Financial Performance - Revenue for the six months ended June 30, 2022, was RMB 121.7 million, a decrease of 6.10% compared to RMB 129.6 million in 2021[17]. - Gross profit increased by 13.70% to RMB 35.7 million from RMB 31.4 million in the previous year[17]. - Profit before tax decreased by 10.19% to RMB 14.1 million from RMB 15.7 million in 2021[17]. - Profit for the period attributable to shareholders was RMB 11.2 million, down 8.94% from RMB 12.3 million in 2021[17]. - Basic earnings per share for the period was RMB 1.5 cents, a decrease of 11.76% from RMB 1.7 cents[18]. - The Group recorded a turnover of approximately RMB121.7 million, representing a decrease of approximately 6.10% compared to RMB129.6 million in the same period of 2021, mainly due to the contraction of the RMAA business[30]. - Profit attributable to Shareholders was approximately RMB11.2 million, a decrease of approximately 8.94% from RMB12.3 million in the same period of 2021, with earnings per share at RMB1.5 cents[30]. - Total comprehensive income for the period was RMB 14,759,000, an increase of 80.5% from RMB 8,190,000 in 2021[131]. Asset and Liability Management - As of June 30, 2022, non-current assets were RMB 914.40 million, an increase of 1.52% from RMB 900.73 million at the end of 2021[20]. - Current assets decreased by 2.62% to RMB 636.73 million from RMB 653.86 million[20]. - Net current assets decreased by 3.69% to RMB 433.56 million from RMB 450.18 million[20]. - Net assets as of June 30, 2022, were RMB 1,167.25 million, a slight increase of 0.19% from RMB 1,165.08 million[20]. - Total assets as of June 30, 2022, amounted to RMB 1,551,127,000, a slight decrease from RMB 1,554,586,000 as of December 31, 2021[178]. - Total liabilities as of June 30, 2022, were RMB 383,877,000, compared to RMB 389,503,000 as of December 31, 2021, indicating a reduction in liabilities[178]. Business Segments and Operations - Revenue from dyeing and processing of differentiated polyester filament fabric accounted for approximately 75.9% of the Group's turnover, while RMAA services and properties investment contributed 13.5% and 10.6%, respectively[31]. - The RMAA segment recorded revenue of approximately RMB 16.5 million, a decline of 63.27% compared to the same period last year, and continued to operate at a loss[40]. - The Group streamlined its business structure by disposing of its RMAA services segment to focus on dyeing and processing of differentiated polyester filament fabric and environmental water project operations[26]. - Segment revenue from processing was RMB 92,327,000, while RMAA service revenue was RMB 16,500,000 for the six months ended June 30, 2022[172]. Market Conditions and Trends - The Consumer Confidence Index has fallen since the second quarter of 2022, leading to weakened demand for non-essential consumables[38]. - The scale of China's textile and apparel orders relocation was approximately US$6 billion in the first half of 2022, primarily to countries like Bangladesh, Vietnam, and India[38]. - The apparel consumption market in China is expected to grow, driven by increasing per capita disposable income and a recovery in offline consumption in the second half of 2022[52]. Cost Management and Efficiency - Selling and distribution expenses decreased by approximately RMB0.7 million to RMB0.64 million, aligning with the drop in sales scale and cost-saving measures[65]. - Administrative expenses increased by RMB1.67 million to approximately RMB22.54 million, mainly due to higher depreciation and operating expenses of the owner-occupied part of Yongsheng Plaza[69]. - The Group aims to complete technological improvements before the peak consumption season to enhance production efficiency and reduce defect rates[52]. Corporate Governance and Compliance - The audit committee reviewed the unaudited interim results and confirmed compliance with applicable accounting standards and adequate disclosures[123]. - The board comprises four executive directors and three independent non-executive directors, maintaining high standards of corporate governance[119]. - The company is committed to transparency, accountability, and independence in its corporate governance practices[119]. Employee and Social Responsibility - As of June 30, 2022, the Group employed a total of 298 employees, a decrease from 319 employees as of June 30, 2021[84]. - Employee costs, including directors' remuneration, amounted to approximately RMB 16.5 million in the first half of 2022, down from approximately RMB 18.6 million in the first half of 2021, representing a decrease of about 5.6%[84]. - The Group emphasizes team building and recognizes that its success depends on the contributions of all employees[84]. Financial Instruments and Risk Management - The Group has not hedged foreign exchange risks and will closely monitor currency fluctuations[82]. - The Group measures expected credit loss (ECL) for loan receivables in accordance with IFRS 9, generally measuring ECL equal to 12-month ECL unless there is a significant increase in credit risk[103]. - The Group conducted due diligence on borrowers prior to granting loans, including reviewing financial statements and repayment records[102].
永盛新材料(03608) - 2022 - 中期财报