今年以来该股累计进行10次回购，合计回购286.80万股，累计回购金额5215.86万港元。（数据宝） 津上机床中国回购明细 | 日期 | 回购股数（万股） | 回购最高价（港元） | 回购最低价（港元） | 回购金额（万港元） | | --- | --- | --- | --- | --- | | 2025.04.08 | 36.60 | 17.800 | 17.340 | 649.43 | | 2025.04.07 | 52.00 | 16.200 | 15.180 | 825.95 | | 2025.03.13 | 32.60 | 22.400 | 22.350 | 730.18 | | 2025.03.11 | 80.00 | 20.600 | 19.800 | 1632.46 | | 2025.03.04 | 10.00 | 18.040 | 17.940 | 180.20 | | 2025.02.28 | 50.00 | 17.600 | 17.280 | 877.49 | | 2025.02.17 | 3.20 | 12.740 | 12.720 | 40.75 | | 2025.02.14 | ...

Core Viewpoint -津上机床中国 has been actively repurchasing its shares, indicating a strategy to enhance shareholder value amidst market fluctuations [1] Group 1: Share Buyback Details - On February 28,津上机床中国 repurchased 500,000 shares at a price range of HKD 17.280 to HKD 17.600, totaling HKD 8.7749 million [1] - The closing price on the same day was HKD 17.400, reflecting a decline of 7.64%, with a total trading volume of HKD 51.0763 million [1] - Year-to-date, the company has conducted five buybacks, totaling 756,000 shares and an aggregate amount of HKD 11.9765 million [1]

Financial Performance - Revenue for the six months ended 30 September 2024 amounted to approximately RMB1,978,056,000, representing a 32.4% increase compared to the same period last year[17] - Gross profit reached approximately RMB634,943,000, a 53.3% increase year-on-year[18] - Net profit attributable to shareholders was approximately RMB340,036,000, up 53.7% compared to the same period in 2023[18] - Basic earnings per share increased by 55.2% to RMB0.90[19] - Gross profit margin improved by 4.4 percentage points to 32.1%[17] - Net profit margin increased by 2.4 percentage points to 17.2%[17] - Profit before tax grew by 50.7% to RMB491,491,000[17] - Group's sales revenue and net profit increased by approximately 32.4% and 53.7% YoY to approximately RMB1,978,056,000 and RMB340,036,000 respectively[28] - Gross profit margin increased by approximately 4.4 percentage points to approximately 32.1% compared with the same period last year[28] - Net profit margin increased by approximately 2.4 percentage points to approximately 17.2% compared with the same period last year[28] - Basic earnings per share during the Period under Review was approximately RMB0.90 (same period of last year: RMB0.58)[30] - Total revenue for the six months ended 30 September 2024 was RMB1,978,056,000, a 32.4% increase compared to the same period last year[34][35] - Gross profit increased by 53.3% to RMB634,943,000, with gross profit margin rising 4.4 percentage points to 32.1%[40][45] - Profit for the six months ended 30 September 2024 increased by 53.7% to approximately RMB340,036,000, up by approximately RMB118,778,000 compared to the same period last year[60] - Revenue for the six months ended 30 September 2024 increased to RMB 1,978,056 thousand, up 32.4% from RMB 1,494,386 thousand in the same period in 2023[152] - Gross profit rose to RMB 634,943 thousand, a 53.3% increase compared to RMB 414,077 thousand in 2023[152] - Profit before tax grew to RMB 491,491 thousand, up 50.7% from RMB 326,039 thousand in the previous year[152] - Net profit attributable to owners of the parent increased to RMB 340,036 thousand, a 53.7% rise from RMB 221,258 thousand in 2023[152] - Basic and diluted earnings per share increased to RMB 0.90, up from RMB 0.58 in the same period last year[152] - Profit before tax for the six months ended September 30, 2024, was RMB 491,491,000, up from RMB 326,039,000 in the same period in 2023[162] - Revenue from the sale of goods increased to RMB 1,974,920 thousand, up from RMB 1,491,153 thousand in the same period last year[182] - Total revenue for the six months ended 30 September 2024 was RMB 1,978,056 thousand, compared to RMB 1,494,386 thousand in 2023[182] Market and Industry Trends - Domestic CNC machine tools industry downtrend slowed down and almost hit bottom in Q3 2023, with significant market recovery since March 2023[28] - The demand for machine tools in the manufacturing industry has begun to pick up, expected to enter a new growth cycle[69] - The Group remains confident in the development prospects of CNC machine tools in China, aiming to achieve higher annual results for FY2025 compared to the previous year[73] - The company remains confident in the development prospects of CNC machine tools in China, aiming for full-year performance in FY2025 to exceed the previous year[76] Operational Highlights - The company is the largest foreign-branded CNC machine tool manufacturer in the Chinese market[2] - Products are primarily sold in China, with additional sales to Japan, Europe, the US, and Southeast Asia[3] - The company specializes in high-end CNC machine tools, including precision lathes, machining centers, and grinding machines[3] - Group proactively adjusted product pricing strategy and increased investment in research and development[31] - New plant of the fifth factory in Pinghu completed construction and passed completion acceptance in August, to be put into operation as an assembly plant for turret machines in the second half of this financial year[31] - Precision Tsugami Anhui continued to increase parts and components processing categories to expand its machining capacity of parts and components[31] - Precision lathes sales increased by RMB455,982,000 (36.1%), contributing the most to revenue growth[34][35] - The company invested approximately RMB130 million in two new plants, expected to increase production capacity by 3,000 to 4,000 units of CNC precision machine tools[63] - The Group expects to increase production capacity by 3,000 to 4,000 units of CNC precision machine tools with the new plant in Pinghu[74] - The company expects to increase production capacity by 3,000 to 4,000 units of CNC precision machine tools with the new Pinghu factory operational in October[76] - The company plans to enhance production efficiency and expand capacity to strengthen its competitive advantage[76] - The company will continue to improve cost efficiency and introduce new models that better meet market and customer demands[76] - The company's primary business is the manufacture and sale of high precision CNC machine tools[167] - The Group operates in a single reportable segment, manufacturing and selling high-precision CNC machine tools[179] Expenses and Costs - Selling and distribution expenses increased by 22.3% to RMB93,057,000, accounting for 4.7% of total revenue[42][47] - Administrative expenses rose by 58.0% to RMB85,633,000, representing 4.3% of total revenue[49][50] - Other income and gains decreased by RMB12,596,000 to RMB36,460,000, mainly due to lower bank interest income[43][46] - Other expenses decreased by RMB6,795,000 to RMB750,000, primarily due to reduced net exchange losses[51][53] - Net impairment loss on financial assets was RMB70,000, compared to a net gain of RMB1,326,000 in the same period last year[52][54] - Finance costs decreased to RMB402,000 from RMB606,000 due to lower interest from discounted bank bills[55] - Income tax expense increased by 44.5% to approximately RMB151,455,000 compared to the same period last year, driven by higher revenue and profit before tax[56][58] - Financing costs decreased to approximately RMB402,000 (compared to RMB606,000 last year) due to reduced bank bill discount interest[57] - Cost of inventories sold increased to RMB 1,343,219 thousand from RMB 1,079,349 thousand in the previous year[186] - Research and development costs rose significantly to RMB 46,566 thousand, up from RMB 16,848 thousand in 2023[186] - Employee benefit expenses, including wages and salaries, increased to RMB 189,147 thousand from RMB 147,732 thousand[186] - Income tax expense for the six months ended 30 September 2024 was RMB 151,455 thousand, compared to RMB 104,781 thousand in the same period in 2023, with current tax at RMB 135,537 thousand and deferred tax at RMB 15,918 thousand[191] Cash Flow and Financial Position - Cash and bank balances decreased to approximately RMB948,520,000 (from RMB1,111,063,000 as of 31 March 2024) due to lower net operating cash inflows, driven by increased inventories (RMB110,030,000) and trade receivables (RMB160,409,000)[60] - Net current assets increased to approximately RMB2,364,532,000 (from RMB2,156,810,000 as of 31 March 2024), with a current ratio of 4.3 times (up from 3.7 times)[60] - Capital expenditures for the six months ended 30 September 2024 amounted to approximately RMB31,466,000, primarily for factory buildings and parts processing equipment[60] - Capital commitments as of 30 September 2024 amounted to approximately RMB6,854,000 (down from RMB27,032,000 as of 31 March 2024)[63] - The company had no outstanding bank loans or other borrowings as of 30 September 2024[60] - Total non-current assets increased to RMB 679,019 thousand as of 30 September 2024, compared to RMB 669,217 thousand as of 31 March 2024[154] - Total current assets grew to RMB 3,075,948 thousand as of 30 September 2024, up from RMB 2,963,018 thousand as of 31 March 2024[154] - Net current assets increased to RMB 2,364,532 thousand as of 30 September 2024, compared to RMB 2,156,810 thousand as of 31 March 2024[154] - Total equity attributable to owners of the parent rose to RMB 2,900,224 thousand as of 30 September 2024, up from RMB 2,701,589 thousand as of 31 March 2024[154] - The company repurchased and cancelled ordinary shares, resulting in a reduction of RMB 5,819 thousand in treasury shares[158] - Total equity increased from RMB 2,528,893,000 to RMB 2,610,029,000 from April 1, 2023, to September 30, 2023, driven by retained profits growth[159] - Retained profits grew by RMB 221,258,000 during the period, reaching RMB 1,687,791,000 as of September 30, 2023[159] - Consolidated reserves increased from RMB 2,290,193,000 to RMB 2,611,793,000 as of September 30, 2024, compared to the same period in 2023[160] - Cash generated from operations for the six months ended September 30, 2024, was RMB 140,353,000, compared to RMB 378,663,000 in the same period in 2023[162] - Net cash flows from operating activities for the six months ended September 30, 2024, were RMB 9,462,000, significantly lower than RMB 277,677,000 in the same period in 2023[165] - Net cash flows from investing activities for the six months ended September 30, 2024, were RMB 247,254,000, compared to a net outflow of RMB 122,920,000 in the same period in 2023[165] - Cash and cash equivalents at the end of the period increased to RMB 788,391,000 from RMB 650,434,000 in the same period in 2023[165] - Dividends paid during the six months ended September 30, 2024, amounted to RMB 138,372,000, slightly lower than RMB 140,122,000 in the same period in 2023[165] - The company repurchased shares worth RMB 5,819,000 during the six months ended September 30, 2024[165] Shareholder and Ownership Information - The company's public float requirement is maintained at not less than 25% as per the Listing Rules[82] - Tang Donglei, Chairman and CEO, holds 350,000 shares directly, representing 0.09197% of issued shares[85] - Tang Donglei is deemed to have an interest in 75,000 shares through his spouse, representing 0.01970% of issued shares[85] - Li Zequn, Executive Director, holds 100,000 shares directly, representing 0.02627% of issued shares[85] - Mami Matsushita, Non-executive Director, holds 75,000 shares directly, representing 0.01970% of issued shares[85] - Kenji Yoneyama, Non-executive Director, holds 75,000 shares directly, representing 0.01970% of issued shares[85] - Tsugami Japan holds a 65.04% beneficial ownership in the company with 247,530,000 shares[93] - FIL Limited, Pandanus Associates Inc., and Pandanus Partners L.P. each hold a 7.01% interest in the company with 26,687,427 shares[93][94] - FMR LLC holds a 5.00% interest in the company with 19,049,425 shares[93][95] - Tang Donglei, Chairman and CEO, holds 39,000 shares in Tsugami Japan, representing 0.08125% ownership[88] - Takao Nishijima, Non-executive Director, holds 414,000 shares in Tsugami Japan, representing 0.8625% ownership[88] - Mami Matsushita, Non-executive Director, holds 115,900 shares in Tsugami Japan, representing 0.2414% ownership[88] - Kenji Yoneyama, Non-executive Director, holds 29,700 shares in Tsugami Japan, representing 0.0618% ownership[88] - As of 30 September 2024, no other substantial shareholders' interests were reported beyond those disclosed[99] Share Award Scheme - The company adopted a Share Award Scheme on 10 November 2023 to incentivize and retain talent[102] - The Share Award Scheme does not involve issuing new shares[103] - The company adopted a Share Award Scheme on November 10, 2023, aimed at incentivizing and retaining talent by allowing eligible participants to share in the company's strategic development[105] - The Share Award Scheme does not involve the issuance of new shares for awards[106] - The total number of awarded shares under the Scheme cannot exceed 6% of the company's issued share capital, which is 22,848,240 shares[109] - No single participant can receive more than 1% of the company's issued share capital under the Scheme[109] - The Scheme is valid for 10 years from the adoption date, with approximately 9 years remaining[109] - Awarded shares will vest according to the Scheme's terms, with no specified vesting period[115] - Vesting conditions require the grantee to remain a director or employee of the Group or related entity until the vesting date[115] - Details of the movements of awarded shares during the review period are provided in a table[118] - Tang Donglei, Director, was granted 200,000 unvested shares on 11 March 2024, with a vesting date of 11 March 2027 and a fair value of HKD 9.29 per share[120] - Wang Xiaojun, Director's spouse, was granted 75,000 unvested shares on 11 March 2024, with a vesting date of 11 March 2027 and a fair value of HKD 9.29 per share[120] - Li Zequn, Director, was granted 100,000 unvested shares on 11 March 2024, with a vesting date of 11 March 2027 and a fair value of HKD 9.29 per share[120] - Mami Matsushita, Director, was granted 75,000 unvested shares on 11 March 2024, with a vesting date of 11 March 2027 and a fair value of HKD 9.29 per share[120] - Kenji Yoneyama, Director, was granted 75,000 unvested shares on 11 March 2024, with a vesting date of 11 March 2027 and a fair value of HKD 9.29 per share[120] - Three other highest paid individuals were granted a total of 375,000 unvested shares on 11 March 2024, with a vesting date of 11 March 2027 and a fair value of HKD 9.29 per share[120] - 21 other employees of the Group were granted a total of 1,175,000 unvested shares on 11 March 2024, with a vesting date of 11 March 2027 and a fair value of HKD 9.29 per share[120] - Two related entity participants were granted a total of 150,000 unvested shares on 11 March 2024, with a vesting date of 11 March 2027 and a fair value of HKD 9.29 per share[120] - The total number of unvested shares granted during the reporting period was 2,225,000, with a fair value of HKD 9.29 per share[120] - As of 1 April 2024 and 30 September 2024, 20,623,240 awarded shares will be available for grant under the Scheme[126] Corporate Governance and Compliance - The Company has adopted the Model Code for Securities Transactions by Directors of Listed Issuers, and all Directors have complied with the required standards during the review period[139][141] - Dr. Tang Donglei has been serving as both the Chairman and CEO since April 1, 2022, a deviation from the Corporate Governance Code, but the Board believes this arrangement benefits the Company by ensuring consistent leadership and operational efficiency[140] - The audit committee reviewed the Group's unaudited condensed consolidated interim financial results for the six months ended September 30, 2024, including accounting principles, risk management, and internal controls[143][144] - Ernst & Young conducted an independent review of the unaudited condensed consolidated interim financial results in accordance with Hong Kong Standard on Review Engagement 2410[144][146] - The interim financial information for the six months ended September 30, 2024, was prepared in accordance with International Accounting Standard 34 (IAS 34), and no material discrepancies were identified[148][149] - The company adopted revised IFRSs for the first time in the current period's financial information, including amendments to IFRS 16, IAS 1, and IAS 7/IFRS 7[169][170][171] - Amendments to IFRS 16 did not impact the company's financial position or performance as it has no sale and leaseback transactions with variable lease payments[174] - The 2020 and 2022 amendments to IAS 1 clarified the classification of liabilities as current or non-current, but did not change the company's liability classification[174] - Amendments to IAS 7 and IFRS 7 require additional

Summary of Earnings Call Transcript Company Overview - The earnings call pertains to Jing Shang Precision Machine Tool (China) Co., Ltd. [1] Financial Performance - **Sales Revenue**: 1.98 billion RMB, a year-on-year increase of 32.4% [1] - **Gross Profit**: Increased by 53.3%, with a gross margin of 32.1%, up by 4.4 percentage points [1] - **Net Profit**: 340 million RMB, a year-on-year increase of 53.7%, with a net margin of 17.2%, up by 2.4 percentage points [1][2] - **Historical Performance**: Both gross and net margins have reached historical highs [2] Market Conditions - The market for CNC machine tools has entered a growth cycle since March 2023, with significant improvements noted in March and April, followed by slight declines in May and June, and a recovery in October [2][3] - Despite improved performance, competition remains intense, with price reductions becoming a common strategy among manufacturers [3][4] Company Strategy and Operations - The company has focused on cost reduction and efficiency improvements since 2018, which has positively impacted profitability [4][5] - **Financial Indicators**: - Current assets increased by 110 million RMB - Net assets increased by 200 million RMB - Current liabilities decreased by 76 million RMB - Total assets grew by 120 million RMB [5][6] Cash Flow and Inventory Management - Cash flow from operating activities decreased to 900,000 RMB due to increased receivables and inventory [6][7] - Inventory increased by 110 million RMB, but the company maintains that the inventory is manageable and necessary for meeting short delivery times [7][9] Product Sales Breakdown - **Precision Lathes**: Account for 86.8% of sales, with a year-on-year increase of 36.1% [10] - **Sales by Product Type**: - Automatic lathes: 65.2% of precision lathe sales, with a growth of 42.4% - Tool lathes: 21.6% of precision lathe sales, with a growth of 20.3% [10][11] - **Domestic vs. Overseas Sales**: Domestic sales increased by 34.9%, while overseas sales grew by 19.4% [12] Industry Trends - The automotive sector has become increasingly significant, contributing 40.4% of sales, with 12.4% from new energy vehicles [13] - Other sectors like 3C electronics have seen a decline in sales contribution, dropping below 10% [13] New Product Development - The company is focusing on optimizing existing products and introducing new models to meet market demands [14][15] - New industries targeted include humanoid robots and AI-related applications, with significant potential for growth [17][18] Future Outlook - The company anticipates challenges from economic pressures and international trade dynamics but remains optimistic about maintaining competitive advantages [32][34] - Plans to expand production capacity and improve operational efficiency are in place to prepare for future market demands [24][25] Dividend Policy - The company has increased its dividend from 0.4 HKD to 0.45 HKD, reflecting strong performance and cash reserves [27] Key Takeaways - The company has demonstrated strong financial growth amidst a competitive landscape, with a focus on cost management and product optimization - Future growth is expected to be driven by new product development and expansion into emerging markets, particularly in the automotive and AI sectors - The company remains vigilant about market conditions and is prepared to adjust strategies as necessary to maintain profitability and market share

Revenue and Profit Growth - Revenue for the six months ended September 30, 2024, increased to RMB 1,978,056 thousand, up 32.4% compared to RMB 1,494,386 thousand in the same period last year[2] - Net profit attributable to owners of the parent company grew to RMB 340,036 thousand, up 53.7% from RMB 221,258 thousand in the same period last year[2] - Revenue from customer contracts for the six months ended September 30, 2024, was RMB 1,978.056 million, compared to RMB 1,494.386 million for the same period in 2023, representing a 32.4% increase[14][15] - Sales revenue increased by 32.4% to approximately RMB 1,978,056 thousand, with net profit rising by 53.7% to RMB 340,036 thousand[27] - Profit for the period increased by 53.7% to approximately RMB 340,036 thousand, an increase of RMB 118,778 thousand compared to the same period last year[39] Gross Profit and Margin - Gross profit rose to RMB 634,943 thousand, a 53.3% increase from RMB 414,077 thousand in the prior year period[2] - Gross profit margin increased by 4.4 percentage points to 32.1%, and net profit margin rose by 2.4 percentage points to 17.2%[27] - Gross profit increased by 53.3% to RMB 634,943 thousand, driven by cost reduction and efficiency improvements[31] Earnings Per Share - Basic earnings per share increased to RMB 0.90, compared to RMB 0.58 in the prior year period[2] - Basic earnings per share for the six months ended September 30, 2024, were RMB 0.90, based on a profit attributable to ordinary equity holders of RMB 340.036 million, compared to RMB 0.58 for the same period in 2023[20] Assets and Liabilities - Total assets as of September 30, 2024, stood at RMB 3,075,948 thousand, up 3.8% from RMB 2,963,018 thousand as of March 31, 2024[3] - Inventory increased to RMB 968,719 thousand as of September 30, 2024, up 13.0% from RMB 857,075 thousand as of March 31, 2024[3] - Trade receivables and bills rose to RMB 1,141,877 thousand, a 16.3% increase from RMB 981,537 thousand as of March 31, 2024[3] - Cash and bank balances decreased to RMB 948,520 thousand, down 14.6% from RMB 1,111,063 thousand as of March 31, 2024[3] - Trade receivables and notes as of September 30, 2024, amounted to RMB 1,141.877 million, a 16.3% increase from RMB 981.537 million as of March 31, 2024[21] - Trade payables and notes as of September 30, 2024, were RMB 459.253 million, a 14% decrease from RMB 533.783 million as of March 31, 2024[23] - Net current assets increased to RMB 2,364,532 thousand, with a current ratio of 4.3 times, and capital expenditure for the period was approximately RMB 31,466 thousand, mainly for factory buildings and equipment[41] Equity and Dividends - Total equity attributable to owners of the parent company increased to RMB 2,900,224 thousand, up 7.4% from RMB 2,701,589 thousand as of March 31, 2024[5] - The company declared an interim dividend of HK$0.45 per ordinary share for the six months ended September 30, 2024, compared to HK$0.40 per ordinary share for the same period in 2023[18] - The company declared an interim dividend of HKD 0.45 per share for the six months ended September 30, 2024[25] - The company will pay an interim dividend of HK$0.45 per share for the six months ended September 30, 2024, an increase from HK$0.4 in 2023[51] Expenses and Costs - Sales and distribution expenses increased by 22.3% to RMB 93,057 thousand, mainly due to higher employee salaries and after-sales service costs[33] - Administrative expenses rose by 58.0% to RMB 85,633 thousand, primarily due to increased salaries and development costs[34] - Other expenses decreased by approximately RMB 6,795 thousand to RMB 750 thousand, mainly due to reduced net foreign exchange losses[35] - Net loss on financial assets impairment was approximately RMB 70 thousand, compared to a net gain of RMB 1,326 thousand in the same period last year, primarily due to increased provisions for receivables and notes[36] - Financing costs decreased to RMB 402 thousand from RMB 606 thousand, mainly due to reduced bank bill discount interest[37] - Income tax expenses increased by 44.5% to approximately RMB 151,455 thousand, driven by higher income and pre-tax profits[38] Production and Capacity Expansion - The company continued to expand production capacity, with the new factory in Pinghu completed and operational in the second half of the fiscal year[29] - The company invested approximately RMB 31,466 thousand in fixed assets, including RMB 20,046 thousand in buildings and RMB 5,669 thousand in machinery, to expand production capacity[43] - The company completed the construction of two new factory buildings in the fifth plant area, with a planned investment of approximately RMB 130 million, expected to increase production capacity by 3,000 to 4,000 CNC precision machine tools[43] Industry and Market Trends - The domestic CNC machine tool industry showed signs of recovery, with downstream manufacturing demand rebounding after a period of stagnation[26] - The company expects to enter a new growth cycle, with demand for CNC machine tools in industries such as new energy vehicles, industrial automation, and medical sectors expected to remain strong[47] Financial Reporting and Governance - The company adopted revised International Financial Reporting Standards (IFRS) during the period, including amendments to IFRS 16 and IAS 1, which did not have a material impact on the financial statements[10] - The company's audit committee has reviewed the unaudited condensed interim financial results for the six months ended September 30, 2024, and discussed audit, risk management, internal control, and financial matters with management[58] - The company's external auditor, Ernst & Young, has reviewed the unaudited condensed interim financial results in accordance with Hong Kong Standard on Review Engagements 2410[58] - The company has deviated from the Corporate Governance Code by having the same individual serve as both Chairman and CEO, but believes this arrangement benefits the company by ensuring consistent leadership and efficient execution of business strategies[56] - The company has adopted the Standard Code for Securities Transactions by Directors of Listed Issuers and confirmed that all directors have complied with the code during the review period[57] - The company maintained a public float of not less than 25% as required by the Listing Rules[54] - The company has not purchased, sold, or redeemed any of its listed securities during the six months ended September 30, 2024[53] - The company's financial condition and business operations have not undergone any significant changes since the publication of the latest annual report for the year ended March 31, 2024[50] - The company will suspend the registration of share transfers from December 9, 2024, to December 12, 2024, to determine eligibility for the interim dividend[52] - The company's interim report will be published on the Hong Kong Exchanges and Clearing Limited website and the company's website at an appropriate time[59] Product Sales Performance - Revenue from sales of high-precision CNC machine tools in mainland China for the six months ended September 30, 2024, was RMB 1,684.905 million, a 35% increase from RMB 1,248.770 million in the same period in 2023[15] - Overseas revenue for the six months ended September 30, 2024, was RMB 293.151 million, a 19.3% increase from RMB 245.616 million in the same period in 2023[15] - Precision lathe sales increased by 36.1% to RMB 1,717,388 thousand, contributing the most to revenue growth[30] - Precision machining center sales grew by 8.7%, and precision grinding machine sales increased by 5.4%[30]

Financial Performance - The net profit for FY2024 is RMB 800 million, an increase from RMB 700 million in FY2023, representing a growth of approximately 14.3%[5] - The total net assets of the company stand at RMB 3,000 million as of FY2024, up from RMB 2,702 million in FY2023[5] - The Group's sales revenue for the Year was approximately RMB 3,119,674,000, representing a decrease of approximately 22.9% compared to the previous financial year[12] - The net profit for the Year was approximately RMB 479,970,000, with a net profit margin of approximately 15.4%, reflecting a year-on-year increase of approximately 1.1 percentage points[12] - The Group's profit for the year decreased by approximately 17.1% from RMB579,188,000 to RMB479,970,000[41] - Total revenue decreased by approximately 22.9%, or approximately RMB 927,228,000, from approximately RMB 4,046,902,000 in the last financial year to approximately RMB 3,119,674,000[29] - Gross profit decreased by approximately 13.6% to approximately RMB 895,539,000, while gross profit margin increased from approximately 25.6% to approximately 28.7%[33] - Basic earnings per share during the Year under Review was approximately RMB1.26, down from approximately RMB1.52 in the last financial year[25] Market Position and Business Operations - The company has established itself as the largest foreign-branded CNC machine tool manufacturer in the Chinese market, with 21 years of rapid development since its inception in 2003[2] - The main business includes the customization, development, production, and sales of CNC high precision machine tools, primarily serving industries such as automobile parts, IT electronics, and industrial automation[9] - The company exports its products to various regions including Japan, South Korea, Europe, and the United States, in addition to its primary market in Mainland China[9] - The company has a strong presence in the supply chains of renowned global manufacturers in the automotive and electronics sectors[9] - The company’s products are recognized for their high quality and have gained wide acceptance in multiple industries, including medical instruments and construction machinery[3] Strategic Initiatives and Future Outlook - The company continues to explore market expansion opportunities and new product development to sustain its competitive edge[8] - The Company plans to continue investing in new models and proprietary models for special industries to capture potential segment-specific demand and boost sales[15] - The Group plans to continue expanding its product lines and production capacity while strengthening marketing and after-sales service systems[18] - The Group expects performance in 2024 to be significantly higher than 2023, driven by the robust supply chain and intelligent transformation in China's manufacturing industry[69] - Demand for CNC machine tools has been in a downturn throughout 2023, but signs of recovery were observed in March and April, indicating a potential new growth cycle[16] Challenges and Market Conditions - The domestic manufacturing industry is facing weak demand for CNC machine tools, leading to a price reduction strategy among machine tool companies[13] - The macroeconomic environment remains challenging, with insufficient demand for production equipment across the domestic manufacturing industry[22] - The real estate industry continued to decline, negatively impacting related upstream and downstream industries[22] - The new energy vehicle industry experienced slight growth but is currently undergoing capacity adjustments, leading to reduced demand for manufacturing equipment[22] - The domestic manufacturing industry's demand for CNC machine tools remained sluggish, influenced by a complex international situation and geopolitical conflicts[22] Corporate Governance and Management - Dr. Tang was appointed as the CEO and Chairman of the Company on April 1, 2022, and has been with the Group since November 2005, focusing on overall management and strategic planning[74] - The Company has a strong management team with members having backgrounds in precision machinery and engineering from prestigious institutions such as Harbin Institute of Technology and Kanazawa University[75][78] - The Company is focused on expanding its market presence and enhancing its product offerings through strategic management and operational excellence[74][76] - The governance structure has been reinforced with the establishment of various committees, including audit and remuneration committees, to ensure accountability[84] - The Board is committed to maintaining robust corporate governance practices across all departments to ensure satisfactory and sustainable returns to shareholders[96] Risk Management and Internal Controls - The Board acknowledges its responsibility for risk management and internal control systems, continuously supervising their effectiveness to manage business objective risks[174] - An independent professional risk advisor has been commissioned to develop a risk management framework and conduct risk assessments, identifying major risks faced by the Group[175] - The Group's risk management process includes ranking risks based on likelihood and severity, with appropriate internal control measures developed to mitigate these risks[175] - The Group's risk management and internal control systems are regularly reviewed by the Board and the Audit Committee to ensure effectiveness[179] ESG and Corporate Social Responsibility - The Group received the "Most Valuable Industrial Manufacturing Company" award at the 8th Golden Hong Kong Stocks Awards in December 2023[187] - The ESG Report aims to demonstrate the Group's performance in corporate governance, environmental protection, employment practices, operational practices, and community investment[188] - The Group's ESG governance structure includes a Board and an Audit Committee responsible for overseeing ESG matters, with at least one annual meeting to align ESG strategies with business objectives[189] - The Group values stakeholder opinions and maintains close communication to improve ESG performance and create greater value for society[200] Shareholder Engagement and Communication - The Company aims to keep investors updated with relevant information in a timely manner[167] - The Company has established a Shareholders' Communication Policy to promote effective communication with shareholders and stakeholders, ensuring satisfactory implementation and effectiveness[170] - Shareholders can propose candidates for election as Directors by submitting a written notice to the Company within a specified timeframe[164] - The Company encourages shareholders to submit proposals as early as practicable to facilitate necessary arrangements[163]

Financial Performance - The total revenue for the fiscal year ending March 31, 2024, was RMB 3,119,674,000, a decrease of 23% compared to RMB 4,046,902,000 in the previous year[2] - Gross profit for the same period was RMB 895,539,000, down from RMB 1,036,121,000, reflecting a gross margin decline[2] - The net profit for the year was RMB 479,970,000, a decrease of 17% from RMB 579,188,000 in the previous year[2] - Basic and diluted earnings per share for the year were RMB 1.26, compared to RMB 1.52 in the previous year[2] - The group's profit before tax for the year ended March 31, 2024, was RMB 702,734,000, a decrease of 16.5% compared to RMB 841,019,000 in 2023[31] - The total income tax expense for the year was RMB 222,764,000, down 15% from RMB 261,831,000 in 2023[30] - The company’s other income and gains increased by approximately 24.7% to about RMB 85,268 thousand, mainly due to a significant increase in bank interest income[51] - The company reported a net foreign exchange gain of RMB 5,909,000, compared to a loss of RMB 1,703,000 in the previous year[6] Assets and Liabilities - Total assets as of March 31, 2024, amounted to RMB 3,495,244,000, an increase from RMB 3,275,365,000 in the previous year[3] - Current assets totaled RMB 2,963,018,000, up from RMB 2,870,410,000, indicating improved liquidity[3] - The company’s non-current liabilities increased to RMB 124,438,000 from RMB 108,063,000, indicating a rise in long-term obligations[4] - Non-current assets in mainland China increased to RMB 644,510 thousand as of March 31, 2024, from RMB 612,841 thousand in the previous year[19] Revenue Breakdown - Revenue from mainland China was RMB 2,632,420 thousand, down from RMB 3,105,711 thousand, indicating a decrease of about 15.2%[21] - Revenue from overseas markets decreased to RMB 487,254 thousand from RMB 941,191 thousand, reflecting a decline of approximately 48.3%[21] - The company recognized RMB 78,795 thousand in revenue from contract liabilities for the year ended March 31, 2024, compared to RMB 180,783 thousand in the previous year[22] Expenses and Costs - The cost of sales inventory decreased to RMB 2,221,681,000 from RMB 3,008,160,000, reflecting a reduction of 26.1%[6] - Research and development expenses increased to RMB 41,858,000, up 21.5% from RMB 34,427,000 in the previous year[6] - Selling and distribution expenses rose by approximately 5.1% to about RMB 155,851 thousand, accounting for about 5.0% of total revenue[52] - Administrative expenses increased by approximately 7.9% to about RMB 113,856 thousand, primarily due to higher development and administrative costs[53] Cash Flow and Liquidity - The company reported a net cash flow from operating activities of RMB 505,814,000, down from RMB 763,403,000 in the previous year[6] - The current ratio improved to approximately 3.7, compared to 3.3 in the previous fiscal year, due to a decrease in current liabilities by 7.6%[62] Shareholder Information - The company declared a final dividend of HKD 0.40 per share for the year ended March 31, 2024, totaling RMB 140,122 thousand, an increase of 6.3% from RMB 131,633 thousand in 2023[45] - The board has proposed a final dividend of HKD 0.40 per share for the fiscal year ending March 31, 2024, subject to shareholder approval[69] - The annual general meeting is scheduled for August 19, 2024, in Hong Kong, with a suspension of share transfer registration from August 14 to August 19, 2024[79] Corporate Governance - The company is committed to enhancing corporate governance and has adopted a standard code for securities trading by directors[73] - The company’s audit committee has reviewed the audited consolidated financial statements for the fiscal year, ensuring compliance with accounting standards[74] Future Outlook - The company expects its performance in 2024 to be significantly higher than in 2023 due to the robust growth potential of the CNC machine tool market in China[68] - The CNC machine tool demand in China has been sluggish throughout 2023 but is showing signs of recovery, indicating a potential new growth cycle starting in March and April 2024[67] - The company plans to optimize production processes and implement energy-saving measures to improve resource utilization and promote sustainable development[68] Investments and Expansion - The expansion of the Pinghu new factory is expected to be completed and operational by July 2024, positioning the company for future growth opportunities[47] - A new factory is under construction with an investment of approximately RMB 130 million, expected to increase production capacity by 3,000 to 4,000 CNC precision machine tools by July 2024[65] Share Repurchase - The company repurchased a total of 250,000 shares during the review year, which were canceled on June 18, 2024, aiming to enhance earnings per share[77] - In December 2023, the company repurchased 195,000 shares at a price range of HKD 8.99 to HKD 7.91, totaling HKD 1,684,720[78] - In January 2024, the company repurchased 55,000 shares at a price range of HKD 9.00 to HKD 8.84, totaling HKD 491,930[78]

Financial Performance - Revenue for the six months ended 30 September 2023 was RMB 1,494,386,000, a decrease of 32.1% compared to the same period in 2022[9] - Gross profit for the period was RMB 414,077,000, down 22.5% year-over-year[9] - Net profit attributable to shareholders was RMB 221,258,000, a 26.4% decrease compared to the previous year[9] - Basic earnings per share decreased by 26.6% to RMB 0.58[9] - Gross profit margin improved to 27.7%, up 3.4 percentage points from the previous year[9] - Net profit margin increased to 14.8%, up 1.1 percentage points year-over-year[9] - Group's sales revenue decreased by 32.1% year-on-year to approximately RMB1,494,386,000, and net profit decreased by 26.4% to approximately RMB221,258,000[14] - Gross profit margin increased by 3.4 percentage points to 27.7%, and net profit margin increased by 1.1 percentage points to 14.8%[14] - Basic earnings per share decreased by 26.6% to approximately RMB0.58 compared to the same period last year[14] - Total revenue for the six months ended 30 September 2023 was RMB1,494,386,000, a year-on-year decrease of 32.1% compared to RMB2,200,360,000 in the same period last year[22] - Gross profit for the period was RMB414,077,000, a 22.5% decrease year-on-year, but gross profit margin increased by 3.4 percentage points to 27.7%[24][27] - Profit for the period decreased by 26.4% to approximately RMB221,258,000 compared to the same period last year[31] - Revenue for the six months ended 30 September 2023 was RMB 1,494,386 thousand, a decrease from RMB 2,200,360 thousand in the same period in 2022[77] - Gross profit for the six months ended 30 September 2023 was RMB 414,077 thousand, down from RMB 534,098 thousand in 2022[77] - Profit before tax for the six months ended 30 September 2023 was RMB 326,039 thousand, compared to RMB 442,776 thousand in 2022[77] - Net profit for the six months ended 30 September 2023 was RMB 221,258 thousand, a decrease from RMB 300,693 thousand in 2022[77] - Basic and diluted earnings per share for the six months ended 30 September 2023 were RMB 0.58, down from RMB 0.79 in 2022[77] - Profit before tax for the six months ended 30 September 2023 was RMB 326,039 thousand, a decrease from RMB 442,776 thousand in the same period last year[85] - Profit before tax from continuing operations for the six months ended 30 September 2023 was RMB 221,258 thousand, compared to RMB 300,693 thousand in the same period in 2022[111] Market and Industry Trends - The company is the largest foreign-branded CNC machine tool manufacturer in China's machine tools market[4] - Products are primarily sold in China, with additional sales to Japan, Europe, the US, and Southeast Asia[5] - The company manufactures high-end CNC machine tools including precision lathes, machining centers, and grinding machines[5] - Key industries served include automotive parts, IT communications, electronics, and industrial automation[5] - Sales of precision lathes decreased by 32.8% to approximately RMB616,164,000, significantly impacting the company's revenue[19] - Sales of precision machining centers decreased by 51.4% due to the downturn in the 3C and automobile industries[19] - Precision grinding machines recorded revenue similar to the same period last year[19] - The demand for CNC machine tools in Mainland China is still lower than the same period last year, but may bottom out in Q3 2023 and start to pick up within the year or the first half of next year[35] - The new energy automobile industry experienced a contraction in capital expenditure demand this year, while industrial automation, healthcare, and mold industries outperformed year-on-year[35] - The domestic market for medium and high-end CNC machine tools is still in the expansion stage, with strong potential demand driven by China's transformation to high value-added, technology-intensive manufacturing[36] Operational and Strategic Initiatives - The company continued to invest in expanding production capacity, with the new Pinghu factory expected to be completed and operational by July 2024[17] - The company actively participated in local trade fairs to strengthen connections with end customers and explore potential market segments[16] - The Group plans to launch new products and optimize its product portfolio to meet customer needs and maintain competitive edge by reducing costs and enhancing cost-effectiveness[36] - The Group will continue to optimize manufacturing processes and implement energy-saving and emission-reduction measures to enhance resource utilization efficiency and promote sustainable development[37] - The Board approved a share award scheme on 10 November 2023 to recognize contributions, retain talents, and attract suitable personnel for further development[40] - The company adopted a share incentive plan on November 10, 2023, to retain and attract talent by purchasing shares from the secondary market[44] - New company Precision Nakatsu (China) Corporation has a planned production capacity of 4,000-4,500 units of CNC precision machine tools with an annual production value of RMB1,000,000,000[32] - Construction of a new plant building with an investment of approximately RMB130,000,000 began during the period, with RMB46,071,000 already utilized[32] Financial Position and Cash Flow - Net operating cash inflows increased to approximately RMB277,677,000 from RMB163,679,000 in the same period last year[31] - Total cash and bank balances increased to approximately RMB1,071,934,000 as of 30 September 2023[31] - Current ratio improved to 4.1 times from 3.3 times as of 31 March 2023[31] - Capital expenditures for the period amounted to approximately RMB54,704,000, primarily for factory buildings and mechanical equipment[31] - Gearing ratio increased slightly to 0.18% from 0.12% as of 31 March 2023[31] - Capital commitments contracted but not provided for amounted to approximately RMB56,272,000 as of 30 September 2023[32] - Investment in fixed assets during the period included approximately RMB50,218,000 in buildings and RMB3,418,000 in machinery and equipment[32] - Total non-current assets as of 30 September 2023 were RMB 670,530 thousand, an increase from RMB 638,955 thousand as of 31 March 2023[79] - Total current assets as of 30 September 2023 were RMB 2,713,100 thousand, a decrease from RMB 2,870,410 thousand as of 31 March 2023[79] - Total current liabilities as of 30 September 2023 were RMB 657,585 thousand, down from RMB 872,409 thousand as of 31 March 2023[79] - Net current assets as of 30 September 2023 were RMB 2,055,515 thousand, an increase from RMB 1,998,001 thousand as of 31 March 2023[79] - Total equity as of 30 September 2023 was RMB 2,610,029 thousand, up from RMB 2,528,893 thousand as of 31 March 2023[79] - Total comprehensive income for the period was RMB 221,258 thousand, compared to RMB 300,693 thousand in the same period last year[81][82] - Dividend distribution for the period was RMB 140,122 thousand, compared to RMB 131,633 thousand in the same period last year[81][82] - Cash generated from operations for the six months ended 30 September 2023 was RMB 378,663 thousand, an increase from RMB 286,233 thousand in the same period last year[85] - Income taxes paid for the six months ended 30 September 2023 were RMB 100,986 thousand, a decrease from RMB 122,554 thousand in the same period last year[85] - Decrease in trade and notes receivables was RMB 81,110 thousand, compared to RMB 66,447 thousand in the same period last year[85] - Decrease in inventories was RMB 171,969 thousand, compared to an increase of RMB 35,204 thousand in the same period last year[85] - Increase in other payables and accruals was RMB 12,903 thousand, compared to a decrease of RMB 6,434 thousand in the same period last year[85] - Increase in contract liabilities was RMB 8,262 thousand, compared to a decrease of RMB 91,654 thousand in the same period last year[85] - Decrease in deferred income was RMB 424 thousand, consistent with the same period last year[85] - Net cash flows from operating activities increased to RMB 277,677 thousand in 2023, up from RMB 163,679 thousand in 2022[87] - Interest received rose significantly to RMB 15,841 thousand in 2023, compared to RMB 5,875 thousand in 2022[87] - Purchases of property, plant, and equipment increased to RMB 54,704 thousand in 2023, up from RMB 16,798 thousand in 2022[87] - Net cash flows used in investing activities increased to RMB 122,920 thousand in 2023, compared to RMB 13,418 thousand in 2022[87] - Dividends paid decreased to RMB 140,122 thousand in 2023, down from RMB 131,633 thousand in 2022[87] - Net cash flows used in financing activities decreased to RMB 142,895 thousand in 2023, compared to RMB 155,118 thousand in 2022[87] - Cash and cash equivalents at the end of the period increased to RMB 650,434 thousand in 2023, up from RMB 550,576 thousand in 2022[87] Expenses and Costs - Selling and distribution expenses increased by 0.5% to RMB76,062,000, accounting for 5.1% of total revenue[26][29] - Administrative expenses remained stable at RMB54,207,000 compared to RMB54,660,000 in the same period last year[30] - Other expenses increased by RMB3,239,000 to RMB7,545,000, mainly due to a RMB1,719,000 increase in exchange losses and RMB2,048,000 in compensation expenses[30] - Impairment gains on financial assets increased to RMB1,326,000 from RMB571,000 due to the reversal of impairment provision[30] - Finance costs increased to RMB606,000 from RMB70,000 due to higher interest from bank bill discounting[30] - Income tax expenses decreased by 26.3% to RMB104,781,000 due to lower revenue and pre-tax profit[30] - Cost of inventories sold decreased to RMB 1,079,349 thousand in 2023 from RMB 1,665,155 thousand in 2022[102] - Research and development costs decreased to RMB 16,848 thousand in 2023 from RMB 18,224 thousand in 2022[102] - Employee benefit expenses, including wages and salaries, decreased to RMB 147,732 thousand in 2023 from RMB 157,042 thousand in 2022[102] - Government grants received decreased to RMB 32,381 thousand in 2023 from RMB 36,792 thousand in 2022[102] - Total tax charge for the period decreased to RMB 104,781 thousand in 2023 from RMB 142,083 thousand in 2022[107] - Depreciation of property, plant, and equipment decreased to RMB 26,909 thousand in 2023 from RMB 28,867 thousand in 2022[102] - Bank interest income increased to RMB (15,841) thousand in 2023 from RMB (5,875) thousand in 2022[102] - Reversal of impairment loss on inventories was RMB (304) thousand in 2023 compared to RMB (216) thousand in 2022[102] Dividends and Shareholder Information - The Board declared an interim dividend of HK$0.4 per share for the six months ended 30 September 2023, payable on 12 January 2024[43] - The company announced an interim dividend of HKD 0.4 per share for the six months ended September 30, 2023, unchanged from the previous year[46] - The company declared an interim dividend of HK$0.4 per share, totaling HK$152,321,600, for the six months ended 30 September 2023[108] - The register of members will be closed from December 8, 2023, to December 12, 2023, for the interim dividend eligibility[47][49] - Dr. Tang Donglei, Chairman and CEO, holds 150,000 shares, representing 0.039% of the issued shares[54] - Tang Donglei holds 13,000 shares, representing 0.026% of the associated corporation's shareholding[57] - Takao Nishijima holds 414,000 shares, representing 0.828% of the associated corporation's shareholding[57] - Mami Matsushita holds 18,200 shares, representing 0.0364% of the associated corporation's shareholding[57] - Kenji Yoneyama holds 14,700 shares, representing 0.0294% of the associated corporation's shareholding[57] - Tsugami Japan holds 270,000,000 shares, representing 70.90% of the issued shares[60] - FIL Limited holds 23,399,000 shares, representing 6.14% of the issued shares[60] - FMR LLC holds 19,049,425 shares, representing 5.00% of the issued shares[60] - Pandanus Associates Inc. and Pandanus Partners L.P. each hold 23,399,000 shares, representing 6.14% of the issued shares[60] - FIAM LLC directly holds 4,295,972 shares and Fidelity Management & Research Company LLC directly holds 14,753,453 shares, totaling 19,049,425 shares[61] Corporate Governance and Compliance - The company's public float requirement is maintained at not less than 25% as per the Hong Kong Stock Exchange Listing Rules[51][53] - No significant changes in the company's financial or business conditions were reported for the six months ended September 30, 2023[45] - The company did not purchase, sell, or redeem any of its listed securities during the review period[48][50] - No subsisting share option scheme during the review period[63] - Dr. Tang Donglei ceased roles as president and legal representative of Precision Tsugami (China) Corporation and related entities from October 1, 2023[63] - Mr. Kenji Yoneyama appointed as representative director and chairman of Tsugami General Service Co., Ltd and director of Precision Tsugami (China) Corporation in 2023[63] - Company deviated from Corporate Governance Code provisions C.1.8 and C.2.1 due to reasonable grounds[65] - Dr. Tang Donglei serves as both Chairman and CEO since April 1, 2022, deviating from Corporate Governance Code provision C.2.1[65] - All Directors complied with the Model Code for Securities Transactions during the review period[66] - Audit committee reviewed unaudited condensed consolidated interim financial results for six months ended September 30, 2023[67] - External auditor Ernst & Young reviewed interim financial results in accordance with Hong Kong Standard on Review Engagement 2410[67] - Interim financial information prepared in compliance with IAS 34 and Hong Kong Listing Rules[70] - Review conducted in accordance with Hong Kong Standard on Review Engagements 2410[71] Revenue and Sales Breakdown - Revenue from the sale of high precision CNC machine tools decreased to RMB 1,491,153 thousand in 2023 from RMB 2,197,130 thousand in 2022[98] - Total revenue from contracts with customers dropped to RMB 1,494,386 thousand in 2023 compared to RMB 2,200,360 thousand in 2022[98] - Revenue from Mainland China decreased to RMB 1,248,770 thousand in 2023 from RMB 1,650,339 thousand in 2022[99] - Overseas revenue declined to RMB 245,616 thousand in 2023 from RMB 550,021 thousand in 2022[99] - Revenue from rendering of services remained stable at RMB 3,233 thousand in 2023 compared to RMB 3,230 thousand in 2022[98] - Sales of goods to Tsugami Corporation amounted to RMB 226,372 thousand, a decrease of 56.4% compared to RMB 519,843 thousand in the same period last year[132] - Purchases of materials from Tsugami Corporation totaled RMB 61,861 thousand, down 51.9% from RMB 128,581 thousand in the previous year[132] - Licence fee paid to Tsugami Corporation was RMB 67,965 thousand, a decrease of 32.8% from RMB 101,150 thousand in the same period last year[132] Assets and Liabilities - Trade and notes receivables decreased to RMB738,106,000 as of 30 September 2023 from RMB817,892,000 as of 31 March 2023, with trade receivables dropping to RMB131,228,000 from RMB219,414,000[117] - Trade and notes payables decreased to RMB393,577,000 as of 30 September 2023 from RMB626,673,000 as of 31 March 2023, with trade payables dropping to RMB342,354,000 from RMB545,268,000[122] - The Group's capital commitments decreased to RMB56,272,000 as of 30 September 2023 from RMB112,602,000 as of 31 March 2023, primarily due to a reduction in machinery commitments[128] - The credit period for trade receivables is generally one to six months, with the majority (RMB126,445,000) being within 3 months as of 30 September 2023[121] - The Group maintains strict control over outstanding receivables, with senior management actively monitoring overdue balances, and does not hold any collateral for trade receivables[118] - Trade payables are non-interest-bearing and are typically settled within 90 days, with the majority (RMB342,

Financial Performance - Revenue for the six months ended September 30, 2023, was RMB 1,494,386, a decrease of 32% compared to RMB 2,200,360 for the same period in 2022[2] - Gross profit for the period was RMB 414,077, down 22.5% from RMB 534,098 in the previous year[2] - Profit before tax decreased to RMB 326,039, representing a decline of 26.4% from RMB 442,776 in the same period last year[2] - Net profit for the period was RMB 221,258, a decrease of 26.4% compared to RMB 300,693 in the prior year[2] - Basic and diluted earnings per share for the period were RMB 0.58, down from RMB 0.79 in the previous year[2] - For the six months ended September 30, 2023, total revenue was approximately RMB 1,494,386 thousand, a decrease of about RMB 705,974 thousand or 32.1% compared to the same period last year[28] - The net profit for the same period was approximately RMB 221,258 thousand, representing a decline of about 26.4% year-on-year[26] - Gross profit for the same period was approximately RMB 414,077 thousand, a decrease of 22.5%, while the overall gross margin increased by 3.4 percentage points to approximately 27.7%[30] Assets and Equity - Non-current assets increased to RMB 670,530 as of September 30, 2023, compared to RMB 638,955 as of March 31, 2023[3] - Current assets decreased to RMB 2,713,100 from RMB 2,870,410 as of March 31, 2023[3] - Total equity increased to RMB 2,610,029 as of September 30, 2023, from RMB 2,528,893 as of March 31, 2023[4] - Trade receivables as of September 30, 2023, amounted to RMB 738,106 thousand, a decrease from RMB 817,892 thousand as of March 31, 2023[22] - Cash and bank balances increased to approximately RMB 1,071,934 thousand as of September 30, 2023, up from RMB 977,572 thousand as of March 31, 2023, driven by increased operating cash flow[37] Revenue Breakdown - Revenue from the sale of high-precision CNC machine tools was RMB 1,491,153 thousand, while service revenue was RMB 3,233 thousand for the six months ended September 30, 2023[15] - Revenue from the domestic market in mainland China was RMB 1,248,770 thousand, down from RMB 1,650,339 thousand in the previous year, indicating a decrease of about 24%[15] - Revenue from overseas markets was RMB 245,616 thousand, compared to RMB 550,021 thousand in the same period of 2022, reflecting a decline of approximately 55%[15] Expenses and Other Income - Other income and gains amounted to approximately RMB 49,056 thousand, an increase of RMB 6,241 thousand, primarily due to increased bank interest income from higher cash and bank balances[31] - Selling and distribution expenses were approximately RMB 76,062 thousand, an increase of 0.5% compared to the previous year, accounting for about 5.1% of total revenue[32] - Capital expenditures for the period were approximately RMB 54,704 thousand, primarily for the construction of factory buildings and machinery[39] Dividends and Shareholder Returns - The company declared a final dividend of HKD 0.40 per share, totaling HKD 152,321,600, which was approved by shareholders and paid in September 2023[18] - The company announced an interim dividend of HKD 0.4 per share for the six months ending September 30, 2023, consistent with the previous year[43] - The company maintains a stable dividend policy to create investment returns for shareholders[41] Business Operations and Strategy - The company continues to focus on the manufacturing and sales of high-precision CNC machine tools[6] - The company plans to complete the expansion of the Pinghu new factory by July 2024, which will prepare for the introduction of new technologies and product updates[27] - The company continues to actively participate in local exhibitions to strengthen connections with end customers and explore potential niche markets[26] - The company is closely monitoring industry trends and will adjust strategies flexibly to seize market opportunities[41] - The company is committed to improving product competitiveness and increasing market share for long-term growth[41] - The company will continue to optimize production processes and implement energy-saving measures to enhance resource efficiency and promote sustainable development[41] Compliance and Accounting Standards - The financial data is prepared in accordance with International Accounting Standard 34, indicating compliance with international financial reporting standards[7] - The group does not have any contracts within the scope of IFRS 17, thus the standard has no impact on its financial position or performance[10] - The implementation of IAS 1 (Revised) is expected to affect the accounting policy disclosures in the annual consolidated financial statements but has no impact on the interim condensed consolidated financial information[11] - The group has applied the amendments to IAS 12 (Revised) regarding deferred tax assets and liabilities without any impact on its financial position or performance[12] - The group has not been affected by the OECD's Pillar Two legislation template, and thus the related amendments have no impact on its financial position[12] Employment and Workforce - The company employed 2,177 employees as of September 30, 2023, with total employee costs amounting to approximately RMB 182,115 thousand, representing 12.19% of total revenue[40] Market Conditions - The demand for CNC machine tools in mainland China remains lower than the same period last year, but feedback indicates a potential bottoming out in Q3 2023, with possible recovery in the latter half of the year or early next year[41] - The company believes that the domestic mid-to-high-end CNC machine tool market is still in an expansion phase, driven by the transition to high value-added, technology-intensive manufacturing[41] Miscellaneous - No significant changes in the company's financial condition or business performance have occurred since the latest annual report[42] - The company has not purchased, sold, or redeemed any of its listed securities during the six months ending September 30, 2023[45] - The company will issue its interim report to shareholders and make it available on relevant websites[50]

Company Overview and Market Position - Precision Tsugami (China) Corporation Limited is the largest foreign-branded CNC machine tool manufacturer in the Chinese market, with 20 years of rapid development since its establishment in 2003[2] - The company manufactures and sells high-end CNC machine tools, including precision lathes, machining centers, and grinding machines, primarily for the Chinese market, with additional sales to Japan, Europe, the United States, and Southeast Asia[2] - The company's products are widely recognized in industries such as automobile parts, IT communications, electronics, and industrial automation, with a focus on high speed, high precision, and high rigidity[2] - The company's products are sold under the TSUGAMI brand, with or without customizations, through overseas sales channels managed by Tsugami Japan[2] - The company's market position as the largest foreign-branded CNC machine tool manufacturer in China is supported by an industry report from Frost & Sullivan (Beijing) Inc., Shanghai Branch Co., dated December 2018[2] - The company has grown into the largest foreign-branded CNC machine tool manufacturer in the Chinese market since its establishment in 2003[189][190] Financial Performance - Sales revenue for the fiscal year 2023 was approximately RMB 4,046,902,000, representing an 8.4% decrease compared to the previous fiscal year[10] - Gross profit margin decreased from 26.5% in the previous fiscal year to 25.6% for the fiscal year 2023[10] - Net profit for the fiscal year 2023 was approximately RMB 579,188,000, with a net profit margin of 14.3%, a year-on-year decrease of 0.8 percentage points[10] - Basic earnings per share for the fiscal year 2023 amounted to approximately RMB 1.62[10] - The Group's sales revenue for the year was approximately RMB4,046,902,000, a decrease of 8.4% compared to the previous financial year[22] - The gross profit margin decreased from 26.5% to 25.6%, and the net profit margin decreased by 0.8 percentage points to 14.3%[22] - The net profit for the year was approximately RMB579,188,000[22] - Total revenue decreased by 8.4% to approximately RMB4,046,902,000, down from RMB4,419,887,000 last year[25] - Precision lathes sales decreased by 10.4% to approximately RMB3,467,575,000[25] - Precision machining centres sales increased by 5.9% to approximately RMB247,817,000 due to higher demand from the new energy vehicle industry[25] - Precision grinding machines sales decreased by 4.0% to approximately RMB162,858,000[25] - Other sales, including ancillary parts and components, increased by 15.3% to approximately RMB168,652,000[25] - Gross profit decreased by 11.7% to approximately RMB1,036,121,000, with gross profit margin dropping from 26.5% to 25.6%[29] - Other income and gains decreased by 62.1% to approximately RMB68,357,000, primarily due to a one-off insurance compensation of RMB110,530,000 in the previous year[31] - Administrative expenses increased by 10.1% to approximately RMB105,559,000, driven by higher development and depreciation expenses[32] - Other expenses decreased significantly by approximately RMB106,379,000 to RMB11,470,000, mainly due to the absence of fire-related losses from the previous year[33] - Finance costs decreased to approximately RMB674,000 from RMB2,141,000, due to lower interest from bank bill discounting[35] - Income tax expenses decreased by 14.6% to approximately RMB261,831,000 due to lower revenue and profit before tax[40] - Profit for the year decreased by 13.2% from RMB667,404,000 in 2022 to RMB579,188,000 in 2023[40] - Cash and cash equivalents increased to approximately RMB638,572,000 as of 31 March 2023, up from RMB555,433,000 in 2022, driven by higher net cash flows from operating activities and reduced capital expenditures[40] - Net current assets rose to approximately RMB1,998,001,000 as of 31 March 2023, compared to RMB1,655,353,000 in 2022[40] - Capital expenditures for the year ended 31 March 2023 amounted to approximately RMB57,909,000, primarily for processing equipment and software[40] - The Group's gearing ratio decreased to 0.12% as of 31 March 2023, down from 1.1% in 2022[40] - Average inventory turnover days increased to 127 days in 2023, up by 31 days compared to 2022, due to a 22.2% increase in average inventory balance and an 8.4% decrease in sales[47][48] - Current ratio improved to 3.3 as of 31 March 2023, compared to 2.4 in 2022[45] - The Group's average turnover days of trade and notes receivables for the year ended 31 March 2023 were approximately 92 days, representing an increase of approximately 1 day compared to last year[49] - The Group's average turnover days of trade and notes payables for the year ended 31 March 2023 were approximately 88 days, representing an increase of approximately 12 days compared to last year, mainly due to a 5.3% increase in the average balance of trade and bills payables[49] - As at 31 March 2023, the Group's current ratio was approximately 3.3 times, compared to 2.4 times in the previous year, with trade payables decreasing by approximately 24% and overall current liabilities decreasing by approximately 28%[49] - The Group's capital commitments as at 31 March 2023 included RMB105,902,000 for property, plant, and equipment, and RMB6,700,000 for equity investments designated at fair value through other comprehensive income[51] - Precision Nakatsu's new plant investment increased by approximately RMB100 million, with a planned investment of approximately RMB130 million for another plant[51] - The total fees paid or payable to the independent auditor, Ernst & Young, for audit and non-audit services during the year amounted to RMB 1,370 thousand, with audit fees for the year ended 31 March 2023 being RMB 870 thousand and interim review fees for the six months ended 30 September 2022 being RMB 500 thousand[146] COVID-19 Impact and Market Challenges - The COVID-19 pandemic and strict prevention measures significantly impacted logistics, production, and demand for CNC machine tools, particularly in Eastern China[13] - The COVID-19 pandemic and strict control measures significantly impacted logistics and production in Eastern China, particularly in Shanghai, leading to a decline in demand for CNC machine tools[21][24] - The CNC machine tool industry entered a downward adjustment phase due to declining market demand and reduced confidence in the macroeconomic situation[21][24] - COVID-19 pandemic and international geopolitics significantly impacted China's manufacturing industry and overall economy, leading to a decline in demand for high-end CNC machine tools[149] Strategic Initiatives and Future Plans - The company focused on improving product performance, service quality, and cost reduction to enhance competitiveness in a shrinking market[14] - The company continued to invest in new technologies, upgrade existing models, and expand sales of key products to explore potential market demand[14] - The company is preparing for future market demand recovery by investing in the equipment of Tsugami Anhui and constructing a fifth new factory in Pinghu[14] - The company focused on improving product performance, service quality, and reducing costs to enhance competitiveness in a shrinking market[23][24] - The company continued its medium and long-term expansion strategy, including investments in equipment at Tsugami Anhui and the construction of a new factory in Pinghu[23][24] - The company invested in new technologies and models to upgrade existing products and explored potential market demand[23][24] - The company remains confident in the long-term demand for high-end CNC machine tools due to the transformation and upgrading of the Chinese manufacturing industry[17][19] - The company plans to expand product lines, increase production capacity, and strengthen marketing and after-sales service systems to achieve medium and long-term development goals[59] - The company aims to improve product performance, service quality, and reduce costs to provide competitive and cost-effective products, aiming to overtake competitors and increase market share[59] - The company emphasizes the importance of upgrading and transforming China's manufacturing industry from labor-intensive to technology-intensive and further to intelligent manufacturing[58] Corporate Governance and Board Structure - The company has adopted the Corporate Governance Code (CG Code) as its own code of corporate governance and ensures continuous compliance through periodic reviews[89][90] - The roles of Chairman and Chief Executive Officer are performed by the same individual, Dr. Tang Donglei, which deviates from the CG Code[91] - The Board consists of at least three independent non-executive Directors, with at least one-third representation at all times during the year[95] - The Board is responsible for determining the Group's business and investment plans, preparing annual financial budgets, and supervising management[94] - The company has not made insurance arrangements for Directors as it considers no additional risk exists[91] - The company has adopted the Model Code for Securities Transactions by Directors and confirms compliance by all Directors during the year[92][93] - The management provides monthly updates to all Board members in accordance with the CG Code[95] - The Board is collectively responsible for directing and supervising the Company's affairs, including strategy implementation, operational and financial performance monitoring, and ensuring sound internal control and risk management systems[98] - The Board reserves decision-making authority on major matters such as policy, strategies, budgets, internal control, risk management, material transactions, financial information, and significant operational matters[99] - The Chairman and CEO roles are combined under Dr. Tang Donglei, which the Board believes provides consistent leadership and facilitates prompt execution of business strategies, despite deviating from the CG Code[101] - Non-executive Directors, including independent non-executive Directors, provide strategic advice, ensure high standards of financial reporting, and safeguard the interests of the Company and shareholders[102] - The Board Independence Evaluation Mechanism was established to ensure a strong independent element on the Board, with annual reviews conducted to improve effectiveness and identify areas for improvement[105] - Independent non-executive Directors constitute more than one-third of the Board, providing diversified expertise and independent judgment on strategies, prospects, and internal control[106] - The independence assessment for all Directors was completed individually during the year ended 31 March 2023, with satisfactory results[106] - The Board reviewed the implementation and effectiveness of the Board Independence Evaluation Mechanism during the year ended 31 March 2023, with satisfactory results[107] - Directors receive induction upon appointment and are encouraged to participate in continuous professional development to refresh their knowledge and skills[109] - All Directors participated in continuous professional development during the year and provided records of their training to the Company[110] - All directors participated in appropriate continuous professional development and provided training records for the year[111] - The Board convened a total of four meetings during the year to update directors on business developments[114] - Directors received meeting agendas and relevant documents prior to each Board meeting, ensuring timely and accurate information[115] - The Chairman held a separate meeting with all independent non-executive directors without the presence of other directors[116] - Executive and non-executive directors attended both in-house/external training (Type A) and self-study (Type B) for professional development[113] - Independent non-executive directors Dr. Satoshi Iwabuchi and Dr. Eiichi Koda did not participate in any training during the year[113] - Mr. Motoi Yamada was appointed on 29 April 2022 and resigned on 28 June 2023[113] - Mr. Kenji Yoneyama resigned on 29 April 2022 and was re-appointed on 28 June 2023[113] - Dr. Satoshi Iwabuchi was appointed as an independent non-executive director on 28 June 2023[113] - Dr. Eiichi Koda resigned as an independent non-executive director on 28 June 2023[113] Remuneration and Audit Committees - The Audit Committee reviewed the audited consolidated financial statements for the year ended 31 March 2022 and unaudited consolidated financial statements for the six months ended 30 September 2022[117] - The Audit Committee held two meetings during the year to review financial statements and assess the effectiveness of risk management and internal control systems[117] - The Remuneration Committee determined the remuneration for newly appointed Director Mr. Motoi Yamada and Senior Management Member Dr. Wang Xiaokun[123] - The Remuneration Committee reviewed and approved remuneration packages for Directors and senior management, aligning with industry market standards[123] - The Group's audited consolidated annual results were reviewed by the Audit Committee, confirming compliance with applicable accounting standards and adequate disclosure[118] - The Remuneration Committee's policy links discretionary bonuses and merit payments to the Group's profit performance and individual performance of Directors and senior management[120] - The Audit Committee recommended the re-appointment of the external auditor and approved their remuneration and terms of engagement[117] - The Remuneration Committee held two meetings during the year to address remuneration matters for Directors and senior management[123] - The Audit Committee reviewed the external auditor's independence, objectivity, and the effectiveness of the audit process[118] - The Remuneration Committee's remuneration policy is based on experience, level of responsibility, and general market conditions[120] - The company's senior management remuneration ranges from HK$1,000,001 to HK$2,500,000, with 1 individual in the HK$1,000,001 to HK$1,500,000 band and 2 individuals in the HK$1,500,001 to HK$2,500,000 band[125] Nomination and Diversity Policies - The Nomination Committee held 2 meetings during the year, recommending changes to the Board committee and reviewing the Board's structure, size, composition, and diversity[126] - The company has adopted a Diversity Policy aiming to maintain a balanced and diverse Board profile, considering aspects such as professional experience, skills, gender, age, and cultural background[126] - The Nomination Committee will set measurable objectives for achieving gender diversity on the Board, including numerical targets and timelines[127] - The Nomination Committee will monitor and report annually on the implementation of the Diversity Policy, including progress towards achieving gender diversity on the Board[128] - The Board currently has 1 female member, achieving gender diversity at the Board level, and aims to maintain at least 1 female Director in compliance with Listing Rules[130] - The Nomination Committee reviewed the Board's structure, size, and diversity to ensure compliance with Listing Rules and alignment with the company's strategy and governance[130] - The company currently has one female board member and aims to maintain at least one female board member to comply with gender diversity requirements[131] - As of 31 March 2023, the company's workforce consists of 2,238 employees, with 68.45% male and 31.55% female employees[132] - The company has adopted a nomination policy on 28 December 2018, outlining criteria for director nomination and appointment, including character, integrity, qualifications, and diversity factors[132] - The nomination committee and/or board may recruit director candidates from various sources, including internal promotion, re-designation, and external recruitment agencies[135] - The nomination committee and/or board assesses candidates based on criteria such as professional qualifications, skills, experience, independence, and gender diversity[134] - The nomination committee makes recommendations to the board for the appointment of suitable candidates as directors[136] - The nomination committee reviews the overall contribution and service of retiring directors and determines if they still conform to the criteria for re-election[136] Risk Management and Internal Control - The Board has established a risk management and internal control system to manage the risk of failure to achieve business objectives, including ESG risks, and to enhance operational efficiency. However, the system provides reasonable, not absolute, assurance against material misstatement or loss[176][178] - The Group has commissioned an independent professional risk advisor to develop a risk management framework, conduct risk assessments, and identify major risks, including ESG risks, ranked by likelihood and severity of impact[177][179] - The internal audit department is responsible for independently reviewing the adequacy and effectiveness of the risk management and internal control systems[180] - The Group has established clear internal control policies, a code of conduct, a comprehensive financial accounting system, and anti-corruption policies to ensure compliance and prevent unethical activities[180] - Management and the internal audit department report findings and the effectiveness of risk management and internal control systems to the Audit Committee and the Board[181][182] - The Board conducts an annual review of financial, operational, and compliance monitoring systems, assessing their effectiveness based on reports from the Audit Committee, management, and internal auditors[183][184] - The company has established an effective risk management and internal control system, covering financial, operational, and compliance monitoring, ensuring accurate financial data and asset protection[185] - The company has implemented an Inside Information Policy to handle and disseminate inside information, ensuring compliance and preventing unauthorized disclosure[186][187] ESG and Sustainability - The company integrates ESG (Environmental, Social, and Governance) concepts into its risk management system and daily operations, emphasizing sustainable development[191] - The company was awarded the "Most Valuable Industrial Manufacturing Company" at the 7th Golden Hong Kong Stocks Awards in December 2022[191] - The company received the title of "Meritorious Enterprise in 2022" from the Pinghu Municipal People's Government in January 2023[191] - The company established an ESG governance structure, with the Board and Audit Committee overseeing ESG matters, holding at least one annual meeting to align ESG strategy with business goals[192] - The ESG working group, composed of core members from various departments, collaborates with third parties to collect and analyze ESG data, monitor performance, and ensure compliance with regulations[192] - The reporting scope covers major operating locations in China, including Precision Tsugami (China) Corporation, Shinagawa Precision Machinery (Zhejiang), and Precision Tsugami (Anhui)[194] - The company conducted a materiality assessment to identify key ESG issues, reviewed and confirmed by the Board, Audit Committee, and working group[196] - The ESG report follows the ESG Reporting Guide of the Hong Kong Stock Exchange, ensuring consistency with the previous year's report unless stated otherwise[196][199] - The company maintains close communication with stakeholders to address core concerns and improve ESG performance through constructive dialogue[200] Shareholder Communication and Engagement - The company maintains an open-door and effective policy for investor communication, providing timely updates through its website and other channels[164][167] - The company has established multiple channels for ongoing dialogue with shareholders, including corporate communications, announcements, and shareholder meetings[168][