Financial Performance - For the six months ended June 30, 2022, the turnover was RMB 3,151,541, a decrease of 1.4% compared to RMB 3,194,976 in the same period of 2021[11]. - Profit for the period increased by 44.9% to RMB 12,447 from RMB 8,592 in the previous year[11]. - Profit attributable to owners of the Company rose by 36.9% to RMB 14,214 compared to RMB 10,382 in the same period last year[11]. - Basic and diluted earnings per share increased by 36.8% to 1.30 RMB cents from 0.95 RMB cents[11]. - The Group recorded a consolidated turnover of approximately RMB3,151.5 million for the first half of 2022, a decrease of approximately 1.4% compared to RMB3,195.0 million in the same period of 2021[32]. - Profit attributable to owners of the Company was approximately RMB14.2 million, an increase from RMB10.4 million in 2021, with basic and diluted earnings per share of approximately RMB1.30 cents compared to RMB0.95 cents in 2021[32]. - The Group's gross profit was approximately RMB262.7 million, down approximately 4.0% from RMB273.6 million in 2021[46]. - EBITDA increased by approximately 27.5% to approximately RMB116.1 million, compared to RMB91.1 million in 2021[46]. - Profit for the period reached RMB 12,447,000, compared to RMB 8,592,000 in the previous year, indicating a year-over-year increase of about 45.5%[112]. - Profit attributable to the owners of the Company for the six months ended June 30, 2022, was approximately RMB 14.2 million, up from RMB 10.4 million in 2021[69]. Market Trends - The global smartphone shipments are predicted to decline by 3.5% to 1.31 billion units in 2022, while 5G mobile phone shipments are expected to increase by 25.5% to 700 million units, accounting for 53% of new phone shipments[14]. - The smartphone industry has experienced three consecutive quarters of declines in global supply and demand due to weak demand, inflation, and supply chain constraints[14]. - The mobile phone industry is expected to recover at a growth rate of 5% in 2023, with a five-year compound annual growth rate of 1.9% through 2026[14]. - The overall poor consumer sentiment in the smartphone market has led to a decline in sales for mainstream smartphone brands in China compared to 2021[14]. - Many mobile phone manufacturers are adopting more conservative operational strategies due to uncertainties in overseas markets, posing challenges for the market throughout the year[14]. - The stabilizing pandemic is anticipated to provide favorable conditions for the recovery of the smartphone industry[15]. Business Segments - The ODM business generated a turnover of approximately RMB3,009.7 million, accounting for approximately 95.5% of the Group's consolidated turnover, while the bare battery cell business recorded RMB73.8 million, accounting for approximately 2.3%[32]. - The ODM business segment generated a turnover of approximately RMB3,009,688, while the bare battery cell business contributed RMB73,834[172]. - The Group operates in two reportable segments: Original Design Manufacturing (ODM) and Bare Battery Cell business, focusing on lithium-ion battery modules and cells[156]. - ODM business involves manufacturing and supplying lithium-ion battery modules and related accessories for branded mobile phone and tablet manufacturers[156]. - The Bare Battery Cell business manufactures and sells lithium-ion bare battery cells for mobile phones, tablets, and power banks[156]. Financial Position - As of June 30, 2022, the Group's cash and cash equivalents amounted to approximately RMB175.3 million, a decrease from RMB226.7 million as of December 31, 2021, primarily due to a net cash outflow from operating activities of approximately RMB403.6 million[74]. - The Group's outstanding borrowings as of June 30, 2022, were approximately RMB1,315.4 million, an increase from RMB1,175.0 million as of December 31, 2021, with a total debt to equity ratio of approximately 124.9%[74]. - The Group's current ratio was approximately 1.1 times as of June 30, 2022, with current assets of approximately RMB4,061.1 million and current liabilities of approximately RMB3,649.7 million[76]. - Net current assets increased by approximately 15.6% to RMB411.4 million as of June 30, 2022, compared to RMB355.9 million as of December 31, 2021[76]. - The Group's net assets as of June 30, 2022, were approximately RMB1,053.4 million, a decrease of approximately RMB8.0 million from December 31, 2021[76]. - The Group's total assets at June 30, 2022, were RMB 1,060,363,000, compared to RMB 1,053,422,000 at the same time in 2021[128]. Operational Challenges - The pandemic has significantly impacted the smartphone industry, leading to a decrease in consumer sentiment and smartphone sales globally, with many manufacturers adopting conservative operational strategies[16]. - The economic environment is expected to remain complicated and severe in the second half of 2022, with ongoing uncertainties due to the pandemic[21]. - The Group's experienced ODM product development team is dedicated to optimizing battery solutions to meet customer needs, ensuring high safety standards for battery products[35]. Employee and Administrative Costs - As of June 30, 2022, the Group had 3,155 full-time employees, a decrease from 3,725 employees as of June 30, 2021[90]. - Employee costs for the review period amounted to RMB 264.4 million, an increase of 19.0% compared to RMB 222.1 million for the six months ended June 30, 2021[90]. - Administrative expenses increased to approximately RMB 172.5 million, representing 5.5% of the Group's turnover, up from 5.3% in 2021[65]. Cash Flow and Investments - For the six months ended June 30, 2022, the net cash used in operating activities was RMB (403,556,000), compared to RMB (14,026,000) for the same period in 2021[130]. - The net cash generated from investing activities for the six months ended June 30, 2022, was RMB 241,785,000, while it was RMB (258,237,000) in 2021[130]. - The net cash generated from financing activities was RMB 106,509,000 for the six months ended June 30, 2022, compared to RMB 232,918,000 in 2021[130]. Compliance and Reporting - The interim financial information was prepared in accordance with International Accounting Standard 34, ensuring compliance with international reporting standards[137]. - The interim financial information has been reviewed by BDO Limited, ensuring compliance with relevant auditing standards[148]. - Significant judgments and estimates used in preparing the interim financial information are consistent with those applied in the 2021 annual financial statements[153].
锐信控股(01399) - 2022 - 中期财报