Financial Performance - Net profit margin decreased by 3.3% to approximately -9.8% compared to the same period last year, primarily due to reduced revenue and increased general and administrative expenses[2] - Revenue for the six months ended June 30, 2023, was HKD 140,576 thousand, a decrease from HKD 203,321 thousand in the same period last year[9] - Gross profit for the six months ended June 30, 2023, was HKD 2,517 thousand, compared to a gross loss of HKD 15,474 thousand in the same period last year[9] - Operating loss for the six months ended June 30, 2023, was HKD 22,969 thousand, an improvement from HKD 28,064 thousand in the same period last year[9] - The company's total comprehensive loss for the six months ended June 30, 2023, was HKD 44,914 thousand, compared to HKD 52,483 thousand in the same period last year[9] - Revenue for the first half of 2023 was approximately HKD 140,576,000, a decrease of 30.9% compared to HKD 203,321,000 in the same period last year[71] - The company's net profit margin for the period was approximately -13.1%[126] - The company reported a loss of HKD 17,433,000 for the six months ended June 30, 2023, compared to a loss of HKD 18,661,000 for the same period in 2022[163] - Total comprehensive loss for the six months ended June 30, 2023, was HKD 44,257,000[163] - Revenue from the cement production and sales segment was HKD 140.576 million, a decrease from HKD 203.321 million in the same period last year[199] - The cement production and sales segment reported a loss of HKD 10.196 million, while the biotechnology R&D segment reported a loss of HKD 2.816 million[199] Assets and Liabilities - Total assets decreased to HKD 569,066 thousand as of June 30, 2023, from HKD 616,378 thousand as of December 31, 2022[23] - Total liabilities decreased to HKD 386,830 thousand as of June 30, 2023, from HKD 418,265 thousand as of December 31, 2022[22] - The company's equity attributable to owners decreased to HKD 542,956 thousand as of June 30, 2023, from HKD 587,213 thousand as of December 31, 2022[23] - The company's capital-to-debt ratio as of June 30, 2023, was 78.6%[108] - The company's capital-to-debt ratio was 78.6% as of June 30, 2023, slightly higher than 78.3% at the end of 2022, while the asset-to-liability ratio was 44.0%, up from 43.9%[136] - Total assets as of June 30, 2023, were HKD 955.896 million, down from HKD 1.034 billion at the end of the previous year[199] - Trade receivables and bills receivable decreased to HKD 31.183 million from HKD 43.209 million at the end of the previous year[193] - Depreciation for property, plant, and equipment was HKD 13.150 million, with a carrying amount of HKD 175.821 million as of June 30, 2023[194] Revenue Breakdown by Region - Jiangsu Province accounted for 87.47% of total revenue, generating 122,809 thousand HKD[39] - Wujiang District contributed 75.74% of total revenue, with 106,343 thousand HKD[39] - Suzhou City (excluding Wujiang District) accounted for 11.73% of total revenue, generating 16,466 thousand HKD[39] - Zhejiang Province contributed 11.54% of total revenue, with 16,213 thousand HKD[39] - Southern Zhejiang (including Taizhou, Zhoushan, and Ningbo) accounted for 1.06% of total revenue, generating 1,492 thousand HKD[39] - Jiaxing City contributed 10.48% of total revenue, with 14,721 thousand HKD[39] - Shanghai accounted for 0.99% of total revenue, generating 1,387 thousand HKD[39] - Total revenue for the period was 140,409 thousand HKD[39] Cement Market and Sales - Cement product sales volume decreased by 7% YoY to approximately 444 thousand tons, with sales revenue down by 31% YoY[38] - PO 42.5 cement sales volume decreased to 326,000 tons from 383,000 tons, with average selling price dropping to HKD 324/ton from HKD 433.19/ton[72] - PC 32.5 cement sales volume increased to 118,000 tons from 95,000 tons, but average selling price decreased to HKD 294/ton from HKD 392.10/ton[72] - National cement production in the first half of 2023 was 953 million tons, a 1.3% year-on-year increase, but the lowest in 12 years[70] - Cement prices in key regions (Nanjing, Hangzhou, Shanghai) dropped significantly, with PO42.5 cement prices falling by 23.6%, 27.7%, and 10% respectively[70] - Cement demand remained sluggish due to a downturn in the real estate market, with insufficient new construction projects and funding shortages in the real estate sector[37] - The cement segment's gross profit was approximately HKD 2.517 million, a significant improvement from a gross loss of HKD 15.474 million in the same period last year, representing an increase of HKD 17.991 million or 116.3%. The gross margin improved to 1.8% from -7.6% last year, primarily due to lower raw material costs, especially coal prices[123] Expenses and Costs - Distribution expenses decreased by 39.9% to HKD 1.144 million from HKD 1.905 million last year, primarily due to reduced cement deliveries. Distribution expenses accounted for 1% of the company's consolidated revenue, consistent with the previous year[124] - General and administrative expenses increased by 88.1% to HKD 24.927 million from HKD 13.255 million last year, mainly due to increased consulting fees related to the acquisition of Ganzhou Chengzheng Rare Earth Technology Co., Ltd[135] - Cost of goods sold for the six months ended June 30, 2023, was HKD 137,788,000, down from HKD 218,143,000 in the same period in 2022[174] - Depreciation of property, plant, and equipment for the six months ended June 30, 2023, was HKD 12,451,000[174] - Employee expenses, including director remuneration, totaled HKD 9,122,000 for the six months ended June 30, 2023[174] - The company's minimum lease payments as of June 30, 2023, were HKD 1,314,000, with a present value of HKD 1,273,000[169] Cash Flow and Liquidity - Cash and cash equivalents decreased by 27% to HKD 5.63 million as of June 30, 2023, from HKD 7.662 million at the end of 2022, primarily due to increased administrative expenses[136] - The company maintains sufficient cash and credit facilities to meet its liquidity requirements[165] - Operating cash flow from activities was negative at HKD 16.117 million, compared to a positive HKD 103.857 million in the same period last year[178] - Investment activities generated a net cash inflow of HKD 25.616 million, a significant improvement from a net cash outflow of HKD 60.423 million in the previous year[178] - Financing activities resulted in a net cash outflow of HKD 11.357 million, compared to a net cash outflow of HKD 3.220 million in the prior year[178] - The company's cash and cash equivalents decreased by HKD 1.858 million, ending the period at HKD 5.630 million, down from HKD 125.563 million at the end of the previous period[178] Investments and Acquisitions - The company acquired 25% equity in a target company for RMB 40 million and injected RMB 160 million, increasing its total stake to 62.5%[75] - The target company specializes in rare earth exploration, rare earth permanent magnet materials, and rare earth permanent magnet motors[75] - The company acquired 25% equity of the target company for RMB 40 million (approximately HKD 44.01 million) and injected RMB 160 million (approximately HKD 176 million) into the target company, increasing its registered capital by RMB 56 million (approximately HKD 61.62 million) and capital reserve by RMB 104 million (approximately HKD 114 million). Post-injection, the company holds 62.5% equity in the target company[120] - The company holds a 43.2% stake in Suzhou Dongtong Environmental Technology Co., Ltd., with an investment cost of HKD 27,637,000[161] Other Financial Information - Bank borrowings decreased by 15.0% to HKD 85,320,000 as of June 30, 2023, compared to HKD 100,317,000 as of December 31, 2022, mainly due to loan repayments during the reporting period[3] - The company's capital expenditure for the first half of 2023 was approximately HKD 2.532 million, all generated by the cement segment, a significant decrease compared to HKD 10.618 million in the same period last year[116] - The company's capital commitment as of June 30, 2023, was approximately HKD 646,000, down from HKD 1.154 million as of December 31, 2022[116] - The company had 213 employees as of June 30, 2023, with total employee compensation amounting to approximately HKD 12.617 million during the reporting period[109] - The company did not have any unused bank financing facilities as of June 30, 2023[96] - The company did not have any significant contingent liabilities as of June 30, 2023[118] - The company did not mortgage any assets during the reporting period[117] - The company plans to meet its working capital needs primarily through cash flow generated from operating activities, bank loans, trade and other payables, and proceeds from its initial public offering[98] - The company did not experience significant foreign exchange risks during the reporting period and did not implement any hedging measures[119] - The company's major shareholder, Goldview, held a 53.89% stake in the company as of June 30, 2023[113] - Other income for the period was approximately HKD 585,000, a decrease of HKD 1.985 million or 77.2% compared to HKD 2.57 million last year, mainly due to reduced government subsidies[124] - The company's income tax credit for the period was approximately HKD 224,000, a significant decrease from HKD 2.558 million last year, mainly due to pre-tax losses incurred during the period[147] - The company's total bank and other borrowings amounted to HKD 163.206 million as of June 30, 2023, a decrease from HKD 178.439 million at the end of 2022[145] - Prepayments and deposits for raw materials, machinery, and property licenses amounted to HKD 6,934,000, HKD 469,000, and HKD 24,300,000 respectively as of June 30, 2023[157] - Exchange rate differences resulted in a loss of HKD 26,824,000 for the six months ended June 30, 2023[163] Strategic Plans and Future Outlook - The company plans to enhance internal management, upgrade facilities, and explore opportunities in the new energy sector[75] - The biopharmaceutical segment's R&D progress slowed due to the pandemic, with ongoing clinical studies for CAR-T cell therapy and early-stage development of ADC drugs[73] - No interim dividend was recommended for the six months ended June 30, 2023[88] Customer and Market Concentration - The single largest external independent customer accounted for 19.93% of the company's revenue, up from 15.92% in the previous year[191]
东吴水泥(00695) - 2023 - 中期财报