兴业合金(00505) - 2022 - 年度业绩

Financial Statements Consolidated Income Statement The Group's total revenue for 2022 was RMB 6.239 billion, a 10.2% decrease from RMB 6.950 billion in 2021, with profit for the year at RMB 217 million, down 21.8% year-on-year, and basic earnings per share decreasing from RMB 0.32 to RMB 0.24 | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Revenue | 6,238,504 | 6,949,881 | -10.2% | | Gross Profit | 587,947 | 790,468 | -25.6% | | Operating Profit | 232,302 | 368,410 | -36.9% | | Profit Before Tax | 249,417 | 353,862 | -29.5% | | Profit for the Year | 216,826 | 277,343 | -21.8% | | Profit Attributable to Equity Holders of the Company | 216,607 | 276,977 | -21.8% | | Basic Earnings Per Share (RMB) | 0.24 | 0.32 | -25.0% | Consolidated Statement of Comprehensive Income Total comprehensive income for 2022 was RMB 222 million, a decrease from RMB 276 million in 2021, primarily due to lower profit for the year, partially offset by positive exchange differences | Indicator | 2022 (RMB thousands) | 2021 (RMB thousands) | | :--- | :--- | :--- | | Profit for the Year | 216,826 | 277,343 | | Exchange differences on translation of financial statements of overseas operations | 4,845 | (881) | | Total Comprehensive Income for the Year | 221,671 | 276,462 | Consolidated Balance Sheet At the end of 2022, the Group's total assets increased to RMB 4.171 billion, and net assets increased to RMB 1.786 billion, indicating a solid financial position, with net current assets significantly rising from RMB 686 million to RMB 903 million | Indicator | December 31, 2022 (RMB thousands) | December 31, 2021 (RMB thousands) | | :--- | :--- | :--- | | Non-current Assets | 1,045,676 | 967,917 | | Current Assets | 3,125,809 | 2,605,024 | | Total Assets | 4,171,485 | 3,572,941 | | Current Liabilities | 2,222,433 | 1,918,608 | | Non-current Liabilities | 163,522 | 85,462 | | Total Liabilities | 2,385,955 | 2,004,070 | | Net Assets | 1,785,530 | 1,568,871 | | Net Current Assets | 903,376 | 686,416 | Notes to the Financial Statements Basis of Preparation and Accounting Policies Financial statements are prepared in accordance with all applicable IFRS and Hong Kong Companies Ordinance requirements, with new and revised IFRS effective during the year having no significant impact on the Group's results or financial position - Financial statements strictly comply with International Financial Reporting Standards and Hong Kong Companies Ordinance disclosure requirements[35] - New and revised IFRS first applied this year had no significant impact on the Group's financial position[37][47] Revenue and Segment Reporting The Group's total revenue primarily derived from copper products business, reaching RMB 6.225 billion, with network gaming contributing RMB 13.6 million, and Mainland China being the main revenue source, accounting for 85.8% of total revenue, with the Group determining it has only one operating segment based on internal financial reporting Revenue by Business Segment | Business Segment | 2022 Revenue (RMB thousands) | 2021 Revenue (RMB thousands) | | :--- | :--- | :--- | | Copper Product Related | 6,224,911 | 6,939,542 | | Network Gaming Related | 13,593 | 10,339 | | Total | 6,238,504 | 6,949,881 | Revenue by Geographical Region | Region | 2022 Revenue (RMB thousands) | 2021 Revenue (RMB thousands) | | :--- | :--- | :--- | | Mainland China | 5,350,135 | 6,195,644 | | Other Countries and Regions | 888,369 | 754,237 | - According to IFRS 8, the Group has determined it has only one operating segment, thus segment assets and liabilities are not presented[54][68] Key Income Statement Items In 2022, other income increased to RMB 40.85 million, mainly due to higher government grants and derivative financial instrument gains, while other expenses significantly decreased to RMB 1.34 million due to large derivative financial instrument losses in 2021, and net finance income shifted from a net cost of RMB 14.55 million in 2021 to a net income of RMB 17.12 million, primarily benefiting from increased interest income and foreign exchange gains - Other income increased from RMB 15.41 million to RMB 40.85 million, primarily due to increased government grants and a net gain of RMB 12.74 million from derivative financial instruments[56] - Other expenses significantly decreased from RMB 62.03 million to RMB 1.34 million, mainly due to a net loss of RMB 59.71 million from derivative financial instruments recorded in 2021[73] - Financial position shifted from net cost to net income, primarily due to increased bank deposit interest income and net foreign exchange gains[59] - Research and development expenses for the year were RMB 199.9 million, an increase from RMB 189.8 million in the prior year, included in administrative expenses[77] Income Tax The Group's income tax expense for 2022 was RMB 32.59 million, a significant decrease from RMB 76.52 million in 2021, with the effective tax rate falling from 21.6% to 13.1%, primarily because two major subsidiaries enjoyed a 100% super deduction tax incentive for eligible R&D expenses Income Tax Expense | Item | 2022 (RMB thousands) | 2021 (RMB thousands) | | :--- | :--- | :--- | | Current Tax | 37,786 | 64,393 | | Deferred Tax | (5,195) | 12,126 | | Total Income Tax | 32,591 | 76,519 | - The decrease in effective tax rate was primarily due to tax incentives for R&D expense super deduction enjoyed by major subsidiaries[172] Earnings Per Share (EPS) Basic and diluted earnings per share for 2022 were both RMB 0.24, lower than RMB 0.32 in 2021, primarily reflecting the decrease in profit attributable to ordinary equity holders of the Company Earnings Per Share Calculation | Item | 2022 | 2021 | | :--- | :--- | :--- | | Profit Attributable to Ordinary Equity Holders of the Company (RMB thousands) | 216,607 | 276,977 | | Weighted Average Number of Ordinary Shares in Issue (shares) | 891,143,672 | 852,683,874 | | Basic Earnings Per Share (RMB) | 0.24 | 0.32 | Key Balance Sheet Items At the end of 2022, the Group's inventory book value was RMB 1.229 billion, trade and other receivables increased to RMB 547 million, total interest-bearing borrowings were RMB 863 million, of which RMB 745 million were repayable within one year, and trade and other payables significantly increased to RMB 1.457 billion Key Balance Sheet Figures | Item | December 31, 2022 (RMB thousands) | December 31, 2021 (RMB thousands) | | :--- | :--- | :--- | | Inventories | 1,229,301 | 1,217,711 | | Trade and Other Receivables | 546,898 | 461,169 | | Interest-bearing Borrowings | 862,789 | 862,787 | | Trade and Other Payables | 1,456,706 | 1,062,213 | - At the end of 2022, inventories with a book value totaling RMB 330 million and bills receivable of RMB 2.5 million were pledged as collateral for bank loans[98][100] Equity-settled Share-based Transactions The Group incentivizes employees through a share award scheme, with the trustee purchasing 9.701 million company shares and transferring 5.45 million vested shares to directors and employees in 2022, and the Group recognized RMB 4.916 million in employee service costs for the year Share Award Scheme Share Movement | Share Award Scheme Held Shares Movement | Number of Shares | | :--- | :--- | | As at December 31, 2021 | 5,450,000 | | Vested and transferred during the year | (5,450,000) | | As at December 31, 2022 | – | - In 2022, the trustee purchased a total of 9,701,000 shares of the Company on the Stock Exchange under the share award scheme for a total consideration of HKD 11,174,000[17] - Employee service costs of RMB 4,916,000 were recognized in the consolidated income statement for the year 2022[128] Management Discussion & Analysis Overall Business Review In 2022, facing slowing global economic demand and copper price volatility, the Group's total revenue decreased by 10.2% year-on-year to RMB 6.239 billion, and profit attributable to shareholders decreased by 21.8% to RMB 217 million Key Financial Indicators | Financial Indicator | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Total Revenue (RMB millions) | 6,238.5 | 6,949.9 | -10.2% | | Profit Attributable to Shareholders (RMB millions) | 216.6 | 277.0 | -21.8% | Copper Processing Business As a core business, copper processing faced market downturn pressure in 2022, with revenue decreasing by 10.3% year-on-year to RMB 6.225 billion and sales volume declining by 14.1%, leading the Group to optimize supply chains, enhance production efficiency, and explore new product application areas like new energy vehicles to address challenges Copper Processing Business Indicators | Copper Processing Business Indicator | 2022 | 2021 | Change | | :--- | :--- | :--- | :--- | | Revenue (RMB millions) | 6,224.9 | 6,939.5 | -10.3% | | Sales Volume (tons) | 139,307 | 162,158 | -14.1% | - The Group actively responded to market challenges by implementing multiple measures, including: - Optimizing procurement supply chain, increasing recycled copper imports to reduce costs[134] - Enhancing on-site production management, implementing a self-management production system[135] - Intensifying customer visits, exploring new clients[136] - Successfully entering the new energy vehicle material application field, achieving significant order growth[136] Gaming Business The Group's network gaming business performed well in 2022, with revenue increasing by 30.8% year-on-year to RMB 13.6 million and net loss significantly narrowing by 92.9% to RMB 0.2 million, primarily due to the launch of two new game products during the year Gaming Business Indicators | Gaming Business Indicator | 2022 (RMB millions) | 2021 (RMB millions) | Change | | :--- | :--- | :--- | :--- | | Revenue | 13.6 | 10.4 | +30.8% | | Net Loss | (0.2) | (2.8) | -92.9% | Financial Review This section details financial performance, with revenue and gross profit decline primarily due to reduced copper product sales, administrative expenses rising due to increased R&D investment, other income increasing and other expenses significantly decreasing mainly related to derivative financial instruments, and improved net finance income and lower effective tax rate being positive aspects of the annual financials - Gross profit decreased by 25.6%, mainly due to reduced sales volume of copper products[168] - Administrative expenses increased by RMB 20.1 million, primarily due to increased R&D expenses[153] - Other expenses decreased by RMB 60.7 million, mainly because a net loss of RMB 59.7 million from derivative financial instruments was recorded in 2021[151] - Financial position shifted from net cost to net income, primarily due to increased bank deposit interest income and net foreign exchange gains[178] Liquidity and Financial Resources The Group maintained strong liquidity, recording net current assets of RMB 903 million at the end of 2022, possessing sufficient bank credit facilities and cash reserves, with a gearing ratio of 33.0%, consistent with the prior year, indicating a stable financial structure - At the end of 2022, the Group had available but undrawn bank credit facilities of RMB 1.3997 billion and bank balances and cash totaling RMB 1.3487 billion[157] - Gearing ratio (calculated as net debt divided by total capital) was 33.0%, largely consistent with 33.9% in 2021[175] Other Information Capital Commitments and Expenditures At the end of 2022, the Group's contracted but unprovided capital expenditures were approximately RMB 451 million, primarily for plant construction and capacity expansion in the copper processing business, and during the year, the Group invested RMB 134 million in purchasing property, plant, and equipment - As of December 31, 2022, the Group's future capital expenditure commitments were approximately RMB 450.5 million[1] - For the year ended December 31, 2022, the Group invested RMB 134.1 million in purchasing property, plant and equipment[21] Employee and Environmental Policies As of the end of 2022, the Group had 1,457 employees, regularly reviews remuneration policies, provides competitive benefits, and offers annual training programs, while in environmental aspects, the Group promotes resource recycling and strictly requires suppliers to comply with environmental regulations - As of December 31, 2022, the Group had 1,457 employees, with 1,405 in copper business and 52 in network gaming business[15] - The Group emphasizes environmental protection and energy conservation, establishing recycling workshops for resource recovery and strictly complying with relevant laws and regulations in China, Cayman Islands, and Hong Kong[16] Corporate Governance and Compliance During the reporting period, the company consistently complied with the Corporate Governance Code and the Model Code for Securities Transactions by Directors of Listed Issuers, with the audit committee reviewing the annual financial statements, and the company also maintained sufficient public float - All directors confirmed compliance with the Model Code for Securities Transactions by Directors during the year[5] - The Company has complied with the code provisions in the Corporate Governance Code throughout the year[6] - The audit committee, comprising three independent non-executive directors, has reviewed the annual audited financial statements[8] Dividends and Shareholder Information The Board does not recommend a final dividend for the year ended December 31, 2022, and to determine eligibility for attending the Annual General Meeting, share transfer registration will be suspended from June 13 to 16, 2023 - The Board does not recommend the payment of a final dividend for the year ended December 31, 2022[11] - To determine eligibility for attending the Annual General Meeting, the Company will suspend share transfer registration from June 13 to 16, 2023[18]