中国淀粉(03838) - 2023 - 中期业绩

Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income For the six months ended June 30, 2023, the company turned from profit to loss, with revenue largely flat year-on-year, but gross profit significantly declined by over 75%, resulting in an operating loss of 45.74 million RMB and a net loss of 28.96 million RMB Summary of Consolidated Statement of Profit or Loss (For the six months ended June 30) | Metric | 2023 (thousand RMB) | 2022 (thousand RMB) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 5,814,323 | 5,814,428 | -0.002% | | Gross Profit | 175,247 | 725,479 | -75.8% | | Operating (Loss)/Profit | (45,735) | 445,206 | Turned from profit to loss | | (Loss)/Profit for the Period | (28,959) | 364,695 | Turned from profit to loss | | (Loss)/Profit attributable to owners of the Company | (37,754) | 262,330 | Turned from profit to loss | | (Loss)/Earnings per share (RMB) | (0.0063) | 0.0438 | Turned from profit to loss | Consolidated Statement of Financial Position As of June 30, 2023, the company's total assets were 4.916 billion RMB, a slight decrease from the end of 2022, with total liabilities decreasing to 1.162 billion RMB and total owners' equity at 3.753 billion RMB, maintaining an overall stable financial structure Summary of Consolidated Statement of Financial Position | Metric | June 30, 2023 (thousand RMB) | December 31, 2022 (thousand RMB) | | :--- | :--- | :--- | | Assets | | | | Total Non-current Assets | 2,509,497 | 2,439,327 | | Total Current Assets | 2,406,012 | 2,666,521 | | Total Assets | 4,915,509 | 5,105,848 | | Equity and Liabilities | | | | Total Equity | 3,753,285 | 3,821,783 | | Total Non-current Liabilities | 272,040 | 318,132 | | Total Current Liabilities | 890,184 | 965,933 | | Total Liabilities | 1,162,224 | 1,284,065 | Management Discussion and Analysis Industry Overview and Corporate Development In the first half of 2023, the market faced dual challenges of oversupply and weak demand, with significant price drops for corn starch and its derivatives, while downstream aquaculture demand contracted due to falling hog prices. To address these difficulties, the company optimized production, reduced inventory, strengthened quality supervision, and advanced its lysine expansion and polylactic acid pilot production line projects as planned - The market environment is severe, with key challenges including: - Oversupply: Manufacturers resuming operations led to product oversupply, while limited recovery in export demand caused product market prices to fall[38] - Weak Demand: Falling pork prices led to a reduction in pig farming scale, weakening demand for lysine[20] - Substitute Competition: Declining wheat and soybean prices, and their by-products, suppressed downstream use of corn starch products[60] - The company adopted multiple strategies to maintain competitive advantages, including optimizing production arrangements, reducing inventory levels to ease working capital pressure, and strengthening the product quality supervision system[21][61][39] - Key projects are progressing smoothly: the expansion of lysine annual production capacity from 300,000 tons to 500,000 tons, and the construction of a 5,000-ton annual capacity pilot production line for lactide and polylactic acid are both on schedule, with the target completion date remaining the end of 2023[61] Business Review During the reporting period, the company's two business segments showed divergent performance. Upstream products saw increased sales but a sharp decline in gross profit margin due to falling prices, while fermentation and downstream products experienced significant drops in both revenue and gross profit margin due to stagnant market demand Upstream Products Upstream product revenue increased by 5.3% year-on-year to 4.35 billion RMB, primarily driven by a significant increase in sales volume. However, due to market oversupply putting pressure on average selling prices, the gross profit margin sharply declined from 6.5% in the prior period to 0.4% Upstream Products Segment Performance (For the six months ended June 30) | Metric | 2023 (thousand RMB) | 2022 (thousand RMB) | | :--- | :--- | :--- | | Revenue | 4,349,545 | 4,132,319 | | Gross Profit | 16,051 | 268,389 | | Gross Profit Margin | 0.4% | 6.5% | - Corn starch sales volume increased to approximately 1,007,971 tons (2022: 927,221 tons), but the average selling price decreased to approximately 2,740 RMB per ton (2022: 2,936 RMB per ton)[46] Fermentation and Downstream Products Fermentation and downstream products segment revenue decreased by 12.9% year-on-year to 1.46 billion RMB, with gross profit margin falling from 27.2% to 10.9%. This was primarily due to weak demand in the lysine market caused by falling hog prices, leading to a significant drop in average selling prices. The modified starch business achieved revenue growth through new product development, becoming a highlight for this segment Fermentation and Downstream Products Segment Performance (For the six months ended June 30) | Metric | 2023 (thousand RMB) | 2022 (thousand RMB) | | :--- | :--- | :--- | | Revenue | 1,464,778 | 1,682,109 | | Gross Profit | 159,196 | 457,090 | | Gross Profit Margin | 10.9% | 27.2% | - Lysine product revenue decreased to 1.01 billion RMB (2022: 1.28 billion RMB), with the average selling price falling from 8,344 RMB per ton to 6,344 RMB per ton, despite sales volume increasing from 153,000 tons to 160,000 tons[48] - Modified starch revenue increased to 154 million RMB (2022: 95 million RMB), primarily due to the successful development of liquid modified starch[49] Financial Performance Analysis During the reporting period, the company's overall revenue slightly decreased, but gross profit significantly declined due to suppressed market prices and relatively higher production costs. The average purchase price of corn, a key raw material, remained higher than the prior period. All operating expenses decreased, with research and development expenses showing the most significant reduction - Although corn grain prices gradually decreased, the average purchase price during the reporting period remained higher than the prior period, at approximately 2,554 RMB per ton (2022: 2,529 RMB per ton)[69] - The decline in gross profit margin was primarily due to (i) suppressed market demand and prices for corn starch and related products, and (ii) relatively higher unit production costs[70] - All expenses decreased: - Distribution expenses: Decreased to 82.36 million RMB, as more customers opted for self-pickup and bulk transportation[72] - Administrative expenses: Decreased to 98.60 million RMB, mainly due to reduced government levies[85] - Research expenses: Significantly decreased to 94.06 million RMB, influenced by the number, progress, and available resources of new projects[86] Liquidity, Financial Resources and Capital Structure The company considers its working capital sufficient and financial position robust. As of the period end, all borrowings were short-term, and the gearing ratio significantly decreased from 9.4% to 4.6%. Operational efficiency metrics such as inventory turnover days and accounts receivable/payable turnover days remained stable Key Financial Ratios | Metric | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Accounts Receivable Turnover (days) | 11 | 11 | | Accounts Payable Turnover (days) | 6 | 7 | | Inventory Turnover (days) | 24 | 25 | | Current Ratio (times) | 2.7 | 2.8 | | Quick Ratio (times) | 2.0 | 1.9 | | Gearing Ratio (Borrowings/Total Assets) | 4.6% | 9.4% | - As of June 30, 2023, all of the Group's borrowings were short-term, totaling approximately 227 million RMB. Most borrowings were denominated in RMB and bore fixed interest rates[54] - As of June 30, 2023, the Group had a total of 2,310 employees (end of 2022: 2,392 employees), with total employee costs for the first half of the year approximately 139 million RMB[77] Dividends and Corporate Governance Interim Dividend The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2023, consistent with the policy for the prior period - The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2023 (2022: nil)[13][79] Corporate Governance During the reporting period, the company complied with the Corporate Governance Code in the Listing Rules. The Audit Committee has reviewed the unaudited financial statements for the current period - The company has complied with the applicable provisions of the Corporate Governance Code as set out in Appendix 14 to the Listing Rules[81] - The Audit Committee (comprising all independent non-executive directors) has reviewed the unaudited condensed consolidated interim financial statements for the six months ended June 30, 2023[82] Notes to the Financial Statements 3 Segment Information The company's business is divided into two reportable segments: Upstream Products and Fermentation and Downstream Products. In the first half of 2023, external sales for the Upstream Products segment were 4.35 billion RMB, and for Fermentation and Downstream Products, they were 1.46 billion RMB. In terms of segment results, Upstream Products recorded a loss of 93.32 million RMB, while Fermentation and Downstream Products recorded a profit of 58.50 million RMB Summary of Segment Results (For the six months ended June 30, 2023) | Item (thousand RMB) | Upstream Products | Fermentation and Downstream Products | Total | | :--- | :--- | :--- | :--- | | Sales to external customers | 4,349,545 | 1,464,778 | 5,814,323 | | Reportable segment results | (93,324) | 58,500 | (34,824) | 7 Earnings (loss) per share The loss attributable to owners of the company for the current period was 37.754 million RMB, resulting in a basic loss per share of 0.0063 RMB based on 5.994 billion weighted average ordinary shares outstanding. In the prior period, it was an earnings per share of 0.0438 RMB. Diluted loss per share is not presented as there are no potential dilutive ordinary shares Basic (Loss)/Earnings Per Share Calculation | Item | For the six months ended June 30 (2023) | For the six months ended June 30 (2022) | | :--- | :--- | :--- | | (Loss)/Profit attributable to owners of the Company (thousand RMB) | (37,754) | 262,330 | | Weighted average number of ordinary shares outstanding (thousand shares) | 5,994,132 | 5,994,132 | 9 Trade and other receivables As of the period end, total trade and other receivables were 480 million RMB, a decrease from 590 million RMB at the end of 2022. Trade receivables amounted to 183 million RMB, with a healthy aging profile, over 90% being within 30 days. Bank acceptance notes decreased to 151 million RMB Trade Receivables Aging Analysis (thousand RMB) | Aging | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | 0-30 days | 166,707 | 134,162 | | 31-60 days | 8,360 | 5,391 | | 61-90 days | 6,250 | 1,022 | | Over 90 days | 2,123 | 5,019 | | Total | 183,440 | 145,594 | 10 Trade and other payables As of the period end, total trade and other payables were 351 million RMB, a slight decrease from 369 million RMB at the end of 2022. Trade payables and bills payable combined amounted to 173 million RMB, with the aging analysis showing an increased proportion of amounts over 90 days Trade and Bills Payable Aging Analysis (thousand RMB) | Aging | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | 0-60 days | 107,588 | 163,355 | | 61-90 days | 8,680 | 2,558 | | Over 90 days | 57,076 | 30,590 | | Total | 173,344 | 196,503 |