RNS Number:1526E
China Biodiesel International Hold
20 September 2007
Thursday, 20 September 2007 -- China Biodiesel International Holding Co., Ltd.
(AIM: CBI), the leading producer of biodiesel focused on the Chinese market,
announces its Interim Results for the six months ended 30 June 2007.
Highlights
*Turnover increase of 15 per cent to RMB 52.66million(2006: RMB
45.73million)
*Successfully acquired government authorisation for three national patents
and submitted applications for a further five patents
*Recognised in the Chinese National 11th Five-year Plan as the only
'Technologically Supporting Enterprise' in the biodiesel industry
*Received awards including "Provincial Experimental Innovative Enterprise"
and "the Thirty Best Enterprises in Western Fujian Province"
CBI's chairman, Huodong Ye, commented: "This period has proved difficult for the
global biodiesel industry due to the worldwide increase in the price of
feedstock. This has let to an erosion in the profit margins of CBI. The Company
has also suffered delays in the commissioning of its new plants, caused by
severe weather conditions, which has also negatively impacted profits.
Nevertheless, the Company is still profitable through effective management and
our advanced and efficient production techniques. We expect some growth in the
coming months, based on the continuing rise in fossil fuel prices, the
continued growth within the biodiesel market, and the start of production at the
new plants. Further government support and their friendly policies towards the
biodiesel industry are also expected to encourage some growth.
For further information:
Gloria He, CFO:+86 (592) 789 0366
James King Wang, Company Secretary: +86 (597) 228 3825
Simon Bloomfield or Louise Mason
Bankside Consultants: +44 (0) 207 367 8888
Tom Price or Bobbie Hilliam
Evolution Securities: +44 (0) 20 7071 4300
Chairman's statement
Overview
During the first half of 2007, CBI overcame a number of difficulties to continue
its business development and provide a platform for continued growth for 2008
and beyond.
Globally we believe that the biodiesel industry experienced a difficult period
due to the increasing price of raw materials. This significantly impacted CBI's
margin. However, we were able to keep our costs low, compared to industry
standards, due to our ability to use waste cooking oil as feedstock.
The abundant supply of fossil fuel in the Chinese domestic market caused a
decrease in biodiesel demand in the first six months of the year. However the
Company has been able to mitigate some of the impact of this by increasing our
production of Biodiesel II, which has a higher value and price than Biodiesel
III. The proportion of total production of Biodiesel II has increased to 33.02%
for the first half of 2007 from 15.96% for the same period last year. This shift
in our product mix has partially offset the effect of the increase in feedstock
prices.
Despite the best efforts of the Company to stay on schedule for the construction
of the new plants, external factors, such as persistent poor weather, has caused
delays in commissioning the plant and commencing production. The Longyan plant
extension saw trial production begin on August 23 and installation is now well
underway at the Xiamen plant. A third plant, in Longyan with 100,000 tons
capacity per annum, is in its design and preparation stage.
We are establishing relationships with a number of new suppliers of raw
material, and with the increase in the fossil fuel global market price, CBI is
becoming cautiously confident that it can improve gross margins and profit
growth in 2008.
Operational review
In the first half of 2007 production from our existing plants exceeded that of
the same period last year on a like for like basis. Furthermore, higher quality
products were produced creating an encouraging growth in sales value. To
counteract the effects of the continuing rise in the price of feedstock, the
Company has sought supplies from further domestic and foreign markets.
LYZE, one of CBI's subsidiaries, has acquired government authorization for three
national patents and has submitted applications for five further patents. In
addition, it was recognized in the Chinese National 11th Five-year Plan as the
only "Technologically Supporting Enterprise" in the biodiesel industry. We are
the only company in our sector expected to continue to receive financial subsidy
from the Chinese government. The subsidies commenced payment in 2007. Owing to
our innovative progress and strong market competitiveness, we have won further
accolades including being a "Provincial Experimental Innovative Enterprise" and
"the Thirty Best Enterprises in Western Fujian Province".
Financial review
The revenue for the six months ended 30 June 2007 was RMB52.66 million (15 per
cent up from 2006: RMB45.73 million), arising from the total output of 11,690
tons (4.2 per cent up from 2006: 11,215 tons). The increase in revenue was on
the back of a rising average selling price; 10.53 per cent higher than last
year. However, the margin was affected by the increased global price of
feedstock. As a result, gross profit fell to RMB9.08 million (2006: RMB16.9
million), representing a margin of 17 per cent (2006:37 per cent).
Since CBI's listing on AIM last June, we have pursued a strategy to strengthen
our management and comply with best practice corporate governance guidelines,
this has led to an increase however in administration expenses of two and a half
times to RMB3.57 million. Financial costs fell to RMB 0.24 million (2006:
RMB0.37 million), as a result of a lower bank loan.
Outlook
With the continued growth of the economy in China there is an increased reliance
on imported energy. Further the Chinese Government has recently listed the bio
diesel industry into the National Mid-term and Long-term Development Plan, a
reflection of the industries importance in the economic growth within China. As
a consequence we expect future preferential financial and taxation policies that
will support our industry and eventually be beneficial to the Company.
At the same time as constructing new production capacity we continue to improve
our technology, management and marketing of our products. We are exploring both
the purchase of used cooking oil and other oil products from both inside and
outside of China in order to restore margins to historic levels. Furthermore, we
are establishing more sales channels now for when our production capacity grows.
We have previously announced that we are now producing biodiesel at the Longyan
extension where we are now capable of producing and selling from Longyan
approximately 50,000 pa at full production. The completion of the Longyan
extension was held up by poor weather conditions which is also affecting the
construction of our new site at Xiamen where we expect to produce and sell
another 50,000 pa when in full production. Today our best estimate as to when
test production will start at Xiamen is H1 of 2008 and then increasing our
output to full production that should be achieved before the end of 2008. The
delays in production, together with higher selling prices, however continue to
impact revenue with sales lower than previous expectations.
Recently our gross margins have been under pressure, as set out in our trading
statement in August 2007. While this has stabilised, the improvement in margins
as highlighted in August has yet to materialise. As a result of the growing
demand for better quality produce, which we are capable of producing, we remain
confident that by marginally reducing our total output, we can achieve margin
improvement albeit at a slower rate than initially anticipated.
Our management team have been frustrated by these difficulties this year but we
have learned much from the experience and this has made us more determined to
make 2008 as successful as we know we all want it to be with a bright future
ahead of us.
Huodong Ye
Chairman
20 September 2007
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Notes 6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Turnover 6 52,659,596 45,726,571 101,098,548
Cost of sales (43,572,193) (28,823,176) (71,191,170)
--------- -------- -----------
Gross profit 9,087,403 16,903,395 29,907,378
Other income, net 7 1,591,753 1,982,608 4,212,324
Government grants 8 1,350,000 250,000 7,750,000
Distribution costs (403,870) (266,655) (625,462)
Administrative expenses (3,570,573) (1,013,347) (2,453,939)
Other operating expenses (98,162) 1,478 (22,658)
--------- -------- -----------
Profit from operations 7,956,551 17,857,479 38,767,643
Finance income 199,031 6,986 246,310
Finance costs (235,846) (374,779) (624,895)
Gain on disposal of an
associate - - 450,000
--------- -------- -----------
Profit before income tax
expense 7,919,736 17,489,686 38,839,058
Income tax expense 9 (153,078) (1,540,095) (1,719,826)
--------- -------- -----------
Profit for the period 7,766,658 15,949,591 37,119,232
========= ======== ===========
Attributable to:
- Equity holders of the
Company 7,772,678 15,953,750 37,057,373
- Minority interests (6,020) (4,159) 61,859
--------- -------- -----------
7,766,658 15,949,591 37,119,232
========= ======== ===========
Dividends 19 - - 1,020,019
========= ======== ===========
Dividend per share 19 - - 0.0816
========= ======== ===========
Earnings per share 10
Basic 0.171 0.443 0.910
========= ======== ===========
Diluted 0.170 0.443 0.909
========= ======== ===========
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2007
Notes 30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Assets
Non-current assets
Property, plant and equipment 11 114,331,603 26,920,313 43,617,764
Deposits for acquisition of
property, plant and equipment - - 23,194,250
Payments for leasehold land
held for own use under
operating leases 9,100,557 753,143 8,836,715
Other intangible assets 3,010 3,456 3,233
Interests in an associate - 1,550,000 -
Deferred tax assets 190,649 158,319 207,149
-------- --------- ---------
Total non-current assets 123,625,819 29,385,231 75,859,111
-------- --------- ---------
Current assets
Inventories 12 7,476,855 4,002,428 6,170,567
Trade and other receivables 13 29,273,686 129,716,363 27,276,313
Cash and cash equivalents 37,906,325 4,779,968 69,326,379
-------- --------- ---------
Total current assets 74,656,866 138,498,759 102,773,259
-------- --------- ---------
Total assets 198,282,685 167,883,990 178,632,370
-------- --------- ---------
-------- --------- ---------
Liabilities
Current liabilities
Trade and other payables 14 18,020,521 10,231,112 5,970,095
Current tax liabilities 1,600,730 1,441,782 1,590,471
Other financial liabilities 15 7,510,091 11,315,643 6,323,324
-------- --------- ---------
Total current liabilities 27,131,342 22,988,537 13,883,890
-------- --------- ---------
Non-current liabilities
Other financial liabilities 15 447,019 601,914 617,924
-------- --------- ---------
Total liabilities 27,578,361 23,590,451 14,501,814
-------- --------- ---------
-------- --------- ---------
TOTAL NET ASSETS 170,704,324 144,293,539 164,130,556
======== ========= =========
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED BALANCE SHEET (CONTINUED)
AS AT 30 JUNE 2007
Notes 30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Capital and reserves
attributable to equity
holders of the Company
Share capital 3,632,941 3,632,941 3,632,941
Reserves 166,757,371 140,406,584 159,157,564
Dividends 19 - - 1,020,019
-------- --------- ---------
Equity attributable to
equity 170,390,312 144,039,525 163,810,524
holders of the Company
Minority interests 314,012 254,014 320,032
-------- --------- ---------
TOTAL EQUITY 170,704,324 144,293,539 164,130,556
======== ========= =========
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 30 JUNE 2007
--------------------------------------------------------
Equity attributable to equity holders of the Company
RMB RMB RMB RMB RMB RMB
At 1 January 2007 (Audited) 3,632,941 90,572,623 5,047,816 (1,307,048) 2,229,427 (121,330)
---------- ---------- ---------- ---------- ---------- ----------
Effect from translation of functional
currency to presentation currency - - - (172,871) - -
---------- ---------- ---------- ---------- ---------- ----------
Net income recognised directly in
equity - - - (172,871) - -
Profit/(loss) for the period - - - - - -
---------- ---------- ---------- ---------- ---------- ----------
Total recognised income and expenses - - - (172,871) - -
Provision for general reserve - - - - - -
Dividend distribution - - - - - -
---------- ---------- ---------- ---------- ---------- ----------
At 30 June 2007 (Unaudited) 3,632,941 90,572,623 5,047,816 (1,479,919) 2,229,427 (121,330)
========== ========== ========== ========== ========== ==========
At 1 January 2006 (Audited) 8 - 4,927,808 - - (121,330)
---------- ---------- ---------- ---------- ---------- ----------
Profit/(loss) for the period - - - - - -
---------- ---------- ---------- ---------- ---------- ----------
Total recognised income and expenses - - - - - -
Issuance of bonus shares 2,879,992 - (2,879,992) - - -
Issuance of shares for placing 752,941 116,312,901 - - - -
Share issue costs - (20,485,275) - - - -
Settlement of share issue costs by
share-based payments paid by equity
holder - (3,000,000) 3,000,000 - - -
Issuance of share options - (2,229,427) - - 2,229,427 -
---------- ---------- ---------- ---------- ---------- ----------
At 30 June 2006 (Unaudited) 3,632,941 90,598,199 5,047,816 - 2,229,427 (121,330)
========== ========== ========== ========== ========== ==========
--------------------------------------------------------
Equity attributable to equity holders of the Company
RMB RMB RMB RMB RMB RMB
At 1 January 2007 (Audited) 6,273,540 1,020,019 56,462,536 163,810,524 320,032 164,130,556
---------- ---------- ---------- ---------- ---------- ----------
Effect from translation of functional
currency to presentation currency - - - (172,871) - (172,871)
---------- ---------- ---------- ---------- ---------- ----------
Net income recognised directly in equity - - - (172,871) - (172,871)
Profit/(loss) for the period - - 7,772,678 7,772,678 (6,020) 7,766,658
---------- ---------- ---------- ---------- ---------- ----------
Total recognised income and expenses - - 7,772,678 7,599,807 (6,020) 7,593,787
Provision for general reserve 1,034,504 - (1,034,504) - - -
Dividend distribution - (1,020,019) - (1,020,019) - (1,020,019)
---------- ---------- ---------- ---------- ---------- ----------
At 30 June 2007 (Unaudited) 7,308,044 - 63,200,710 170,390,312 314,012 170,704,324
========== ========== ========== ========== ========== ==========
At 1 January 2006 (Audited) 2,529,491 - 24,169,231 31,505,208 258,173 31,763,381
---------- ---------- ---------- ---------- ---------- ----------
Profit/(loss) for the period - - 15,953,750 15,953,750 (4,159) 15,949,591
Total recognised income and expenses - - 15,953,750 15,953,750 (4,159) 15,949,591
Issuance of bonus shares - - - - - -
Issuance of shares for placing - - - 117,065,842 - 117,065,842
Share issue costs - - - (20,485,275) - (20,485,275)
Settlement of share issue costs - - - - - -
by share-based payments paid by
equity holder
Issuance of share options - - - - - -
---------- ---------- ---------- ---------- ---------- ----------
At 30 June 2006 (Unaudited) 2,529,491 - 40,122,981 144,039,525 254,014 144,293,539
========== ========== ========== ========== ========== ==========
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
CONDENSED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 30 JUNE 2007
Notes 6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Net cash flows from operating
activities 16 8,171,268 11,851,238 29,591,412
Net cash used in investing
activities (39,178,448) (15,118,304) (59,407,295)
Net cash flows from/(used in)
financing activities (240,003) (1,411,992) 90,990,284
--------- --------- -----------
Net (decrease)/increase in
cash and cash equivalents (31,247,183) (4,679,058) 61,174,401
Cash and cash equivalents at
beginning of period 69,326,379 9,459,026 9,459,026
Effect of foreign exchange
rate changes (172,871) - (1,307,048)
--------- --------- -----------
Cash and cash equivalents at
end of period 37,906,325 4,779,968 69,326,379
========= ========= ===========
CHINA BIODIESEL INTERNATIONAL HOLDING CO., LTD.
NOTES TO THE CONDENSED
CONSOLIDATED INTERIM FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED 30 JUNE 2007
1. GENERAL
China Biodiesel International Holding Co., Limited (the "Company") was
incorporated in the British Virgin Islands ("BVI") on 18 October 2005. Its
registered office is at Nerine Chamber, PO Box 905, Road Town, Tortola, the
British Virgin Islands. The shares of the Company were admitted to trading on
the Alternative Investment Market ("AIM") of the London Stock Exchange plc (the
"Stock Exchange") on 30 June 2006.
The principal activities of the Company and its subsidiaries (hereinafter
collectively referred as "the Group") are engaged in the manufacturing and sale
of biodiesel products and the provision of services in connection with biodiesel
distillation technologies in the People's Republic of China (the "PRC"). The
Group's principal places of business are at Longyan and Xiamen, both cities are
located in Fujian Province, the PRC.
The consolidated financial statements are presented in Renminbi ("RMB") instead
of Hong Kong dollars, which is the functional currency of the Company. The
adoption of RMB as presentation currency of the Group is due to the fact that
most of the Group's business transactions are conducted in RMB.
2. BASIS OF PREPARATION AND ACCOUNTING POLICIES
The unaudited condensed financial statements (the "Interim Financial
Statements") are prepared in accordance with International Accounting Standards
("IAS") 34, Interim Financial Reporting issued by the International Accounting
Standards Board ("IASB"). These Interim Financial Statements should be read in
conjunction with the consolidated financial statements for the year ended 31
December 2006 (hereafter the "Annual Financial Statements"), as they provide an
update of previously reported information.
The accounting policies and the methods of computation used in the Interim
Financial Statements are consistent with those followed in the preparation of
the Annual Financial Statements.
In the current period, the Group has also applied, for the first time, the new
standards, amendments and interpretation issued by the IASB (hereinafter
collectively referred to as the "new IFRSs") that are effective for the
accounting periods beginning on or after 1 January 2007.
The adoption of these new IFRSs has had no material effect on how the results
for the current or prior accounting periods have been prepared and presented.
Accordingly, no prior period adjustment is required.
The preparation of the Interim Financial Statements in conformity with
International Financial Reporting Standards ("IFRSs") issued by the IASB
requires the management to make estimates and assumptions that affect the
reported amounts of revenue, expenses, assets, liabilities, and disclosure of
contingent liabilities at the date of the Interim Financial Statements. If in
the future such estimates and assumptions, which are based on management's best
judgment at the date of the Interim Financial Statements, deviate from the
actual circumstance, the original estimates and assumptions will be modified as
appropriate in the period in which the circumstance change.
3. POTENTIAL IMPACT ARISING ON THE NEW ACCOUNTING STANDARDS NOT YET EFFECTIVE
The Group has not yet applied the following IFRSs that have been issued but not
been effective. The directors of the Company anticipated that the application of
these IFRSs will have no material impact on the Interim Financial Statements of
the Group.
IAS 23 Revised - Borrowing costs
Effective for annual periods beginning on or after 1 January 2009
IFRS 8 - Operating segments
Effective for annual periods beginning on or after 1 January 2009
IFRIC interpretation 11 - Group and treasury share transactions
Effective for annual periods beginning on or after 1 March 2007
IFRIC interpretation 12 - Service concession arrangements
Effective for annual periods beginning on or after 1 January 2008
IFRIC interpretation 13 - Customer loyalty programmes
Effective for annual periods beginning on or after 1 July 2008
IFRIC interpretation 14 - The limit on a defined benefit asset, minimum funding
requirements and their interaction
Effective for annual periods beginning on or after 1 January 2008
4. SUBSIDIARIES
The subsidiaries of the Company, which have been included in the Interim
Financial Statements, are as follows:
---------- ---------- --------- ------------- ---------
Name Place of Date of Principal activities Proportion
incorporation incorporation of ownership
and interest
operations
Longyan Longyan, 1 November Manufacturing and sale of 100%
Zhuoyue New Fujian 2001 biodiesel products
Energy Province,
Development The PRC
Co., Ltd.
("LZNE")
Longyan Longyan, 21 April Development of biodiesel 90%
Zhuoyue Fujian 2005 technology, provision of
Biodiesel Province, technology consultancy and
Technology The PRC transfer of technology in
Development respect of production of
Co., biodiesel products
Limited
("ZBTD")
Xiamen Xiamen, 17 August Manufacturing and sale of 100%
Zhuoyue Fujian 2006 biodiesel products
Bio-mass Province,
Energy Co., the PRC
Limited
("XZBM")
Longyan Longyan, 28 February Manufacturing and sale of 100%
Zhuoyue Fujian 2007 biodiesel products
Bio-mass Province,
Energy Co., the PRC
Limited
("LYBM")
5. SEGMENT INFORMATION
No primary reporting format for reporting segment information is shown as
significant portion of the business is related to the sale of biodiesel
products. All revenues were generated from continuing operation.
No secondary reporting format for reporting segment information is shown as
significant portion of products are sold and services are rendered to customers
in the PRC.
6. TURNOVER
Turnover represents the net invoiced value of goods sold and service income
earned by the Group. The amounts of each significant category of revenue
recognised in turnover during the year are as follows:
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Revenue arises from:
Sale of biodiesel products 52,609,596 45,706,071 100,479,548
Provision of technology services
and others 50,000 20,500 619,000
--------- ---------- ----------
52,659,596 45,726,571 101,098,548
========= ========== ==========
7. OTHER INCOME, NET
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Income from sale of used packaging
materials 1,614,921 1,986,821 4,318,572
Loss from sale of auxiliary and scrap
products (23,168) (4,213) (106,248)
--------- ---------- -----------
1,591,753 1,982,608 4,212,324
========= ========== ===========
8. GOVERNMENT GRANTS
Government grants represented the financial support from relevant government
authorities in connection with research and development of biodiesel products.
9. INCOME TAX EXPENSE
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Provision of income tax expense for
the period:
- BVI - - -
- PRC 153,078 1,540,095 1,719,826
--------- --------- ---------
153,078 1,540,095 1,719,826
========= ========= =========
The Company itself did not generate any taxable profit during the period. In the
opinion of the management, the Company is not subject to income tax in the PRC
or BVI.
Current tax expense of the Group represented the PRC enterprise income tax
calculated at the standard income tax rate or preferential income tax rate on
the assessable income.
The income tax expense during the period can be reconciled to profit per
condensed consolidated income statement as follows:
6 months 6 months Year
ended ended ended
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Profit before income tax expense 7,919,736 17,489,686 38,839,058
========= ========= =========
Expected tax charged based on the
standard rate of enterprise
income 2,613,513 5,771,596 12,816,889
tax in the PRC of 33%
Tax exemption and concession (3,322,357) (4,260,160) (11,256,902)
Tax effect of non-taxable revenue - (141,177) (213,323)
Tax effect of non-deductible
expenses 730,392 150,125 90,928
Effect of difference between
standard rate and expected rate
at realisation of temporary 131,530 19,711 282,234
differences --------- --------- ---------
Income tax expense 153,078 1,540,095 1,719,826
========= ========= =========
On 16 March 2007, the fifth Plenary Session of the Tenth National People's
Congress passed the Corporate Income Tax Law of the PRC ("new tax law") which
will take effect on 1 January 2008. As a result of the new tax law, it is
expected that the income tax rate applicable to the branch of LZNE will be
reduced from 33% to 25% from 1 January 2008. Further, from 1 January 2008, the
income tax rate of LZNE, XMBM and LYBM is expected to gradually increase from
15% to 25% over a five-year transition period. However, the new tax law has not
set out the details as to how the existing preferential tax rate will gradually
increase to the standard rate of 25%. The enactment of the new tax law is not
expected to have any financial effect on the amount accrued in the balance sheet
in respect of current tax payable.
10. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share attributable to the
ordinary equity holders of the Company is based on the following data:
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
Earnings RMB RMB RMB
Earnings for the purpose of basic
earnings per share 7,772,678 15,953,750 37,057,373
Effect of dilutive potential - - -
ordinary shares -------- --------- ---------
Earnings for the purpose of
diluted earnings per share 7,772,678 15,953,750 37,057,373
======== ========= =========
Number of shares
------------------
Weighted average number of ordinary
shares for the purpose of basic 45,411,765 36,051,998 40,705,883
earnings per share
Effect of dilutive potential
ordinary shares:
- share options 74,665 310 63,023
-------- --------- ---------
Weighted average number of ordinary
shares for the purposeof diluted 45,486,430 36,052,308 40,768,906
earnings per share ======== ========= =========
Earnings per share
--------------------
RMB RMB RMB
Basic 0.171 0.443 0.910
======== ========= =========
Diluted 0.170 0.443 0.909
======== ========= =========
10. EARNINGS PER SHARE - Continued
The weighted average number of ordinary shares for the purpose of basic earnings
per share for the period ended 30 June 2006 has been adjusted for the bonus
shares issued on 22 June 2006.
11. PROPERTY, PLANT AND EQUIPMENT
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Cost
Buildings 3,057,216 3,057,216 3,057,216
Machineries 25,991,000 13,943,532 25,935,590
Motor vehicles 1,486,609 444,104 1,486,609
Furniture, fixtures and equipment 332,025 192,947 252,596
Construction in progress 89,150,921 12,721,068 17,186,268
-------- --------- ----------
120,017,771 30,358,867 47,918,279
-------- --------- ----------
Accumulative depreciation (5,686,168) (3,438,554) (4,300,515)
-------- --------- ----------
Net book value 114,331,603 26,920,313 43,617,764
======== ========= ==========
The cost of construction in progress as at 30 June 2007 represented the
accumulative expenditures on the new plants and production facilities located at
Longyan and Xiamen which were still in progress at the balance sheet date.
As at 30 June 2007, the net carrying amount of machineries pledged as security
for bank loan of RMB3,000,000 amounted to RMB 6,475,554 (31 December 2006:
RMB6,925,155).
12. INVENTORIES
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Raw materials and consumables 5,944,002 2,968,940 5,102,789
Work-in-progress 735,142 680,174 728,138
Finished goods 797,711 353,314 339,640
--------- --------- ----------
7,476,855 4,002,428 6,170,567
========= ========= ==========
13. TRADE AND OTHER RECEIVABLES
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Trade debtors - third parties 25,720,161 22,113,479 24,610,743
Trade debtors - related companies 1,296,827 486,461 920,720
Deposit paid 402,254 417,299 442,843
Prepayments 14,410 7,619 26,940
Other receivables 320,014 364,566 275,067
Proceeds receivable from initial
public offering - 105,973,101 -
Amount due from related companies 1,500,000 - 1,000,000
Amount due from an equity holder 20,020 353,838 -
--------- --------- ---------
29,273,686 129,716,363 27,276,313
========= ========= =========
Amounts due from related companies with non-trading nature and equity holder are
unsecured, interest free and repayable on demand. Amounts due from related
companies with trading nature are unsecured, interest free and with credit term
of 60 days.
As at 30 June 2007, all items in trade and other receivables were denominated in
RMB. The directors consider that the carrying amount of trade and other
receivables approximates their fair value.
14. TRADE AND OTHER PAYABLES
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Trade creditors 2,049,821 1,120,253 232,009
Deferred income 700,000 848,500 750,000
Deposit received 413,177 502,030 64,292
Payroll payable 172,505 71,313 582,538
Other payables 566,958 6,838,400 635,089
Payable to contractors for
acquisition 13,379,023 - 3,061,240
of equipment
Value-added tax payable 739,037 850,616 644,927
--------- --------- ----------
18,020,521 10,231,112 5,970,095
========= ========= ==========
As at 30 June 2007, substantively all trade and other payables were denominated
in RMB. The directors consider that the carrying amount of trade and other
payables approximates their fair value.
15. OTHER FINANCIAL LIABILITIES
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Current other financial liabilities
Bank loans due within one year
- Secured by the Group's own
machineries 3,000,000 3,000,000 3,000,000
- Guaranteed by a related company 3,000,000 8,000,000 3,000,000
- Unsecured 490,072 285,713 294,118
-------- --------- ----------
6,490,072 11,285,713 6,294,118
-------- --------- ----------
Amount due to an equity holder - 29,930 29,206
-------- --------- ----------
Dividend payable 1,020,019 - -
-------- --------- ----------
7,510,091 11,315,643 6,323,324
======== ========= ==========
Non-current other financial
liabilities
Bank loans due over one year
(unsecured) 447,019 601,914 617,924
======== ========= ==========
As at 30 June 2007, other financial liabilities were denominated in RMB.
16. RECONCILIATION OF OPERATING PROFIT TO NET CASH INFLOW FROM OPERATING ACTIVITIES
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Cash flows from operating
activities
Profit before income tax expense 7,919,736 17,489,686 38,839,058
Adjustments for:
Interest income (199,031) (6,986) (246,310)
Depreciation of property, plant
and equipment 1,385,653 690,461 1,552,422
Amortisation of land lease payment 6,158 6,158 12,317
Amortisation of other intangible
assets 223 223 446
Interest expense 235,846 374,779 624,895
Gain on disposal of an associate - - (450,000)
-------- --------- ----------
Net cash flows from operating
activities 9,348,585 18,554,321 40,332,828
Increase in inventories (1,306,288) (1,193,160) (3,361,299)
Increase in trade and other
receivables (1,477,353) (5,479,211) (6,611,976)
Increase/(decrease) in trade and
other payables 1,732,643 502,261 (155,297)
-------- --------- ----------
Cash generated from operations 8,297,587 12,384,211 30,204,256
Income tax paid (126,319) (532,973) (612,844)
-------- --------- ----------
Net cash flows from operating
activities 8,171,268 11,851,238 29,591,412
======== ========= ==========
17. RELATED PARTIES TRANSACTIONS
During the six months ended 30 June 2007, the Group entered into the following
transactions with related parties who are not members of the Group.
Entities Type of transactions Transaction amounts
6 months 6 months
ended ended Year ended
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Companies in which Purchase from the Group 1,755,428 1,917,972 5,189,422
directors or their ======== ======== =========
close family members Sales to the Group 1,379,320 211,650 693,330
have an interest ======== ======== =========
The transactions mentioned above were conducted on an arms length basis and were
at standard market prices. The Group has not made any impairment loss for bad
debts in respect of related party debts nor has any guarantee been given or
received during the current interim period regarding related party transactions.
In addition, the Group's bank loans in the amount of RMB3,000,000 as at 30 June
2007 (31 December 2006: RMB 3,000,000) were guaranteed by a related company,
which is controlled by close family members of the Company's directors.
18. CAPITAL COMMITMENT
As at 30 June 2007, the Group's commitments for the acquisition of property,
plant and equipment and for capital injection into LYBM are listed as follows:
30 June 30 June 31 December
2007 2006 2006
(unaudited) (unaudited) (audited)
RMB RMB RMB
Contracted for but not provided
- Purchase of equipment 18,902,861 6,704,000 30,181,217
- Acquisition of land use right - 6,000,000 -
- Capital injection to LYBM by cash 6,905,240 - -
--------- -------- ----------
25,808,101 12,704,000 30,181,217
========= ======== ==========
According to the Article of Association of LYBM, the remaining capital of RMB
6,905,240 should be injected within 2 years commencing on the date when it was
officially incorporated, which was 28 February 2007.
19. DIVIDENDS
The Annual General Meeting of the Company held on 21 June 2007 has resolved to
declare a final dividend of RMB 0.0816 per Ordinary Share for the year ended 31
December 2006 with the waive of the dividend entitlements by Mr. Yehuodong, the
major shareholder and the Chairman of the Board of Directors of the Company.
The directors do not recommend payment of a dividend in respect of the first
half of 2007.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LLMPTMMTBBBR
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