中国民航信息网络(00696) - 2023 - 中期业绩

Financial Statements Consolidated Income Statement Driven by aviation market recovery, the company's H1 2023 total operating revenue grew 45.6% to RMB 3.31 billion, with net profit attributable to parent company shareholders surging 171.0% to RMB 1.20 billion and basic EPS rising to RMB 0.41 Key Income Statement Data for H1 2023 | Metric | Current Period Amount (RMB Thousand) | Prior Period Amount (RMB Thousand) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 3,307,556 | 2,271,991 | +45.6% | | Operating Profit | 1,338,680 | 418,236 | +219.9% | | Total Profit | 1,346,864 | 462,658 | +191.1% | | Net Profit | 1,207,654 | 455,820 | +164.9% | | Net Profit Attributable to Parent Company Shareholders | 1,200,385 | 443,034 | +171.0% | | Basic Earnings Per Share (RMB/share) | 0.41 | 0.15 | +173.3% | Consolidated Balance Sheet As of June 30, 2023, total assets increased 11.5% to RMB 28.18 billion, total liabilities rose 33.6% to RMB 7.38 billion, and net assets attributable to parent company owners grew 5.5% to RMB 20.28 billion, with the asset-liability ratio increasing from 21.9% to 26.2% Key Balance Sheet Item Changes | Metric | Period-End Balance (RMB Thousand) | Prior Year-End Balance (RMB Thousand) | Change | | :--- | :--- | :--- | :--- | | Total Assets | 28,181,130 | 25,262,644 | +11.5% | | Total Liabilities | 7,377,501 | 5,520,414 | +33.6% | | Equity Attributable to Parent Company Owners | 20,283,508 | 19,229,379 | +5.5% | - Current assets increased from RMB 16.78 billion to RMB 19.29 billion, primarily due to a RMB 1.10 billion increase in cash and cash equivalents and a RMB 650 million increase in accounts receivable[5] - Current liabilities increased from RMB 5.14 billion to RMB 7.01 billion, mainly due to new short-term borrowings of RMB 550 million and an increase of RMB 1.54 billion in other payables[6] Notes to Financial Statements Company Overview and Basis of Preparation The company, China National Aviation Information Network Corporation Limited, established in Beijing in 2000, provides IT solutions and services for the aviation travel industry, with its financial statements prepared under Chinese Accounting Standards on a going concern basis - The company primarily operates in aviation passenger business processing, electronic distribution, airport passenger processing, data processing, and settlement and clearing services[8] - Financial statements are prepared in accordance with Chinese Accounting Standards and comply with the disclosure provisions of the Hong Kong Stock Exchange Listing Rules[9] Changes in Accounting Policies Effective January 1, 2023, the group adopted Interpretation No. 16 of Accounting Standards for Business Enterprises regarding deferred income tax on assets and liabilities arising from a single transaction, impacting deferred tax assets, liabilities, and income tax expense - The adoption of new provisions in Interpretation No. 16 of Accounting Standards for Business Enterprises primarily impacts the recognition of deferred tax assets and liabilities[11] Impact of Accounting Policy Changes (January-June 2023) | Affected Statement Item | Impact Amount (RMB Thousand) | | :--- | :--- | | Deferred Tax Assets | 3,729 | | Deferred Tax Liabilities | 3,043 | | Income Tax Expense | -660 | Taxation The company's main taxes are VAT and corporate income tax, enjoying a 15% preferential income tax rate as a high-tech enterprise, with potential for a 10% rate as a key software enterprise, which has been reflected in H1 2023 financial statements - As a high-tech enterprise, the company accrues corporate income tax for H1 2023 at a preferential rate of 15%[15] - The company may also enjoy a lower 10% tax rate as a key software enterprise, with related tax benefits reflected in the current period's financial statements[16] Notes to Major Items in Consolidated Financial Statements This section details key consolidated financial statement items, including accounts receivable increasing to RMB 4.74 billion, operating revenue growing 45.6% driven by aviation IT services, significant growth in investment income, and notable increases in personnel, technical support, and commission expenses Revenue and Costs In H1 2023, main business revenue grew 46.1% to RMB 3.28 billion, primarily driven by a 135.7% increase in aviation IT services revenue, while system integration services revenue decreased 46.5% Operating Revenue Details (RMB Thousand) | Item | Current Period Amount | Prior Period Amount | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Aviation Information Technology Services | 1,890,118 | 801,913 | +135.7% | | Settlement and Clearing Services | 185,361 | 141,082 | +31.4% | | System Integration Services | 320,895 | 600,325 | -46.5% | | Data Network Services | 201,682 | 232,282 | -13.2% | | Other Income | 709,499 | 496,389 | +42.9% | | Total | 3,307,556 | 2,271,991 | +45.6% | Accounts Receivable As of June 30, 2023, accounts receivable increased to RMB 4.74 billion, with the highest proportion being less than one year old, while impairment allowance decreased to RMB 580 million due to a RMB 120 million reversal of impairment losses Accounts Receivable Movement | Metric (RMB Thousand) | Period-End Balance | Prior Year-End Balance | | :--- | :--- | :--- | | Accounts Receivable Subtotal | 5,315,163 | 4,780,758 | | Less: Impairment Allowance | 578,423 | 696,351 | | Total | 4,736,740 | 4,084,407 | - A reversal of RMB 120 million in accounts receivable impairment losses was recognized in the current period, compared to an impairment loss of RMB 99 million in the prior period[28] Financial Asset Investments The company holds a 13.26% equity stake in China Merchants Renhe Life Insurance Co., Ltd., classified as other equity instrument investment with a fair value of RMB 836 million, and an investment in China Mobile Equity Fund accounted for as other non-current financial assets with a carrying value of RMB 603 million - The company holds a 13.26% equity stake in China Merchants Renhe Life Insurance, with a stable period-end fair value of RMB 836 million[20] - Investment in China Mobile Equity Fund has a carrying value of RMB 603 million, with the fund primarily investing in the 5G and information and communication industry chains[21][22] Liability Items As of period-end, accounts payable decreased to RMB 1.99 billion, with the majority less than one year old, while contract liabilities slightly increased to RMB 660 million, primarily related to system integration service contracts Key Liability Items (RMB Thousand) | Item | Period-End Balance | Prior Year-End Balance | | :--- | :--- | :--- | | Accounts Payable | 1,990,589 | 2,183,484 | | Contract Liabilities | 657,229 | 614,312 | Profit and Loss Items Investment income surged 254.8% to RMB 44.64 million, driven by gains from financial assets held for trading, while credit impairment losses turned into a RMB 117 million gain due to accounts receivable impairment allowance reversals, and asset impairment losses also became a RMB 2.45 million gain Key Profit and Loss Item Changes (RMB Thousand) | Item | Current Period Amount | Prior Period Amount | | :--- | :--- | :--- | | Investment Income | 44,643 | 12,583 | | Credit Impairment Losses | 116,978 | -97,971 | | Asset Impairment Losses | 2,453 | -5,230 | Earnings Per Share and Dividends In H1 2023, basic and diluted earnings per share both significantly increased to RMB 0.41, and the company approved a final cash dividend of RMB 0.053 per share for 2022, totaling RMB 155 million - Basic and diluted earnings per share both reached RMB 0.41, representing a 173.3% year-on-year increase[31] - A final dividend for 2022 totaling RMB 155 million has been distributed[32] Share-based Payments The company's H-share share appreciation rights incentive plan was terminated in December 2021, with remaining rights not remeasured at period-end due to ongoing termination document signing, resulting in a cumulative liability of RMB 23.5 million - The H-share share appreciation rights plan has been decided for termination, with related termination documents currently being signed[35] - As of period-end, the cumulative liability arising from cash-settled share-based payments amounted to RMB 23.5 million[35] Management Discussion and Analysis Business Review In H1 2023, driven by the robust recovery of China's civil aviation market, the company's electronic travel distribution system processing volume surged 143.0%, while significant progress was made in airline digitalization, smart airport construction, settlement and clearing services, and innovative solutions like digital RMB - Electronic Travel Distribution (ETD) system processed approximately 284 million passengers, a 143.0% year-on-year increase, recovering to 84.2% of 2019 levels[36] - Progress in smart airport construction includes facial recognition boarding deployed at 54 airports nationwide and the One ID passenger service platform extended to over 20 airports[37] - Settlement and clearing systems processed approximately 446 million transactions, a 64.6% year-on-year increase, with agency settlement amounts exceeding USD 2.57 billion, up 100.8%[37] - Launched the civil aviation industry's first airport digital RMB solution, 'Shu Bi Tong', which was put into operation at Changsha Huanghua International Airport[38] Financial Position and Operating Performance Analysis In H1 2023, the group achieved significant profit growth, with total profit increasing 191.1% to RMB 1.35 billion and net profit attributable to parent company surging 171.0% to RMB 1.20 billion, driven by increased system processing volumes from recovering passenger traffic and demonstrating strong operating leverage Overall Performance In H1 2023, the group's total profit reached RMB 1.347 billion, a 191.1% year-on-year increase, with net profit attributable to parent company shareholders at RMB 1.20 billion, up 171.0%, primarily due to increased system processing volumes from recovering domestic and international passenger traffic H1 2023 Performance Overview | Metric | Amount (RMB Million) | Year-on-Year Growth | | :--- | :--- | :--- | | Total Profit | 1,346.9 | +191.1% | | Net Profit Attributable to Parent Company | 1,200.4 | +171.0% | | Earnings Per Share | 0.41元 | +173.3% | Revenue Analysis Total revenue grew 45.6% to RMB 3.31 billion, primarily driven by a 135.7% increase in aviation IT services revenue, while system integration services revenue decreased 46.5% and data network revenue declined 13.2% - Aviation information technology services revenue was the primary growth driver, increasing by RMB 1.088 billion, a 135.7% year-on-year increase[41] - System integration services revenue decreased by 46.5% year-on-year, mainly due to fewer projects meeting completion and acceptance criteria[41] Cost Analysis Total operating costs increased 19.5% to RMB 2.18 billion, with commissions and promotion expenses surging 122.4% and technical support and maintenance fees rising 64.6%, while software and hardware sales costs decreased 38.7% Key Cost Item Changes | Cost Item | Year-on-Year Change | | :--- | :--- | | Personnel Costs | +13.1% | | Depreciation and Amortization | -3.7% | | Software and Hardware Sales Costs | -38.7% | | Commissions and Promotion Expenses | +122.4% | | Technical Support and Maintenance Fees | +64.6% | Liquidity and Capital Structure The company's working capital primarily stems from operating activities, with H1 net cash inflow of RMB 1.01 billion, period-end cash and cash equivalents of RMB 8.58 billion, total borrowings of RMB 750 million, and an asset-liability ratio of 26.2%, reflecting prudent financial management and strategic investments Cash and Liabilities As of June 30, 2023, the group's cash and cash equivalents totaled RMB 8.58 billion, with total borrowings of RMB 750 million, and net cash inflow from operating activities of RMB 1.01 billion, indicating strong cash generation - Net cash inflow from operating activities amounted to RMB 1.011 billion[47] Period-End Cash and Borrowings (RMB Million) | Item | Amount | | :--- | :--- | | Cash and Cash Equivalents | 8,576.6 | | Total Borrowings | 753.4 | Details of Financial Asset Investments The company holds RMB 3.5 billion in structured bank deposits and RMB 650 million in time deposits, with an RMB 836 million fair value investment in China Merchants Renhe Life Insurance, which incurred a RMB 217 million loss in H1, and an actual contribution of RMB 575 million to China Mobile Equity Fund - The company holds a total of RMB 3.5 billion in financial assets held for trading (structured deposits)[51] - The investment in China Merchants Renhe Life Insurance has a fair value of RMB 836 million, with the company reporting a RMB 217 million loss in H1 2023, primarily due to increased reserves from falling interest rates and capital market volatility[53][54][55] - An actual contribution of RMB 575 million has been made to China Mobile Equity Fund, which primarily invests in the 5G and information and communication industries[57] Other Financial Information As of June 30, 2023, the group had no asset pledges or significant contingent liabilities, with an asset-liability ratio of 26.2%, H1 total capital expenditure of RMB 363 million for daily operations, and period-end capital expenditure commitments of approximately RMB 1.09 billion - The asset-liability ratio increased to 26.2% from 21.9% at the end of the prior year[58] - Total capital expenditure for H1 amounted to RMB 363 million, representing a year-on-year increase[60] Staff Information As of June 30, 2023, the group had 6,721 employees, with H1 personnel costs of approximately RMB 712 million, accounting for 32.7% of total operating costs, providing comprehensive compensation and benefits Staff and Personnel Costs | Metric | Value | | :--- | :--- | | Total Employees (number) | 6,721 | | Personnel Costs (RMB Million) | 712.2 | | Percentage of Total Operating Costs | 32.7% | Outlook and Other Matters Future Outlook For H2 2023, despite global economic uncertainties, the group aims to ensure system security, enhance core system autonomy, unlock main business potential, explore emerging businesses, and deepen reforms to build a world-class enterprise, leveraging China's long-term economic growth and the civil aviation industry's recovery - The company will continue to ensure the secure operation of civil aviation information systems and enhance the autonomy and control of core systems[63] - Strategic priorities include fostering high-quality development of core businesses, exploring technology empowerment for emerging businesses, and advancing initiatives to benchmark against world-class enterprises[63] Dividends and Share Repurchases The Board recommends no interim dividend for H1 2023, and neither the company nor its subsidiaries repurchased, sold, or redeemed any listed securities during the period - The Board recommends no interim dividend for 2023[64] - There were no repurchases, sales, or redemptions of the company's listed securities during the period[64] Corporate Governance The company maintains high corporate governance standards, adopting HKEX's Corporate Governance Code, with two deviations noted during the reporting period: the combined roles of Chairman and General Manager as a transitional arrangement, and delayed board re-election due to incomplete nominations - There was a deviation from Code Provision C.2.1, where the roles of Chairman and General Manager (President) were not separated, with Mr. Huang Rongshun holding both positions, which the company states is a transitional arrangement[66] - There was a deviation from Code Provision B.2.2, as the re-election of the Board of Directors was postponed due to incomplete nomination of new board candidates[66]