Financial Performance - For the six months ended June 30, 2023, total sales to external customers amounted to RMB 5,814,428, with upstream products contributing RMB 4,132,319 and downstream products contributing RMB 1,682,109[6]. - The reportable segment results showed a profit of RMB 505,758, with upstream products generating RMB 222,092 and downstream products generating RMB 283,666[6]. - The profit attributable to owners of the Company for the same period was a loss of RMB 37,754, compared to a profit of RMB 262,330 in the previous year[9]. - The Group recorded a loss before taxation of RMB38,300,000 for the six months ended 30 June 2023, compared to a profit of RMB452,654,000 in 2022[39]. - The Group's loss after taxation for the period was RMB28,959,000, compared to a profit of RMB364,695,000 in 2022[39]. - The gross profit for the same period was RMB 175,247, significantly down from RMB 725,479 in 2022, indicating a decline of approximately 75.8%[123]. - The operating loss for the first half of 2023 was RMB 45,735, compared to an operating profit of RMB 445,206 in the previous year[123]. - The net loss attributable to owners of the company was RMB 37,754, contrasting with a profit of RMB 262,330 in the first half of 2022[123]. Revenue Breakdown - Revenue from upstream products increased to RMB4,349,545,000, up from RMB4,132,319,000 in 2022, with cornstarch sales volume reaching approximately 1,007,971 tonnes, compared to 927,221 tonnes in 2022[40][44]. - Revenue from the fermented and downstream products segment decreased significantly to RMB1,464,778,000 (2022: RMB1,682,109,000), with a gross profit margin of 10.9% (2022: 27.2%) and a gross profit of RMB159,196,000 (2022: RMB457,090,000)[46]. - Revenue of lysine products was RMB1,012,954,000 (2022: RMB1,275,857,000), with an average selling price decreasing to RMB6,344 per tonne (2022: RMB8,344) and sales volume increasing to approximately 159,682 tonnes (2022: 152,910 tonnes)[46]. - Revenue of starch-based sweetener was RMB237,182,000 (2022: RMB285,148,000), with sales volume decreasing to 93,998 tonnes (2022: 132,384 tonnes) and the average selling price increasing to approximately RMB2,523 per tonne (2022: RMB2,154 per tonne)[46]. - Revenue of modified starch increased to RMB154,371,000 (2022: RMB94,541,000), attributed to the successful development of liquid-modified starch[46]. - Revenue of new biobased material and others was RMB60,271,000 (2022: RMB26,563,000), with the increase mainly due to the full year effect after the trial-run in 2022[50]. Cost and Expenses - The gross profit margin for upstream products significantly declined to 0.4% from 6.5% in 2022, reflecting weak market sentiment[44]. - Distribution expenses decreased to RMB82,360,000 from RMB85,501,000, attributed to customers' preference for self-arranged delivery and increased use of bulk cargo delivery[34]. - The gross profit margin of the Group diminished due to suppressed market demand and prices of cornstarch and its related products, along with comparatively higher production costs per unit[58]. - The Group's electricity and steam expenses remained high despite the economic recession in the domestic market[52]. - For the six months ended June 30, 2023, administrative expenses decreased significantly to RMB98,603,000 from RMB104,325,000, mainly due to a reduction in government levies[74]. - Research expenses decreased substantially to RMB94,056,000 from RMB151,496,000, influenced by the number and complexity of new research projects[76]. - Distribution expenses totaled RMB66,939,000 (2022: RMB70,794,000), while total distribution and administrative expenses were RMB82,360,000 (2022: RMB85,501,000)[54]. Assets and Liabilities - Total assets as of June 30, 2023, amounted to RMB 4,915,509, a decrease from RMB 5,105,848 at the end of 2022[125]. - Current assets decreased to RMB 2,406,012 from RMB 2,666,521 at the end of 2022, reflecting a decline of approximately 9.7%[125]. - Total liabilities as of June 30, 2023, amounted to RMB 1,162,224, down from RMB 1,284,065 as of June 30, 2022, indicating a reduction of approximately 9.5%[132]. - Total current liabilities as of June 30, 2023, were RMB 890,184, a decrease from RMB 965,933 as of June 30, 2022, showing a reduction of approximately 7.8%[132]. - The current ratio as of June 30, 2023, was 2.7, slightly down from 2.8 as of December 31, 2022[89]. - The gearing ratio, defined as borrowings to total assets, improved to 4.6% from 9.4%[89]. Cash Flow - The net cash inflow from operating activities for the six months ended June 30, 2023, was RMB 399,882, a significant improvement compared to a net outflow of RMB 139,002 in the same period of 2022[135]. - Cash and cash equivalents increased to RMB 1,102,821 from RMB 1,002,985, showing a growth of about 9.9%[125]. - Cash and cash equivalents increased to RMB 1,102,821 as of June 30, 2023, from RMB 792,185 as of June 30, 2022, representing a growth of approximately 39.2%[135]. - The company reported a net cash outflow from investing activities of RMB 212,027 for the first half of 2023, compared to RMB 62,666 in the same period of 2022, indicating a significant increase in investment expenditures[135]. Staffing and Management - The number of staff decreased to 2,310 from 2,392 in 2022[90]. - Total staff costs for the six months ended June 30, 2023, were approximately RMB139,483,000, an increase from RMB125,578,000 in 2022[90]. - The Directors believe that the working capital available to the Group is sufficient for its present requirements[89]. - The Group provided a deposit of RMB201,645,000 and bank acceptance bills of RMB4,496,000 as collateral for banking facilities as of June 30, 2023[94]. Dividends and Shareholder Information - The Company did not recommend an interim dividend for the six months ended June 30, 2023[81]. - The Board did not recommend the payment of an interim dividend for the six months ended June 30, 2023, consistent with 2022[96]. - Merry Boom holds 3,705,385,194 shares, representing 61.81% of the issued share capital, with Mr. Tian Qixiang owning approximately 54.58% of Merry Boom[114]. Taxation - The effective tax rate for the Group's PRC subsidiaries is 25%, with one subsidiary benefiting from a preferential rate of 15%[158]. - Current income tax for PRC Enterprises Income Tax decreased to RMB 6,325,000 in 2023 from RMB 104,378,000 in 2022, representing a decline of approximately 93.9%[176]. - The over-provision in prior years resulted in a credit of RMB 14,156,000 in 2023, compared to no such provision in 2022[176].
中国淀粉(03838) - 2023 - 中期财报