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Heng Hup Holdings Limited
興 合 控 股 有 限 公 司
(incorporated in the Cayman Islands with limited liability)
(Stock Code: 1891)
ANNOUNCEMENT OF UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2019
FINANCIAL HIGHLIGHTS
- Revenue for the six months ended 30 June 2019 amounted to RM499.0 million, representing an increase of 20.7% from RM413.5 million for the six months ended 30 June 2018.
- Gross profit for the six months ended 30 June 2019 amounted to RM29.1 million, representing a decrease of 0.4% from RM29.2 million for the six months ended 30 June 2018.
- Profit attributable to owners of the Company for the six months ended 30 June 2019 amounted to RM7.8 million, representing a decrease of 29.4% from RM11.1 million for the six months ended 30 June 2018.
- If excluding the listing expenses from the net profit attributable to owners of the Company, the adjusted profit attributable to owners of the Company for the six months ended 30 June 2019 would have been RM11.5 million, representing a decrease of 17.9% from RM14.0 million for the six months ended 30 June 2018.
- The equity attributable to owners of the Company as at 30 June 2019 amounted to RM179.9 million, representing an increase of 53.2% from RM117.4 million as at 31 December 2018.
- The Board does not declare the payment of any dividend for the six months ended 30 June 2019 (six months ended 30 June 2018: Nil).
In this announcement, "we", "us", "our" and "Heng Hup" refer to the Company (as defined below) and where the context otherwise requires, the Group (as defined below).
The board (the "Board") of directors (the "Directors") of Heng Hup Holdings Limited 興合控股 有限公司(the "Company") is pleased to announce the unaudited condensed consolidated interim results of the Company and its subsidiaries (collectively, the "Group") for the six months ended 30 June 2019, together with the comparative figures for the corresponding period in 2018. The audit committee of the Company (the "Audit Committee") has reviewed the unaudited condensed consolidated interim financial statements of the Group for the six months ended 30 June 2019.
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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the six months ended 30 June 2019 and 2018
For the six months | |||||
ended 30 June | |||||
Notes | 2019 | 2018 | |||
RM' 000 | RM' 000 | ||||
(Unaudited) | (Unaudited) | ||||
Revenue | 3 | 498,973 | 413,496 | ||
Cost of sales | 6 | (469,869) | (384,276) | ||
Gross profit | 29,104 | 29,220 | |||
Other income | 4 | 26 | 93 | ||
Other gains, net | 5 | 264 | 111 | ||
Distribution and selling expenses | 6 | (7,118) | (4,043) | ||
Administrative expenses | 6 | (10,327) | (9,128) | ||
Finance costs, net | 7 | (248) | (200) | ||
Share of post-tax loss of an associate | (233) | - | |||
Profit before income tax | 11,468 | 16,053 | |||
Income tax expenses | 8 | (3,638) | (4,964) | ||
Profit for the period attributable to the | |||||
owners of the company | 7,830 | 11,089 | |||
Other comprehensive income for the period: | |||||
Exchange differences on translation of | |||||
foreign operations | 250 | - | |||
Total comprehensive income for the period | |||||
attributable to owners of the Company | 8,080 | 11,089 | |||
Earnings per share attributable to owners of the Company | |||||
for the period (expressed in sen per share) | |||||
- Basic earnings per share | 9 | 0.87 | 1.48 | ||
- Diluted earnings per share | 9 | 0.87 | 1.48 | ||
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CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2019 and 31 December 2018
As at | As at | |||||
30 June | 31 December | |||||
Notes | 2019 | 2018 | ||||
RM' 000 | RM' 000 | |||||
(Unaudited) | (Audited) | |||||
ASSETS | ||||||
Non-current assets | ||||||
Property, plant and equipment | 10,668 | 18,657 | ||||
Right-of-use assets | 12,072 | - | ||||
Investment properties | 4,039 | 4,052 | ||||
Investment in an associate | 783 | - | ||||
Deferred income tax assets | 53 | 53 | ||||
27,615 | 22,762 | |||||
Current assets | ||||||
Inventories | 17,512 | 8,794 | ||||
Trade and other receivables | 11 | 129,852 | 113,127 | |||
Fixed deposits and pledged bank deposits | 24,464 | 5,232 | ||||
Cash and cash equivalents | 18,581 | 5,572 | ||||
190,409 | 132,725 | |||||
Total assets | 218,024 | 155,487 | ||||
EQUITY AND LIABILITIES | ||||||
Equity attributable to owners of the Company | ||||||
Share capital/Combined capital | 5,206 | 112,313 | ||||
Share premium | 49,306 | - | ||||
Capital reserve | 29,168 | (82,826) | ||||
Foreign translation reserve | 250 | - | ||||
Retained earnings | 95,932 | 87,911 | ||||
Total equity | 179,862 | 117,398 | ||||
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As at | As at | ||||
30 June | 31 December | ||||
Notes | 2019 | 2018 | |||
RM' 000 | RM' 000 | ||||
(Unaudited) | (Audited) | ||||
Non-current liabilities | |||||
Finance lease liabilities | - | 763 | |||
Lease liabilities | 2,666 | - | |||
Borrowings | 3,739 | 3,981 | |||
6,405 | 4,744 | ||||
Current liabilities | |||||
Trade and other payables | 12 | 24,727 | 26,536 | ||
Current income tax liabilities | 556 | 841 | |||
Finance lease liabilities | - | 371 | |||
Lease liabilities | 1,474 | - | |||
Borrowings | 5,000 | 5,597 | |||
31,757 | 33,345 | ||||
Total liabilities | 38,162 | 38,089 | |||
Total equity and liabilities | 218,024 | 155,487 | |||
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NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1 REORGANISATION, BASIS OF PRESENTATION AND GENERAL INFORMATION
1.1 Reorganisation
In preparing for the listing of the Company's shares on the Main Board of The Stock Exchange of Hong Kong Limited, the following reorganisation activities were carried out.
Prior to the incorporation of the Company and the completion of the reorganisation as described below (the "Reorganisation"), the business of the Group was primarily carried out by Heng Hup Metal Sdn. Bhd., Heng Hup Paper Sdn. Bhd., Heng Hup Paper (Melaka) Sdn. Bhd., Heng Hup Hardware (M) Sdn. Bhd. (formerly known as Heng Hup Recycle Sdn. Bhd.) and Heng Hup Metal (Johor) Sdn. Bhd. (collectively, the "Operating Companies").
Pursuant to the Reorganisation, the Operating Companies were transferred to the Company through the following steps:
- On 22 December 2017, Heng Hup Holdings (Malaysia) Sdn. Bhd. was incorporated in Malaysia. One share was allotted and issued, credited as fully paid, to each of the Sia Brothers (as defined below), all as initial subscribers.
- On 18 January 2018, Heng Hup Hardware (M) Sdn. Bhd. acquired 20% of the issued share capital of Heng Hup Metal (Johor) Sdn. Bhd. from Goh Eng Kiat for a cash consideration of RM337,000, which was based on 20% of the net asset value of Heng Hup Metal (Johor) Sdn. Bhd. as at 30 November 2017 and settled by Heng Hup Hardware (M) Sdn. Bhd. in cash in January 2018.
- On 10 April 2018, 5S Holdings (BVI) Limited was incorporated in the British Virgin Islands. 2,000 shares were allotted and issued, credited as fully paid at par, to each of the Sia Brothers as initial subscribers. On 13 April 2018, 5S Holdings (BVI) Limited allotted and issued 5,000 shares, 1,250 shares, 1,250 shares, 1,250 shares and 1,250 shares, all credited as fully paid at par, to Mr. Sia Kok Chin, Datuk Sia Keng Leong, Mr. Sia Kok Chong, Mr. Sia Kok Seng and Mr. Sia Kok Heong respectively.
- On 12 April 2018, the Company was incorporated in the Cayman Islands. One share was allotted and issued for cash at par to the initial third party subscriber and such share was transferred to 5S Holdings (BVI) Limited on the same date, and further allotted and issued 6,799 shares, for cash at par, to 5S Holdings (BVI) Limited and 640 shares, for cash at par, to each of the Sia Brothers.
- On 17 April 2018, Heng Hup (BVI) Limited was incorporated in the British Virgin Islands. 10,000 shares were allotted and issued, credited as fully paid at par, to the Company as the initial subscriber.
- a) On 7 May 2018, Heng Hup Holdings (Malaysia) Sdn. Bhd. acquired the entire issued share capital of Heng Hup Paper Sdn. Bhd. from the Sia Brothers for an aggregate nominal consideration of RM5, which was satisfied by Heng Hup Holdings (Malaysia) Sdn. Bhd. by issuing and allotting one share to each of the Sia Brothers for RM1 per share (the "Share Swap I"). The Share Swap I was completed on 24 May 2018.
- On 7 May 2018, Heng Hup Holdings (Malaysia) Sdn. Bhd. acquired the entire issued share capital of Heng Hup Paper (Melaka) Sdn. Bhd. from the Sia Brothers for an aggregate nominal consideration of RM5, which was satisfied by Heng Hup Holdings (Malaysia) Sdn. Bhd. by issuing and allotting one share to each of the Sia Brothers for RM1 per share (the "Share Swap II"). The Share Swap II was completed on 24 May 2018.
- On 7 May 2018, Heng Hup Holdings (Malaysia) Sdn. Bhd. acquired the entire issued share capital of Heng Hup Metal (Johor) Sdn. Bhd. from Heng Hup Hardware (M) Sdn. Bhd. for an aggregate nominal cash consideration of RM1, which was paid by Heng Hup Holdings (Malaysia) Sdn. Bhd. in May 2018.
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