Corporate Governance - The company has recognized the importance of good corporate governance and has complied with all applicable code provisions during the six months ended June 30, 2023, except for a deviation from Code Provision C.2.1[19] - Mr. Zhang Chao was appointed as Chairman and Chief Executive Officer on January 25, 2021, but resigned as Chairman on July 13, 2023, with Mr. Du Peng appointed as the new Chairman, ensuring compliance with Code Provision C.2.1[20] - The company has established a structure for the Board to facilitate effective decision-making and strategy implementation[20] - The company has a compliance officer and a company secretary to ensure adherence to regulatory requirements[12] - The company has appointed an independent auditor to enhance the credibility of its financial reporting[15] - The Audit Committee has reviewed the financial reporting process and confirmed compliance with applicable accounting principles for the six months ended June 30, 2023[33] - The Audit Committee consists of three independent non-executive Directors, ensuring oversight of the company's financial reporting and risk management systems[28] Market and Operational Risks - The company operates in a market designed for small and mid-sized companies, which may involve higher investment risks compared to other companies listed on the Stock Exchange[2] - Securities traded on GEM may be more susceptible to high market volatility, and there is no assurance of a liquid market for these securities[3] Financial Performance - Revenue for the six months ended June 30, 2023, was RMB 33.6 million, a decrease of RMB 11.2 million or 25.0% from RMB 44.8 million for the same period in 2022[100] - Revenue from ITO film sales was RMB 13.5 million for the six months ended June 30, 2023, representing a decrease of RMB 5.4 million or 28.6% from RMB 18.9 million for the same period in 2022[90] - Revenue from Smart PDLC products was RMB 15.9 million for the six months ended June 30, 2023, a decrease of RMB 0.8 million or 4.8% from RMB 16.7 million for the same period in 2022[89] - Revenue from other products was RMB 4.2 million for the six months ended June 30, 2023, a decrease of RMB 5.0 million or 54.3% from RMB 9.2 million for the same period in 2022[94] - The company recorded a loss attributable to owners of RMB 3.0 million for the six months ended June 30, 2023, compared to a loss of RMB 2.5 million for the same period in 2022[95] - The company reported a loss for the period of RMB 2,958,000, which is an increase from a loss of RMB 1,675,000 in the same period of 2022[143] - Loss before tax for the six months ended June 30, 2023, was RMB 4,118,000, compared to a loss of RMB 2,898,000 in the previous year[143] Share Option Scheme - A total of 4,690,000 share options have been granted under the Share Option Scheme, representing 0.9% of the issued Shares of the Company[42] - The maximum number of Shares issued under the Share Option Scheme to any Eligible Person in any 12-month period shall not exceed 1% of the number of Shares in issue without shareholder approval[43] - The total number of Shares available under the Share Option Scheme must not exceed 10% of the total issued share capital as of October 17, 2017, equating to 480,000,000 Shares[41] - During the six months ended June 30, 2023, 410,000 options were forfeited due to resignations, with no options exercised during this period[42] - The total outstanding share options as of June 30, 2023, is 4,690,000, with no options exercised during the reporting period[59] - The exercise price for the share options is set at HK$1.16 per share, which is the price determined by the Board[59] - The Share Option Scheme will remain in effect for a total of ten years from October 17, 2017, expiring on the day immediately preceding the tenth anniversary unless terminated earlier[54] Financial Position and Assets - As of June 30, 2023, non-current assets increased to RMB 95,310,000 from RMB 94,292,000 as of December 31, 2022, reflecting a growth of 1.08%[146] - Current assets decreased slightly to RMB 216,015,000 from RMB 219,313,000, a decline of 1.05%[146] - Trade receivables rose significantly to RMB 145,730,000, up 17.77% from RMB 123,723,000[146] - Current liabilities increased to RMB 78,546,000 from RMB 77,259,000, marking a rise of 1.66%[147] - Net assets as of June 30, 2023, were RMB 204,202,000, down from RMB 206,309,000, a decrease of 1.02%[147] - Total equity attributable to equity shareholders decreased to RMB 198,836,000 from RMB 201,006,000, a decline of 1.08%[147] Cash Flow and Liquidity - The Group reported a net cash used in operating activities of RMB (9,133,000), an improvement from RMB (11,873,000) in the same period last year[151] - Net cash used in investing activities was RMB (3,508,000), compared to RMB 7,561,000 generated in the same period of 2022[151] - Financing activities resulted in a net cash outflow of RMB (9,331,000), a significant decrease from RMB 32,717,000 generated in the previous year[151] - Cash and cash equivalents decreased to RMB 35,854,000 from RMB 59,535,000, a significant drop of 39.87%[146] Employee and Operational Insights - The company had a total headcount of 118 full-time employees as of June 30, 2023[138] - The company plans to enhance its production capabilities through various projects, including the installation of automated production lines by the end of 2023[136] - The company is focusing on overseas business expansion and research and development of new materials and products, with allocated proceeds of HK$9.8 million and HK$21.2 million respectively[134] Revenue and Market Conditions - In the first half of 2023, the Group faced intense competition in the saturated domestic market, resulting in a decrease in sales compared to the same period in 2022[87] - Domestic revenue from Mainland China was RMB 25,949,000, representing a decline of 30.9% compared to RMB 37,565,000 in the first half of 2022[174] Dividends and Shareholder Returns - The Board did not recommend the payment of an interim dividend for the six months ended June 30, 2023[137] - No interim dividend was proposed for the six months ended June 30, 2023, nor for the same period in 2022, and no final dividend was declared for the year ended December 31, 2022[193][194]
水发兴业新材料(08073) - 2023 - 中期财报