Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 377.66 million, representing a 75.0% increase compared to RMB 215.86 million in the same period of 2021[9]. - Gross profit for the same period was RMB 181.93 million, up 30.8% from RMB 139.06 million year-on-year[9]. - Profit from continuing operations for the period was RMB 125.87 million, an 18.6% increase from RMB 106.12 million in 2021[9]. - The company reported a profit of RMB 164.52 million for the period, a significant increase of 79.8% compared to RMB 91.52 million in the previous year[9]. - Adjusted net profit was RMB 147.88 million, reflecting a 39.4% increase from RMB 106.12 million in the prior year[9]. - Total revenue from continuing operations increased by 75.0% from RMB 215.9 million for the six months ended June 30, 2021, to RMB 377.7 million for the six months ended June 30, 2022[45]. - Revenue from higher education (media and arts) and vocational education increased by RMB 70.1 million, or 33.1%, from RMB 211.7 million to RMB 281.8 million due to an increase in total student enrollment[46]. - Revenue from film and television production and investment rose from RMB 4.2 million to RMB 95.8 million, primarily due to the recognition of revenue from the first round of the television drama "New Home Agreement" (formerly "Ideal House"), in which the company invested 55%[46]. - The overall gross profit increased by 30.8% from RMB 139.1 million for the six months ended June 30, 2021, to RMB 181.9 million for the six months ended June 30, 2022[50]. - The overall gross margin decreased from 64.4% to 48.2%, primarily due to a decline in the gross margin of the film production and investment business[50]. - Profit before tax increased to RMB 129,976,000, up 27% from RMB 102,175,000 in the previous year[140]. - Net profit attributable to the owners of the company from continuing operations was RMB 112,543,000, compared to RMB 96,189,000 in the prior year[141]. - Total comprehensive income for the period was RMB 175,050,000, significantly higher than RMB 79,101,000 in the same period last year[141]. Dividends and Shareholder Returns - The company declared an interim dividend of HKD 0.06 per share for the six months ended June 30, 2022, consistent with the previous year[9]. - The board proposed an interim dividend of HKD 0.06 per share for the six months ended June 30, 2022, to be paid on or around October 28, 2022[107]. - The company declared an interim dividend of HKD 0.06 per share, totaling approximately RMB 82,436,000, to be paid to shareholders listed on October 12, 2022[197]. Regulatory Changes and Business Discontinuation - The company sold its entire stake in Waterwood, which provided art examination training services in China, and reclassified its media and arts training business as discontinued operations[12]. - The sale of Waterwood was influenced by new regulatory measures affecting non-academic training institutions in China, leading to the decision to divest[13]. - The media and arts training business has been reclassified as discontinued operations due to regulatory changes and the uncertain impact of COVID-19[28]. - The company decided to exit the art training services business due to regulatory changes and potential adverse impacts on operations, marking the business as discontinued[187]. Acquisitions and Investments - The acquisition of Olympic College is valued at RMB 450 million, which may be adjusted to RMB 250 million if certain conditions are not met within 36 months[20]. - The company completed the acquisition of all shares of Waterwood from its founder for a total consideration of RMB 300,000,000, which includes a cash payment of RMB 165,000,000[184]. - The guaranteed net profit for Waterwood for the years ending December 31, 2021, 2022, and 2023 is RMB 24,000,000, RMB 27,600,000, and RMB 31,740,000, respectively[185]. Student Enrollment and Educational Programs - As of June 30, 2022, the total number of students in the group reached approximately 24,508, with a year-on-year increase of about 26.6% excluding Olympic College students[24]. - The group has provided over 50 undergraduate programs, with 4 programs rated as national first-class and 12 as Jiangsu provincial first-class[25]. - The total student capacity of the university is approximately 24,000[26]. - The company has established partnerships with over 70 leading global media and arts universities for its international foundation programs[25]. Financial Position and Cash Flow - As of June 30, 2022, the group's cash and cash equivalents amounted to RMB 550.3 million, an increase from RMB 250.0 million as of December 31, 2021[70]. - The current ratio as of June 30, 2022, was 679.9%, up from 267.8% as of December 31, 2021[71]. - Total assets decreased from RMB 3,703.5 million as of December 31, 2021, to RMB 3,032.3 million as of June 30, 2022, while total liabilities dropped from RMB 988.4 million to RMB 262.3 million[71]. - The debt-to-equity ratio improved from 26.7% at the end of 2021 to 8.6% as of June 30, 2022, with no interest-bearing borrowings reported[73][74]. - The company reported a significant increase in cash and cash equivalents, reaching RMB 550,301,000 compared to RMB 249,953,000 at the end of 2021[144]. - The net cash used in operating activities for the six months ended June 30, 2022, was RMB (143,224) thousand, an improvement from RMB (277,462) thousand in the same period of 2021[149]. - The net cash generated from investing activities was RMB 490,322 thousand for the six months ended June 30, 2022, compared to RMB (444,115) thousand in the same period of 2021[149]. Operational Costs and Expenses - Sales expenses increased by 23.7% to RMB 4.2 million for the six months ended June 30, 2022, primarily due to increased distribution expenses in the film production and investment business[57]. - Administrative expenses rose by 3.3% to RMB 48.7 million for the six months ended June 30, 2022, mainly due to increased salaries for administrative staff[58]. - Total employee costs for the six months ended June 30, 2022, amounted to RMB 74,975,000, compared to RMB 63,220,000 in the previous year, representing an increase of about 18.6%[182]. Auditor and Compliance - The company has appointed Deloitte as the new auditor following the resignation of PwC due to a disagreement over audit fees[31]. - The audit committee reviewed the unaudited interim results for the six months ended June 30, 2022, and discussed accounting policies and risk management with the independent auditor[100]. - The company’s financial statements have been reviewed and found to comply with Hong Kong Accounting Standards[136]. Shareholder Information - As of June 30, 2022, the company’s major shareholder, Mr. Pu, holds 1,160,934,000 shares, representing 70.14% of the total issued shares of 1,654,937,000[110]. - Cathay Media Holding Inc., controlled by Mr. Pu, also holds 1 share, representing 100% ownership[111]. - The company has a share incentive plan with a maximum of 32,000,000 shares available for distribution, which is approximately 2% of the total issued shares as of the listing date[118]. - As of June 30, 2022, the trustee has purchased a total of 32,000,000 shares under the share incentive plan[119].
华夏控股(01981) - 2022 - 中期财报