瑞和数智(03680) - 2023 - 中期业绩

Performance Summary Performance Summary In the first half of 2023, the company faced performance challenges, with total revenue decreasing by 29.7% year-on-year and net loss widening by 68.5%, primarily due to tightened IT budgets from financial institutions, increased market competition, and significant asset impairment provisions Key Performance Indicators for H1 2023 | Indicator | H1 2023 | H1 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Revenue (RMB million) | Approx. 121.0 | Approx. 172.0 | -29.7% | | Gross Profit (RMB million) | Approx. 25.3 | Approx. 43.43 | -41.7% | | Net Loss (RMB million) | Approx. 63.18 | Approx. 37.48 | +68.5% | | Basic Loss Per Share (RMB cents) | 12.40 | 9.12 | - | | Diluted Loss Per Share (RMB cents) | 12.40 | 9.14 | - | - The performance decline was primarily due to: (1) tightened IT and marketing budgets from financial institutions and increased market competition leading to lower gross profit; (2) asset impairment of approximately RMB 17.8 million on property, equipment, intangible assets, and right-of-use assets due to business strategy adjustments; and (3) impairment provisions of approximately RMB 9.92 million for financial and contract assets[13] Financial Statements Interim Condensed Consolidated Statement of Comprehensive Income During the reporting period, the company recorded total revenue of RMB 121.13 million, a 29.7% year-on-year decrease, with operating loss expanding to RMB 60.74 million and net loss for the period significantly increasing to RMB 63.18 million Consolidated Statement of Comprehensive Income for H1 2023 (RMB in thousands) | Item | H1 2023 (Unaudited) | H1 2022 (Unaudited) | | :--- | :--- | :--- | | Revenue | 121,126 | 172,238 | | Gross Profit | 25,302 | 43,432 | | Operating Loss | (60,742) | (32,223) | | Loss Before Income Tax | (64,628) | (37,555) | | Loss for the Period | (63,176) | (37,484) | | Loss Attributable to Owners of the Company | (62,141) | (36,765) | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2023, total assets decreased to RMB 387.15 million, total liabilities reduced to RMB 223.49 million, and total equity increased to RMB 163.66 million, with net current assets improving from negative to positive Key Items from Statement of Financial Position (RMB in thousands) | Item | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | | :--- | :--- | :--- | | Assets | | | | Non-current Assets | 140,315 | 174,463 | | Current Assets | 246,831 | 236,420 | | Total Assets | 387,146 | 410,883 | | Liabilities and Equity | | | | Non-current Liabilities | 14,214 | 7,706 | | Current Liabilities | 209,272 | 299,664 | | Total Liabilities | 223,486 | 307,370 | | Total Equity | 163,660 | 103,513 | | Net Current Assets | 37,559 | (63,244) | Notes to the Financial Statements The notes detail accounting policies, account breakdowns, and changes, including revenue by business line, significant asset impairment, increased expected credit loss provisions for trade and contract assets, and the composition and collateral of bank borrowings Note 4: Revenue and Segment Information The company operates as a single segment, with total revenue of RMB 121.13 million in H1 2023, entirely from mainland China, where data solutions, the primary revenue source, decreased by 32.2% Revenue by Business Segment (RMB in thousands) | Business Segment | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Data Solutions | 88,885 | 131,136 | | Sales of Software, Hardware and Related Services | 21,771 | 24,589 | | IT Maintenance and Support Services | 10,470 | 16,513 | | Total | 121,126 | 172,238 | Note 9: Property, Equipment, Intangible Assets and Right-of-Use Assets Due to deteriorating performance of certain cash-generating units, the company recognized a total impairment loss of RMB 17.8 million in H1 2023, including RMB 12 million for intangible assets, RMB 3.1 million for property and equipment, and RMB 2.7 million for right-of-use assets Asset Impairment Losses for H1 2023 (RMB in thousands) | Asset Category | Impairment Loss | | :--- | :--- | | Property and Equipment | 3,100 | | Intangible Assets | 12,000 | | Right-of-Use Assets | 2,700 | | Total | 17,800 | Note 10: Trade Receivables As of June 30, 2023, net trade receivables decreased to RMB 67.54 million from RMB 82.32 million at the beginning of the period, while the allowance for expected credit losses increased to RMB 51.43 million, indicating higher collection risk Trade Receivables and Provisions (RMB in thousands) | Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Gross Trade Receivables | 118,970 | 129,982 | | Less: Provisions | (51,429) | (47,660) | | Net Carrying Amount | 67,541 | 82,322 | Note 13: Bank and Other Borrowings As of June 30, 2023, total bank and other borrowings increased to RMB 94.51 million, with RMB 84.51 million being current, primarily secured by company properties, trade receivables, pledged deposits, and director guarantees Composition of Bank and Other Borrowings (RMB in thousands) | Category | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Non-current | 10,000 | 2,461 | | Current | 84,511 | 79,130 | | Total | 94,511 | 81,591 | - Bank financing is supported by various asset pledges and personal guarantees, including properties (approx. RMB 9.76 million), trade receivables from specific customers (approx. RMB 50.14 million), pledged bank deposits (approx. RMB 1.01 million), and personal guarantees from directors and related parties[68][91] Management Discussion and Analysis Industry Background Analysis In H1 2023, supportive government policies for data, AI, and Xinchuang (IT Application Innovation) development, particularly in finance and government sectors, created a favorable macro environment and significant opportunities for the company - The Chinese government issued the 'Overall Layout Plan for Building a Digital China,' promoting deep integration of digital technology with the real economy and establishing the National Data Bureau to coordinate data resource development and utilization, providing top-level design support for industry growth[130] - The Xinchuang (Information Technology Application Innovation) industry received favorable policies, with the State-owned Assets Supervision and Administration Commission requiring 100% Xinchuang replacement by state-owned enterprises by 2027, significantly boosting market potential[131] - Cities like Beijing, Shanghai, and Shenzhen introduced policies to accelerate AI scenario development and 'AI+Industries' applications, creating market opportunities for the company's AI solutions in sectors such as finance[75] H1 2023 Performance Review Despite a challenging market, the company expanded its client base, maintained 100% client retention, enhanced R&D with 35 patents and 145 software copyrights, and strengthened its Xinchuang competitiveness through strategic partnerships with industry leaders - Market Expansion: Added a new state-owned large bank client, secured a traffic operation model project with a national joint-stock bank, and maintained a 100% renewal rate with key clients[134][135] - Independent Innovation: Accumulated 35 national invention patents and 145 computer software copyrights, with a subsidiary recognized as a national 'Little Giant' enterprise specializing in niche sectors[104][105] - Ecosystem Collaboration: Jointly launched intelligent marketing solutions with Huawei, became one of the first ecosystem partners for Baidu's 'Wenxin Yiyan,' and collaborated with Kylinsoft and GBase to develop financial Xinchuang solutions[138][139][108] Future Outlook The company plans to capitalize on increased bank IT spending and Xinchuang localization by focusing on AI big data product R&D, expanding solution offerings, securing multi-channel financing, and deepening ecosystem partnerships with tech giants like Huawei and Alibaba - Product R&D: Focus on AI big data products, increase R&D investment, apply AI large model technology, and build technological barriers[112] - Market Expansion: Seize opportunities from Xinchuang localization and digital transformation, provide integrated software, hardware, and service solutions, and achieve scale expansion[144] - Financing Development: Plan to optimize shareholder structure and secure funding through multi-channel financing, including external funding and strategic investors[115] - Ecosystem Collaboration: Continuously strengthen cooperation with tech giants like Huawei and Alibaba to jointly build a diversified ecosystem[116] Financial Review This section analyzes H1 2023 financial performance, detailing revenue and gross profit declines, changes in operating expenses, the impact of asset impairments on net loss, cash flow stability through financing, and a significant reduction in the gearing ratio Revenue Analysis Revenue for the period was RMB 121.13 million, a 29.7% year-on-year decrease, with all business segments declining, notably the core data solutions business by 32.2% due to tightened IT and marketing budgets from financial institutions Revenue by Business Segment and Change (RMB in thousands) | Business Segment | H1 2023 | H1 2022 | YoY Change | | :--- | :--- | :--- | :--- | | Data Solutions | 88,885 | 131,136 | -32.2% | | Sales of Software, Hardware and Related Services | 21,771 | 24,589 | -11.5% | | IT Maintenance and Support Services | 10,470 | 16,513 | -36.6% | | Total | 121,126 | 172,238 | -29.7% | Gross Profit and Gross Margin Analysis Gross profit decreased by 41.7% to RMB 25.3 million, with gross margin falling from 25.2% to 20.9%, primarily due to fewer market orders and lower margins on newly acquired projects amidst increased competition - Gross profit was approximately RMB 25.3 million, a 41.7% year-on-year decrease[149] - Gross margin was 20.9%, compared to 25.2% in the same period last year[149] Loss for the Period Analysis Net loss for the period increased by 68.5% to approximately RMB 63.18 million, mainly driven by a RMB 18.13 million decline in gross profit, RMB 17.8 million in asset impairment, and RMB 9.92 million in financial and contract asset provisions - The increase in loss was primarily due to: (1) a decrease in gross profit of approximately RMB 18.13 million; (2) impairment of property, equipment, intangible assets, and right-of-use assets totaling approximately RMB 17.8 million; and (3) impairment provisions for financial and contract assets of approximately RMB 9.92 million[153] Liquidity and Financial Resources Net cash outflow from operating activities decreased to RMB 51.59 million, while net cash outflow from investing activities significantly reduced, and net cash inflow from financing activities of RMB 106.45 million, mainly from share issuance, effectively bolstered the company's liquidity Cash Flow Statement Summary (RMB in thousands) | Item | H1 2023 | H1 2022 | | :--- | :--- | :--- | | Net Cash from Operating Activities | (51,588) | (78,732) | | Net Cash from Investing Activities | (698) | (24,155) | | Net Cash from Financing Activities | 106,448 | 110,410 | Gearing Ratio The gearing ratio (total borrowings/total equity) significantly decreased from 143.6% at the end of 2022 to 82.7% as of June 30, 2023, primarily due to an increase in total equity and a reduction in certain liabilities during the period - As of June 30, 2023, the gearing ratio was approximately 82.7%, a significant decrease from 143.6% as of December 31, 2022[186] Other Information Remuneration Policy and Employee Benefits As of June 30, 2023, the Group had 688 employees and offered competitive remuneration and discretionary bonuses based on performance, maintaining stable labor relations during the reporting period - As of June 30, 2023, the Group had 688 employees in mainland China and Hong Kong[4] Use of Net Proceeds from Share Offer The company's 2019 IPO generated approximately HKD 104 million in net proceeds, mostly utilized as planned, with HKD 3.5 million remaining for AI lab and office facilities, extended for use until June 30, 2024 Use of Net Proceeds (HKD in millions) | Purpose | Allocated Amount | Amount Utilized | Unutilized Amount | | :--- | :--- | :--- | :--- | | Enhance Data Solutions Portfolio | 20.8 | 20.8 | – | | Enhance Sales and Marketing | 20.8 | 20.8 | – | | Develop Financial AI Lab, etc. | 36.4 | 32.9 | 3.5 | | Potential Strategic Acquisitions | 6.6 | 6.6 | – | | Working Capital and Others | 19.4 | 19.4 | – | | Total | 104.0 | 100.5 | 3.5 | Interim Dividend The Board of Directors does not recommend an interim dividend for the six months ended June 30, 2023, consistent with the prior year - The Board does not recommend an interim dividend for the reporting period (H1 2022: nil)[5]