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金茂源环保(06805) - 2022 - 年度业绩
KIMOU ENVIRONKIMOU ENVIRON(HK:06805)2023-03-24 14:42

Financial Highlights and Dividends The company achieved significant financial growth in FY2022, with revenue and profit attributable to equity holders increasing substantially, alongside a proposed final dividend Financial Highlights The company achieved comprehensive growth in FY2022, with revenue increasing by 18.1% to RMB 1.1 billion and profit attributable to equity holders surging by 98.9% to RMB 111 million FY2022 Financial Highlights (vs. FY2021) | Item | For the year ended December 31, 2022 (RMB thousands) | For the year ended December 31, 2021 (RMB thousands) | Year-on-year change | | :--- | :--- | :--- | :--- | | Revenue | 1,095,791 | 927,750 | +18.1% | | Profit from operations | 253,671 | 170,164 | +49.1% | | Profit attributable to equity holders of the Company | 111,235 | 55,915 | +98.9% | | Basic earnings per share (RMB) | 0.10 | 0.05 | +100.0% | | Total assets | 4,372,118 | 3,535,446 | +23.7% | | Net assets | 1,365,453 | 1,241,635 | +10.0% | | Operating profit margin | 23.1% | 18.3% | +4.8pp | | Net profit margin | 9.9% | 5.1% | +4.8pp | Dividend Policy The Board resolved to declare a final dividend of HK 5 cents per share for FY2022, subject to shareholder approval, with no dividend declared in 2021 - The Board resolved to declare a final dividend of HK 5 cents per share (approximately RMB 4.5 cents), with no final dividend distributed in 202128 - The proposed final dividend is approximately HKD 55.65 million (equivalent to approximately RMB 49.712 million), payable around June 30, 2023, subject to shareholder approval115 Consolidated Financial Statements The company reported significant revenue and profit growth in 2022, with total assets expanding, though net current liabilities also increased Consolidated Statement of Profit or Loss In 2022, revenue increased by 18.1% to RMB 1.1 billion, with profit from operations surging 49.1% to RMB 254 million, and profit attributable to equity holders growing 98.9% to RMB 111 million Key Items from Consolidated Statement of Profit or Loss (RMB thousands) | Item | For the year ended December 31, 2022 | For the year ended December 31, 2021 | | :--- | :--- | :--- | | Revenue | 1,095,791 | 927,750 | | Profit from operations | 253,671 | 170,164 | | Profit before tax | 152,211 | 78,799 | | Profit for the year | 108,705 | 47,764 | | Profit attributable to equity holders | 111,235 | 55,915 | | Basic and diluted earnings per share (RMB) | 0.10 | 0.05 | Consolidated Statement of Financial Position As of year-end 2022, total assets grew 23.7% to RMB 4.37 billion, driven by non-current assets, while total equity increased to RMB 1.37 billion, and net current liabilities expanded to RMB 855 million Consolidated Statement of Financial Position Summary (RMB thousands) | Item | As at December 31, 2022 | As at December 31, 2021 | | :--- | :--- | :--- | | Assets | | | | Non-current assets | 3,871,144 | 3,185,152 | | Current assets | 500,974 | 350,294 | | Total assets | 4,372,118 | 3,535,446 | | Liabilities and Equity | | | | Current liabilities | 1,355,963 | 1,109,042 | | Non-current liabilities | 1,650,702 | 1,184,769 | | Total liabilities | 3,006,665 | 2,293,811 | | Total equity | 1,365,453 | 1,241,635 | | Net current liabilities | (854,989) | (758,748) | Notes to the Financial Statements The financial statements are prepared under HKFRS, with detailed notes on accounting policies, segment performance, profit before tax items, taxation, earnings per share, asset composition, and liability structure Significant Accounting Policies The financial statements are prepared in accordance with applicable Hong Kong Financial Reporting Standards, and despite net current liabilities of RMB 855 million at year-end 2022, the Board confirms the Group's ability to continue as a going concern - The financial statements are prepared in accordance with all applicable Hong Kong Financial Reporting Standards34 - Despite the Group's current liabilities exceeding current assets by RMB 855 million as of December 31, 2022, the Board has confirmed the Group has sufficient resources to continue as a going concern35 Revenue and Segment Reporting The Group operates in three reportable segments: Leasing and Facility Usage, Wastewater Treatment and Utilities, and Sales of Goods and Ancillary Services, with total revenue growing 18.1% to RMB 1.1 billion in 2022, and all segments showing increased revenue and adjusted EBITDA - The Group's principal activities are categorized into three reportable segments: Leasing and Facility Usage, Wastewater Treatment and Utilities, and Sales of Goods and Ancillary Services224158 Revenue by Business Segment (RMB thousands) | Business Segment | 2022 | 2021 | | :--- | :--- | :--- | | Leasing and Facility Usage | 412,554 | 335,863 | | Wastewater Treatment and Utilities | 433,322 | 356,900 | | Sales of Goods and Ancillary Services | 249,915 | 234,987 | | Total | 1,095,791 | 927,750 | Reportable Segment Profit (Adjusted EBITDA) by Business Segment (RMB thousands) | Business Segment | 2022 | 2021 | | :--- | :--- | :--- | | Leasing and Facility Usage | 397,824 | 269,577 | | Wastewater Treatment and Utilities | 88,552 | 114,235 | | Sales of Goods and Ancillary Services | 14,752 | 15,276 | | Total | 501,128 | 399,088 | Profit Before Tax Items Profit before tax in 2022 was RMB 152 million, with significant increases in finance costs to RMB 101 million, staff costs by 30.5% to RMB 133 million, and depreciation and amortization to RMB 219 million Finance Costs (RMB thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Interest on bank loans and other borrowings | 125,199 | 103,381 | | Less: Interest expenses capitalized | (23,787) | (12,074) | | Total | 101,460 | 91,365 | Staff Costs (RMB thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Salaries, wages and other benefits | 122,863 | 93,821 | | Retirement scheme contributions | 10,541 | 8,430 | | Total | 133,404 | 102,251 | Other Major Cost Items (RMB thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Depreciation and amortization | 219,213 | 203,637 | | Cost of inventories | 342,189 | 309,383 | | Utility costs | 32,930 | 25,423 | Income Tax Income tax expense for 2022 increased by 40.2% to RMB 43.506 million, with three Chinese subsidiaries benefiting from a 15% preferential tax rate as high-tech enterprises, reducing tax by RMB 13.596 million - The statutory income tax rate for the Group's Chinese subsidiaries is 25%174 - Huizhou Jinmaoyuan, Tianjin Bingang, and Jingzhou Jinyuan, as high-tech enterprises, enjoyed a 15% preferential tax rate, reducing income tax by a total of RMB 13.596 million in 2022176193194 - Certain Group subsidiaries are eligible for additional pre-tax deductions for R&D expenses, which reduced income tax by RMB 5.357 million in 2022177196 Earnings Per Share and Dividends Basic earnings per share doubled to RMB 0.10 in 2022 due to a significant increase in profit attributable to equity holders, and the Board proposed a final dividend of HK 5 cents per share Basic Earnings Per Share Calculation | Item | 2022 | 2021 | | :--- | :--- | :--- | | Profit attributable to equity holders (RMB thousands) | 111,235 | 55,915 | | Weighted average number of ordinary shares (thousands) | 1,116,457 | 1,119,995 | | Basic earnings per share (RMB) | 0.10 | 0.05 | - The Board proposed a final dividend of HKD 0.05 per ordinary share, compared to zero in 2021198 Asset Analysis As of year-end 2022, the Group's property, plant, and equipment had a carrying value of RMB 1.57 billion, and investment properties had a carrying value of RMB 1.31 billion (fair value RMB 2.39 billion), with substantial assets pledged as collateral for bank loans - As of December 31, 2022, the Group acquired RMB 269 million in property, plant, and equipment, and RMB 472 million in investment properties181182 - As of year-end 2022, property, plant and equipment, investment properties, and land use rights with a total carrying value of RMB 2.15 billion were pledged as collateral for the Group's bank loans and other borrowings141183184 Liability Analysis As of year-end 2022, the Group's total bank loans and other borrowings increased from RMB 1.66 billion to RMB 2.23 billion, with RMB 686 million due within one year, and most borrowings are secured, guaranteed, and at floating rates, while trade payables also increased Maturity Profile of Bank Loans and Other Borrowings (RMB thousands) | Maturity | 2022 | 2021 | | :--- | :--- | :--- | | Within 1 year or on demand | 685,585 | 574,883 | | After 1 year but within 2 years | 461,885 | 274,034 | | After 2 years but within 5 years | 731,115 | 617,638 | | After 5 years | 354,656 | 197,476 | | Total | 2,233,241 | 1,664,031 | - As of year-end 2022, RMB 2.13 billion of the RMB 2.23 billion in bank loans and other borrowings were secured and guaranteed bank loans238 - The majority of bank loans and other borrowings are guaranteed by the Company's directors, their relatives, or non-controlling shareholders, and secured by certain Group assets75239 Management Discussion and Analysis The Group's 2022 performance saw revenue growth across all segments, driven by increased rental and utility usage, while operating costs also rose, leading to improved operating profit margins but higher leverage, with significant capital commitments for ongoing expansion Business Review and Outlook In 2022, the Group operated four surface treatment circular economy industrial parks in China, achieving an 18.1% increase in total revenue, with overall occupancy at 76.5% and wastewater treatment utilization at 51.2%, and plans for future expansion driven by favorable national policies Occupancy Rates by Industrial Park (As at December 31, 2022) | Industrial Park | Total Leasable Area (sqm) | Total Leased Area (sqm) | Occupancy Rate | | :--- | :--- | :--- | :--- | | Guangdong Huizhou | 501,000 | 474,000 | 94.6% | | Tianjin Bingang | 329,000 | 302,000 | 91.8% | | Central China | 143,000 | 47,000 | 32.9% | | Qingshen | 111,000 | 6,000 | 5.4% | | Total | 1,084,000 | 829,000 | 76.5% | Wastewater Treatment Capacity and Utilization Rate (2022) | Metric | Guangdong Huizhou | Tianjin Bingang | Central China | Total | | :--- | :--- | :--- | :--- | :--- | | Daily Wastewater Treatment Capacity (tons) | 10,000 | 6,000 | 2,500 | 18,500 | | Annual Average Daily Treatment Volume (tons) | 7,307 | 2,052 | 112 | 9,471 | | Annual Average Utilization Rate | 73.1% | 34.2% | 4.5% | 51.2% | - National policies promoting higher entry rates for professional electroplating enterprises into industrial parks present growth opportunities, with the Group planning to expand leasable area and wastewater treatment capacity through new park developments like Qingshen and East China83145216 Operating Performance Analysis Total revenue in 2022 increased by 18.1% to RMB 1.1 billion, with all business segments growing, including 22.8% growth in leasing and facility usage, 21.4% in wastewater treatment and utilities, and 6.4% in sales of goods and ancillary services - Revenue from leasing and facility usage services increased by 22.8% to RMB 413 million, primarily due to an increase in average leased area and higher unit rental prices88 - Wastewater treatment fee revenue increased by 26.8% to RMB 233 million, mainly due to increased freshwater consumption from larger leased areas and higher unit treatment fees89 - Steam fee revenue increased by 18.2% to RMB 121 million, primarily due to increased steam consumption and temporary price adjustments due to rising natural gas costs89 - Consumables sales revenue grew to RMB 218 million, mainly driven by improved chemical quality, increased tenant orders, and higher unit selling prices91 Operating Cost Analysis Total operating costs in 2022 increased by 12.4% to RMB 862 million, with significant increases in cost of inventories by 10.6%, staff costs by 30.5%, utility costs by 29.5%, and depreciation and amortization by 7.6% - Cost of inventories: Increased by 10.6% to RMB 342 million, due to higher sales volume and increased unit cost of raw materials226 - Depreciation and amortization: Increased by 7.6% to RMB 219 million, due to newly added operational investment properties and plant and equipment147 - Staff costs: Increased by 30.5% to RMB 133 million, due to an increase in employee headcount and salary adjustments for business development93 - Utility costs: Increased by 29.5% to RMB 32.9 million, due to increased wastewater treatment volume and water and electricity consumption from larger leased areas119 Financial Position Analysis Driven by revenue growth, operating profit increased by 49.1% to RMB 254 million in 2022, with the operating profit margin rising from 18.3% to 23.1%, while finance costs increased by 11.0%, and net current liabilities expanded to RMB 855 million, with the adjusted net debt-to-equity ratio increasing to 1.46 - Profit from operations increased by 49.1% to RMB 254 million, with the operating profit margin rising from 18.3% to 23.1%121 - Finance costs increased by 11.0% to RMB 101 million, primarily due to an increase in the average balance of bank loans285 Adjusted Net Debt-to-Equity Ratio | Item (RMB thousands) | 2022 | 2021 | | :--- | :--- | :--- | | Total liabilities (borrowings and lease liabilities) | 2,234,003 | 1,664,714 | | Less: Cash and deposits | (238,754) | (115,302) | | Adjusted net debt | 1,995,249 | 1,549,412 | | Total equity | 1,365,453 | 1,241,635 | | Adjusted net debt-to-equity ratio | 1.46 | 1.25 | Significant Investments and Capital Commitments In 2022, the Group entered into several significant construction agreements for projects including the East China Park, Tianjin Bingang Park, and Taixing Economic Development Zone, with total contracted but unpaid capital expenditures amounting to approximately RMB 390 million at year-end, primarily for plant and wastewater treatment facilities - During the year, the Group entered into several significant construction agreements for plant construction in Taixing Economic Development Zone and Tianjin Bingang Park269130294 - As of December 31, 2022, the Group's contracted but unpaid capital expenditures amounted to approximately RMB 390 million (2021: RMB 344 million)271 Corporate Governance and Other Matters The company maintained high corporate governance standards, addressed a temporary non-compliance issue, executed share repurchases to enhance shareholder value, and completed a significant post-period acquisition to increase its stake in a key subsidiary Corporate Governance The company is committed to high corporate governance standards, having complied with the Corporate Governance Code in 2022, with a temporary non-compliance regarding independent non-executive directors resolved post-year-end, and the Audit Committee having reviewed the annual results - Due to the resignation of independent non-executive director Mr. Li Yinquan on December 22, 2022, the company temporarily failed to comply with listing rules regarding the number of independent non-executive directors and the composition of the Audit Committee299 - On March 1, 2023, Mr. Liu Da was appointed as an independent non-executive director and Chairman of the Audit Committee, bringing the company back into compliance with relevant listing rules110 - The Audit Committee has reviewed the Group's annual results for the current year151 Share Repurchases To enhance shareholder value, the company repurchased 8,724,000 shares on the Stock Exchange in 2022 for approximately HKD 8.8 million, with 6,986,000 of these shares subsequently cancelled - In 2022, the company repurchased a total of 8,724,000 shares on the Stock Exchange at a total cost of approximately HKD 8.8 million (equivalent to approximately RMB 7.86 million)136 - The company believes that share repurchases enhance net asset value per share and/or earnings per share, aligning with shareholders' best interests136 - The company cancelled 1,412,000 shares and 5,574,000 shares of repurchased stock in May and October 2022, respectively112 Events After Reporting Period Subsequent to December 31, 2022, a significant transaction occurred on February 20, 2023, where a company subsidiary agreed to acquire an additional 38.72% equity stake in Tianjin Bingang for approximately RMB 194 million, increasing the company's total ownership to 89.72% - On February 20, 2023, a company subsidiary entered into an equity transfer agreement to acquire an additional 38.72% equity interest in Tianjin Bingang for approximately RMB 193.6 million277 - Upon completion of the acquisition, the company's equity interest in Tianjin Bingang will increase from 51% to 89.72%277