奥星生命科技(06118) - 2023 - 中期业绩

Financial Summary Financial Summary for the Six Months Ended June 30, 2023 | Metric | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | Change | | :--- | :--- | :--- | :--- | | Revenue (million yuan) | 964 | 1,104 | -12.7% | | Gross Profit (million yuan) | 147 | 236 | -37.5% | | Gross Margin | 15.3% | 21.4% | -6.1pp | | (Loss)/Profit attributable to owners of the Company (million yuan) | (39.944) | 45.843 | Swung to Loss | | Basic (Loss)/Earnings per Share (RMB) | (0.08) | 0.09 | Swung to Loss | Balance Sheet Summary | Metric | June 30, 2023 | December 31, 2022 | Change | | :--- | :--- | :--- | :--- | | Total Assets (billion yuan) | 2.302 | 2.389 | -3.6% | | Net Assets (million yuan) | 810 | 884 | -8.4% | | Gearing Ratio | 34.8% | 27.8% | +7.0pp | Interim Results Interim Condensed Consolidated Statement of Profit or Loss For the six months ended June 30, 2023, the Group's revenue decreased by 12.7% to 964 million yuan, gross profit fell by 37.5% to 147 million yuan, and operating profit swung to a loss of 69.37 million yuan, resulting in a loss attributable to owners of the Company of 39.94 million yuan Key Items from Interim Condensed Consolidated Statement of Profit or Loss (RMB in thousands) | Item | 2023 H1 (Unaudited) | 2022 H1 (Unaudited) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 964,269 | 1,103,980 | -12.7% | | Cost of Sales | (816,996) | (868,245) | -5.9% | | Gross Profit | 147,273 | 235,735 | -37.5% | | Selling and Marketing Expenses | (92,978) | (83,777) | +11.0% | | Administrative Expenses | (86,656) | (67,812) | +27.8% | | Impairment Loss on Assets | (11,410) | – | Not Applicable | | Operating (Loss)/Profit | (69,368) | 46,013 | Swung to Loss | | (Loss)/Profit Before Income Tax | (70,286) | 48,234 | Swung to Loss | | (Loss)/Profit for the Period | (72,186) | 36,664 | Swung to Loss | | (Loss) Attributable to Owners of the Company | (39,944) | 45,843 | Swung to Loss | | Basic (Loss)/Earnings per Share (RMB) | (0.08) | 0.09 | Swung to Loss | Interim Condensed Consolidated Statement of Comprehensive Income During the reporting period, the Group recorded a total comprehensive loss of 72.82 million yuan, compared to a total comprehensive income of 53.04 million yuan in the prior period, primarily due to the swing from profit to loss and negative foreign currency translation differences - Total comprehensive loss attributable to owners of the Company was 36.85 million yuan, compared to a total comprehensive income of 62.15 million yuan in the prior period[45] - Exchange differences on translation of foreign operations resulted in a loss of 0.636 million yuan, compared to an income of 16.376 million yuan in the prior period, negatively impacting comprehensive income[45] Interim Condensed Consolidated Statement of Financial Position As of June 30, 2023, the Group's total assets were 2.302 billion yuan, a 3.6% decrease from the end of 2022, with total liabilities remaining stable at 1.492 billion yuan and total equity decreasing by 8.3% to 810 million yuan, while current assets saw reductions in inventories and trade receivables but an increase in contract assets Balance Sheet Summary (RMB in thousands) | Item | June 30, 2023 (Unaudited) | December 31, 2022 (Audited) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 2,302,221 | 2,388,763 | -3.6% | | Total Non-current Assets | 587,651 | 587,756 | -0.02% | | Total Current Assets | 1,714,570 | 1,801,007 | -4.8% | | Total Liabilities | 1,492,008 | 1,505,182 | -0.9% | | Total Non-current Liabilities | 156,170 | 145,417 | +7.4% | | Total Current Liabilities | 1,335,838 | 1,359,765 | -1.8% | | Total Equity | 810,213 | 883,581 | -8.3% | - Within current assets, inventories decreased from 388 million yuan to 330 million yuan, and trade and bills receivables decreased from 417 million yuan to 385 million yuan[53] - Among current liabilities, short-term borrowings increased from 172 million yuan to 265 million yuan, while contract liabilities decreased from 383 million yuan to 269 million yuan[55] Notes to the Interim Condensed Consolidated Financial Information Segment Information The Group operates through six business segments, with total revenue decreasing year-on-year to 964 million yuan during the reporting period, primarily due to significant declines in revenue and gross profit from Fluid and Bioprocess Systems and Life Science Consumables, while GMP Compliance Services and Pharmaceutical Equipment Distribution and Agency segments saw gross profit growth Revenue and Gross Profit by Business Segment (RMB in thousands) | Business Segment | 2023 H1 Revenue | 2022 H1 Revenue | 2023 H1 Gross Profit | 2022 H1 Gross Profit | | :--- | :--- | :--- | :--- | :--- | | Fluid and Bioprocess Systems | 371,814 | 497,778 | 4,527 | 63,038 | | Cleanroom and Automation Control and Monitoring Systems | 222,090 | 240,861 | 37,205 | 43,452 | | Powder and Solid Systems | 129,557 | 108,819 | 16,721 | 19,969 | | GMP Compliance Services | 50,448 | 44,292 | 23,451 | 18,018 | | Life Science Consumables | 161,205 | 195,538 | 55,789 | 85,546 | | Pharmaceutical Equipment Distribution and Agency | 29,155 | 16,692 | 9,580 | 5,712 | | Total | 964,269 | 1,103,980 | 147,273 | 235,735 | - Geographically, Mainland China remains the primary revenue source, accounting for 91.5% of total revenue with 882 million yuan, a year-on-year decrease of 12.9%[1] Income Tax Expense During the reporting period, the Group's income tax expense significantly decreased to 1.9 million yuan from 11.57 million yuan in the prior period, primarily due to lower profit before tax, with certain Chinese subsidiaries enjoying a preferential 15% corporate income tax rate as high-tech enterprises - Current income tax expense decreased from 9.988 million yuan in the prior period to 2.279 million yuan[5] - Certain subsidiaries of the Group in Mainland China (Shanghai Austar, Austar Hengxun, Austar Shijiazhuang) are certified as high-tech enterprises, enjoying a preferential tax rate of 15% compared to the standard rate of 25%[11] (Loss)/Earnings per Share For the six months ended June 30, 2023, the loss attributable to owners of the Company was 39.944 million yuan, resulting in a basic loss per share of RMB 0.08, compared to a basic earnings per share of RMB 0.09 in the prior period, with no diluted ordinary shares during the reporting period Calculation of Basic (Loss)/Earnings per Share | Item | 2023 H1 (Unaudited) | 2022 H1 (Unaudited) | | :--- | :--- | :--- | | (Loss)/Profit attributable to owners of the Company (RMB in thousands) | (39,944) | 45,843 | | Weighted average number of ordinary shares in issue (thousands) | 512,582 | 512,582 | | Basic (Loss)/Earnings per Share (RMB) | (0.08) | 0.09 | Dividends The Board of Directors decided not to declare an interim dividend for the six months ended June 30, 2023, consistent with the policy for the same period in 2022 - The Company did not declare an interim dividend for the six months ended June 30, 2023 (2022: nil)[6] Management Discussion and Analysis Market Review In H1 2023, the biopharmaceutical industry saw divergence, with a significant decline in monoclonal antibody drug project demand impacting related service and supply companies, while areas like API, complex drug formulations, and GLP-1 class drugs showed strong demand or new investment, and China's impending PIC/S accession and national policy support created opportunities for high-tech and compliant domestic equipment providers - Demand for monoclonal antibody drug projects significantly declined, but capital expenditure for other biologics like blood products and insulin remained strong[32] - Some CDMO clients reduced costs, slowed, or canceled capital expenditure projects due to capital market funding shortages[38] - The significant efficacy of GLP-1 class weight-loss drugs sparked an investment boom in upstream areas such as peptide production[39] - China's impending formal application to join PIC/S increased demand from pharmaceutical companies for production lines built to PIC/S GMP standards, creating business opportunities for the Company[41] Business Review During the reporting period, the Group recorded revenue of 964 million yuan, but order intake significantly decreased by 45.6% year-on-year due to slow post-pandemic recovery and cautious capital expenditure sentiment, resulting in a loss of 72.2 million yuan, with 63.9 million yuan attributable to a German non-wholly-owned subsidiary that subsequently filed for bankruptcy; the Group is responding by integrating product lines, enhancing technical solutions, expanding service businesses, and investing in R&D and global expansion for long-term competitiveness - During the reporting period, the Group's order intake decreased by approximately 45.6% year-on-year, primarily due to slow post-COVID-19 recovery and project delays[49] - The Group recorded a loss of approximately 72.2 million yuan, with approximately 63.9 million yuan attributable to a German non-wholly-owned subsidiary which filed for bankruptcy on August 3, 2023, an action expected to help the Group cease financial support and terminate recording its losses[49] - The Group is actively expanding its service business, aiming for it to become a new significant revenue source and a higher profit growth driver in the future[50] - As of June 30, 2023, the Group had obtained 402 patents, with 30 new patents granted during the period and 66 applications pending[129] Order Book Analysis For the six months ended June 30, 2023, the Group's total order intake was 733 million yuan, a significant year-on-year decrease of 45.6%, with all business segments experiencing substantial declines except for a modest 2.7% increase in Pharmaceutical Equipment Distribution and Agency, and Cleanroom and Automation Control and Monitoring Systems seeing the largest drop at 64.4% Order Intake by Business Segment (RMB in thousands) | Business Segment | 2023 H1 | 2022 H1 | Change | | :--- | :--- | :--- | :--- | | Fluid and Bioprocess Systems | 264,403 | 478,315 | -44.7% | | Cleanroom and Automation Control and Monitoring Systems | 112,786 | 317,081 | -64.4% | | Powder and Solid Systems | 105,524 | 224,630 | -53.0% | | GMP Compliance Services | 47,590 | 58,522 | -18.7% | | Life Science Consumables | 168,096 | 234,990 | -28.5% | | Pharmaceutical Equipment Distribution and Agency | 34,255 | 33,345 | 2.7% | | Total | 732,654 | 1,346,883 | -45.6% | Outlook Looking ahead, the Group will focus on developing and integrating 12 key technology applications to offer comprehensive solutions, sees significant potential in emerging areas like continuous manufacturing, Pharma 4.0 digital transformation, and cell and gene therapy, and plans to increase investment through collaborations, while also vigorously developing its service business to enhance gross margins and customer loyalty - The Group has established 12 technology application teams to integrate single product line capabilities into comprehensive technical solutions, including "Pharmaceutical Automation and Digitalization" and "Biopharmaceutical Process and Technology"[143] - The Group believes continuous manufacturing technology holds significant potential in the API and OSD industries and plans to invest in developing related technologies[145] - The Group is vigorously developing Pharma 4.0-related digital transformation businesses and has created the REMOIIS platform to provide solutions as a system integrator[146] - Service business is considered key to improving gross margins and brand recognition, with the Group having established a dedicated growth acceleration team to increase service revenue[151] Operating Results In H1 2023, the Group's total revenue decreased by 12.7% year-on-year to 964 million yuan, with gross profit significantly declining by 37.5% to 147 million yuan and gross margin falling from 21.4% to 15.3%, primarily due to lower gross margins in Fluid and Bioprocess Systems and Life Science Consumables segments, while increased selling and administrative expenses and asset impairment losses led to a loss of 72.2 million yuan for the period Revenue During the reporting period, the Group's total revenue was 964 million yuan, a 12.7% year-on-year decrease, primarily driven by revenue declines in Fluid and Bioprocess Systems, Cleanroom and Automation Control and Monitoring Systems, and Life Science Consumables segments, while Powder and Solid Systems, GMP Compliance Services, and Pharmaceutical Equipment Distribution and Agency segments achieved revenue growth Revenue Breakdown by Business Segment (RMB in thousands) | Business Segment | 2023 H1 | 2022 H1 | Change | | :--- | :--- | :--- | :--- | | Fluid and Bioprocess Systems | 371,814 | 497,778 | -25.3% | | Cleanroom and Automation Control and Monitoring Systems | 222,090 | 240,861 | -7.8% | | Powder and Solid Systems | 129,557 | 108,819 | 19.1% | | GMP Compliance Services | 50,448 | 44,292 | 13.9% | | Life Science Consumables | 161,205 | 195,538 | -17.6% | | Pharmaceutical Equipment Distribution and Agency | 29,155 | 16,692 | 74.7% | | Total | 964,269 | 1,103,980 | -12.7% | Gross Profit and Gross Margin The Group's overall gross profit decreased by 37.5% year-on-year to 147 million yuan, with gross margin falling from 21.4% to 15.3%, primarily due to a 92.8% plunge in Fluid and Bioprocess Systems' gross profit and a drop to 1.2% gross margin (13.7% excluding the German non-wholly-owned subsidiary's gross loss), and a decline in Life Science Consumables' gross margin due to product mix changes Gross Profit and Gross Margin by Business Segment | Business Segment | 2023 H1 Gross Profit (thousands) | 2023 H1 Gross Margin | 2022 H1 Gross Profit (thousands) | 2022 H1 Gross Margin | | :--- | :--- | :--- | :--- | :--- | | Fluid and Bioprocess Systems | 4,527 | 1.2% | 63,038 | 12.7% | | Cleanroom and Automation Control and Monitoring Systems | 37,205 | 16.8% | 43,452 | 18.0% | | Powder and Solid Systems | 16,721 | 12.9% | 19,969 | 18.4% | | GMP Compliance Services | 23,451 | 46.5% | 18,018 | 40.7% | | Life Science Consumables | 55,789 | 34.6% | 85,546 | 43.7% | | Pharmaceutical Equipment Distribution and Agency | 9,580 | 32.9% | 5,712 | 34.2% | | Total | 147,273 | 15.3% | 235,735 | 21.4% | Liquidity and Financial Resources As of June 30, 2023, the Group's cash and cash equivalents totaled 126 million yuan, with net cash outflows of 64.83 million yuan from operating activities and 25.37 million yuan from investing activities, and net cash inflows of 82.37 million yuan from financing activities during the period, while the gearing ratio increased from 27.8% at the end of 2022 to 34.8%, and total short-term and long-term borrowings increased with changes in interest rate ranges Condensed Consolidated Cash Flow Statement (RMB in thousands) | Item | 2023 H1 (Unaudited) | 2022 H1 (Unaudited) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | (64,830) | (42,542) | | Net Cash Used in Investing Activities | (25,366) | (79,442) | | Net Cash Generated from Financing Activities | 82,370 | 102,627 | | Net Decrease in Cash and Cash Equivalents | (7,826) | (19,357) | - The Group's gearing ratio increased from 27.8% as of December 31, 2022, to 34.8% as of June 30, 2023[216] - As of June 30, 2023, the Group had 1,838 full-time employees, a 3.9% decrease from the end of 2022, with employee costs for the period approximately 261 million yuan, a 3.1% increase year-on-year[220] Events After Reporting Period Subsequent to the reporting period, the Company's two indirect non-wholly-owned German subsidiaries, H+E Pharma and S-Tec, filed for bankruptcy on August 3, 2023, with the Group expecting to record a loss of approximately 60 million yuan in the second half of 2023 due to this application - The Company's indirect non-wholly-owned German subsidiaries, H+E Pharma and S-Tec, filed for bankruptcy on August 3, 2023[188] - The Group expects to record a loss of approximately 60 million yuan in the second half of the year ending December 31, 2023, due to the bankruptcy application[188] Corporate Governance and Other Information Corporate Governance Practices The Company is committed to maintaining high corporate governance standards, adhering to most code provisions during the reporting period, with one deviation being the combined roles of Chairman and Chief Executive Officer held by Mr. He Guoqiang, an arrangement the Board believes ensures leadership consistency and decision-making efficiency, balanced by the Board's composition - The Company deviated from the Corporate Governance Code's provision requiring separation of the roles of Chairman and Chief Executive Officer, with Mr. He Guoqiang currently holding both positions[190] - The Board believes that combining the roles of Chairman and Chief Executive Officer helps ensure leadership continuity and enhances the efficiency of overall strategic planning[190] Audit Committee The Audit Committee, chaired by Mr. Zhang Liji, comprises two independent non-executive directors and one non-executive director, with primary responsibilities including reviewing financial reports and overseeing internal control and risk management systems, and has reviewed the unaudited condensed consolidated interim financial information for the current period - The Audit Committee has reviewed the Group's unaudited condensed consolidated interim financial information for the review period[194]