Find Your Broker
Share Name Share Symbol Market Type Share ISIN Share Description
Haike Chemical LSE:HAIK London Ordinary Share KYG423181083 ORD USD0.002 (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  +0.00p +0.00% 38.00p 1.00p 75.00p - - - 0 05:00:01
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 85.1 2.4 0.1 751.5 14.57

HaiKe Chemical Group Ltd. Half-year Report

01/09/2017 7:00am

UK Regulatory (RNS & others)


Haike Chemical (LSE:HAIK)
Historical Stock Chart

2 Years : From Dec 2016 to Dec 2018

Click Here for more Haike Chemical Charts.

TIDMHAIK

RNS Number : 4891P

HaiKe Chemical Group Ltd.

01 September 2017

HAIKE CHEMICAL GROUP LIMITED

INTERIM CONSOLIDATED RESULTS FOR THE SIX MONTHSED 30 JUNE 2017

(UNAUDITED)

HaiKe Chemical Group Ltd. ("HaiKe" or "the Company" or "the Group"), the AIM quoted (AIM: HAIK) specialty chemical company based in Shandong Province, China, announces its unaudited consolidated results for the six months ended 30 June 2017.

The Group has delivered a profitable performance despite facing challenging market conditions and a reduction in output as a result of the planned annual plant shutdown and upgrades. The Board continues to be mindful of the difficult trading environment and expects to make further technical upgrades and develop new products in H2 2017 to ensure continued profitability.

Financial highlights*

-- Total revenues increased by 14.9% to CNY402.8 million / GBP46.6 million (H1 2016: CNY350.7 million / GBP37.5 million)

-- Gross profit increased slightly to CNY61.6 million / GBP7.1 million (H1 2016: CNY61.2 million / GBP6.5 million)

-- Profit for the period decreased by 10.7% to CNY10.2 million / GBP1.2 million (H1 2016: CNY11.4 million / GBP1.3 million)

-- Cash and cash equivalents balance as at 30 June 2017 was CNY44.7 million / GBP5.1 million (31 December 2016: CNY CNY55.0 million / GBP6.5 million)

-- Total borrowings at 30 June 2017 were CNY80.0 million / GBP9.1 million (31 December 2016: CNY80.0 million / GBP9.4 million)

* As at 30 June 2017 the GBP/CNY exchange rate was 1:8.8144. The arithmetic average of the exchange rate for the first half of 2017 was 1:8.6483

Operational highlights

-- Selling price of products increased significantly, driven by the increase in price of raw materials, while sales volumes decreased due to the planned annual plant shutdown for maintenance and upgrade of the Company's principal production facility

-- Profit for the period decreased due to costs associated with the annual shutdown of the aforementioned production facility

-- Investment in a new electrolyte solvent plant which produces higher-end battery grade products

-- One high-end product of the new electrolyte solvent plant has passed acceptance testing and been successfully sold to customers since May

Outlook

-- Continue to focus on product innovation and enhancing customer service to mitigate difficult trading conditions, which are expected for the remainder of the year

-- Investment in a new pulverized coal stove to meet increased heating demand for higher-end products; this will also reduce shutdown frequency and meet enhanced environmental regulations

-- July 2017 recorded a loss of CNY0.98m due to lower than expected sales. Upgrades required by enhanced environmental regulations meant downstream companies have had to shut down operations in recent weeks, impacting sales. The Group therefore expects August 2017 to be a loss-making month.

Mr. Xiaohong Yang, Executive Chairman, said:

"The Board is pleased with the performance of the Group and, despite facing challenging market conditions and a reduction in output as a result of the planned annual plant shutdown, HaiKe has made good progress in its long-term strategy of focusing on the higher margin specialty chemicals business. The Company is planning further technical upgrades and expects to develop new products in H2 to ensure continued profitability."

For further information please contact:

 
HaiKe Chemical         Jes Cui, Chief Financial   +86 546 7787789 
 Group                  Officer                    cuizhiqiang@haikegroup.com 
                                                   yolanda.zhang@haikegroup.com 
                       Richard Johnson /          +44 (0) 20 7601 
Stockdale Securities    Antonio Bossi              6100 
                       Shan Shan Willenbrock 
                        / 
                        Joe McGregor              +44 (0) 20 7930 
Cardew Group            haike@cardewgroup.com      0777 
 

A copy of this half yearly financial report is available on the Company's website www.haikechemical.com.

CHAIRMAN'S STATEMENT

   1.   Review of operating results 

In H1 2017, the Group sold 58,000 tons of specialty chemicals, representing a volume decrease of 14.2% when compared to the same period in the previous year. The sales of high-end specialty chemicals accounted for 14.5% of total sales in H1 2017, compared to 3.4% in H1 2016.

The IPA plant was shut down for annual maintenance from 11 May to 13 June 2017. During this period, the Company carried out additional upgrades to support the planned focus on higher-end products and in compliance with enhanced environment regulations. As a result of increased heating demand for higher-end products, the Company is building a new pulverized coal stove. In order to manage the heating capacity prior to the completion of the stove, the Board, as previously announced on 26 June 2017, has decided to reduce the operating capacity of the DMC plant which produces lower margin products. The DMC plant is expected to be fully operational by the year end, in line with the completion of the coal stove.

As previously stated in the final results, the Company is focused on upgrading various products and supplying multiple types of supporting products. To facilitate the upgrade, the Company has invested CNY 62 million, funded from existing cashflow, in a new electrolyte solvent plant which is expected to produce a range of higher-end battery grade products including DiMethyl Carbonate (DMC), battery grade Propylene Carbonate (PC), battery grade Ethyl Methyl Carbonate (EMC), battery grade Diethyl Carbonate (DEC), and battery grade Ethylene Carbonate (EC). DEC, one of new high-end products produced from the new electrolyte solvent plant has passed the acceptance testing and has been sold to customers since May.

The selling price of products increased significantly, driven by the increase in the price of raw materials and the rise in oil prices.

 
                                                                 Average Realized 
                                Sales Volume                           Price 
                            ('000 ton)                          (CNY/ton) 
                       6 months     6 months    Change    6 months     6 months    Change 
                         ended        ended      y-o-y      ended        ended      y-o-y 
                       30-Jun-17    30-Jun-16    (%)      30-Jun-17    30-Jun-16    (%) 
 DiMethyl 
  Carbonate                   19           24   -20.3%        5,176        3,782    36.9% 
 Propylene 
  glycol                      16           19   -12.3%        7,961        6,618    20.3% 
 Isopropyl 
  alcohol                     21           24   -12.1%        6,446        4,705      37% 
 Diisopropyl 
  ether                        2            1    14.3%       10,705        9,688    10.5% 
 Diethyl carbonate           0.2            0                10,958 
 Total                        58           68   -14.2%        6,593        5,013    31.5% 
 
   2.   Financial Analysis 

Turnover

The Group's turnover increased by 14.9% to CNY402.8 million in the first half of 2017 (H1 2016: CNY350.7 million). Selling prices of DMC and IPA rose 36.9% and 37% respectively. This was attributable to the rise in raw materials.

The price of propylene is closely related to that of crude oil which increased 26% compared with H1 2016. In addition, some companies producing propylene as a main product shut down for maintenance which reduced the supply of propylene sharply, resulting in the Company not producing any new propylene products in the period. For propylene oxide, the average operating rate was 79% for H1 2017, down by 4% compared to the same period last year. The government has implemented more stringent environment inspections and regulation, causing some factories to cease operation.

While the overall average realized price increased by 31.5% in the period, total sales volumes decreased by 14.2% due to the shutdown of some of the Company's plants. The IPA plant was closed for annual maintenance for one month. The smaller 15,000 tons per annum DMC plant which produces lower margin products was shut down from 24 April until the end of this year to manage the heating capacity prior to the completion of the coal stove. The larger 30,000 tons per annum DMC plant continues to operate normally.

Gross Profit

Gross profit increased slightly to CNY61.6 million compared with the same period in 2017 (H1 2016: CNY61.2 million). The price of propylene and propylene oxide increased by 29% and 28% respectively. This led to a rise in the cost of sales of 17.8%. The Company maintains a reasonable stock of raw materials.

Selling, General and Administrative Expenses

Selling and distribution expenses decreased to CNY20.4 million in H1 2017 (H1 2016: CNY20.8 million). Freight costs decreased by 14.5% and commission fell by 68.3% due to a reduction in sales volume.

General and administrative expenses increased to CNY28.4 million in H1 2017 (H1 2016: CNY25.2 million) which was mainly attributable to an increase in labour cost as a result of an increase in domestic inflation.

Net Interest Expenses

Interest income decreased by 5% year-on-year to CNY0.87 million for H1 2017 (H1 2016: CNY0.91 million).

Interest expenses were CNY1.9 million for H1 2017 (H1 2016: CNY1.9 million). Bank loans remained unchanged.

Profit Before Tax

Profit before taxation was CNY12.1 million for H1 2017 (H1 2016: CNY13.8 million). A lower profit was achieved in the period compared to H1 2016 as a result of a 4.6% increase in total expenses. This is attributable to shutdown costs of the IPA plant and start-up expenses of the new electrolyte solvent plant which accounted for CNY4.5 million.

Income Tax

Income tax charge was CNY1.9 million for H1 2017, as compared to CNY2.4 million for the same period in the previous year.

Profit for the Period

Profit for the half year was CNY10.2 million (H1 2016: CNY11.4 million).

Cash and Cash Equivalents

Cash and cash equivalents decreased to CNY44.7 million as at 30 June 2017 compared to CNY55.0 million as at 31 December 2016. The reduction in cash and cash equivalents was due to the investment in the new electrolyte solvent plant, associated start-up expenses and shutdown costs of the IPA plant.

Bank Loans

Bank loans were CNY80.0 million as at 30 June 2017, unchanged from 31 December 2016 (CNY 80.0 million).

Cash Flow from Operations

Cash flow from operating activities was CNY86.7 million for the six months ended 30 June 2017, compared to CNY68.0 million for the same period in 2016. This was mainly attributable to positive movements of working capital.

   3.   Outlook 

The Group recorded an unaudited loss of CNY0.98 million for July due to demand being lower than expected. The output product of the operating DMC plant, propylene glycol, was used as raw material for the new electrolyte solvent plant, which reduced sales volume of propylene glycol. Sales of Diisopropyl ether were lower than expected due to weak market conditions.

In order to facilitate upgrades required by enhanced environmental regulations, some downstream companies have had to shut down operations in recent weeks, impacting sales. The Group therefore expects August 2017 to be a loss-making month.

As previously announced, the Company expects a further shutdown of the IPA plant in the second half of 2017 to fit a new catalyst which is anticipated to take no longer than one month. As a result of increased heating demand for our higher-end products, the Company is building a new pulverized coal stove. This action is intended to reduce shutdown frequency and allow the Company to meet enhanced environment regulations. Construction of the stove has begun, with completion expected toward the year end.

In order to continue to deliver a profitable performance for H2 in a challenging operating environment, our efforts will remain focused on:

   --       Establishing strategic partnerships with customers for higher-end products 

-- Providing specialist technical services to enhance product value and improve overall customer service

   --       Continuing to increase marketing investment 
   --       Product innovation to introduce new higher-end products to diversify our product portfolio 

Xiaohong Yang

Executive Chairman

Condensed consolidated statement of comprehensive income

For the six months ended 30 June 2017

 
                                             6 months           6 months ended      Year ended 
                                               ended 
                                             30-Jun-17             30-Jun-16        31-Dec-16 
                                 Note       (Unaudited)           (Unaudited)       (Audited) 
                                                    CNY'000               CNY'000      CNY'000 
                                       --------------------  --------------------  ----------- 
 
 Revenue                                          402,818               350,706        728,274 
 Cost of sales                                   (341,178)             (289,521)     (613,367) 
                                       --------------------  --------------------  ----------- 
 Gross profit                                      61,640                61,185        114,908 
 Other operating 
  income                                             300                  (387)        (1,070) 
 Administrative expenses                          (28,410)              (25,160)      (51,060) 
 Selling and distribution 
  expenses                                        (20,398)              (20,843)      (40,542) 
                                       --------------------  --------------------  ----------- 
 Profit from operations                             13,132                14,795        22,237 
 
 Finance expenses                                  (1,892)               (1,877)      (15,043) 
 Finance income                                       866                  906          13,509 
                                       --------------------  --------------------  ----------- 
 
 Profit / (loss) 
  before tax                                         12,106               13,824        20,703 
 
 Tax expense                      7                 (1,940)               (2,435)      (3,757) 
 Profit/(Loss) for 
  the period                                      10,166                11,389          16,946 
                                       --------------------  --------------------  ----------- 
 
 Other comprehensive 
  profit, net of tax 
 Items that will 
  be reclassified 
  subsequently to 
  profit or loss 
  Exchange difference 
   arising from consolidation                     -                     -                    - 
                                       --------------------  --------------------  ----------- 
 Total comprehensive 
  profit for the period, 
  net of tax                                      10,166                11,389          16,946 
                                       --------------------  --------------------  ----------- 
 
 Profit / (loss) 
  for the period attributable 
  to: 
  Owners of parent                                10,152                11,372          16,921 
  Non-controlling 
   interest                                         14                     17               25 
                                       --------------------  --------------------  ----------- 
                                                 10,166                 11,389          16,946 
                                       --------------------  --------------------  ----------- 
 
 Total comprehensive 
  profit for the period 
  attributable to:                                10,152                11,372          16,921 
  Owners of parent                                   14                    17               25 
                                       --------------------  --------------------  ----------- 
  Non-controlling 
   interests                                     10,166                 11,389          16,946 
                                       --------------------  --------------------  ----------- 
 
 Earnings per share 
  for profit attributable 
  to the 
 ordinary equity 
  holders of the parent 
  during the period 
 
 
 Basic                                             CNY0.265              CNY0.297     CNY0.442 
 Diluted                                           CNY0.265              CNY0.297     CNY0.442 
                                       --------------------  --------------------  ----------- 
 

Condensed consolidated Statement of Financial Position

As at 30 June 2017

 
                                         6 months                           6 months                     Year ended 
                                           ended                              ended 
                                        30-Jun-17                          30-Jun-16                      31-Dec-16 
                    Notes              (Unaudited)                        (Unaudited)                     (Audited) 
                                                      CNY'000                            CNY'000                   CNY'000 
                            ---------------------------------  ---------------------------------  ------------------------ 
 ASSETS 
 Non-current 
 assets 
 Property, plant 
  and equipment                                       209,691                            148,632                   181,287 
 Intangible assets                                     10,174                             11,465                    10,819 
                                                      219,865                            160,097                   192,106 
                            ---------------------------------  ---------------------------------  ------------------------ 
 Current assets 
 Inventories                                           46,299                             33,296                    39,798 
 Trade and other 
  receivables                                         151,911                            105,941                   142,196 
 Amounts due from 
  related parties                                     204,789                            580,931                   149,221 
 Income tax 
 receivable                                                                                                              - 
 Restricted cash                                        2,200                              7,612                     4,156 
 Cash and cash equivalents                             44,700                             73,541                    54,978 
                            --------------------------------- 
                                                      449,899                            801,321                   390,349 
                            ---------------------------------  ---------------------------------  ------------------------ 
 Total assets                                         669,764                            961,418                   582,455 
                            ---------------------------------  ---------------------------------  ------------------------ 
 
 LIABILITIES 
 Current 
 liabilities 
 Short-term loan                                       80,000                             80,000                    80,000 
 Trade and other 
  payables                                            184,473                            180,202                   121,570 
 Income tax payable                                     4,076                              6,749                     7,921 
                            ---------------------------------  --------------------------------- 
 Amounts due to 
  related parties                                     257,327                            568,654                   241,657 
                            ---------------------------------  --------------------------------- 
                                                      525,876                            835,605                   451,148 
                            ---------------------------------  ---------------------------------  ------------------------ 
 Non-current 
 liabilities 
 Long-term loan 
 Deferred income                                        2,300                              2,192                     2,129 
                            ---------------------------------  --------------------------------- 
                                                        2,300                              2,192                     2,129 
                            ---------------------------------  ---------------------------------  ------------------------ 
 Total liabilities                                    528,176                            837,797                   453,277 
                            ---------------------------------  ---------------------------------  ------------------------ 
 
 CAPITAL AND 
 RESERVES 
 Share capital                                            598                                598                       598 
 Share premium                                      1,564,667                          1,564,667                 1,564,667 
 Other reserves                                         1,818                              1,818                     1,818 
 Foreign currency 
  translation reserve                                   (587)                              (587)                     (587) 
 Statutory reserves                                    34,205                             32,268                    34,205 
 Accumulated losses                               (1,459,224)                        (1,475,228)               (1,471,616) 
                            ---------------------------------  ---------------------------------  ------------------------ 
 Equity attributable 
  to equity holders 
  of the parent                                       141,477                            123,536                   129,085 
 Non-controlling 
  interest                                                111                                 85                        93 
                            ---------------------------------  --------------------------------- 
 Total equity                                         141,588                            123,621                   129,178 
                            ---------------------------------  ---------------------------------  ------------------------ 
 Total liabilities 
  and equity                                          669,764                            961,418                   582,455 
                            ---------------------------------  ---------------------------------  ------------------------ 
 

Condensed consolidated Statement of Changes in Equity

For the 6 months ended 30 June 2017

 
                                                                           Attributable to equity holders of the parent 
                             For the 6 months                                                                                            Foreign 
                            ended 30 June 2017                                                                                           currency 
                                                                               Share               Share              Other            translation        Statutory             Accumulated                                Non-controlling            Total 
                                                                              capital             premium            reserves            reserve           reserves               losses                  Total                interest               equity 
                                (Unaudited)                                   CNY'000             CNY'000             CNY'000            CNY'000            CNY'000               CNY'000                 CNY'000               CNY'000               CNY'000 
                                                                         --------------      --------------      -------------      ---------------  -----------------      ----------------      -------------------  ---------------------      ----------- 
 Balance as at 1 January 
  2017                                                                              598           1,564,667              1,818                (587)             34,205           (1,471,616)                  129,085                     93          129,178 
 Transfer to statutory 
  reserves 
 Previous year adjustment                                                                                                                                                              2,239                    2,239                                   2,239 
 Transactions with 
  owners                                                                                                  -                  -                    -                  -                 2,239                    2,239                      -           2,239- 
 Profit for the year                                                                                                                                                                  10,152                   10,152                     14           10,166 
 Other comprehensive 
  profit                                                                              -                   -                  -                                       -                                                                     - 
  - Foreign currency 
   translation                                                                        -                   -                                                          - 
 Total comprehensive 
  profit for the year                                                                 -                   -                  -                    -                  -                10,152                   10,152                     14           10,166 
 Balance as at 30 June 
  2017                                                                              598           1,564,667              1,818                (587)             34,205           (1,459,225)                  141,477                    107          141,584 
                                                                         --------------      --------------      -------------      ---------------  -----------------      ----------------      -------------------  ---------------------      ----------- 
 
 
 
 
 
 
 
                                                                             Attributable to equity holders of the parent 
 
                         For the 6 months ended                                                                                          Foreign 
                               30 June 2016                                                                                              currency 
                                                                               Share               Share              Other            translation        Statutory             Accumulated                                Non-controlling            Total 
                                                                              capital             premium            reserves            reserve           reserves               losses                  Total                interest               equity 
                                (Unaudited)                                   CNY'000             CNY'000             CNY'000            CNY'000            CNY'000               CNY'000                 CNY'000               CNY'000               CNY'000 
                                                                         --------------      --------------      -------------      ---------------  -----------------      ----------------      -------------------  ---------------------      ----------- 
 Balance as at 1 January 
  2016                                                                              598           1,564,667              1,818                (587)             32,268           (1,486,585)                  112,179                     68          112,247 
 Transfer to statutory 
  reserves                                                                                                                                                                              (15)                     (15)                                    (15) 
 Previous year adjustment                                                                                                                                                                                                                                (15) 
 Transactions with 
  owners                                                                              -                   -                  -                    -                                     (15)                     (15)                      -                - 
 Profit for the year                                                                                                                                                                  11,372                   11,372                     17           11,389 
 Other comprehensive 
  profit                                                                                                                                                                                                                                   - 
  - Foreign currency 
   translation                                                                        -                   -                  -                    -                  -                                              -                                       - 
 Total comprehensive 
  profit for the year                                                                 -                   -                  -                    -                  -                11,372                   11,372                     17           11,389 
 Balance as at 30 June 
  2016                                                                              598           1,564,667              1,818                (587)             32,268           (1,475,228)                  123,536                     85          123,621 
                                                                         --------------      --------------      -------------      ---------------  -----------------      ----------------      -------------------  ---------------------      ----------- 
 
 
 
                                                                           Attributable to equity holders of the parent 
 
 
                            For the year ended 
                             31 December 2016 
                                (Audited) 
                                                                                                                                         Foreign 
                                                                                                                                         currency 
                                                                              Share               Share               Other            translation        Statutory            Accumulated                                 Non-controlling            Total 
                                                                              capital             premium            reserves            reserve           reserves               losses                  Total                interest               equity 
                                                                              CNY'000             CNY'000            CNY'000             CNY'000           CNY'000                CNY'000                CNY'000               CNY'000               CNY'000 
                                                                         --------------      --------------      -------------      ---------------  -----------------      ----------------      -------------------  ---------------------      ----------- 
 Balance as at 1 January 
  2016                                                                              598           1,564,667              1,818                (587)             32,268           (1,486,585)                  112,179                     68          112,247 
 Transfer to statutory 
  reserves                                                                            -                                      -                                   1,937               (1,937)                        - 
 Previous year adjustment                                                                                                                                                               (15)                     (15)                                    (15) 
 Transactions with 
  owners                                                                              -                                      -                    -               1937                (1952)                     (15)                                    (15) 
 Profit for the year                                                                                                                                                                  16,921                   16,921                     25           16,946 
 Other comprehensive 
  profit                                                                              -                   -                  -                                       -                                              -                                       0 
  - Foreign currency 
   translation                                                                        -                   -                                       -                  -                                              - 
 Total comprehensive 
  profit for the year                                                                 -                   -                  -                    -                  -                16,921                   16,921                     25           16,946 
 
                                                               Balance 
                                                               as at 31 
                                                               December 
                                                               2016                 598           1,564,667              1,818                (587)             34,205           (1,471,616)                  129,085                     93          129,178 
                                                                         --------------      --------------      -------------      ---------------  -----------------      ----------------      -------------------  ---------------------      ----------- 
 
 

Condensed consolidated Statement of Cash Flow

For the 6 months ended 30 June 2017

 
                                              6 months                       6 months               Year 
                                                ended                          ended                ended 
                                   -----------------------------  -----------------------------  ---------- 
                                             30-Jun-17                      30-Jun-16             31-Dec-16 
                                   -----------------------------  -----------------------------  ---------- 
                                            (Unaudited)                    (Unaudited)            (Audited) 
                                   -----------------------------  -----------------------------  ---------- 
                                                         CNY'000                        CNY'000     CNY'000 
                                   -----------------------------  -----------------------------  ---------- 
 
 Profit /(loss) before 
  tax                                                     12,106                         13,824      20,703 
                                   -----------------------------  -----------------------------  ---------- 
 Adjustments for:                                              -                              - 
                                   -----------------------------  -----------------------------  ---------- 
  Amortisation of intangible 
   assets                                                    646                            646       1,291 
                                   -----------------------------  -----------------------------  ---------- 
  Provisions for doubtful 
   debts                                                     885                            136         885 
                                   -----------------------------  -----------------------------  ---------- 
  Depreciation of property, 
   plant and equipment                                    13,491                         12,860      26,203 
                                   -----------------------------  -----------------------------  ---------- 
  Loss on disposal 
   of property, plant 
   and equipment                                                                          (472)       1,448 
                                   -----------------------------  -----------------------------  ---------- 
  Amortisation of deferred 
   capital grants                                            102                            250       1,050 
                                   -----------------------------  -----------------------------  ---------- 
  Interest income                                          (110)                          (114)    (11,062) 
                                   -----------------------------  -----------------------------  ---------- 
  Finance expense                                          1,892                            953      15,043 
                                   -----------------------------  -----------------------------  ---------- 
 Operating cash flows 
  before working capital 
  changes                                                 29,012                         28,083      55,561 
                                   -----------------------------  -----------------------------  ---------- 
 
 Working capital changes: 
                                   -----------------------------  -----------------------------  ---------- 
  (Increase)/decrease 
   in: 
                                   -----------------------------  -----------------------------  ---------- 
     Inventories                                         (6,500)                        (4,701)    (11,204) 
                                   -----------------------------  -----------------------------  ---------- 
    Trade and other receivables                          (9,717)                        (4,634)    (40,888) 
                                   -----------------------------  -----------------------------  ---------- 
    Movement in related 
     parties' balances                                     9,988                       (49,803)      62,256 
                                   -----------------------------  -----------------------------  ---------- 
    Restricted cash                                        1,956                          5,647       9,104 
                                   -----------------------------  -----------------------------  ---------- 
  Increase/(decrease) 
   in: 
                                   -----------------------------  -----------------------------  ---------- 
    Trade and other payables                              59,059                         91,020      32,388 
                                   -----------------------------  -----------------------------  ---------- 
 Cash generated from 
  operations                                              83,798                         65,612     107,220 
                                   -----------------------------  -----------------------------  ---------- 
  Income tax paid                                          2,881                          2,388       3,496 
                                   -----------------------------  -----------------------------  ---------- 
 Net cash generated 
  from operating activities                               86,679                         68,000     110,716 
                                   -----------------------------  -----------------------------  ---------- 
 
                                              6 months                       6 months               Year 
                                                ended                          ended                ended 
                                   -----------------------------  -----------------------------  ---------- 
                                             30-Jun-17                      30-Jun-16             31-Dec-16 
                                   -----------------------------  -----------------------------  ---------- 
                                            (Unaudited)                    (Unaudited)            (Audited) 
                                   -----------------------------  -----------------------------  ---------- 
                                                         CNY'000                        CNY'000     CNY'000 
                                   -----------------------------  -----------------------------  ---------- 
 
 Cash flow generated 
  from operating activities                               86,679                         68,000     110,716 
                                   -----------------------------  -----------------------------  ---------- 
 Cash flow from investing 
  activities 
                                   -----------------------------  -----------------------------  ---------- 
  Purchase of property, 
   plant and equipment                                  (95,443)                       (29,085)    (76,421) 
                                   -----------------------------  -----------------------------  ---------- 
  Purchase of intangible 
   assets                                                                                                 - 
                                   -----------------------------  -----------------------------  ---------- 
  Interest received                                                                         114 
                                   -----------------------------  -----------------------------  ---------- 
  Government grant 
   received                                                  377                             60         321 
                                   -----------------------------  -----------------------------  ---------- 
  Purchase of shares 
   in subsidiary from 
   minorities                                                                                             - 
                                   -----------------------------  -----------------------------  ---------- 
 Cash flow (used in)/ 
  generated from investing 
  activities                                            (95,066)                       (28,911)    (76,100) 
                                   -----------------------------  -----------------------------  ---------- 
 
 Cash flow from financing 
  activities 
                                   -----------------------------  -----------------------------  ---------- 
  Capital injection 
   from minority shareholders 
   in subsidiaires 
                                   -----------------------------  -----------------------------  ---------- 
  Proceeds from bank 
   borrowings                                             80,000                         80,000     120,000 
                                   -----------------------------  -----------------------------  ---------- 
  Repayment of bank 
   borrowings                                           (80,000)                       (80,000)   (120,000) 
                                   -----------------------------  -----------------------------  ---------- 
  Loans(from)/to related 
   parties 
                                   -----------------------------  -----------------------------  ---------- 
  Interest paid                                          (1,892)                          (953)    (15,043) 
                                   -----------------------------  -----------------------------  ---------- 
  Dividends paid to 
   non-controlling interest                                    -                              - 
                                   -----------------------------  -----------------------------  ---------- 
 Cash flow (used in) 
  /generated from financing 
  activities                                             (1,892)                          (953)    (15,043) 
                                   -----------------------------  -----------------------------  ---------- 
 
 Net (decrease) /increase 
  in cash and cash equivalents                          (10,279)                         38,136      19,573 
                                   -----------------------------  -----------------------------  ---------- 
 Cash at beginning 
  of period                                               54,978                         35,405      35,405 
                                   -----------------------------  -----------------------------  ---------- 
 Foreign currency translation 
  differences 
                                   -----------------------------  -----------------------------  ---------- 
 Cash at end of year                                      44,700                         73,541      54,978 
                                   -----------------------------  -----------------------------  ---------- 
 

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL INFORMATION

FOR SIX MONTHSED 30 JUNE 2017

(UNAUDITED)

   1.   General information 

HaiKe Chemical Group Ltd. ("the Company") is a public limited company, incorporated in the Cayman Islands on 20 June 2006, and is quoted on AIM. The address of the registered office is Scotia Center 4th Floor, P.O. Box 2804, George Town, Grand Cayman, Cayman Islands.

The Company's ultimate parent company is HiTech Chemical Investment Ltd, a company incorporated in the British Virgin Islands.

The principal activities of the Company are manufacturing of specialty chemical products.

The principal place of business of the Company is Shengli Industrial Park, Dongying City, Shandong Province, China.

The interim consolidated financial information of the Company for the six months ended 30 June 2017 comprises the Company and its subsidiary undertakings ("the Group").

   2.   Accounting policies 

The consolidated financial statements of the Company have been prepared in accordance with those International Financial Reporting Standards and Interpretations in force ("IFRS"), as adopted by the European Union.

The principal accounting policies adopted in the preparation of the interim financial statements have been consistently applied in the Company's latest annual audited consolidated financial statements and are expected to be used for Company's annual consolidated financial statements for the year ending 31 December 2017.

Financial information for the six months ended 30 June 2017 and 30 June 2016 is unaudited and does not constitute the Company's financial statements for these periods.

Comparative financial information for the full year ended 31 December 2016 has been derived from the audited financial statements for that period. The Board of Directors approved the interim statements on 31 August 2017.

   3.   Related Party Transactions 

The Company undertook a restructuring in 2014 which resulted in the divestment of the Group's refinery and biochemical assets to leave a smaller, more focused specialty chemicals business. The disposed companies and HaiKe are controlled by HiTech Chemical Investment Ltd and therefore, in accordance with IAS24, the disposed companies are deemed to be related parties of the Group.

The immediate and ultimate parent company is HiTech Chemical Investment Ltd., a company incorporated in British Virgin Islands. Related parties include companies that fall under the common control provisions of IAS24. Details of transactions with related parties are as follows:

Sales, purchase of goods and loans

In H1 2017, the Group made the following sales, purchase and funds transfer with related parties:

 
                               Sales   Purchase      Loan      Loan         Loan 
                                                     from        to    repayment 
--------------------------  --------  ---------  --------  --------  ----------- 
 30-06-2017                  CNY'000    CNY'000   CNY'000   CNY'000      CNY'000 
--------------------------  --------  ---------  --------  --------  ----------- 
 Shareholder                       -          -         -         8            - 
 Haike Holding Hongkong 
  Limited                          -          -    14,380    83,709            - 
 Haike International               -          -         -        10            - 
  Holding Limited 
 HiTech Chemical                   -          -         -       397            - 
  Investment Ltd. 
 Dongying Hi-tech 
  Qifen Co., Ltd               1,921    112,990         -     75699            - 
 Shandong Hi-tech                                 119,423         -            - 
  Ruilin Chemical 
  Co., Ltd 
 Dongying He-bang 
  Chemical Co., Ltd                -        842    75,976         -            - 
 Dongying Tiandong 
  Biochemical Co., 
  Ltd                              -          -     4,864     3,209            - 
 Shandong Hi-tech 
  Chemical Group Ltd               -         52    35,811    37,892            - 
 Shanghai Yuanchuan                -          -     6,535         -            - 
  Chemical Ltd 
 Dongying Hi-tech 
  Transport Co.,Ltd.               -        370       337         -            - 
 Shandong Hi-Tech                  -          -         -       390            - 
  Shengli Electrochemical 
  Co., Ltd 
--------------------------  --------  ---------  --------  --------  ----------- 
                               1,921    114,254   257,327   201,313            - 
--------------------------  --------  ---------  --------  --------  ----------- 
 

The sales of goods to the related parties are based on the market price.

   4.   Subsequent Event 

No subsequent event occurred after the reporting period.

   5.     Capital commitments 

Capital expenditure contracted for property, plant and equipment in continuing operations as at 30 June 2017 but not recognized in the financial statements, was CNY29.7 million (31 December 2016: CNY29.4 million).

   6.   Acquisitions and disposals of items of property, plant and equipment 

Acquisitions of items of property, plant and equipment were CNY95.4 million (H1 2016: CNY29.1million). Loss on disposals of items of property, plant and equipment was CNY0 (H1 2016: CNY472,000).

   7.   Tax 

Major components of income tax expense/(credit)

The major components of income tax expense are as follows:

 
                               6 months      6 months          Year ended 
                                 ended         ended 
                               30-Jun-17     30-Jun-16          31-Dec-16 
                              (Unaudited)   (Unaudited)         (Audited) 
                                  CNY'000       CNY'000                 CNY'000 
                             ------------  ------------  ---------------------- 
 
 Current income tax                 1,940         2,435                   3,757 
 Deferred tax: 
 Originating and reversal               -             -                       - 
  of temporary differences 
                             ------------  ------------ 
 Income tax recognised 
  in income statement               1,940         2,435                   3,757 
                             ------------  ------------  ---------------------- 
 

Relationship between tax expense and accounting (loss)/profit

Reconciliation between tax expense and the accounting profit multiplied by the applicable corporate tax rate is as follows:

 
                                  6 months                  6 months           Year ended 
                                    ended                     ended 
                                  30-Jun-17                 30-Jun-16          31-Dec-16 
                                 (Unaudited)               (Unaudited)         (Audited) 
                                           CNY'000                   CNY'000      CNY'000 
                          ------------------------  ------------------------  ----------- 
 
 Accounting profit 
  before income tax                         12,106                    13,824       20,703 
 Tax at respective 
  companies' domestic 
  income tax rate                            3,027                     3,456        5,176 
 Nondeductible expenses                    (1,087)                   (1,021)      (1,419) 
 Income tax expense 
  recognized in income 
  statement                                  1,940                     2,435        3,757 
                          ------------------------  ------------------------  ----------- 
 
   8.   Profit per share from operations 

Earnings for the purpose of basic and diluted earnings per share are the net profit for six months ended 30 June 2017 attributable to equity holders of the parent of CNY10,152,000 (for the six months ended 30 June 2016: profit of CNY11,372,000; for the year ended 31 December 2016: profit of CNY16,921,000).

The profit from operations for the financial periods attributable to equity holders of the parent was as follows:

 
 
 
   Profit per share from 
   operations 
 
                                   6 months      6 months   Year ended 
                                      ended         ended 
                                  30-Jun-17     30-Jun-16    31-Dec-16 
                                (Unaudited)   (Unaudited)    (Audited) 
                                    CNY'000       CNY'000      CNY'000 
                               ------------  ------------  ----------- 
 Profit per share from 
  operations 
 attributable to equity 
  holders of the parent              10,152        11,372       16,921 
                               ------------  ------------  ----------- 
 
 
 Number of ordinary shares         6 months      6 months   Year ended 
                                      ended         ended 
                                  30-Jun-17     30-Jun-16    31-Dec-16 
                                (Unaudited)   (Unaudited)    (Audited) 
                                       '000          '000         '000 
                               ------------  ------------  ----------- 
 Weighted average number 
  of ordinary shares - basic 
  & diluted 
                                     38,354        38,354       38,354 
                               ------------  ------------  ----------- 
 

This information is provided by RNS

The company news service from the London Stock Exchange

END

IR BSGDIIXXBGRB

(END) Dow Jones Newswires

September 01, 2017 02:00 ET (06:00 GMT)

1 Year Haike Chemical Chart

1 Year Haike Chemical Chart

1 Month Haike Chemical Chart

1 Month Haike Chemical Chart
Your Recent History
LSE
HAIK
Haike Chem..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20181218 17:11:46