福田股份(08196) - 2022 Q3 - 季度财报

Cover and Summary Financial Highlights The Group reported strong financial performance for the nine months ended September 30, 2022, with revenue more than doubling, gross profit increasing by nearly 1.5 times, and loss attributable to owners significantly narrowing by almost 90%, indicating improved profitability 2022 First Three Quarters Key Financial Indicators | Indicator | Q1-Q3 2022 (RMB) | Q1-Q3 2021 (RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 132,687,000 | 65,329,000 | +103.1% | | Gross Profit | 21,455,000 | 8,738,000 | +145.5% | | Loss Attributable to Owners | 1,075,000 | 10,639,000 | -89.9% | - The Board does not recommend the payment of an interim dividend for the period[8] Consolidated Financial Statements Condensed Consolidated Statement of Comprehensive Income For the nine months ended September 30, 2022, the Group's total revenue reached RMB 133 million, a 103.1% increase, with gross profit rising to RMB 21.46 million, a 145.5% increase, significantly narrowing the loss for the period to RMB 1.08 million from RMB 10.64 million in the prior year, and improving basic loss per share from RMB 0.035 to RMB 0.004 Condensed Consolidated Statement of Comprehensive Income (For the Nine Months Ended September 30) | Item (RMB thousand) | 2022 (Unaudited) | 2021 (Unaudited) | | :--- | :--- | :--- | | Revenue | 132,687 | 65,329 | | Gross Profit | 21,455 | 8,738 | | Loss Before Tax | (313) | (11,229) | | Loss for the Period | (1,075) | (10,639) | | Loss Per Share Attributable to Owners (RMB) | (0.004) | (0.035) | Condensed Consolidated Statement of Changes in Equity As of September 30, 2022, the Group's total equity was RMB 73.53 million, a slight decrease from RMB 74.82 million at the year's start, primarily due to the RMB 1.075 million loss and RMB 0.218 million exchange difference recorded during the period Summary of Changes in Equity (For the Nine Months Ended September 30, 2022) | Item (RMB thousand) | Amount | | :--- | :--- | | Total Equity as at January 1, 2022 | 74,823 | | Loss for the Period | (1,075) | | Exchange Differences on Translation of Foreign Operations | (218) | | Total Equity as at September 30, 2022 | 73,530 | Notes to the Condensed Consolidated Financial Statements The notes detail the company's business nature, financial statement preparation basis, segment performance, revenue composition, share option scheme, taxation, and dividend policies, highlighting equipment projects as the main growth driver and the recognition of share option expenses Company Information and Basis of Preparation The company, an investment holding company registered in the Cayman Islands, primarily engages in environmental protection businesses including wastewater treatment and soil remediation facility design, construction, operation, and maintenance, with financial statements prepared under Hong Kong Financial Reporting Standards - The Group is principally engaged in environmental protection businesses, including the design, construction, operation, and maintenance services for wastewater treatment and soil remediation facilities, as well as trading of related equipment[29] Operating Segment Information The Group's five business segments saw the Equipment Projects segment as the most prominent in the first nine months of 2022, with revenue surging from RMB 36.28 million to RMB 95.45 million and segment results increasing from RMB 4.14 million to RMB 13.93 million, becoming the core engine of growth, while EPC project revenue also significantly increased, and other segments experienced declines Revenue and Results by Segment (For the Nine Months Ended September 30) | Segment (RMB thousand) | 2022 Revenue | 2021 Revenue | 2022 Results | 2021 Results | | :--- | :--- | :--- | :--- | :--- | | EPC Projects | 15,351 | 428 | 5,874 | (33) | | Construction Projects | 1,715 | 3,031 | 146 | 804 | | Equipment Projects | 95,447 | 36,284 | 13,927 | 4,139 | | Service Concession Arrangements | 16,827 | 18,401 | 836 | 1,126 | | Others | 3,347 | 7,185 | 672 | 2,702 | | Total | 132,687 | 65,329 | 21,455 | 8,738 | Revenue, Other Income and Gains Total revenue for the period was RMB 133 million, primarily from equipment projects, while other income and gains totaled RMB 3.48 million, an 85% year-on-year increase, mainly driven by RMB 1.61 million in exchange gains - The increase in other income and gains was mainly due to exchange gains of approximately RMB 1.606 million recorded during the period, whereas no such gains were recorded in the prior period[41] Share Option Scheme The company adopted a share option scheme on June 17, 2022, granting 18,000,000 options on June 29 at an exercise price of HKD 1.19 per share, resulting in approximately HKD 1.502 million in share option expenses recognized for the nine months ended September 30, 2022 - The Company adopted a share option scheme on June 17, 2022, and granted 18,000,000 share options during the period[45][54] - For the nine months ended September 30, 2022, the Group recognized share option expenses of approximately HKD 1,502,000[55] Income Tax and Dividends The Group's main operating subsidiary in mainland China, certified as a high-tech enterprise, benefits from a preferential corporate income tax rate of 15%, and the Board does not recommend any dividend payment for the nine months ended September 30, 2022 - Guangzhou Zhongke Jianyu Environmental Protection Co., Ltd., the Group's principal operating subsidiary, enjoys a preferential corporate income tax rate of 15% as a high-tech enterprise[61] - The Board does not recommend the payment of any dividend for the nine months ended September 30, 2022[64] Loss Per Share For the nine months ended September 30, 2022, basic loss per share was RMB 0.004, calculated based on a loss of RMB 1.075 million and 300 million weighted average ordinary shares outstanding, representing a significant improvement from RMB 0.035 in the prior year - Basic loss per share for the nine months ended September 30, 2022, was RMB 0.004, compared to a loss of RMB 0.035 for the same period in 2021[66] Management Discussion and Analysis Business Review and Outlook The Group's performance significantly improved, with revenue increasing by 103.1% and loss narrowing by 89.9%, primarily due to a large municipal equipment project in the Greater Bay Area; the Group remains cautious given macroeconomic uncertainties, focusing strategically on the Greater Bay Area, maintaining client relationships, restarting the Vietnam project, and optimizing internal cost structures - Performance improvement was mainly due to the recognition of approximately RMB 90 million in progress revenue from a large municipal equipment wastewater treatment project in the Greater Bay Area, leading to an increase in overall turnover, gross profit, and a reduction in loss[70] - Future strategy focuses on the Greater Bay Area and restarting the Vietnam project, while adjusting administrative expenses to reduce operating costs[73] - Management maintains a cautious outlook on business conditions for 2022 and 2023, believing the operating environment remains challenging with no short-term improvement expected[74] Financial Review The period saw strong financial performance, with total revenue growing 103.1% to RMB 133 million and gross profit increasing 145.5% to RMB 21.46 million, primarily driven by equipment projects whose revenue surged 163.1%, while administrative expenses rose 16.1% due to R&D and share option fees, ultimately reducing the loss for the period from RMB 10.64 million to RMB 1.08 million Business Revenue Analysis Total revenue growth was primarily driven by the Equipment Projects segment, which saw a 163.1% year-on-year increase due to a large municipal project in the Greater Bay Area, and EPC project revenue also surged, while Construction, Service Concession Arrangements, and Other segments experienced revenue declines Revenue Changes by Segment (For the Nine Months Ended September 30) | Segment | 2022 Revenue (RMB) | 2021 Revenue (RMB) | YoY Change | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | EPC Projects | 15,351,000 | 428,000 | +3486.7% | Number of projects increased from 1 to 4 | | Construction Projects | 1,715,000 | 3,031,000 | -43.4% | Number of projects decreased from 3 to 1 | | Equipment Projects | 95,447,000 | 36,284,000 | +163.1% | Contribution from large municipal project in Greater Bay Area | | Service Concession Arrangements | 16,827,000 | 18,401,000 | -8.6% | Decrease in service income | | Others | 3,347,000 | 7,185,000 | -53.4% | Decrease in technical consulting projects | Cost and Profit Analysis Gross profit increased by 145.5% year-on-year, primarily due to high revenue and profit from a large equipment project in the Greater Bay Area, while cost of sales increased by 96.6% with revenue, and administrative expenses rose by 16.1% due to increased R&D and share-based payment expenses, ultimately leading to an 89.9% reduction in loss for the period - Gross profit increased by 145.5% to RMB 21,455,000, mainly due to the recognition of revenue from a large municipal equipment project in the Greater Bay Area[86] - Administrative expenses increased by 16.1%, primarily due to an increase in R&D expenses of approximately RMB 2.076 million and the recognition of share-based payments related to share options of approximately RMB 1.27 million[90] - Loss for the period decreased by 89.9% to RMB 1,075,000, mainly due to the increase in overall turnover and gross profit[91] Corporate Governance and Other Disclosures This section covers the company's corporate governance practices, directors' and shareholders' shareholdings, share option scheme details, and the audit committee's review, noting compliance with most corporate governance codes despite the Chairman and CEO being the same person, and disclosing major shareholder and director holdings and June 2022 share options Disclosure of Directors' and Shareholders' Interests As of September 30, 2022, Chairman Mr. Xie Yang held 30.45% of the company's shares through controlled corporations, making him the controlling shareholder, while Mr. Song Xiaoxing held 14.68% through his controlled corporations, and several directors held granted share options Major Shareholders' Shareholdings (As at September 30, 2022) | Shareholder Name | Capacity | Number of Shares Held | Approximate Percentage of Issued Shares | | :--- | :--- | :--- | :--- | | Mr. Xie Yang | Interest in controlled corporation | 91,350,000 | 30.45% | | Mr. Song Xiaoxing | Interest in controlled corporation | 44,032,500 | 14.68% | Details of Share Option Scheme On June 29, 2022, the company granted 18,000,000 share options to directors and employees at an exercise price of HKD 1.19 per share, vesting in three tranches from 2023 to 2025 based on performance, with an exercise period until June 28, 2032 - On June 29, 2022, the Company granted 18,000,000 share options to directors and employees under the share option scheme, with an exercise price of HKD 1.19[108] Share Options Granted to Directors (Balance as at September 30, 2022) | Director Name | Total Share Options Granted | | :--- | :--- | | Mr. Xie Yang | 3,000,000 | | Mr. Gao Xuefeng | 3,000,000 | | Mr. Zhao Yanwei | 3,000,000 | | Mr. He Xuanxi | 1,000,000 | Audit Committee Review The company's Audit Committee, comprising three independent non-executive directors chaired by Mr. Xie Zhiwei, has reviewed the Group's adopted accounting policies and the unaudited condensed consolidated financial statements for the period - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the period[116]