中庆股份(01855) - 2023 - 中期业绩

Financial Highlights Consolidated Income Statement In the first half of 2023, the company achieved a significant turnaround, with net profit reaching RMB 43.5 million compared to a loss of RMB 68.3 million in the prior year, driven by a 149.1% increase in total revenue to RMB 910 million and a substantial 183.9% rise in gross profit Consolidated Income Statement Key Metrics (For the six months ended June 30) | Indicator | 2023 (RMB '000) | 2022 (RMB '000, Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | 909,819 | 365,267 | +149.1% | | Gross Profit | 145,934 | 51,393 | +183.9% | | Operating Profit/(Loss) | 75,986 | (47,308) | Turnaround to Profit | | Profit/(Loss) for the Period | 43,491 | (68,255) | Turnaround to Profit | | Profit/(Loss) Attributable to Equity Holders of the Company | 37,102 | (65,240) | Turnaround to Profit | | Basic Earnings/(Loss) Per Share (RMB cents) | 13 | (24) | Turnaround to Profit | Consolidated Balance Sheet As of June 30, 2023, the company's total assets were RMB 3.70 billion, with total liabilities at RMB 3.04 billion, while net assets decreased to RMB 661 million from RMB 918 million at the end of 2022, primarily due to the consideration paid for the acquisition of Jilin Modern Zhongqing Consolidated Balance Sheet Key Metrics | Indicator | June 30, 2023 (RMB '000) | December 31, 2022 (RMB '000, Restated) | Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 487,997 | 493,793 | -1.2% | | Current Assets | 3,208,753 | 3,689,191 | -13.0% | | Total Assets | 3,696,750 | 4,182,984 | -11.6% | | Current Liabilities | 2,944,798 | 3,172,465 | -7.2% | | Non-current Liabilities | 91,082 | 92,509 | -1.5% | | Total Liabilities | 3,035,880 | 3,264,974 | -7.0% | | Net Assets | 660,870 | 918,010 | -28.0% | | Cash and Cash Equivalents | 131,057 | 220,233 | -40.5% | | Bank and Other Loans (Current + Non-current) | 819,420 | 1,053,713 | -22.2% | Notes to Financial Statements Basis of Preparation and Accounting Policies This interim financial information is prepared in accordance with IAS 34, with comparative figures for 2022 restated due to the acquisition of Jilin Modern Zhongqing, a business combination under common control, and management has assessed the group's liquidity, deeming the going concern basis appropriate - Due to the acquisitions of Jilin Modern Zhongqing and Jilin Jinghe Design, these common control business combinations have been accounted for under merger accounting principles, and comparative figures for the corresponding period in 2022 have been restated accordingly[11] - Management has formulated multiple initiatives, including accelerating collections, negotiating payments, securing new financing, and obtaining financial support commitments from the controlling shareholder, to address liquidity needs and believes the Group has sufficient funds for continued operation[12][13] Revenue and Segment Reporting During the reporting period, the company's operations were categorized into three segments: Urban Renewal Construction Services, Urban Operation and Maintenance Services, and Design and Consulting Services, with total revenue of RMB 910 million, where Urban Renewal Construction Services served as the primary driver for both revenue and gross profit, contributing over 85% of revenue and nearly 80% of gross profit, achieving robust growth Revenue by Segment (For the six months ended June 30) | Segment | 2023 (RMB '000) | 2022 (RMB '000, Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Urban Renewal Construction Services | 783,582 | 277,212 | +182.7% | | Urban Operation and Maintenance Services | 61,674 | 69,436 | -11.2% | | Design and Consulting Services | 64,563 | 18,619 | +246.8% | | Total | 909,819 | 365,267 | +149.1% | Gross Profit by Segment (For the six months ended June 30) | Segment | 2023 (RMB '000) | 2022 (RMB '000, Restated) | YoY Change | | :--- | :--- | :--- | :--- | | Urban Renewal Construction Services | 115,975 | 36,258 | +219.9% | | Urban Operation and Maintenance Services | 9,977 | 18,193 | -45.2% | | Design and Consulting Services | 19,982 | (3,058) | Turnaround to Profit | | Total | 145,934 | 51,393 | +183.9% | - All of the Group's revenue is derived from China, with no significant assets or operations outside of China[24] Notes on Key Financial Items This section details key items impacting profit and loss and financial position, including a decrease in finance costs due to reduced exchange losses, a significant over 200% year-on-year increase in R&D costs, and a long aging profile for trade receivables, with approximately 46% overdue by more than one year Profit/(Loss) Before Tax Finance costs decreased by 11.0% year-on-year to RMB 32.33 million, primarily due to the absence of exchange losses on bank loans this period, while R&D costs significantly increased by 213% to RMB 54.42 million, reflecting increased investment in research and development - Finance costs decreased from RMB 36.30 million in the prior year to RMB 32.33 million, primarily due to no exchange losses on bank loans recorded in the current period[25] - Research and development costs significantly increased from RMB 17.38 million in the prior year to RMB 54.42 million, a year-on-year increase of 213%[26] Income Tax The Group's income tax expense was RMB 2.59 million, compared to a tax credit of RMB 10.25 million in the prior year, a change primarily driven by the company's shift from loss to profit, with four Chinese subsidiaries recognized as high-tech enterprises enjoying a preferential 15% corporate income tax rate - Four of the Group's Chinese subsidiaries are recognized as high-tech enterprises, enjoying a preferential income tax rate of 15% and a 100% super deduction for R&D expenses[28] Earnings/(Loss) Per Share Basic and diluted earnings per share for the first half of 2023 were RMB 13 cents, a significant improvement compared to a loss of RMB 24 cents per share in the prior year, with no potentially dilutive outstanding shares during the reporting period Earnings/(Loss) Per Share Calculation | Indicator | For the six months ended June 30, 2023 | For the six months ended June 30, 2022 (Restated) | | :--- | :--- | :--- | | Profit/(Loss) Attributable to Equity Holders of the Company (RMB '000) | 37,102 | (65,240) | | Number of Ordinary Shares in Issue (shares) | 275,000,000 | 275,000,000 | | Basic and Diluted Earnings/(Loss) Per Share (RMB cents) | 13 | (24) | Contract Assets and Liabilities As of the period end, net contract assets decreased to RMB 922 million from RMB 1.056 billion at the beginning of the year, and contract liabilities also decreased to RMB 429 million from RMB 583 million, with all contract liabilities expected to be recognized as revenue within one year Contract Assets and Liabilities Balances | Item | June 30, 2023 (RMB '000) | December 31, 2022 (RMB '000, Restated) | | :--- | :--- | :--- | | Contract Assets (net of loss allowance) | 922,096 | 1,055,709 | | Contract Liabilities | 428,885 | 583,036 | Trade and Bills Receivables As of the period end, net trade and bills receivables were RMB 1.556 billion, largely consistent with the beginning of the year, but aging analysis reveals approximately 46% (RMB 716 million) are over one year old, indicating collection pressure Trade and Bills Receivables Aging Analysis (Net of loss allowance) | Aging | June 30, 2023 (RMB '000) | Percentage | | :--- | :--- | :--- | | Within 1 year | 839,774 | 54.0% | | 1 to 2 years | 363,983 | 23.4% | | 2 to 3 years | 151,629 | 9.7% | | Over 3 years | 200,962 | 12.9% | | Total | 1,556,348 | 100.0% | Trade and Bills Payables As of the period end, total trade and bills payables were RMB 1.131 billion, a decrease from RMB 1.237 billion at the beginning of the year, with approximately 46% (RMB 526 million) of payables aged over one year Trade and Bills Payables Aging Analysis | Aging | June 30, 2023 (RMB '000) | Percentage | | :--- | :--- | :--- | | Within 1 year | 605,664 | 53.5% | | 1 to 3 years | 362,525 | 32.1% | | Over 3 years | 163,283 | 14.4% | | Total | 1,131,472 | 100.0% | Dividends The Board of Directors does not recommend the payment of any interim dividend for the six months ended June 30, 2023 - The Board of Directors does not recommend the payment of an interim dividend for the six months ended June 30, 2023 (H1 2022: Nil)[41] Management Discussion and Analysis Business Review In the first half of 2023, the Group significantly expanded its business, securing new contracts totaling RMB 2,209 million, a 1278.9% year-on-year increase, successfully winning several large projects exceeding RMB 100 million, particularly achieving new breakthroughs in the Changchun area, while its subsidiaries received multiple industry awards for quality engineering - In the first half of 2023, the Group submitted 272 bids, with a successful bid rate of approximately 41.54%, securing new project contracts worth approximately RMB 2,209 million[43] - Major projects won include: Changchun New Area Urban Improvement Project (approx. RMB 752 million), Jingyuetan Scenic Area Infrastructure Project (approx. RMB 459 million), and Yitong River Basin Ecological Restoration Project (approx. RMB 524 million)[43][46] - Subsidiaries including Jinghe Design Group, Zhongbang Ecological Environment, and Changchun Urban Construction Maintenance received multiple provincial and national quality engineering awards and corporate honors during the reporting period[44] Outlook Looking ahead, the Group will capitalize on national policy opportunities in the "14th Five-Year Plan," urban renewal, and cultural tourism integration, leveraging its "culture, commerce, tourism, and engineering integrated" synergistic advantage, while consolidating its Changchun base, planning to expand into national markets like Tianjin, Chongqing, and Beijing, and extending into full-process consulting services to achieve sustained healthy development - The Group will leverage national policy support for cultural tourism, urban renewal, and infrastructure construction, especially the investment from local government special bonds, to expand its business[46] - Strategic priorities include: leveraging the "culture, commerce, tourism, and engineering integrated" synergistic business advantage, consolidating the Changchun market while expanding into national cities such as Tianjin, Chongqing, Beijing, Shandong, and Guangzhou, and planning to jointly explore markets with partners[47] - The company will continue to upgrade qualifications, stabilize and enhance corporate credit, and actively apply for various outstanding design and engineering awards, laying a solid foundation for performance growth[47] Financial Review The Group demonstrated strong financial performance, with total revenue increasing by 149.1% to RMB 910 million and gross profit rising by 183.8% to RMB 146 million, primarily driven by the Urban Renewal Construction Services segment, which saw revenue growth of 182.7%, attributed to a low base effect from COVID-19 lockdowns in the prior year and an increase in newly approved large contracts this period Revenue Performance by Segment (For the six months ended June 30) | Segment | 2023 Revenue (RMB million) | 2022 Revenue (RMB million, Restated) | YoY Change | Primary Reason | | :--- | :--- | :--- | :--- | :--- | | Urban Renewal Construction Services | 783.6 | 277.2 | +182.7% | Increase in newly approved large contracts | | Urban Operation and Maintenance Services | 61.7 | 69.4 | -11.1% | A large-scale environmental sanitation project expired in 2022 | | Design and Consulting Services | 64.6 | 18.6 | +247.3% | Undertaking newly approved large consulting projects | - The significant overall revenue growth was primarily due to: (i) a lower base in H1 2022 caused by COVID-19 lockdowns in Changchun; and (ii) an increase in newly approved contracts in H1 2023[48] - Administrative expenses increased by 12.5%, mainly due to increased intermediary fees related to the acquisition of Jilin Modern Zhongqing[55] - Finance costs decreased by 11.0%, primarily because no net exchange losses on bank loans were recorded in the first half of 2023[56] Liquidity and Capital Structure As of the period end, the Group held cash and cash equivalents of RMB 131 million, while net current assets significantly decreased from RMB 517 million to RMB 264 million due to the consideration paid for the acquisition of Jilin Modern Zhongqing, and the gearing ratio slightly increased from 1.1 times to 1.2 times due to a reduction in total equity Liquidity and Capital Structure Key Metrics | Indicator | June 30, 2023 | December 31, 2022 (Restated) | | :--- | :--- | :--- | | Cash and Cash Equivalents (RMB million) | 131.1 | 220.2 | | Total Borrowings (RMB million) | 819.4 | 1,053.7 | | Net Current Assets (RMB million) | 264.0 | 516.7 | | Gearing Ratio (Borrowings/Total Equity) | 1.2 times | 1.1 times | - The decrease in net current assets was primarily due to the payment of consideration to Zhongqing Investment for the acquisition of Jilin Modern Zhongqing[61] Significant Acquisitions and Investments During the reporting period, the Group completed a significant acquisition of an 87.5% equity interest in Jilin Modern Zhongqing on June 30, 2023, with no other major acquisitions, disposals, or significant investment matters - Apart from the acquisition of an 87.5% equity interest in Jilin Modern Zhongqing completed on June 30, 2023, the Group had no other significant acquisitions or disposals in the first half of 2023[64] Contingent Liabilities As of the period end, the Group had contingent liabilities primarily from providing financial guarantees for bank loans of its joint venture, Tianjun Tourism, and associate, Changchun Xianbang, with the total unamortized balance of issued financial guarantees amounting to approximately RMB 30.1 million as of June 30, 2023 - The Group provided guarantees for bank loans of its joint venture, Tianjun Tourism, with an outstanding loan balance of RMB 330 million, and the Group's unamortized guarantee balance was RMB 20.171 million[66] - The Group provided guarantees for bank loans of its associate, Changchun Xianbang, with an outstanding loan balance of RMB 170 million, and the Group's unamortized guarantee balance was RMB 9.879 million[66] Other Information Dividend Policy The Board of Directors has recommended not to declare an interim dividend for the first half of 2023 - The Board of Directors recommends no interim dividend for the first half of 2023 (H1 2022: Nil)[69] Employee and Remuneration Policy As of June 30, 2023, the Group had 844 employees, and the company has established a remuneration committee and a systematic remuneration management policy to ensure fairness and transparency in its compensation system - As of June 30, 2023, the Group had 844 employees[70] Corporate Governance The company has adopted the Corporate Governance Code in Appendix 14 of the Listing Rules, and its audit committee, comprising three independent non-executive directors, has reviewed the unaudited interim results for the current period - The company's audit committee, composed of three independent non-executive directors, has reviewed the Group's unaudited interim results and interim financial report for the six months ended June 30, 2023[73]