嘉兴燃气(09908) - 2023 - 中期业绩

Interim Results Announcement Financial Summary Jiaxing Gas Group reported H1 2023 unaudited interim results, with revenue down 6.62%, but significant growth in gross profit and profit attributable to owners, improved basic EPS, and an interim dividend declared | Metric | June 30, 2023 (RMB million) | Same Period 2022 (RMB million) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,218.1 | 1,304.5 | -6.62% | | Gross Profit | 102.1 | 94.4 | +8.16% | | Profit Attributable to Owners of the Company | 159.3 | 28.6 | +456.99% | | Basic Earnings Per Share (RMB) | 1.16 | 0.21 | +452.38% | | Interim Dividend (RMB per share) | 0.20 | None | N/A | Interim Condensed Consolidated Financial Information Interim Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income For H1 2023, group revenue decreased year-on-year, yet gross profit and period profit significantly grew, primarily due to joint venture contributions, while other comprehensive income was negative | Metric | 2023 (RMB thousand) | 2022 (RMB thousand) | Y-o-Y Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 1,218,105 | 1,304,538 | -6.62% | | Cost of Sales | (1,115,997) | (1,210,165) | -7.78% | | Gross Profit | 102,108 | 94,373 | +8.19% | | Profit Before Tax | 173,546 | 45,481 | +281.59% | | Profit for the Period | 164,732 | 32,718 | +403.51% | | Profit Attributable to Owners of the Parent | 159,302 | 28,566 | +457.88% | | Non-controlling Interests | 5,430 | 4,152 | +30.78% | | Other Comprehensive Income for the Year, Net of Tax | (1,962) | (46) | -4165.22% | | Total Comprehensive Income for the Year | 162,770 | 32,672 | +398.20% | Interim Condensed Consolidated Statement of Financial Position As of June 30, 2023, total assets and liabilities increased, driven by substantial growth in joint venture investments, cash, and trade receivables, while net current assets decreased due to doubled current liabilities | Metric | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Assets | | | | | Total Non-current Assets | 1,636,529 | 1,444,837 | +13.27% | | Investments in Joint Ventures | 461,308 | 323,426 | +42.64% | | Total Current Assets | 1,155,347 | 631,990 | +82.82% | | Cash and Cash Equivalents | 460,833 | 220,691 | +108.82% | | Trade and Bills Receivables | 370,612 | 207,459 | +78.65% | | Liabilities and Equity | | | | | Total Current Liabilities | 1,078,449 | 525,536 | +105.19% | | Trade and Bills Payables | 573,108 | 305,536 | +87.59% | | Total Non-current Liabilities | 705,166 | 673,782 | +4.66% | | Total Equity | 1,008,261 | 877,509 | +14.90% | | Net Current Assets | 76,898 | 106,454 | -27.77% | Notes to the Interim Condensed Consolidated Financial Information Company Information Jiaxing Gas Group, listed on HKEX since 2020, is a Chinese share company primarily engaged in gas sales, construction, installation, and related services in Jiaxing, with no single controlling shareholder - Company's principal activities include gas sales (piped natural gas, LNG, LPG), construction and installation services, natural gas transportation, steam and building materials sales, and property leasing[59] - The company's shares have been listed on the Main Board of the Hong Kong Stock Exchange since July 16, 2020[61] - As of June 30, 2023, the company had no single controlling shareholder, with parties acting in concert holding approximately 25.42% and Jiaxing City Urban Investment Development Group Co., Ltd. holding approximately 23.76%[60] Basis of Preparation and Changes in Accounting Policies Interim financial information is prepared under IAS 34, adopting new IFRS standards with limited impact on financial position or performance, primarily affecting annual disclosure - The interim financial information is prepared in accordance with IAS 34 and should be read in conjunction with the 2022 annual consolidated financial statements[62] - The Group first adopted amendments to IAS 8, clarifying the distinction between accounting estimates and changes in accounting policies, with no impact on financial position or performance[25] - The Group first adopted amendments to IAS 1, requiring disclosure of material accounting policy information, expected to impact accounting policy disclosures in the annual consolidated financial statements[27] - The Group first adopted amendments to IAS 12, concerning deferred tax arising from a single transaction and international tax reform, with no impact on the interim condensed consolidated financial statements, as the Group is not within the scope of Pillar Two rules[28][30] Operating Segment Information The Group operates a single reportable segment, focusing on gas sales, construction, installation, and related services within Jiaxing, China, thus no further segment analysis is presented - The Group has only one reportable operating segment, with its principal activities concentrated in gas sales, construction and installation services, and related activities in Jiaxing, China[31] Geographical Information All Group revenue is derived from external customers in mainland China, with geographical information based on customer location | Region | June 30, 2023 (RMB thousand) | June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Mainland China | 1,218,105 | 1,304,538 | Seasonality of Business While gas sales revenue typically peaks in winter due to heating demand, management does not consider the Group's business to be "highly susceptible to seasonal fluctuations" - Sales revenue is typically higher in winter due to increased gas consumption for heating[33] - Management believes the Group's business is not "highly susceptible to seasonal fluctuations"[33] Revenue Group revenue for H1 2023 decreased by 6.62% to RMB 1,218,105 thousand, primarily due to lower natural gas procurement costs leading to reduced non-residential sales prices | Revenue Source | June 30, 2023 (RMB thousand) | June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Sales of Goods | 1,126,245 | 1,216,247 | | Provision of Construction Services | 60,548 | 55,615 | | Provision of Installation and Management Services | 24,776 | 23,392 | | Provision of Gas Storage Services | – | 4,799 | | Provision of Transportation Services | 837 | 1,097 | | Others | 2,240 | 999 | | Total Rental Income | 6,154 | 6,664 | | Less: Government Surcharges | (2,695) | (4,275) | | Total Revenue | 1,218,105 | 1,304,538 | | Type of Goods or Services | June 30, 2023 (RMB thousand) | June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Sales of Piped Natural Gas | 946,981 | 983,140 | | Sales of Liquefied Natural Gas | 73,176 | 95,339 | | Sales of Liquefied Petroleum Gas | 55,250 | 76,027 | | Sales of Steam | 17,075 | 17,727 | | Sales of Electricity | 888 | 519 | | Sales of Other Gas | 28,648 | 40,219 | | Sales of Building Materials | 3,158 | 3,276 | | Provision of Construction Services | 60,630 | 55,615 | | Provision of Installation and Management Services | 24,776 | 23,392 | | Provision of Gas Storage Services | – | 4,799 | | Provision of Gas Transportation Services | 837 | 1,097 | | Others | 3,227 | 999 | | Total Revenue from Contracts with Customers | 1,214,646 | 1,302,149 | - Revenue decreased by 6.62% year-on-year, primarily due to lower natural gas procurement prices leading to downward adjustments in non-residential sales prices[72] Profit Before Tax The Group's profit before tax is influenced by cost of inventories sold, cost of services, loss on disposal of PPE, and a significant increase in impairment of financial instruments reported at amortized cost | Item | June 30, 2023 (RMB thousand) | June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Cost of Inventories Sold | 1,066,080 | 1,177,142 | | Cost of Services Provided | 49,917 | 33,023 | | Loss on Disposal of Property, Plant and Equipment | 3,079 | 869 | | Net Impairment of Trade Receivables | 6,662 | 352 | | Impairment of Financial Instruments Reported at Amortized Cost | 15,850 | – | | Financial Assets Measured at Fair Value Through Profit or Loss | 1,373 | 6,473 | Income Tax Group income tax is levied based on profit in respective jurisdictions, with Hong Kong profits tax at 16.5% and mainland China corporate income tax at 25%, resulting in decreased tax expense and a lower effective tax rate - Hong Kong profits tax rate is 16.5%, while mainland China corporate income tax rate is 25%, with preferential tax rates for small-profit enterprises[39] | Item | June 30, 2023 (RMB thousand) | June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Current Tax: China Income Tax for the Period | 7,322 | 9,928 | | Deferred Tax | 1,492 | 2,835 | | Total Tax Expense for the Period | 8,814 | 12,763 | | Effective Tax Rate | 5.08% | N/A | Dividends The Board declared an interim dividend of RMB 0.20 per share for H1 2023, totaling approximately RMB 27.57 million, with no interim dividend declared in the prior year | Item | June 30, 2023 (RMB thousand) | June 30, 2022 (RMB thousand) | | :--- | :--- | :--- | | Final Dividend Declared and Paid – RMB 0.20 per ordinary share (2022: RMB 0.15) | 27,569 | 20,677 | - The Board declared an interim dividend of RMB 0.20 per ordinary share, totaling approximately RMB 27,568,900, with no interim dividend declared for the same period last year[44] Earnings Per Share Basic and diluted earnings per share for H1 2023 significantly increased to RMB 1.16, calculated based on profit attributable to ordinary equity holders and the weighted average number of shares outstanding | Metric | June 30, 2023 (RMB) | June 30, 2022 (RMB) | | :--- | :--- | :--- | | Basic and Diluted Earnings Per Share | 1.16 | 0.21 | | Profit Attributable to Ordinary Equity Holders of the Parent (RMB thousand) | 159,302 | 28,566 | | Weighted Average Number of Ordinary Shares Outstanding (shares) | 137,844,500 | 137,844,500 | Property, Plant and Equipment As of June 30, 2023, the carrying value of property, plant and equipment slightly increased, with changes from additions, depreciation, transfers, and disposals, and some assets are pledged for bank loans | Item | June 30, 2023 (RMB thousand) | | :--- | :--- | | Opening Net Book Value (audited) | 576,333 | | Additions | 34,556 | | Depreciation Expense for the Period | (25,667) | | Transfer from Investment Properties | 8,279 | | Transfer to Investment Properties | (10,186) | | Disposals | (3,079) | | Closing Net Book Value (unaudited) | 580,236 | | Net Book Value Pledged as Collateral | RMB 7,028,020.00 | Trade and Bills Receivables As of June 30, 2023, total trade and bills receivables significantly increased, driven by a substantial rise in bills receivable, with the majority of receivables aged within one year | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Receivables | 214,022 | 201,105 | +6.42% | | Bills Receivables | 173,109 | 16,211 | +967.84% | | Impairment | (16,519) | (9,857) | +67.59% | | Total | 370,612 | 207,459 | +78.65% | | Aged within 1 year | 357,210 | 201,980 | +76.86% | | Aged over 1 year | 13,402 | 5,479 | +144.62% | Trade and Bills Payables As of June 30, 2023, total trade and bills payables significantly increased, with substantial growth in both trade payables and bills payable, and most payables are aged within one year | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Trade Payables | 439,801 | 243,036 | +80.14% | | Bills Payables | 133,307 | 62,500 | +113.29% | | Total | 573,108 | 305,536 | +87.59% | | Aged within 1 year | 568,258 | 303,791 | +87.08% | | Aged 1 to 2 years | 4,190 | 1,082 | +287.25% | | Aged over 2 years | 660 | 663 | -0.45% | Interest-bearing Bank Borrowings As of June 30, 2023, total interest-bearing bank borrowings increased, comprising secured and unsecured loans at floating rates, with certain assets pledged as collateral | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Current Secured Bank Loans | 34,440 | 34,440 | 0.00% | | Non-current Secured Bank Loans | 177,120 | 189,340 | -6.56% | | Current Unsecured Bank Loans | 50,200 | – | N/A | | Non-current Unsecured Bank Loans | 49,800 | – | N/A | | Total Borrowings | 311,560 | 223,780 | +39.23% | | Repayable within 1 year or on demand | 84,640 | 34,440 | +145.77% | | Total Carrying Value of Pledged Assets | 116,968 | 120,447 | -2.89% | - All utilized bank loans are floating-rate loans, with annual interest rates ranging from 3.65% to 4.39%[80] Share Capital As of June 30, 2023, the company's ordinary share capital remained unchanged from December 31, 2022, with 137,844,500 shares at a par value of RMB 137,845 thousand | Item | Number of Shares | Par Value (RMB thousand) | | :--- | :--- | :--- | | Ordinary Shares (June 30, 2023) | 137,844,500 | 137,845 | | Ordinary Shares (December 31, 2022) | 137,844,500 | 137,845 | Contingent Liabilities As of June 30, 2023, the Group no longer provides bank loan guarantees for its joint venture, Hangjiaxin, which has replaced the guarantee with its own assets, resulting in no significant contingent liabilities | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Guaranteed Bank Loans for Zhejiang Hangjiaxin Clean Energy Co., Ltd. | – | 477,252 | - As of June 30, 2023, the Group no longer provides any guarantees for its joint venture, Hangjiaxin[57] Capital Commitments As of June 30, 2023, the Group's contracted but unprovided capital commitments for property, plant and equipment amounted to RMB 2,959 thousand, a decrease from the end of 2022 | Item | June 30, 2023 (RMB thousand) | December 31, 2022 (RMB thousand) | | :--- | :--- | :--- | | Contracted but not provided for: Property, Plant and Equipment | 2,959 | 3,424 | Management Discussion and Analysis Industry Overview In H1 2023, China's natural gas consumption resumed positive growth, supported by price reforms and a unified pipeline network, enabling city gas companies to secure lower-cost gas sources - In H1 2023, China's natural gas consumption reached 194.1 billion cubic meters, a 5.6% year-on-year increase, resuming positive growth[65] - Natural gas price reforms are advancing, with source and sales price linkage adjustments helping to alleviate pressure from inverted residential gas prices[65] - Under the "X+1+X" reform, a unified natural gas pipeline network has largely formed, allowing city gas companies to directly access primary gas sources and reduce procurement costs[66] Performance Review In the reporting period, the Group's total gas sales volume increased by 2.62% to 275 million cubic meters, serving 443,000 residential and 2,324 industrial/commercial users, with joint venture Hangjiaxin significantly boosting gross profit - Total gas sales volume for the reporting period was 275 million cubic meters, a 2.62% year-on-year increase[67] - As of the end of the reporting period, the Group operated a natural gas pipeline network totaling 1,112.51 kilometers[67] - The Group provides gas supply services to approximately 443,000 residential users and 2,324 industrial and commercial users[68] - Joint venture Hangjiaxin's gross profit significantly increased due to lower long-term LNG procurement agreement prices and rising international spot LNG sales prices[69] Development Strategy and Outlook The company plans to strengthen its urban pipeline network and storage, secure low-cost gas to mitigate residential gas price inversions, leverage its Dushan Port terminal for LNG-pipeline gas synergy, and explore new energy businesses for sustainable growth - The Group will strengthen its urban pipeline network and storage capacity, fulfilling its responsibility for continuous supply[71] - Efforts will be made to secure high-quality, low-cost gas sources to alleviate operational pressure from inverted residential natural gas prices[71] - The Dushan Port receiving terminal will be utilized to achieve synergy and hedging between LNG and pipeline gas, enhancing supply capacity and price competitiveness[71] - The Group will further explore and expand new energy businesses to achieve sustainable development[71] Financial Overview This section reviews H1 2023 financial performance, highlighting revenue decrease, significant gross profit and attributable profit growth, reduced other income, lower finance costs, and decreased income tax expense - Revenue decreased by 6.62% year-on-year, primarily due to lower natural gas procurement prices leading to downward adjustments in non-residential sales prices[72] - Gross profit increased by 8.16% year-on-year, mainly due to lower natural gas procurement prices and reduced losses from inverted residential gas sales prices[73] - Other income and gains decreased by 51.61% year-on-year, primarily due to higher Hong Kong dollar exchange gains in the prior year[74] - Finance costs decreased by 9.84% year-on-year, mainly due to reduced interest expenses on discounted bank acceptance bills[75] - Income tax expense decreased year-on-year, with an effective tax rate of 5.08% for the period[76] - Profit attributable to owners of the parent increased by 456.99% year-on-year, primarily due to the higher gross profit from joint venture Hangjiaxin[78] Liquidity, Financial Position and Capital Structure As of June 30, 2023, the Group saw a substantial increase in current assets and cash, a slight decrease in current ratio, and increased asset-liability and capital-to-debt ratios, while maintaining a net cash position with available credit | Metric | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Current Assets | RMB 1,155.3 million | RMB 632.0 million | | Cash and Bank Balances | RMB 460.8 million | N/A | | Current Ratio (Current Assets/Current Liabilities) | 1.1 | 1.2 | | Asset-Liability Ratio (Total Liabilities/Total Assets) | 63.89% | 57.75% | | Utilized Bank Loans | RMB 311.6 million | N/A | | Debt-to-Equity Ratio | -0.69% | 15.17% | | Capital-to-Debt Ratio | 49.03% | 45.59% | - The Group has an unused bank credit facility balance of RMB 783.3 million[80] - The Group maintains a net cash position[81] Exchange Rate Fluctuation Risk The Group's primary foreign exchange risk stems from its joint venture Hangjiaxin's USD-denominated LNG transactions, which can impact the Group's share of profit, necessitating close monitoring and mitigation - Foreign exchange risk primarily arises from joint venture Hangjiaxin's LNG purchases and sales settled in US dollars[82] Contingent Liabilities (MD&A) As of June 30, 2023, the Group no longer provides bank loan guarantees for its joint venture Hangjiaxin, which has replaced the guarantee with its own assets, resulting in no significant contingent liabilities - The Group no longer provides bank loan guarantees for its joint venture Hangjiaxin[83] - As of June 30, 2023, the Group had no significant contingent liabilities[84] Financial Guarantee Liabilities and Pledged Assets As of June 30, 2023, the Group has no financial guarantee liabilities, but has pledged investment properties and property, plant and equipment totaling RMB 116.9 million to secure bank financing - As of June 30, 2023, the Group had no financial guarantee liabilities[86] | Pledged Assets | June 30, 2023 (RMB million) | December 31, 2022 (RMB million) | | :--- | :--- | :--- | | Investment Properties | 109.9 | 113.3 | | Property, Plant and Equipment | 7.0 | 7.1 | | Total | 116.9 | 120.4 | Significant Acquisitions and Disposals During the reporting period, Jiaxing Jaran Construction Co., Ltd., a wholly-owned subsidiary, acquired a 10% equity stake in Yancheng Xingzhou Jiayuan Real Estate Development Co., Ltd., making it an associate, with no other significant acquisitions or disposals - Jiaxing Jaran Construction Co., Ltd. acquired a 10% equity stake in Yancheng Xingzhou Jiayuan Real Estate Development Co., Ltd., making it an associate of the company[88] - No other significant acquisitions or disposals were undertaken during the reporting period[88] Human Resources and Employee Remuneration As of June 30, 2023, the Group employed 378 staff with total employee costs of approximately RMB 30.6 million, focusing on training and competitive compensation to enhance professional skills and customer service - As of June 30, 2023, the Group had 378 employees (June 30, 2022: 375 employees)[89] - Total employee costs for the period were approximately RMB 30.6 million (same period 2022: RMB 32.0 million)[89] - The Group enhances employee professional skills and overall quality through targeted training programs and competitive remuneration packages[89] Other Information Events After Reporting Period No significant events have occurred since the end of the reporting period up to the date of this announcement - No significant events have occurred since the end of the reporting period up to the date of this announcement[91] Significant Litigation During the reporting period, the company was not involved in any significant litigation or arbitration, and the directors are unaware of any outstanding or threatened material lawsuits or claims - The company was not involved in any significant litigation or arbitration during the reporting period[97] Use of Net Proceeds from Listing The net proceeds of approximately RMB 302.1 million from the company's H-share listing were fully utilized as described in the prospectus by December 31, 2022 - Net proceeds of approximately RMB 302.1 million from the listing were fully utilized as described in the prospectus by December 31, 2022[97] Purchase, Sale or Redemption of Listed Securities During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - Neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities during the reporting period[98] Corporate Governance and Other Information The company has adopted the HKEX Corporate Governance Code and strives for high governance standards, with deviations noted for the combined Chairman/CEO role and the absence of a formal dividend policy - The company has adopted the HKEX Corporate Governance Code and is committed to maintaining high standards of corporate governance[93][99] - The roles of Chairman and Chief Executive Officer are combined and held by Mr. Sun Lianqing, deviating from Code Provision C.2.1 of the Corporate Governance Code[94] - The company has not adopted a formal dividend policy, deviating from Code Provision F.1.1, as the Board deems it inappropriate at this stage[101] Standard Code for Securities Transactions The company has adopted a code of conduct for directors and supervisors trading company securities, which is no less stringent than the Listing Rules' Model Code, and all confirmed compliance during the period - The company has adopted a code of conduct for directors and supervisors trading company securities, and all directors and supervisors confirmed compliance during the reporting period[102] Interim Dividend The Board approved an interim dividend of RMB 0.20 per share (tax inclusive) for H1 2023, totaling RMB 27.57 million, with H-share dividends payable in HKD at a specified exchange rate, subject to tax withholding - An interim dividend of RMB 0.20 per share (tax inclusive) for 2023 was declared, totaling approximately RMB 27,568,900[104] - H-share dividends will be paid in Hong Kong dollars, converted at an exchange rate of HKD 1: RMB 0.916738, equivalent to HKD 0.2182 per share (tax inclusive)[104] - The company will withhold and pay 10% corporate income tax on behalf of non-resident enterprise H-share shareholders[105] - Individual H-share shareholders' personal income tax withholding rates range from 10% to 20%, depending on their resident status and tax treaties[106] Suspension of Share Register Closure To determine H-share shareholders' entitlement to the 2023 interim dividend, the H-share register will be closed from September 20 to September 25, 2023, with a deadline for transfer documents on September 19 | Item | Date/Time | | :--- | :--- | | Latest time for lodging share transfer documents for registration | September 19, 2023 (Tuesday) at 4:30 p.m. | | Suspension of H-share register closure (both days inclusive) | September 20, 2023 (Wednesday) to September 25, 2023 (Monday) | | Record Date | September 25, 2023 (Monday) | Audit Committee and Review of Interim Financial Statements The company's Audit Committee has reviewed the Group's accounting principles, policies, and unaudited interim results, confirming compliance with applicable accounting standards and adequate disclosure without objection - The Audit Committee has reviewed the interim results, confirming compliance with applicable accounting standards and requirements, adequate disclosure, and no objections to the accounting treatments adopted[112] Publication of Interim Results and 2023 Interim Report This announcement is published on the company and HKEX websites, and the 2023 interim report will be dispatched to shareholders and published online in due course - This announcement has been published on the company's website (http://www.jxrqgs.com) and the HKEX website (http://www.hkexnews.hk)[113](index=113&type=chunk) - The 2023 interim report will be dispatched to shareholders and published on the company and HKEX websites in due course[113]