TIDMJSI
RNS Number : 7194C
Jiasen International Holdings Ltd
30 June 2016
JIASEN INTERNATIONAL HOLDINGS LIMITED
FiNAL RESULTS FOR THE YEARED 31 DECEMBER 2015
Jiasen International Holdings Limited ("Jiasen" or "the
Company"), together with its subsidiaries ("the Group"), is pleased
to report its final results for the year ended 31 December 2015
(FY2015). Jiasen is a designer, manufacturer and wholesaler of
wooden home furnishings, high-end solid wooden doors and other
wooden design solutions to both the domestic Chinese and overseas
markets.
FINANCIAL KEY POINTS
-- Revenue for the year ended 31 December 2015 decreased by 27%
to RMB 639.2 million (FY2014: RMB 870.9 million) reflecting a
slowdown in China's economic growth which has had an adverse effect
on consumer confidence and demand across many sectors, including
property.
-- Profit before tax for the year ended 31 December 2015
decreased by 64% to RMB 77.9 million (FY2014: RMB 214.4 million),
inclusive of a provision against bad debts of RMB 52.3 million.
-- Profit after tax for the year ended 31 December 2015
decreased by 65% to RMB 55.8 million (FY2014: RMB 158.5
million).
-- Cash and cash equivalents as at 31 December 2015 decreased by
10% to RMB 299.1 million (FY2014: RMB 333.9 million).
-- Following the review of our dividend policy announced at our
interim results, the Board has decided to suspend dividend payments
in light of the difficult trading environment, and will review it
again when conditions and the Company's performance improves.
OPERATIONAL KEY POINTS
-- The Group now has 16 distributors which operate 54 outlets across China.
-- Diversification away from non-door products to mitigate
market margin erosion seen with bulk door supply has continued to
be a core focus of the Group.
-- Exports remain a small part of the business contributing
13.4% of revenue in 2015 (2014: 12.6%).
-- Furniture and fittings accounted for 67.7% (2014: 60.2%)
whilst doors contributed 20.4% (2014: 28.2%) of the Group's
revenue.
-- In light of the wider macroeconomic conditions and reduced
demand for our products in the property segment, the Board has
agreed with the local government (Quanzhou Economic Development
District - Guangqiao Sector) ("QEDD") to defer the decision to
purchase 47 hectares of land for its new factory until the end of
2016. Should the Company decide against the investment, QEDD will
refund the down payment in full.
-- The Group has made a provision of RMB 52.3 million against an
outstanding debt of RMB 84.6 million. An agreement has been reached
with the customer stipulating that the balance be repaid as the
properties within which the Group's products were installed are
ultimately sold. However, due to the current status of China's
property market, the directors have chosen to provide against a
significant portion of this outstanding balance.
OUTLOOK
-- Trading in the first five months of 2016 has continued to be challenging.
-- The Board expects trading conditions to remain challenging
over the short to medium term, particularly for the property
segment of the business, but it continues to have confidence in the
long term fundamentals of China's property market driven by a
change in child policy, continued urbanisation and the importance
of home ownership in China.
-- The Group will continue to scale back the property segment,
which took place in the last three months of 2015, in an attempt to
mitigate the risk of bad debt.
-- We will look to appoint new distributors and increase our
marketing and promotional activities to ensure the business is
better positioned than if it were to remain heavily reliant upon
its property segment.
COMMENTING ON THE RESULTS, WEIGANG CHEN (CHAIRMAN) SAID:
"It has been a very challenging time for the Chinese property
market as the economy has slowed. The Group has seen consumer
confidence impacted as a result and this is effecting our revenue.
Jiasen is taking mitigating actions to ensure that we are protected
both now and in the short to medium term by diversifying our
revenue mix, reviewing the purchase of land for our new factory,
and suspending dividend payments. The Board remains committed to
the long term opportunities that the Chinese property market
offers, and is confident that we have the fundamentals in place to
manage the business through these challenging times."
For further information, please visit www.jsih.net or
contact:
Jiasen International
Holdings Limited Gareth Wong +86 18016603993
-------------------------- -------------- ----------------
Cairn Financial Advisers
LLP Jo Turner +44 (0)20 7148
(Nominated Adviser) Liam Murray 7900
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Beaufort Securities
Limited +44 (0)20 7382
(Broker) Elliot Hance 8300
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David Roach +44 (0)20 7930
Cardew Group Emma Ruttle 0777
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Notes to Editors
-- Jiasen is an international property fit-out business
specialising in designing, manufacturing, kitting and installation
of multiple wooden products for residential properties. The Company
was established in 2001 and is based in Quanzhou City, Fujian
province, located in south-eastern China. Its products are sold and
marketed under the 'Fuyou' brand and produced in its 83,000 sqm
factory in Nan'an City, Fujian province.
-- Jiasen's main products include doors, wall panels and
assorted fixtures, such as fitted wardrobes, cupboards and skirting
boards, and furniture which are sold principally to property
development projects, through branded 'Fuyou' retail stores and to
export markets. The Company's products are sold in three main
segments: residential and property development projects, wholesale
distribution and export.
EXECUTIVE CHAIRMAN'S STATEMENT
Introduction
The slowdown in China's economic growth has had an adverse
effect on consumer confidence and demand across many sectors,
including property. These external factors have affected our
performance. Group revenues for the period decreased by 26.6% to
RMB 639.2 million (2014: RMB 870.9 million) reflecting a slowdown
in sales for our multiple wooden-products and reduced demand for
high-end Refined Housing Decoration (RHD) or "semi-furnished
homes".
The property segment of our business contributed 41.7% of our
group revenues (2014: 61.9%). The distribution segment of our
business performed strongly and revenues grew by 29.4% to RMB 286.9
million (2014: RMB 221.7 million) as a result of new outlets opened
during the period. The Company now has 16 distributors which
operate 54 outlets across China. Export remains a small part of our
business contributing 13.4% of revenue in 2015 (2014: 12.6%).
Diversification away from non-door products to mitigate market
margin erosion seen with bulk door supply has continued to be a
core focus and this has been particularly successfully. Furniture
and fittings accounted for 67.7% (2014: 60.2%) whilst doors
contributed 20.4% (2014: 28.2%) of group revenue.
Strategy
China's economic slowdown has had an impact on demand for RHD as
property developers delayed projects or decreased their investment
in residential developments in 2015. We expect trading conditions
to remain challenging over the short to medium term, particularly
for the property segment of our business.
In light of this and in order to better position the business,
the Board has taken action to reconsider the sales strategy for the
Group to scale back the property segment, which took place in the
last three months of 2015 and continues into 2016, in order to
insulate the business from the risk of doubtful debts against trade
receivables. This is highlighted by the fact that a charge against
doubtful debts amounting to RMB 52.3 million is recorded in the
Statement of Comprehensive Income for the year ended 31 December
2015. The Group will continue to work with property developers but
is likely to use intermediaries and therefore there will be a
change to segmental revenues in 2016. Overall, the Group expects to
switch its focus onto the wholesale distribution segment and
servicing retail outlets until there is a recovery in the housing
market which is not expected in the short term.
Our core customers within the wholesale distribution business
are homeowners and interior designers who want to furnish their own
homes or refurbish their existing homes. During the year, we began
to work more closely with our distributors and going forward, we
will look to appoint new distributors and increase our marketing
and promotional activities to enhance performance. These actions
will ensure the business is better positioned than it would have
been having a reliance on the property segment within the current
market environment and allow for greater cost control.
Diversification of our product offering remains a core focus and
we will continue to increase the sale of non-door products through
our wholesale distribution segment. We continue to look seek
suitable, complementary foreign brands in permanent fixtures for
strategic collaboration in the medium to long-term.
Land Purchase and Future Development
In light of the wider macroeconomic conditions and reduced
demand for our products in the property segment, the Board has
decided to review the decision to purchase 47 hectares of land for
its new factory. The Company has verbally agreed with the local
government (Quanzhou Economic Development District - Guangqiao
Sector) ("QEDD") to defer the decision to invest in the new land
until the end of 2016. The total cost of the land is RMB 217
million and the Company made a down payment of RMB 69 million on
February 2015. Should the Company decide against the investment,
QEDD will refund the down payment in full. The Board will review
the investment over the next few months against the economic
backdrop and the property market and decide on the best course of
action for the long term future of the business and its
shareholders.
Dividend Policy
Following a review of the dividend policy as announced at our
interim results on 25 September 2015, the Board has decided to
suspend dividend payments in light of the difficult trading
environment. The Board will review the dividend policy again when
economic conditions and the Company's performance improves and
following the further appraisal of the proposed factory
development.
Outlook
Trading in the first five months of 2016 has continued to be
challenging. While we have confidence in the long term fundamentals
of China's property market driven by a change in child policy,
continued urbanisation and the importance of home ownership in
China, we expect the trading environment to continue to be
difficult for the remainder of 2016. In order to better position
the business in the short to medium term, Jiasen
-- has temporarily scaled back activity in the property segment
to control costs and mitigate business risk in this slower
market;
-- is focusing on the wholesale distribution segment of the
business which is significantly less exposed to volatility in the
new property build market; and
-- has deferred the further payment and purchase of the new land
use rights for factory development until the end of 2016.
Weigang Chen
Executive Chairman
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
AT 31 DECEMBER 2015
2015 2014
RMB'000 RMB'000
Revenue 639,188 870,902
Cost of sales (466,469) (603,361)
Gross profit 172,719 267,541
---------- ----------
Other operating income 4,166 5,843
Selling and distribution
expenses (25,342) (37,242)
Administrative expenses (16,925) (18,105)
Other expenses (53,446) (411)
Operating profit 81,172 217,626
---------- ----------
Finance income 1,088 1,167
Finance costs (4,402) (4,389)
Profit before taxation 77,858 214,404
---------- ----------
Income tax expense (22,044) (55,945)
---------- ----------
Profit for the year 55,814 158,459
---------- ----------
Other comprehensive income - -
Total comprehensive income
for the year 55,814 158,459
Owners of the Company 55,814 158,459
Earnings per share - Basic and
diluted (RMB) 0.5 1.9
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AT 31 DECEMBER 2015
2015 2014
RMB'000 RMB'000
ASSETS
NON-CURRENT ASSETS
Property, plant and
equipment 58,896 62,900
Land use rights 6,153 6,320
Deferred tax asset 13,075 -
78,124 69,220
--------- ---------
CURRENT ASSETS
Inventories 40,886 61,390
Trade receivables 143,417 176,240
Other receivables, deposit and
prepayments 71,612 9,386
Cash and cash equivalents 299,095 333,901
555,010 580,917
--------- ---------
TOTAL ASSETS 633,134 650,137
--------- ---------
EQUITY AND LIABILITIES
EQUITY
Share capital 74,913 74,913
Share premium 15,411 15,411
Other reserves 82,342 82,342
Retained earnings 368,851 346,029
TOTAL EQUITY ATTRIBUTABLE
TO 541,517 518,695
---------
OWNERS OF THE COMPANY
CURRENT LIABILITIES
Trade payables 3,412 17,973
Other payables and accruals 28,188 33,800
Interest-bearing bank
borrowings 52,600 67,600
Current tax payable 7,417 12,069
TOTAL LIABILITIES 91,617 131,442
--------- ---------
TOTAL EQUITY AND LIABILITIES 633,134 650,137
The consolidated financial statements were approved and
authorised for issue by the Board of Directors on 29 June 2016 and
signed on their behalf by
Weigang Chen, Executive Chairman
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEARED 31 DECEMBER 2015
Share Share Statutory Retained Merger Other Warrant
Capital Premium Reserve Earnings Reserve Reserve Reserve Total
RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000 RMB'000
-------------------------- --------- --------- ---------- ---------- --------- --------- --------- -----------
As at 1 January 2014 6 - 49,005 236,053 87,597 - - 372,661
Total comprehensive
income for the year - - - 158,459 - - - 158,459
Capitalisation of
shareholder's
loan 73,157 - - - (73,157) - - -
Shares issued on
admission
to trading on AIM 1,750 22,864 - - - - - 24,614
Share issue costs - (7,453) (7,453)
Transfer to statutory
reserve - - 16,271 (16,271) - - - -
Share based payment - - - - - 1,500 - 1,500
Warrants issued - - - - - - 1,126 1,126
Dividends - - - (32,212) - - - (32,212)
As at 31 December 2014 74,913 15,411 65,276 346,029 14,440 1,500 1,126 518,695
As at 1 January 2015 74,913 15,411 65,276 346,029 14,440 1,500 1,126 518,695
Total comprehensive
income for the year - - - 55,814 - - - 55,814
Dividends - - - (32,992) - - - (32,992)
As at 31 December 2015 74,913 15,411 65,276 368,851 14,440 1,500 1,126 541,517
========= ========= ========== ========== ========= ========= ========= ===========
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEARED 31 DECEMBER 2015
2015 2014
RMB'000 RMB'000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 77,858 214,404
Adjustments for:-
Amortisation of land use rights 167 182
Impairment loss on trade receivables 52,300 -
Trade receivables written
off 9,216 11,174
Depreciation of property,
plant and equipment 4,024 2,706
Interest expense 4,402 4,389
Property, plant and equipment 86 -
written off
Share based payment - 1,500
Warrant costs - 1,126
Gain on foreign exchange (2,016) (723)
Interest income (1,088) (1,167)
Operating profit before working
capital changes 144,949 233,591
----------- ----------
Decrease/(increase) in inventories 20,504 (23,726)
(Increase) in trade and other
receivables (18,974) (39,134)
(Decrease)/increase in trade
and other payables (34,015) 4,448
CASH FLOWS FROM OPERATIONS 112,464 175,179
Interest paid (4,402) (4,389)
Income tax paid (39,771) (58,837)
NET CASH GENERATED FROM OPERATING
ACTIVITIES 68,291 111,953
-----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant
and equipment (106) (22,170)
Deposit of land use right (69,929) -
Interest received 1,088 1,167
NET CASH USED IN INVESTING
ACTIVITIES (68,947) (21,003)
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds from share issuance - 17,161
Dividends paid (27,762) (32,212)
Advanced from a shareholder 8,612 -
Repayment of interest-bearing (15,000) -
bank borrowings
NET CASH USED IN FINANCING
ACTIVITIES (34,150) (15,051)
----------- ----------
NET (DECREASE)/INCREASE IN
CASH AND CASH EQUIVALENTS (34,806) 75,899
----------- ----------
CASH AND CASH EQUIVALENTS AT
BEGINNING OF THE FINANCIAL
YEAR 333,901 258,002
----------- ----------
CASH AND CASH EQUIVALENTS AT
END OF THE FINANCIAL YEAR 299,095 333,901
----------- ----------
NOTES TO THE FINANCIAL STATEMENTS
1. General Information
Jiasen International Holdings Limited (the "Company" or
"Jiasen") was incorporated on 31 October 2012 and is domiciled in
the British Virgin Islands. The Company's registered office is
Commerce House, Wickhams Cay 1, P. O. Box 3140, Road Town, Tortola,
VG1110, British Virgin Islands. Jiasen is a limited liability
company which is admitted to the United Kingdom Alternative
Investment Market.
Jiasen was established as an investment holding company for two
wholly owned subsidiaries, Jiasen Holdings (HK) Company Limited
("Jiasen HK") and Quanzhou Jiasen Wood Co., Ltd. ("Jiasen PRC"),
(together, the "Group").
The main activity of the Company and Jiasen HK is that of an
investment holding company. Jiasen PRC is principally engaged in
the business of design, manufacturing and wholesalers of high
quality wooden doors and home furnishings. The principal place of
business of the Group is in the People's Republic of China ("PRC").
Amounts are reported in RMB thousands, unless otherwise stated.
2. Basis of Preparation
The Consolidated financial statements of the Group are prepared
under the historical cost convention and modified to include other
bases of valuation as disclosed in other sections under significant
accounting policies, and in compliance with International Financial
Reporting Standards ("IFRS").
The consolidated financial statements incorporate the financial
information of the Company and its subsidiaries. A subsidiary is an
entity (including special purpose entities) over which the Group
has the power to govern the financial operating policies, generally
accompanied by a shareholding giving rise to the majority of the
voting rights, so as to obtain benefits from its activities.
A subsidiary is consolidated from the date on which control is
transferred to the Group up to the effective date on which control
ceases, as appropriate.
The consolidated financial statements present the results of the
Company and its subsidiaries (the "Group") as if they formed a
single entity.
Intra-group balances and transactions and any income and
expenses arising from intra-group transactions are eliminated on
consolidation. Unrealised gains and losses arising from
transactions with associates and joint ventures are eliminated
against the investment to the extent of the Group's interest in the
investee.
The financial information of the subsidiaries is prepared for
the same reporting period as that of the Group, using consistent
accounting policies.
The Directors have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future. Thus they continue to adopt the going concern
basis of accounting in preparing the consolidated financial
statements.
3. Earnings per Share
Basic and diluted earnings per share are calculated by dividing
the profit attributable to equity holders of the Company by the
weighted average number of Ordinary shares in issue during the
period.
2015 2014
Profit attributable
to equity holders (RMB'000) 55,814 158,459
Weighted average number
of shares 121,656,361 82,606,377
Basic and diluted earnings
per share (RMB) 0.5 1.9
Although the Group reconstruction did not become unconditional
until 4 March 2014, the consolidated financial statements are
presented as if the Group structure has always been in place,
including a share split effected by the Company on 26 May 2014 by
which each of its Ordinary shares, with a par value of US$ 1.00 per
share, was split into 10 Ordinary shares, with a par value of US$
0.10 per share.
No adjustment has been made to the basic earnings per share in
respect of a dilution as the impact of the warrants outstanding had
an anti-dilutive effect on the basic earnings per share.
4. Notice of AGM and Posting of Accounts
The annual general meeting ("AGM") will be held at the
conference room of Jiasen International Holdings Limited, 7th
floor, Nanlian Industrial Park, Guanqiao Town, Nan'an City, Fujian
Province, PRC 25 July 2016 at 16:30 pm (BST + 07.00).
The full version of the report and accounts for the year ended
31 December 2015 will be available shortly the Company's website
http://www.jsih.net/ and notification of posting of the accounts,
together with the Notice of AGM and the Form of Proxy, will shortly
be sent to all shareholders.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEAFAUFMSEEM
(END) Dow Jones Newswires
June 30, 2016 02:00 ET (06:00 GMT)
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