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Extracted from Annual Report 2017

Financial Performance

Revenue increased by approximately RMB339.3 million or 20.9% from RMB1,626.2 million in FY2016 to RMB1,965.5 million in FY2017. This was mainly attributed to an increase of RMB313.5 million and RMB152.2 million from EEM and GI segments, respectively.

The Group’s gross profit decreased by approximately RMB0.5 million or 0.1% from RMB408.3 million in FY2016 to RMB407.8 million in FY2017. Gross profit margin decreased from 25.1% for FY2016 to 20.7% for FY2017 mainly due to the increase of the manufacturing cost in EEM segments as a result of increase in prices of raw materials in 2017.

Profit before tax increased by 0.1% from RMB177.7 million in FY2016 to RMB177.8 million in FY2017 mainly due to the following factors:

  1. Increase in fair value gain on Convertible Bonds of RMB69.3 million between 3 March 2017 and 31 December 2017; and
  2. Increase in other operating income of RMB42.0 million mainly due to an increase in government grants and interest income.

On the other hand, administrative expenses increased by RMB41.8 million in FY2017 largely due to increase in personnel expenses to support the Group’s expansion. Foreign exchange losses increased due to unutilised proceeds from Convertible Bonds. Finance costs increased by RMB 66.9 million in FY2017 mainly due to accrued effective interest of Convertible Bonds.

As a result of the above, the Group reported a 2.5% growth in its net profit attributable to shareholders to RMB145.8 million in FY2017.

Cash Flow And Liquidity

The Group’s cash and cash equivalents increase by RMB621.3 million from RMB281.3 million as at 31 December 2016 to RMB902.6 million as at 31 December 2017. With financial effects of Convertible Bonds, net cash generated from operating activities amounted to approximately RMB95.1 million in FY2017. Net cash used in investing activities amounted to RMB692.6 million mainly due to an increase in expenditure on intangible assets and purchase of property, plant and equipment respectively. Net cash generated from financing activities amounted to RMB1,228.1 million due to net proceeds of borrowings and Convertible Bonds.

Financial Position

With financial effects of Convertible Bonds, the shareholders’ equity as at 31 December 2017 stood at RMB1,256.2 million, improved by 12.4% from RMB1,118.0 million as at 31 December 2016. Net asset value per share increased by RMB18.73 cents to RMB170.30 cents as at 31 December 2017.