TINGYI(00322)2023-08-29 04:10Revenue and Profit Growth - Revenue increased by 7.04% to RMB 40,907.46 million compared to the same period last year[2] - Net profit attributable to shareholders increased by 30.66% to RMB 1,637.67 million[2] - Net profit for the first half of 2023 was RMB 1,922,879 thousand, compared to RMB 1,494,574 thousand in the same period of 2022, an increase of 28.7%[9] - Total comprehensive income for the first half of 2023 was RMB 1,896,008 thousand, a 166.4% increase from RMB 711,905 thousand in the same period of 2022[9] - The company's total profit for the period increased to RMB 1,922,879 thousand in H1 2023, up from RMB 1,494,574 thousand in H1 2022[13] - Net profit attributable to shareholders increased to RMB 1,637,670 thousand for the first half of 2023, compared to RMB 1,253,367 thousand for the same period in 2022[19] - Group revenue increased by 7.04% YoY to RMB 40.907 billion in the first half of 2023, with instant noodle revenue growing by 2.97% and beverage revenue growing by 9.50%[44] - EBITDA increased by 25.87% YoY to RMB 4.302 billion, and net profit attributable to shareholders rose by 30.66% YoY to RMB 1.638 billion[44] - Instant noodle business net profit attributable to shareholders surged by 48.11% YoY to RMB 806 million, driven by improved gross profit margin[45] - Beverage business net profit attributable to shareholders increased by 18.06% YoY to RMB 879 million, supported by favorable raw material costs and product mix[49] Gross Profit Margin and Cost Efficiency - Gross profit margin improved by 2.25 percentage points to 30.47%[2] - Gross profit margin improved by 2.25 percentage points YoY to 30.47%, driven by favorable pricing and raw material costs[44] - Instant noodle business revenue reached RMB 13.95 billion, accounting for 34.10% of total group revenue, with gross profit margin increasing by 5.20 percentage points YoY to 25.83%[45] - Beverage business revenue grew by 9.50% YoY to RMB 26.606 billion, contributing 65.04% of total group revenue, with gross profit margin improving by 0.52 percentage points YoY to 32.66%[49] Cash Flow and Liquidity - Cash and cash equivalents stood at RMB 21,315.62 million as of June 30, 2023, an increase of RMB 1,427.26 million from December 31, 2022[2] - Bank balances and cash increased to RMB 14,257.34 million from RMB 12,323.92 million at the end of 2022[6] - Operating cash flow from activities increased to RMB 3,821,835 thousand in the first half of 2023, up from RMB 1,917,870 thousand in the same period of 2022[10] - Net cash generated from operating activities rose to RMB 2,842,994 thousand in H1 2023, compared to RMB 1,278,828 thousand in H1 2022[10] - The company's cash and cash equivalents stood at RMB 14,283,716 thousand as of June 30, 2023, down from RMB 17,119,711 thousand as of June 30, 2022[10] - Net cash used in investing activities decreased to RMB 205,312 thousand in H1 2023, compared to RMB 2,621,194 thousand in H1 2022[10] - Operating cash inflow for the period was RMB 2.843 billion, while investment cash outflow was RMB 205 million, with asset activation generating a net cash inflow of RMB 214 million[55] - As of June 30, 2023, the company's bank deposits and cash amounted to RMB 21.316 billion, an increase of RMB 1.427 billion compared to December 31, 2022[55] Segment Performance - Revenue from customer contracts in the instant noodle segment reached RMB 13,913,767 thousand in H1 2023, up from RMB 13,521,336 thousand in H1 2022[13] - Beverage segment revenue from customer contracts grew to RMB 26,600,680 thousand in H1 2023, compared to RMB 24,295,072 thousand in H1 2022[13] - Total revenue from customer contracts across all segments increased to RMB 40,871,653 thousand in H1 2023, up from RMB 38,176,719 thousand in H1 2022[13] - Profit before tax for the beverage segment rose to RMB 1,558,803 thousand in H1 2023, compared to RMB 1,297,489 thousand in H1 2022[14] - Instant noodle business revenue reached RMB 13.95 billion, accounting for 34.10% of total group revenue, with gross profit margin increasing by 5.20 percentage points YoY to 25.83%[45] - Beverage business revenue grew by 9.50% YoY to RMB 26.606 billion, contributing 65.04% of total group revenue, with gross profit margin improving by 0.52 percentage points YoY to 32.66%[49] - The company focused on premium and ultra-premium instant noodle products, targeting middle-class consumers with upgraded offerings such as "Ranhun Noodles" and "Yupin Feast"[47] - Beverage business emphasized health trends, launching new products and optimizing product portfolios for home, travel, and dining-out scenarios[49] Assets and Liabilities - Total assets increased to RMB 59,307.51 million from RMB 58,449.31 million at the end of 2022[6] - Inventory decreased to RMB 4,350.69 million from RMB 5,254.59 million at the end of 2022[6] - Total equity decreased from RMB 16,815,475 thousand in 2022 to RMB 15,653,833 thousand in 2023, a decline of 6.9%[7] - Long-term interest-bearing borrowings increased by 16.3% from RMB 8,415,871 thousand in 2022 to RMB 9,790,341 thousand in 2023[7] - Total liabilities rose from RMB 41,633,831 thousand in 2022 to RMB 43,653,676 thousand in 2023, an increase of 4.8%[7] - Shareholders' equity attributable to the company decreased by 7.6% from RMB 13,371,526 thousand in 2022 to RMB 12,349,587 thousand in 2023[7] - Net current liabilities improved from RMB 7,677,469 thousand in 2022 to RMB 5,104,679 thousand in 2023, a reduction of 33.5%[7] - Convenience food segment assets decreased to RMB 16,669,443 thousand as of June 30, 2023, compared to RMB 20,015,049 thousand as of December 31, 2022[15] - Beverage segment assets increased to RMB 35,623,515 thousand as of June 30, 2023, compared to RMB 34,145,275 thousand as of December 31, 2022[15] - Total liabilities increased to RMB 43,653,676 thousand as of June 30, 2023, compared to RMB 41,633,831 thousand as of December 31, 2022[15] - The company's total assets and total liabilities as of June 30, 2023 were RMB 59.308 billion and RMB 43.654 billion, respectively, with a debt ratio of 73.61%, up 2.38 percentage points from December 31, 2022[55] - The net debt-to-capital ratio decreased from -16.97% at the end of 2022 to -29.89% as of June 30, 2023[55] Dividends and Shareholder Returns - The company approved a final and special final dividend of RMB 2,632,371 thousand for 2022, a decrease of 39.2% compared to the RMB 3,802,482 thousand dividend approved for 2021[9] - The company did not declare an interim dividend for the first half of 2023, compared to a special interim dividend of RMB 44.38 cents per share in 2022[22] Financial Instruments and Investments - Exchange rate differences resulted in a gain of RMB 13,788 thousand in 2023, compared to a loss of RMB 756,978 thousand in 2022[9] - The company's financial assets measured at fair value under Level 3 amounted to RMB 413,914,000 as of June 30, 2023[31] - Total financial assets at fair value through profit or loss increased to RMB 258,488 thousand as of June 30, 2023, compared to RMB 254,349 thousand at the beginning of the period[33] - Non-listed equity securities at fair value through other comprehensive income decreased to RMB 155,426 thousand as of June 30, 2023, from RMB 158,518 thousand at the beginning of the period[33] - Capital expenditure commitments for property, plant, and equipment increased to RMB 772,710 thousand as of June 30, 2023, compared to RMB 541,830 thousand as of December 31, 2022[40] - Purchases of financial assets at fair value through profit or loss amounted to RMB 31,898 thousand as of June 30, 2023, with no such purchases in the previous year[40] - The fair value of Level 3 financial instruments was determined using unobservable inputs such as expected growth rates and average price-to-sales ratios of comparable companies[34] - The valuation process for Level 3 financial instruments involves annual discussions with investment managers and trustees to review valuation techniques and inputs[38] - The company's financial department reviews the valuation of investment funds and non-listed equity securities, ensuring consistency with previous year's assumptions[36] Corporate Governance and Shareholder Structure - The company has complied with the Hong Kong Stock Exchange's Corporate Governance Code, except for deviations from Code Provisions B.2.2 and B.2.4, which are deemed in the company's best interest[60] - The company's three independent non-executive directors have served for over nine years, with Xu Xinqun serving for 22 years, Li Changfu for 18 years, and Fukada Hiroshi for 11 years, and the board believes their long tenure does not compromise their independence[60] - The company has established a risk management and internal control system based on the COSO framework, with no significant deficiencies identified as of June 30, 2023[63][64] - The company did not grant any share options under the 2008 Share Option Scheme during the six months ended June 30, 2023[67] - The 2008 Share Option Scheme, which expired in 2018, was replaced by the 2018 Share Option Scheme, approved by shareholders on April 26, 2018, with a 10-year term[66] - The company's audit committee, chaired by Li Changfu, reviewed the group's performance during the period[62] - The company's internal control and risk management system aims to control overall risk at an acceptable level, ensuring operational efficiency, asset security, and compliance with regulations[63] - The company has not purchased, sold, or redeemed any of its shares during the review period[66] - The company's board ensures the timely publication of financial statements in compliance with statutory requirements and applicable accounting standards[61] - The company continues to expand subsidiary supervision, prioritizing the establishment of management norms for high-risk processes[64] - The company's employees exercised a total of 192,000 share options during the first half of 2023, with a weighted average exercise price of HKD 8.93 and a weighted average closing price before exercise of HKD 12.58[69] - The total number of share options outstanding as of June 30, 2023, was 25,763,000 under the 2008 Share Option Scheme[69] - No share options were exercised under the 2018 Share Option Scheme during the first half of 2023[73] - The 2018 Share Option Scheme has a total of 6,263,000 share options outstanding as of June 30, 2023[73] - The company's former chairman, Wei Yingzhou, indirectly holds 1,882,927,866 shares through Profit Surplus Holdings Limited and Profit Surplus 3 Holdings Limited[70][74] - Chairman Wei Hongming holds 5,000,000 shares, representing 0.09% of the total shares[76] - CEO Wei Hongcheng holds 5,000,000 shares, representing 0.09% of the total shares[76] - Tingyi (Cayman Islands) Holding Co., Ltd. holds 1,882,927,866 shares, representing a significant portion of the company's total shares[77] - Wei Yingzhou holds 13,942,000 shares and 3,682,000 share options[77] - The board of directors includes six executive directors and three independent non-executive directors as of the announcement date[78] Operational Efficiency and Turnover - The company's finished goods turnover period improved to 18.70 days from 20.77 days at the end of 2022[56] - The company employed 65,956 people as of June 30, 2023[56] - The company has deepened partnerships with 66 universities and 32 vocational schools nationwide, reaching hundreds of thousands of people through recruitment activities[57] - The company actively participated in the "2023 Shanghai International Carbon Neutral Technology, Products, and Achievements Expo" and shared its green, low-carbon, and high-quality development path[58] - The company plans to focus on core categories in the beverage business, adjust product structures, and leverage peak seasons to drive sales growth[59] - The company is accelerating digital transformation in supply chain management, data platform construction, and information security[59] Related Party Transactions - Sales to joint ventures increased to RMB 455,357 thousand in the first half of 2023, compared to RMB 438,771 thousand in the same period of 2022[41] - Purchases from companies controlled by directors and their relatives decreased to RMB 3,031,420 thousand in the first half of 2023, compared to RMB 3,176,023 thousand in the same period of 2022[41] - Distribution costs paid to companies controlled by family members of directors increased to RMB 886,256 thousand in the first half of 2023, compared to RMB 858,490 thousand in the same period of 2022[41] Other Financial Metrics - EBITDA rose by 25.87% to RMB 4,301.71 million[2] - Basic earnings per share increased by 6.82 cents to 29.07 cents[2] - Net debt to capital ratio was -29.89%[2] - Basic earnings per share increased to RMB 29.07 cents for the first half of 2023, compared to RMB 22.25 cents for the same period in 2022[20] - Diluted earnings per share increased to RMB 29.04 cents for the first half of 2023, compared to RMB 22.24 cents for the same period in 2022[21] - Accounts receivable within 0 to 90 days increased to RMB 1,970,780 thousand as of June 30, 2023, compared to RMB 1,686,700 thousand as of December 31, 2022[24] - Accounts receivable over 90 days increased to RMB 131,582 thousand as of June 30, 2023, compared to RMB 121,581 thousand as of December 31, 2022[24] - The company issued 192,000 shares under the share option plan, with a total consideration of RMB 1,532,000, of which RMB 7,000 was allocated to issued share capital and RMB 1,525,000 to the share premium account[25] - The company's interest-bearing loans due within one year decreased to RMB 7,834,264,000 as of June 30, 2023, compared to RMB 9,203,139,000 as of December 31, 2022[26] - The company issued notes with a book value of USD 497,594,000 (approximately RMB 3,610,541,000) as of June 30, 2023, listed on the Singapore Exchange[27] - The company's accounts payable increased to RMB 9,943,722,000 as of June 30, 2023, from RMB 9,489,908,000 as of December 31, 2022[28] - The company sold a subsidiary for a total consideration of approximately RMB 220,469,000, resulting in a net gain of RMB 154,416,000[29]