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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Qihang Equip | LSE:QIH | London | Ordinary Share | GB00B030LW50 | ORD 2.5P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 5.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From May 2019 to May 2024
TIDMQIH
RNS Number : 2737N
Qihang Equipment Company Limited
27 September 2012
Qihang Equipment Company Limited (Formerly China Wonder Limited)
(The "Company" or "Qihang")
Interim Results for the six months ended 30 June 2012
Qihang (AIM:QIH) was admitted to AIM on 4(th) July 2011 via the reverse acquisition of China Wonder Limited which had become a cash shell in April 2011 following the disposal of its operating businesses.
Qihang, based in Zhenjiang, Jiangsu Province, Eastern China, is a fast growing machine tool manufacturer including large lathe and milling machines capable of creating huge components of greater than one metre in diameter and sixty tonnes in weight. The Company is one of the few businesses which can manufacture milling machines for processing complicated screws used in the plastic and petrochemical industry in China.
Financial Highlights
-- Cash at period end of RMB62 million (2011: RMB46 million) -- Turnover down 14% to RMB118 million (2011: 137 million) -- Gross profit for the period down by 26% to RMB28 million (2011: RMB38 million) -- Profit from operations for the period is RMB1.5 million (2011: RMB16.4 million)
Chairman's Statement:
I am pleased to announce the interim results for Qihang Equipment Company Ltd for the 6 months to June 30th 2012. The Company made a loss of RMB 4,090,000 (approximately GBP400,000) for the period on a turnover of RMB 117,773,000 (approximately GBP11.5 million). The loss arises from a reduction in sales due to the prevailing market conditions within China. The results for the first half of the year include a contribution of RMB14.8 million to turnover and RMB3.8 million to gross profit from Zhenjiang Anda Coal Mine Special Equipment Company ("ZACM") which was acquired in January 2012. As these figures are materially below the expectations of the directors when ZACM was purchased, we are currently negotiating with the original owners to sell ZACM back to them.
The trading of the Company has been disappointing so far this year. The effect of the general slowdown within China and the European debt crisis has been seen in both our home province of Jiangsu and also within the Machine Tool Industry throughout China and the rest of the world. Indeed, the Economic Department of the British Embassy estimated that Jiangsu may have shown no growth at all in the summer months.
We believe that we have maintained our market share during this difficult period. We increased our sales network and now have over 300 sales distributors, an increase of 40% over last year.
Although the month of July was below expectations, August showed an upturn in both deliveries and orders and September has started well. We are cautiously optimistic that this positive trend will continue for the rest of the year and are determined to demonstrate an improved performance in the second half.
27 September 2012
Enquiries:
Hot Features
Premium
Qihang
Mr Yuanqing Li, CEO Tel: 0086 139 2159 4638
Mark Chapman, Chairman Tel: 0044 (0)1483 892130 / (0)7449
842717
------------------------------------ -------------------------------------
Nominated Adviser and Joint Broker Tel: 0044 (0)20 7796 8800
Northland Capital Partners Limited
William Vandyk / Tim Metcalfe
------------------------------------ -------------------------------------
Joint Broker Tel: 0044 (0)20 7469 0935
Peterhouse Corporate Finance
Jon Levinson / Tom Stockton
------------------------------------ -------------------------------------
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 30 JUNE 2012
Note Six months Six months Year ended
ended ended 31 December
30 June 30 June 2011
2012 2011 Audited
Unaudited Unaudited
RMB'000 RMB'000 RMB'000
Revenue 5, 6 117,773 137,235 262,107
Cost of sales (89,489) (99,018) (189,903)
------------ ------------ --------------
Gross profit 28,284 38,217 72,204
Other operating income 473 766 1,597
Distribution expenses (9,395) (9,247) (18,024)
Administrative expenses (17,911) (13,380) (30,161)
Listing costs - - (6,747)
------------ ------------ --------------
Profit from operations 1,451 16,356 18,869
Non-operating income net of expenses 14 15 5
Loss on disposal of subsidiaries - (63) (63)
Fair value loss on financial instrument - - (461)
Other gains/(losses) 7 3,607 - -
Income from subsidies - 44 50
Investment income 531 1,175 2,799
Finance costs (9,552) (5,321) (12,331)
(Loss)/profit before tax (3,949) 12,206 8,868
Income tax expense 8 (141) (1,958) (754)
------------ ------------ --------------
(Loss)/profit for the year (4,090) 10,248 8,114
============ ============ ==============
Other comprehensive income
Exchange difference - - (380)
Revaluation of available-for-sale
investment - - (1,241)
------------ ------------ --------------
Total comprehensive income for
the period (4,090) - 6,493
============ ============ ==============
(Loss)/profit attributable to
Equity holders of the Company (4,090) 10,248 6,493
(Loss)/earnings per share 9
Basic and diluted (RMB) (0.07) - 0.17
Basic and diluted (pence) (0.71) - 1.73
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2012
Note 30 June 30 June 31 December
2012 2011 2011
Unaudited Unaudited Audited
RMB'000 RMB'000 RMB'000
Non-current assets
Property, plant and equipment 10 188,765 177,519 201,454
Intangible assets 51,533 40,548 42,920
Available-for-sale financial
assets - - 657
Deferred tax assets 3,416 554 456
----------- ----------- ------------
243,714 218,621 245,487
----------- ----------- ------------
Current assets
Inventories 128,584 72,395 92,264
Trade and other receivables 98,198 82,082 55,129
Available-for-sale financial
assets - 100 100
Cash and cash equivalents 61,454 45,825 47,160
----------- ----------- ------------
288,236 200,402 194,653
----------- ----------- ------------
Total assets 531,950 419,023 440,140
=========== =========== ============
Equity and reserves
Share capital 11 15,196 4,612 15,196
Share premium 86,711 19,842 86,711
Other reserves (13,952) 59,770 (15,344)
Retained earnings 13,282 12,755 18,764
101,237 96,979 105,327
----------- ----------- ------------
Current liabilities
Bank borrowings 226,750 127,000 186,350
Income tax liabilities 1,291 1,029 2,399
Trade and other payables 149,699 127,360 90,964
----------- ----------- ------------
377,740 255,389 279,713
Non-current liabilities
Bank borrowings 12 - 15,000 -
Other borrowings 43,318 42,000 45,445
Deferred tax liabilities 9,655 9,655 9,655
----------- ----------- ------------
52,973 66,655 55,100
----------- ----------- ------------
Total liabilities 430,713 322,044 334,813
=========== =========== ============
Total equity and liabilities 531,950 419,023 440,140
=========== =========== ============
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 30 JUNE 2012
Share Share Other Retained Total
capital premium reserves earnings equity
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
Balance at 1 January 2012 15,196 86,711 (15,344) 18,764 105,327
========== ========== =========== =========== =========
Comprehensive income
Loss for the period - - - (4,090) (4,090)
Total comprehensive income
for the period - - - (4,090) (4,090)
---------- ---------- ----------- ----------- ---------
Transactions with owners
Disposal of available-for-sale
financial assets - - 1,392 (1,392) -
---------- ---------- ----------- ----------- ---------
Total transactions with owners - - 1,392 (1,392) -
---------- ---------- ----------- ----------- ---------
Balance at 30 June 2012 15,196 86,711 (13,952) 13,282 101,237
========== ========== =========== =========== =========
Balance at 1 January 2011 ** 4,612 19,842 59,776 2,507 86,737
========== ========== =========== =========== =========
Comprehensive income
Profit for the period - - - 10,248 10,248
---------- ---------- ----------- ----------- ---------
Total comprehensive income
for the period - - - 10,248 10,248
---------- ---------- ----------- ----------- ---------
Transactions with owners
Disposal of subsidiary - - (6) - (6)
---------- ---------- ----------- ----------- ---------
Total transactions with owners - - (6) - (6)
---------- ---------- ----------- ----------- ---------
Balance at 30 June 2011 4,612 19,842 59,770 12,755 96,979
========== ========== =========== =========== =========
Balance at 1 January 2011 4,612 19,842 59,776 2,507 86,737
======= ======== ========= ======== =========
Comprehensive income
Profit for the period - - - 8,114 8,114
Exchange difference - - (380) - (380)
Revaluation of available-for-sale
financial assets - - (1,241) - (1,241)
------- -------- --------- -------- ---------
Total comprehensive income
for the period - - (1,621) 8,114 6,493
------- -------- --------- -------- ---------
Transactions with owners
Issue of shares 10,584 69,853 - - 80,437
Transfer - - 2,106 (2,106) -
Disposal of subsidiary - - (8) 8 -
Capital restructuring after
merger - (2,984) (75,597) 10,241 (68,340)
------- -------- --------- -------- ---------
Total transactions with owners 10,584 66,869 (73,499) 8,143 12,097
------- -------- --------- -------- ---------
Balance at 31 December 2011 15,196 86,711 (15,344) 18,764 105,327
======= ======== ========= ======== =========
** The business combination between Qihang and Win Yu were completed on 4 July 2012 and this has been retroactively adjusted to reflect the legal capital of Qihang for presentation
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 30 JUNE 2012
Note Six months Six months Year ended
ended 30 ended 31 December
June 2012 30 June 2011
2011
Unaudited Unaudited Audited
RMB'000 RMB'000 RMB'000
Profit before interest and tax 5,072 16,352 18,400
Depreciation of property, plant and
equipment 6,738 5,899 12,353
Amortisation of intangible assets 1,220 534 1,346
Loss on disposal of property, plant
and equipment 35 400 27
Fair value gain on derivative financial
instrument - - 461
Other (gains)/losses (3,607) - -
Loss on disposal of investment in
subsidiary company - 63 63
Operating cash flow before changes
in working capital 9,458 23,248 32,650
(Increase)/decrease in inventories (500) 5,812 (14,057)
Increase in trade and other receivables (7,815) (37,396) (10,443)
(Decrease)/increase in trade and other
payables (15,491) 33,479 (2,911)
Net cash (used in)/generated from
operations (14,348) 25,143 5,239
Finance costs paid (9,701) (5,321) (12,331)
Income tax refunded - - 2,761
Income tax paid (1,249) (2,388) (2,477)
----------- ----------- -------------
Net cash (used in)/generated from
operating activities (25,298) 17,434 (6,808)
=========== =========== =============
Investing activities
Purchase of property, plant and equipment (829) (19,545) (49,561)
Refund on cancellation of plant ordered 10,000 - -
Purchase of intangible assets - (364) (3,548)
Purchase of investment - - (2,484)
Proceeds from disposal of investment 94 - -
Net cash inflow from business combination 13.2 8,396 - 10,805
Net cash inflow from disposal of subsidiary - 5,893 5,893
Interest received 531 1,175 2,799
Net cash from/(used in) investing
activities 18,192 (12,841) (36,096)
=========== =========== =============
Financing activities
Proceeds from bank borrowings 163,600 109,600 191,350
Repayment of bank borrowings (142,200) (101,000) (138,400)
Proceeds from other borrowings - - 3,555
Share issued - - 3,437
Share issued costs - - (2,984)
Net cash from financing activities 21,400 8,600 56,958
=========== =========== =============
Net increase in cash and cash equivalents 14,294 13,193 14,054
Cash and cash equivalents at beginning
of period 47,160 32,632 32,632
Effect of foreign exchange differences - - 474
Cash and cash equivalents at end of
period 61,454 45,825 47,160
=========== =========== =============
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2012
1 General information
Qihang Equipment Company Limited, formerly China Wonder Limited ("Qihang") was incorporated and domiciled in Jersey. The address of the registered office is 11 Bath Street, St. Helier, Jersey JE2 4ST.
Win Yu International Investments Company Limited ("Win Yu") is a company incorporated and domiciled in Hong Kong. The nature of the Win Yu group's operations and its principal activities are manufacture of universal lathes, CNC machinery tool and associated parts. On 15 June 2011, the shareholders of Win Yu entered into a conditional agreement with China Wonder Limited, to dispose of the entire issued share capital of the Company. This disposal was completed on 4 July 2011.
On 6 January 2012, the group acquired the entire share capital of Zhenjiang Anda Coal Mine Special Equipment Co Ltd ("ZACM"), a manufacturer of coal mining equipment such as drilling machines, pumps, dust catchers, drill pipe and accessories for a cash consideration up to RMB35 million.
These condensed financial statements present information about the group and are set out in Renminbi ("RMB") of the P. R. China, which is the functional currency of the Company.
These condensed financial statements are presented in the nearest thousands.
2 Basis of preparation
The condensed financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting.
The interim report was approved by the Board of Directors on 26 September 2012. The report is unaudited and does not constitute the Company's statutory accounts for the six months ended 30 June 2012.
3 Significant accounting policies
The condensed financial statements have been prepared under the historical cost convention, except for the revaluation of certain properties and financial instruments. The same accounting policies, presentation and methods of computation have been followed in these condensed financial statements as were applied in the preparation of the group's financial statements for the year ended 31 December 2011.
4 Comparative
The comparative information of the group's financial statements for the six months ended 30 June 2011 are presented with Win Yu's results prior to the completion of the business combination on 4 July 2011, retroactively adjusted to reflect the legal capital of Qihang.
5 Seasonality of interim operation
The group is sensitive to the seasonality of sales. Traditionally and historically, the first quarter of the year is very quiet due to the festive season in China. The revenue of the group decreased significantly compared to the first six months of last year, mainly due to the slowdown of the machine tool industry within China. During the period, ZACM has contributed to turnover of approximate RMB14.8 million
6 Segment information
The sales revenue arises from the sale of universal lathes, CNC machinery, large-scale machinery, coal mining equipment and relevant spare parts which forms the group's main business. All the activities are within P. R. China. Therefore management considers no detail of the operating and geographical segments information is to be reported.
7.05% (6 months ended 30 June 2011: 6.27%) of sales are made via P. R. China agents to customers overseas.
Analysis of revenue from the sale of goods and services are analysed as follows:
Six months Six months Year ended
ended ended 31 December
30 June 30 June 2011
2012 2011 Audited
Unaudited Unaudited
RMB'000 RMB'000 RMB'000
Universal 54,698 81,433 142,540
CNC 31,510 37,622 74,892
Large-scale 14,799 18,555 44,245
Coal mining equipment 14,918 - -
Others 2,520 578 1,830
Sales and other sales related taxes (672) (953) (1,400)
----------- ----------- -------------
117,773 137,235 262,107
=========== =========== =============
7 Other gains/(losses)
Included in other gains/(losses) amount of RMB2,323,822 represent goodwill arising on the acquisition of ZACM. This is a bargain purchase where the group does not anticipate ZACM to report a profit after tax of at least RMB9 million for the year ended 31 December 2012. As a result of this, the balance of the conditional purchase consideration is unlikely to be payable. See note 13 for details of this acquisition.
Also included in other gains/(losses) amount of RMB1,289,031 related to the gain arising from the transfer of 25,000,000 ordinary shares and 50,000,000 options to subscribe for ordinary shares, exercisable at 0.8 pence per share, in Metroelectric plc to Wonder Employee Capital Limited ("WECL") in full and final settlement of the GBP200,000 loan.
8 Taxation
The Company is regarded as resident for tax purposes in Jersey and on the basis that the Company is neither a financial services company nor a utility company for the purposes of the Income Tax (Jersey) Law 1961, as amended; the company is subject to income tax in Jersey at a rate of zero per cent.
Win Yu, an intermediate parent company is regarded as resident for the tax purposes in Hong Kong. There is no tax liability due to losses during the period.
Heng Tai Feng International Holdings Limited, an intermediate parent company was registered in BVI. It is not regarded as resident for the tax purposes in BVI. Therefore, it will not be liable to BVI income tax in this respect other than on BVI source income.
The group's operating subsidiaries in PRC are subject to income tax rate at 25% except certain operating subsidiaries which are entitled to a reduction in tax rate at 15% and due to its high technology enterprise status.
Interim income tax is accrued based on 15% tax rate.
9 (Loss)/earnings per share
Basic earnings per share are calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average number of ordinary shares in issue during the period.
Diluted earnings per share are calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The dilutive potential ordinary shares in the Company are convertible loan notes. This convertible loan notes have been settled during the period, therefore there is no diluted effect.
For year ended 31 December 2011, earnings per share are calculated by dividing the profit attributable to equity shareholders of the Company by the weighted average pre-combination ordinary shares multiplied by exchange ratio established in the acquisition, and the weighted average total actual shares of the parent in issue after the date of acquisition.
Six months Year ended
ended 31 December
30 June 2011
2012 Audited
Unaudited
RMB RMB
Earnings
Earnings for the purposes of basic and diluted
earnings per share being net profit attributable
to equity holders of the parent (4,089,446) 8,113,560
============== =============
Number Number
Number of shares
Weighted average number of ordinary shares
for the purpose of basic earnings per share 58,036,263 48,099,998
============= =============
10 Property, plant and equipment
During the period, the Company spent approximate RMB829,000 on plant and machinery to upgrade its manufacturing capabilities. Having changed its strategy to manufacture CNC machine tools, the Company has cancelled the plant order of RMB32 million which was planned to expand its production capacity for universal lathes.
11 Share capital
The total authorised number of ordinary shares is 200,000,000 at 2.5 pence per share. The issued share capital of the Company as at 30 June 2012 is GBP1,450,906 fully paid. There were no movements in the issued share capital of the Company in the current reporting periods.
12 Borrowings
During the period, the Company has taken over bank borrowings of RMB19 million through the acquisition of ZACM. New short term bank loans obtained in total of RMB163.6 million. These loans bear interest at fixed rates and are repayable with one year. The proceeds were used for short term working capital needs. Repayments of other bank loans amounting to RMB142.2 million were made in line with previously disclosed repayment terms.
13 Acquisition of subsidiary
On 6 January 2012, the Company acquired the entire share capital of Zhenjiang Anda Coal Mine Special Equipment Co Ltd ("ZACM"), a manufacturer of coal mining equipment such as drilling machines, pumps, dust catchers, drill pipe and accessories for a cash consideration up to RMB35 million. RMB30 million of the consideration was payable immediately and the balance RMB5 million is payable by 31 March 2013 conditional upon ZACM reportingprofit after tax of at least RMB9 million for the year ended 31 December 2012. In the event that ZACM does not achieve this profit target then the deferred consideration will be reduced proportionally. Details of the acquisition are as follows:
13.1 Fair value of assets and liabilities acquired
Book value Fair value Fair
adjustment value
RMB'000 RMB'000 RMB'000
Non-current assets
Property, plant and equipment 2,977 278 3,255
Intangible assets 9,833 - 9,833
Deferred taxation 2,960 - 2,960
Current assets
Inventories 25,869 9,952 35,821
Trade and other receivables 35,252 - 35,252
Cash and cash equivalents 29,849 - 29,849
Current liabilities
Bank borrowings (19,000) - (19,000)
Trade and other payables (65,646) - (65,646)
22,094 10,230 32,324
Negative goodwill (2,324)
---------
Fair value of consideration transferred 30,000
=========
Satisfied by:
Cash - paid 21,453
Cash - deferred 8,547
---------
30,000
=========
Due to ZACM's performance to date being significantly lower than expectation, the Company is currently in negotiation with the original owners of ZACM to sell the shares back to them. As a result of this, the deferred part payable of the consideration has not yet been satisfied.
13.2 Net cash inflow arising on acquisition
Cash consideration paid 21,453
Cash and cash equivalent balances acquired 29,849
8,396
=======
14 Related party transactions
None
15 Events after the reporting date
None
This information is provided by RNS
The company news service from the London Stock Exchange
END
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