Financial Performance - For the six months ended June 30, 2022, the group managed and coordinated a total of 47 exhibition and event projects, generating revenue of approximately RMB 54.90 million, a decrease of RMB 6.07 million or about 9.96% year-on-year [9]. - The group recorded a gross profit of approximately RMB 0.23 million, a decrease of about RMB 7.62 million year-on-year, primarily due to the adverse impact of COVID-19 outbreaks on the exhibition and event management services industry in the second quarter of 2022 [9]. - The net loss attributable to the owners of the company for the period was approximately RMB 8.15 million, and the board of directors did not recommend the distribution of dividends for this period [9]. - Total revenue decreased by approximately 9.96% to about RMB 54.90 million compared to RMB 60.97 million in the same period last year [16]. - The gross profit for the same period was RMB 235,000, significantly down from RMB 7,857,000 in 2021, indicating a decline in profitability [125]. - The operating loss for the six months ended June 30, 2022, was RMB 7,786,000, compared to an operating profit of RMB 367,000 in the previous year [125]. - The net loss for the period was RMB 8,146,000, compared to a profit of RMB 154,000 in the same period last year [125]. - The income tax expense for the six months ended June 30, 2022, was RMB 8,000, compared to RMB 44,000 for the same period in 2021, showing a reduction of 81.8% [158]. - The average number of ordinary shares in issue was 120,000,000 for both periods, with a basic loss per share of RMB (6.79) for the six months ended June 30, 2022, compared to a profit of RMB 0.13 for the same period in 2021 [162]. Revenue Breakdown - Revenue from automotive-related exhibitions and activities decreased by approximately 8.76% to about RMB 24.99 million, accounting for 45.53% of total revenue [20]. - Revenue from advertising services increased by approximately 141.83% to about RMB 26.41 million, representing 48.10% of total revenue [20]. - Revenue from exhibition hall services decreased by approximately 76.86% to about RMB 3.50 million, accounting for 6.37% of total revenue [20]. - Revenue from automotive-related exhibition and event services was RMB 24,996,000, a decrease of 8.1% from RMB 27,396,000 in the same period last year [154]. - Revenue from advertising-related services increased significantly to RMB 26,408,000, up 142.5% from RMB 10,920,000 in the previous year [154]. - The total revenue for the six months ended June 30, 2022, was RMB 54,900,000, down 10% from RMB 60,970,000 in the same period of 2021 [154]. Economic Context - The GDP of China for the first half of 2022 was RMB 56,264.2 billion, with a year-on-year growth of 2.5% [8]. - In the second quarter of 2022, the GDP was RMB 29,246.4 billion, showing a year-on-year growth of 0.4% [8]. - The value added of the service industry increased by 1.8% year-on-year in the first half of 2022, while it decreased by 0.4% in the second quarter [8]. - The economic outlook for the second half of 2022 is expected to improve as the foundation for domestic economic recovery strengthens [14]. - The Chinese government has implemented a series of economic stabilization policies, leading to a positive growth in the economy during the second quarter of 2022 [86]. Operational Insights - The group has established a solid customer base and a good reputation in the industry, providing comprehensive exhibition and event management services to well-known automotive brands since 2009 [7]. - The group operates in over 50 cities across China, focusing on the design, planning, coordination, and management of exhibitions and events [7]. - The company is positioned as a comprehensive exhibition and event management service provider in China, facing challenges from the complex international environment and sporadic COVID-19 outbreaks domestically [8]. - The management team is committed to maintaining service quality and strengthening strategic partnerships with international automotive companies [15]. - The group aims to enhance the management of exhibitions and events, improve customer service and experience, and seek transformative changes to create sustainable returns for shareholders [86]. Cash Flow and Liquidity - The net cash used in operating activities was approximately RMB (9.73) million, compared to RMB (5.94) million for the six months ended June 30, 2021 [49]. - Cash and cash equivalents decreased by RMB 702,000 during the period, ending at RMB 5,788,000 compared to RMB 8,913,000 at the end of the same period last year [135]. - The company continues to monitor its liquidity and cash flow needs to ensure sufficient cash for operational requirements [152]. - The company reported a cash outflow from investment activities of RMB 255,000 in the previous year, which improved to a cash inflow of RMB 6,000 in the current period [135]. - The company’s cash flow from operating activities has shown a significant increase in outflow, indicating potential challenges in operational efficiency [135]. Shareholder Information - The company did not recommend any interim dividend for the period, consistent with the previous year [55]. - The company did not declare or pay any dividends for the periods ended June 30, 2021, and June 30, 2022 [173]. - As of June 30, 2022, Mr. Huang holds 63,645,000 shares, representing 53.04% of the company's equity, through A&B Development Holding Limited [98]. - Mr. Ma and Mr. Yan each hold 1,000,000 shares, representing 0.83% of the company's equity, under the stock option plan [99]. - A&B Development Holding Limited, fully owned by Mr. Huang, is the beneficial owner of 63,645,000 shares, equating to 53.04% of the equity [103]. - Ms. Lin, as Mr. Huang's spouse, is also considered to have an interest in the 63,645,000 shares held by A&B Development Holding Limited [104]. Governance and Compliance - The board of directors confirmed that the report's information is accurate and complete, with no misleading or fraudulent elements [3]. - The company proposed amendments to its Articles of Association to enhance corporate governance and comply with shareholder protection standards, which were approved at the annual general meeting on May 11, 2022 [92]. - The board has adopted trading standards for directors in compliance with GEM Listing Rules, ensuring adherence to regulations throughout the period [121]. - The company has complied with all applicable social security and housing fund contribution requirements under Chinese laws and regulations [79]. - No related party transactions or ongoing related party transactions were conducted during the period, adhering to GEM listing rules [94]. Risks and Challenges - The company faces significant risks including low entry barriers in the exhibition services industry and reliance on the automotive sector [61][62]. - Future expansion strategies may face resource allocation pressures and potential cost increases due to market conditions [72]. - The group has no significant foreign exchange risk as its main business transactions are conducted in RMB [80]. - The company has not reported any significant changes in risk management policies since the last fiscal year [151].
天平道合(08403) - 2022 - 中期财报