Financial Performance - The overall revenue of Artgo Holdings increased by approximately 19.1% despite challenges in the marble business due to the pandemic and geopolitical tensions[10]. - The company reported a total revenue of approximately RMB 88.0 million for 2021, an increase of 19.1% compared to RMB 73.9 million in 2020[25]. - Revenue from marble products was approximately RMB 31.2 million, a decrease of 19.4% compared to RMB 38.7 million in 2020[14]. - Sales of calcium carbonate products contributed approximately RMB 55.1 million to the company's revenue, representing a 72.7% increase from RMB 31.9 million in 2020[16]. - The marble stone products accounted for 35.6% of total revenue in 2021, down from 52.4% in 2020, with sales amounting to approximately RMB 31.2 million[25]. - The company’s total sales cost for 2021 was approximately RMB 66.1 million, compared to RMB 60.6 million in 2020, with marble stone product costs at RMB 19.7 million and calcium carbonate product costs at RMB 43.4 million[28]. - The group recorded a gross profit of approximately RMB 21.9 million in 2021, an increase of about RMB 8.6 million compared to 2020, with an overall gross margin of approximately 24.9% compared to 18.1% in 2020[31]. - Other income and gains amounted to approximately RMB 22.4 million in 2021, an increase of about RMB 1.6 million from RMB 20.8 million in 2020, primarily due to increases in VAT refunds and rental income[32]. - Other expenses decreased by approximately RMB 7.5 million to RMB 4.8 million in 2021 from RMB 12.3 million in 2020, mainly due to reduced depreciation from the sale of investment properties[33]. - Selling and distribution expenses were approximately RMB 2.5 million, accounting for about 2.9% of total revenue, down from RMB 2.9 million or 3.9% in 2020, reflecting tighter cost control[34]. - Administrative expenses increased by approximately RMB 6.6 million to RMB 61.6 million in 2021, primarily due to RMB 10.4 million in equity-settled share option expenses[35]. - The group reported a loss attributable to owners of approximately RMB 417.8 million, an increase of RMB 187.6 million compared to a loss of RMB 230.2 million in 2020[41]. Asset Management and Sales - The company sold eight investment properties to strengthen its financial position and liquidity during the challenging economic environment[13]. - The company sold eight investment properties in Shanghai, receiving total proceeds of RMB 153.5 million, resulting in a net loss of RMB 3.7 million from these sales[21]. - The company plans to seek opportunities to liquidate non-core assets to generate immediate liquidity and reduce debt levels[10]. - The company is actively seeking potential buyers for its logistics business, which it decided to divest in late 2019[20]. - The group completed three asset sales during the year, totaling RMB 153.5 million, resulting in a net loss of RMB 3.8 million from these sales[62]. Operational Challenges - The real estate sector, which is a key market for the company's marble products, has not fully recovered from the pandemic, with developers focusing on inventory clearance and debt restructuring[9]. - The ongoing geopolitical tensions and the impact of the Russia-Ukraine war present uncertainties for the company's future outlook[10]. - Artgo Holdings is closely monitoring the development of COVID-19 and its impact on financial performance, adjusting business plans accordingly[10]. - The company has delayed capital expenditures and purchases of raw materials until the operating environment stabilizes[13]. - The company anticipates that the significant revenue growth in its calcium carbonate business will slow down in 2022 due to current market conditions[16]. Mining Operations - In Q4 2021, the company commenced small-scale mining activities at Yongfeng Mine, extracting 703.2 cubic meters of marble after obtaining a new mining permit in 2020[15]. - The company’s marble raw material sales volume increased to 1,520 cubic meters in 2021 from 641 cubic meters in 2020[27]. - The estimated marble resource at the Dejiang mine is 2.1 million cubic meters, with 1.3 million cubic meters classified as controlled and 0.8 million cubic meters as inferred[72]. - The Yongfeng mine has an annual permitted extraction volume of 1.1 million cubic meters, with a mining license valid until June 5, 2030[76]. - The assessed mining rights value for the Yongfeng mine is approximately RMB 55.8 million, valid for 30 years[76]. - As of December 31, 2021, the estimated resource volume of Yongfeng Mine is 106.6 million cubic meters, with 51.2 million cubic meters classified as proven, 46.6 million cubic meters as controlled, and 8.8 million cubic meters as inferred[80]. - In 2021, the group produced approximately 703.2 cubic meters from Yongfeng Mine, a significant increase from 233.3 cubic meters in 2020, representing a growth of approximately 201%[82]. - The estimated marble resource volume at Zhangxi Mine as of December 31, 2021, is 29.7 million cubic meters, with 7.1 million cubic meters proven, 18.4 million cubic meters controlled, and 4.2 million cubic meters inferred[88]. - The group has not conducted exploration, development, or production activities at Zhangxi Mine in 2021, consistent with 2020[88]. - The estimated marble resource volume at Lichuan Mine as of December 31, 2021, is 4.55 million cubic meters, with 3.88 million cubic meters controlled and 0.67 million cubic meters inferred[96]. - The group has not conducted exploration, development, or production activities at Lichuan Mine in 2021, consistent with 2020[96]. - The group is applying for the renewal of the mining license for Zhangxi Mine to expand its mining area and increase marble resources, with no significant obstacles anticipated[85]. Management and Governance - The company appointed Mr. Yan Weiwen as Executive Director and CEO in March 2016, and he has nearly 28 years of experience in trade and investment[105]. - Mr. Zhang Jian, with nearly 16 years of experience in stone mining and processing, is currently the Vice President and General Manager of the Stone Production and Processing Division[106]. - The company has a strong management team with extensive experience in the construction materials sector, particularly in stone product processing and application in construction projects[106]. - The company has a diverse board with members holding various qualifications and experiences in finance and management[112]. - The company has adopted a board diversity policy, considering various measurable aspects such as gender, age, cultural background, and professional experience in board composition[141]. - The chairman and CEO roles are separated, with the current chairman also serving as the acting CEO since December 1, 2016, to strengthen leadership capabilities[142]. - The board has established four committees: Audit Committee, Remuneration Committee, Nomination Committee, and Investment Committee, to oversee specific aspects of the company's affairs[148]. - The company is actively seeking to appoint a qualified candidate for the CEO position to comply with governance code requirements[146]. - The board confirmed that there are no significant uncertainties that may cast doubt on the company's ability to continue as a going concern[167]. - The company has established a training program for directors and senior management to ensure ongoing professional development and compliance with legal standards[165]. Compliance and Risk Management - The company has established a robust internal control system to safeguard its assets and shareholder interests, ensuring compliance with regulatory requirements[185]. - The company has a framework in place to identify, assess, and manage significant risks to achieve its operational goals[186]. - The group has implemented multiple measures to mitigate the impact of environmental pollution, such as conserving and recycling water used in marble mining[199]. - The group has established compliance procedures to ensure adherence to applicable laws, rules, and regulations that significantly impact its operations[200]. - The board has delegated the audit committee to monitor the group's compliance policies and practices, with regular reviews conducted[200]. - As of December 31, 2021, the group has complied with significant aspects of laws and regulations affecting its business and operations[200]. Future Outlook and Strategy - The company has set a revenue target of $500 million for the next fiscal year, representing a 25% increase from the current year[120]. - New product development includes the launch of a premium marble line, expected to contribute an additional $50 million in revenue[119]. - The company plans to expand its market presence in Southeast Asia, targeting a 30% market share within the next three years[126]. - A strategic acquisition of a local competitor is in progress, projected to enhance production capacity by 40%[127]. - Financial management strategies have been revised, aiming for a 15% increase in profit margins by optimizing resource allocation[129].
雅高控股(03313) - 2021 - 年度财报