2021-09-24-港交所-中科生物_中期报告2021_62页_1mb

Summary of 2021 Interim Report

1. Business Performance:

   • Revenue decreased by 11.9% to RMB252.1 million (within the reporting period), primarily due to a shift of marketing focus to Australia to avoid U.S. tariffs.
   • Gross profit margin improved to 14.6%, contributing to a net profit of RMB4.2 million, reversing the loss of RMB28.0 million in 2020.
   • The manufacturing and sales of wooden products remain the core business, contributing 98.8% of revenue, but experienced a 11.9% decline.
   • Retail sales of outdoor wooden products remained minimal, while renewable energy sales decreased 12.4% due to market competition.

2. Market Review:

   • Australia became the largest revenue source, accounting for 68% of total revenue, driven by strong economic recovery and high demand for timber products.
   • U.S./Canada revenue dropped significantly due to tariffs and reduced exports.
   • China's domestic market saw a 96% revenue decline amid intensified competition.

3. Financial Highlights:

   • Operating profit increased from a net loss of RMB28.0 million to a profit of RMB4.2 million.
   • Other gains of RMB6.6 million (from derivative instruments) contributed positively.
   • Administrative expenses rose due to stock-based compensation, and finance costs decreased from RMB0.7 million to RMB0.1 million.
   • Government subsidies decreased from RMB6.4 million to RMB3.1 million, impacting other revenue.

4. Liquidity & Capital:

   • Current assets stood at RMB500.4 million, with bank deposits of RMB167.4 million.
   • Unutilized banking facilities totaled RMB41.3 million, with no material capital commitments or contingent liabilities.

5. Outlook:

   • The Group remains optimistic about the second half of 2021, focusing on strategic investments and expanding presence in Australia and renewable energy.
   • Potential challenges include Delta variant impacts in Australia and volatile U.S.-China trade relations.

6. Management & Governance:

   • Board maintains a diverse membership, with clear oversight committees (Audit, Risk, Remuneration, Nominations).
   • Compliance with the Corporate Governance Code, despite a minor deviation in monthly performance updates.

7. Shareholder Matters:

   • No interim dividend declared; the Share Award Scheme and stock-based compensation were active during the period.

8. Related Party Transactions:

   • Significant transactions with associates involved sales and purchases of wooden products and raw materials, conducted under arm’s length terms.

9. Other:

   • No material events post-reporting period; the Group continues to explore capital expenditure and strategic investments.