度财报