TINGYI(00322)2024-09-02 04:10Financial Performance - Revenue increased by 0.7% to RMB 41,201,208 thousand in the first half of 2024 compared to the same period in 2023[2] - Gross profit margin improved by 2.1 percentage points to 32.6% in the first half of 2024[2] - EBITDA rose by 12.2% to RMB 4,824,605 thousand in the first half of 2024[2] - Net profit attributable to shareholders increased by 15.1% to RMB 1,885,310 thousand in the first half of 2024[2] - Basic earnings per share increased by RMB 4.39 cents to RMB 33.46 cents in the first half of 2024[2] - The company's profit for the period was RMB 1.89 billion, contributing to total comprehensive income of RMB 1.82 billion for the six months ended June 30, 2024[9] - Total comprehensive income for the six months ended June 30, 2024 was RMB 2.17 billion, including minority interests[9] - Revenue from customer contracts reached RMB 41,166.58 million, with the beverage segment contributing RMB 27,063.46 million and the instant noodle segment contributing RMB 13,768.26 million[14] - Profit before tax for the beverage segment grew to RMB 1,988.96 million, up 27.6% from RMB 1,558.80 million in H1 2023[14][15] - The company's total profit for the period was RMB 2,235.07 million, up 16.2% from RMB 1,922.88 million in H1 2023[14][15] - Revenue increased by 0.7% YoY to RMB 41.201 billion, with beverage revenue growing by 1.7% and instant noodle revenue declining by 1.0%[41] - EBITDA grew by 12.2% YoY to RMB 4.825 billion, with net profit attributable to shareholders increasing by 15.1% to RMB 1.885 billion[41] - Instant noodle business revenue declined by 1.0% YoY to RMB 13.814 billion, but gross margin improved by 1.3 percentage points to 27.1%[42][44] - Beverage business revenue grew by 1.7% YoY to RMB 27.065 billion, with gross margin improving by 2.5 percentage points to 35.2%[42][48] - Net profit for the beverage business increased by 26.9% YoY to RMB 1.115 billion, driven by gross margin improvement[48] Cash Flow and Liquidity - Cash and bank deposits (including long-term time deposits) increased by RMB 3,191,904 thousand to RMB 17,930,285 thousand as of June 30, 2024[2] - Bank balances and cash rose to RMB 10,790,607 thousand as of June 30, 2024, compared to RMB 6,754,466 thousand at the end of 2023[6] - Operating cash flow increased to RMB 4,405.46 million in H1 2024, up 15.3% from RMB 3,821.84 million in H1 2023[10] - Net cash from operating activities rose to RMB 3,510.43 million, a 23.5% increase compared to RMB 2,842.99 million in the same period last year[10] - The company's cash and cash equivalents increased to RMB 10,816.89 million as of June 30, 2024, compared to RMB 14,283.72 million in the same period last year[10] - The company's operating cash inflow was RMB 3.51 billion, with a net cash increase of RMB 3.192 billion in bank deposits and cash (including long-term fixed deposits)[54] - The company's net cash position was RMB 2.87 billion, an increase of RMB 1.861 billion compared to December 31, 2023[54] Assets and Liabilities - Total assets grew to RMB 56,019,751 thousand as of June 30, 2024, up from RMB 53,149,654 thousand at the end of 2023[6] - Inventory decreased to RMB 4,028,366 thousand as of June 30, 2024, compared to RMB 4,385,268 thousand at the end of 2023[6] - Accounts receivable increased to RMB 2,111,989 thousand as of June 30, 2024, up from RMB 1,579,983 thousand at the end of 2023[6] - Total liabilities increased to RMB 40.25 billion as of June 30, 2024, compared to RMB 35.93 billion as of December 31, 2023[7] - Net current liabilities worsened to RMB -13.08 billion as of June 30, 2024, from RMB -8.72 billion as of December 31, 2023[7] - Total equity decreased to RMB 15.77 billion as of June 30, 2024, from RMB 17.22 billion as of December 31, 2023[7] - Current liabilities increased to RMB 34.92 billion as of June 30, 2024, compared to RMB 29.19 billion as of December 31, 2023[7] - Long-term interest-bearing borrowings decreased to RMB 3.99 billion as of June 30, 2024, from RMB 5.25 billion as of December 31, 2023[7] - Reserves decreased to RMB 11.51 billion as of June 30, 2024, from RMB 12.91 billion as of December 31, 2023[7] - Minority interests decreased to RMB 3.27 billion as of June 30, 2024, from RMB 3.33 billion as of December 31, 2023[7] - Total assets increased to RMB 56,019,751 thousand as of June 30, 2024, compared to RMB 53,149,654 thousand as of December 31, 2023, reflecting growth in the company's asset base[16] - The beverage segment's assets grew to RMB 32,673,296 thousand as of June 30, 2024, up from RMB 32,415,379 thousand as of December 31, 2023, indicating continued investment in this key segment[16] - Total liabilities increased to RMB 40,250,703 thousand as of June 30, 2024, compared to RMB 35,927,410 thousand as of December 31, 2023, reflecting higher financial obligations[16] - The company's total assets and total liabilities as of June 30, 2024, were RMB 56.02 billion and RMB 40.251 billion, respectively, with a debt ratio of 71.9%, up 4.3 percentage points from the end of 2023[54] Segment Performance - The beverage segment's revenue grew by 1.7% year-over-year, reaching RMB 27,065.28 million in H1 2024[14] - The instant noodle segment's profit before tax increased by 3.4% to RMB 1,128.52 million in H1 2024[14] - The beverage segment experiences strong seasonal demand during Q2 and Q3, with peak sales occurring from June to August due to hot weather conditions[17] - The company focused on premium and high-end instant noodle products, such as "Soup Master" and "Yupin Feast," to meet consumer demand for quality and health[46] - The beverage business launched new sugar-free tea products, including "Sugar-Free Jasmine Tea" and "Sugar-Free Oolong Tea," to align with health trends[49] - The company leveraged celebrity endorsements and IP collaborations, such as with Disney's Zootopia, to enhance brand visibility and drive sales[45][49][50] - The company launched new products such as "Starbucks Raw Coffee" series and "Gatorade Electrolyte Drink," expanding its market presence in specific consumer segments[53] - The company's "Chun Cui Zero Sugar" tea drink and "Speed Noodle House" reduced-salt beef noodles were recognized as landmark achievements in the food industry's nutrition and health initiatives[57] - The company's "Pure Joy" brand collaborated with the "Sweet Potato Travel Agency" IP and China National Geographic to create the "Pure Journey" campaign, enhancing brand visibility[52] - The company's "Juice" product line introduced new flavors and packaging upgrades, focusing on health and regional ingredient preferences[51] Tax and Financial Expenses - The company's tax payments decreased to RMB 809.13 million, down 17.1% from RMB 690.50 million in H1 2023[14][15] - The company's tax expenses for the first half of 2024 totaled RMB 809,130 thousand, up from RMB 690,497 thousand in the same period of 2023, driven by higher current tax payments[18] - Financial expenses decreased to RMB 214,229 thousand in the first half of 2024, down from RMB 264,353 thousand in the same period of 2023, reflecting lower interest costs[18] - The company benefits from tax incentives in China's western regions, where certain subsidiaries enjoy a reduced corporate income tax rate of 15%[19] - In Singapore, the company qualifies for partial tax exemption schemes, with 75% exemption on the first SGD 10,000 of taxable income and 50% on the next SGD 190,000[19] - The company has engaged tax experts to assist with the implementation of OECD's Pillar Two model rules, which are not expected to have a material impact on operations[20] Shareholder and Dividend Information - The company approved final and special final dividends totaling RMB 3.12 billion for 2023, reducing total equity[9] - Basic earnings per share increased to 33.46 RMB cents in the first half of 2024, up from 29.07 RMB cents in the same period of 2023[21] - Diluted earnings per share rose to 33.46 RMB cents in H1 2024 compared to 29.04 RMB cents in H1 2023[21] - The total number of share options under the 2008 Share Option Plan as of June 30, 2024, was 15,722,000, with 9,137,000 options canceled or expired during the period[69] - No share options under the 2008 Share Option Plan were exercised during the six months ended June 30, 2024[69] - Under the 2018 Share Option Plan, 2,478,000 share options were granted on April 27, 2018, with an exercise period from April 30, 2021, to April 26, 2028[72] - Under the 2018 Share Option Plan, 5,626,000 share options were granted on April 27, 2018, with an exercise period from April 30, 2021, to April 26, 2024[72] - The total number of share options under the 2018 Share Option Plan as of June 30, 2024, was 2,478,000, with 3,785,000 options canceled or expired during the period[73] - No share options under the 2018 Share Option Plan were exercised during the six months ended June 30, 2024[73] - As of June 30, 2024, Executive Director Wei Hongming held 5,000,000 shares, representing 0.09% of the total shares, with 1,385,000 shares held by beneficial owners[75] - As of June 30, 2024, Executive Director Wei Hongcheng held 5,000,000 shares, representing 0.09% of the total shares, with 1,385,000 shares held by beneficial owners[75] - As of June 30, 2024, CEO Chen Yingrang held 1,380,000 shares, representing 0.02% of the total shares[75] - No other directors or their immediate family members were granted any rights to acquire shares or debentures of the company during the period ended June 30, 2024[75] - The board of directors includes executive directors Wei Hongming, Ida Junichiro, Wei Hongcheng, Shinohara Koji, Takahashi Yukiyuki, and Zeng Qian, as well as independent non-executive directors Xu Xinqun, Li Changfu, and Tochio Masaya[77] - The announcement was made by Chairman Wei Hongming on August 26, 2024, in Hong Kong[78] Investments and Capital Expenditures - Investment in property, plant, and equipment increased to RMB 1,829.87 million, up 30.4% from RMB 1,402.83 million in H1 2023[10] - Capital expenditure commitments for property, plant, and equipment increased to RMB 1,263,837 thousand, up 17.4% from RMB 1,076,179 thousand in 2023[37] - Investment funds increased from RMB 254,349 thousand to RMB 384,126 thousand, a growth of 51.0%[30] - Structured deposits grew from RMB 50,000 thousand to RMB 323,072 thousand, a significant increase of 546.1%[30] - Non-listed equity securities decreased slightly from RMB 158,518 thousand to RMB 154,560 thousand, a decline of 2.5%[30] Risk Management and Internal Controls - The company has established a risk management and internal control system based on the COSO framework, aiming to control overall risk at an acceptable level and ensure operational efficiency and compliance[63] - The company has implemented a three-line defense organizational structure for risk management, with the audit committee assisting the board in reviewing the effectiveness of the system[64] ESG and Corporate Responsibility - The company has been recognized for its ESG contributions, including being awarded the "2024 ESG Annual Case" by People's Daily and the "Green and Low-Carbon Partner" title by the Shanghai Energy Conservation Promotion Week Organizing Committee[58] Future Outlook and Strategy - The company expects domestic demand to remain a key driver of economic growth in the second half of 2024, with a focus on consolidating, innovating, and developing its business strategies[59] - The company plans to expand its instant noodle product offerings with different specifications, prices, and flavors to cater to consumer needs and drive industry growth[59] - The beverage division aims to accelerate the establishment of scale advantages, focusing on core products and expanding innovative offerings to meet diverse consumer scenarios and boost sales growth[59] - The company emphasizes long-term development by increasing investment in basic research, talent development, brand building, digital operations, and food safety control[59] Accounts Receivable and Payable - Accounts receivable aged 0-90 days increased to 2,014,920 thousand RMB as of June 30, 2024, from 1,490,555 thousand RMB at December 31, 2023[23] - Total accounts payable grew to 9,455,348 thousand RMB as of June 30, 2024, up from 8,572,717 thousand RMB at December 31, 2023[26] Loans and Financial Instruments - The company issued new bank loans totaling 8,408,387 thousand RMB in the first half of 2024, compared to 10,666,968 thousand RMB in the same period of 2023[25] - Repayments of bank loans amounted to 7,211,969 thousand RMB in H1 2024, down from 10,820,642 thousand RMB in H1 2023[25] - Financial assets measured at fair value through profit or loss totaled 1,123,441 thousand RMB as of June 30, 2024, compared to 1,314,415 thousand RMB at December 31, 2023[28] - Level 3 financial assets (unobservable inputs) increased to 861,758 thousand RMB as of June 30, 2024, from 1,145,230 thousand RMB at December 31, 2023[28] - The company's notes payable had a fair value of 3,479,117 thousand RMB as of June 30, 2024, up from 3,333,928 thousand RMB at December 31, 2023[25] Related Party Transactions - Sales to joint ventures increased from RMB 455,357 thousand to RMB 485,253 thousand, a growth of 6.6%[38] - Purchases from companies controlled by directors and their relatives decreased from RMB 3,031,420 thousand to RMB 2,860,992 thousand, a decline of 5.6%[38] - Distribution costs paid to companies controlled by directors' family members decreased slightly from RMB 886,256 thousand to RMB 870,636 thousand, a decline of 1.8%[38] - Promotional expenses paid to companies controlled by major shareholders increased from RMB 25,893 thousand to RMB 26,713 thousand, a growth of 3.2%[38] - Rental income from investment properties and property, plant, and equipment decreased from RMB 17,842 thousand to RMB 16,076 thousand, a decline of 9.9%[38] Operational Metrics - The company's finished goods turnover period decreased to 16.7 days from 19.5 days, and the accounts receivable turnover period increased to 8.1 days from 7.7 days[55] - The company's current ratio decreased to 0.6x from 0.7x, and the net debt-to-capital ratio dropped to -23.0% from -7.3%[55] - The company's employee count as of June 30, 2024, was 64,797, with significant efforts in leadership and organizational capacity building[56]