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MarketScreener Homepage  >  Equities  >  Hong Kong Stock Exchange  >  Neo-Neon Holdings Limited    1868   KYG642571015

NEO-NEON HOLDINGS LIMITED

(1868)
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Neo-Neon Holdings Limited : INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30TH SEPTEMBER, 2013

11/29/2013 | 09:19am EST

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

Neo-Neon Holdings Limited

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1868)

INTERIM RESULTS ANNOUNCEMENT FOR THE SIX MONTHS ENDED 30TH SEPTEMBER, 2013

The board (the "Board") of directors (the "Directors") of Neo-Neon Holdings Limited (the "Company") is pleased to announce the unaudited condensed consolidated interim results of the Company and its subsidiaries (the "Group") for the six months ended 30th September, 2013 (the "Review Period") together with comparative figures for the same period in 2012.

1

CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the six months ended 30th September, 2013

Six months ended 1.4.2013 to 30.9.2013

1.4.2012 to 30.9.2012

Notes HK$'000 HK$'000

(unaudited) (unaudited)

Turnover 4 540,592 531,518

Cost of goods sold (638,409) (403,539)


Gross (loss)/profit (97,817) 127,979

Other income 5,063 2,650

Other gains, losses and expenses 5 63,594 10,274

Distribution and selling expenses (36,990) (39,601) Administrative expenses (78,370) (92,714) Finance costs (7,760) (5,372) Share of profits of an associate - 26

Share of profits of a jointly controlled entity 1,998 2,762


(Loss)/profit before taxation 6 (150,282) 6,004

Taxation 7 (203) (543)


(Loss)/profit for the period (150,485) 5,461


Other comprehensive income:

Item that may be subsequently reclassified to profit or loss:

Exchange differences arising from translation 27,970 (16,230)


Total comprehensive expenses for the period (122,515) (10,769)


(Loss)/profit for the period attributable to:

Owners of the Company (149,556) 4,231

Non-controlling interests (929) 1,230


(150,485) 5,461


Total comprehensive (expenses)/income for the period attributable to:

Owners of the Company (123,444) (11,999) Non-controlling interests 929 1,230



(122,515) (10,769) Proposed interim dividend 8 - -

(Loss)/earnings per share 9

Basic HK$(0.159) HK$0.005


Diluted HK$(0.159) HK$0.005


2

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION At 30th September, 2013

N



Current assets



915,884 1,066,467

Inventories

487,626

734,065

Trade and other receivables

11

440,077

267,475

Amounts due from non-controlling shareholders

-

2,471

Loan receivable

35,065

72,903

Tax recoverable

5,281

1,750

Amount due from a director

1,584

-

Investments held-for-trading

15,395

51,910

Pledged bank deposits

2,513

31,354

Bank balances and cash

225,405

253,508

1,212,946

1,415,436

Current liabilities

Trade and other payables

12

367,437

291,456

Amount due to a director

-

9,078

Taxation payable

5,522

8,839

Bank borrowings repayable within one year

263,696

461,879

636,655

771,252

Net current assets

576,291

644,184

Total assets less current liabilities

1,492,175

1,710,651



3

Notes

30.9.2013

HK$'000

(unaudited)

31.3.2013

HK$'000

(audited)

Non-current liabilities

Long-term bank loans

-

101,522

Government grants

23,554

23,206

Deferred taxation

7,890

7,890

31,444

132,618

Net assets

1,460,731

1,578,033

Capital and reserves

Share capital

13

93,932

93,932

Share premium

1,683,128

1,683,128

Other reserves

511,885

478,702

Retained loss

(835,625)

(686,069)

Equity attributable to owners of the Company

1,453,320

1,569,693

Non-controlling interests

7,411

8,340



Total equity 1,460,731 1,578,033


4

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 1. GENERAL

The Company was incorporated as an exempted company with limited liability under the Companies Law of the Cayman Islands and acts as an investment holding company. Its shares are listed on the Main Board of The Stock Exchange of Hong Kong Limited and certain of its shares are listed as Depositary Receipts in Taiwan Stock Exchange.
The addresses of the registered office and principal place of business of the Company are disclosed in the
"Corporate Information" section of the interim report.

2. BASIS OF PREPARATION

The unaudited condensed consolidated interim financial statements of the Group for the six months ended
30th September, 2013 have been prepared in accordance with the applicable disclosure requirements set out in Appendix 16 to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") and with Hong Kong Accounting Standard ("HKAS") 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants ("HKICPA").

3. PRINCIPAL ACCOUNTING POLICIES

The condensed consolidated interim financial statements have been prepared on the historical cost basis, except for leasehold land and buildings and derivative financial instruments, which are stated at revalued amounts or fair value, as appropriate.
Except as described below, the accounting policies used in the condensed consolidated interim financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 31st March, 2013.
In the current interim period, the Group has applied, for the first time, the following new and revised standards, amendments and interpretation issued by the HKICPA which are relevant to and effective for the Group's financial statements for the annual period beginning on 1st April, 2013.
HKFRS 10 Consolidated financial statements
HKFRS 11 Joint arrangements
HKFRS 12 Disclosure of interests in other entities
Amendments to HKFRS 10, HKFRS 11 and HKFRS 12
Consolidated financial statements, joint arrangements and disclosure of interest in other entities: Transition guidance
HKFRS 13 Fair value measurement
HKAS 19 (as revised in 2011) Employee benefits
HKAS 28 (as revised in 2011) Investments in associates and joint ventures
Amendments to HKFRS 7 Disclosures - offsetting financial assets and financial liabilities Amendments to HKAS 1 Presentation of items of other comprehensive income Amendments to HKFRSs Annual improvements to HKFRSs 2009-2011 cycle
Except as described below, the application of the above new or revised HKFRSs in the current interim period has had no material effect on the amounts reported in these condensed consolidated financial statements and/or disclosures set out in these condensed consolidated financial statements. The impact of the application of these standards is set out below.

5

New and Revised Standards on Consolidation, Joint Arrangements, Associates and disclosures

In the current interim period, the Group has applied for the first time HKFRS 10, HKFRS 11, HKFRS 12 and HKAS 28 (as revised in 2011) together with the amendments to HKFRS 10, HKFRS 11 and HKFRS
12 regarding the transitional guidance. HKAS 27 (as revised in 2011) is not applicable to these condensed consolidated financial statements as it deals only with separate financial statements.

Impact of the Application of HKFRS 10

HKFRS 10 replaces the parts of HKAS 27 "Consolidated and Separate Financial Statements" that deal with consolidated financial statements and HK(SIC) - INT 12 "Consolidation - Special Purpose Entities". HKFRS 10 changes the definition of control such that an investor has control over an investee when a) it has power over the investee, b) it is exposed, or has rights, to variable returns from its involvement with the investee and c) has the ability to use its power to affect its returns. All three of these criteria must be met for an investor to have control over an investee. Previously, control was defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Additional guidance has been included in HKFRS 10 to explain when an investor has control over an investee.
The directors of the Company concluded that the application of HKFRS 10 has no impact to the control conclusion over its investees they reached before.

Impact of the Application of HKFRS 11

HKFRS 11 replaces HKAS 31 "Interests in Joint Ventures", and the guidance contained in a related interpretation, HK(SIC)-Int 13 "Jointly Controlled Entities - Non-Monetary Contributions by Venturers", has been incorporated in HKAS 28 (as revised in 2011). HKFRS 11 deals with how a joint arrangement of which two or more parties have joint control should be classified and accounted for. Under HKFRS 11, there are only two types of joint arrangements - joint operations and joint ventures. The classification of which is determined based on the rights and obligations of parties to the joint arrangements by considering the structure, the legal form of the arrangements, the contractual terms agreed by the parties to the arrangement, and, when relevant, other facts and circumstances. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint venturers) have rights to the net assets of the arrangement. Previously, HKAS 31 had three types of joint arrangements - jointly controlled entities, jointly controlled operations and jointly controlled assets. The classification of joint arrangements under HKAS 31 was primarily determined based on the legal form of the arrangement (e.g. a joint arrangement that was established through a separate entity was classified as a jointly controlled entity).
The initial and subsequent accounting of joint ventures and joint operations are different. Investments in joint ventures are accounted for using the equity method (proportionate consolidation is no longer allowed). Investments in joint operations are accounted for such that each joint operator recognises its assets (including its share of any assets jointly held), its liabilities (including its share of any liabilities incurred jointly), its revenue (including its share of revenue from the sale of the output by the joint operation) and its expenses (including its share of any expenses incurred jointly). Each joint operator accounts for the assets and liabilities, as well as revenues and expenses, relating to its interest in the joint operation in accordance with the applicable standards.
The application of HKFRS 11 did not have significant impact on amounts reported in the condensed consolidated financial statements.

6

HKFRS 13 Fair value measurement

HKFRS 13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. The standard defines fair value, establishes a framework for measuring fair value, and requires disclosures about fair value measurements. The scope of HKFRS 13 is broad; it applies to both financial instrument items and non-financial instrument items for which other HKFRSs require or permit fair value measurements and disclosures about fair value measurements, except in specified circumstances. In general, the disclosure requirements in HKFRS 13 are more extensive than those in the current standards. For example, quantitative and qualitative disclosures based on the three-level fair value hierarchy currently required for financial instruments only under HKFRS 7 "Financial instruments: Disclosures" will be extended by HKFRS
13 to cover all assets and liabilities within its scope. The adoption of HKFRS 13 does not result in significant impact on the disclosures made in the financial statements.

Amendments to HKAS 1 Presentation of items of other comprehensive income

The amendments to HKAS 1 "Presentation of items of other comprehensive income" introduce new terminology for the statement of comprehensive income and income statement. Under the amendments to HKAS 1, a
'statement of comprehensive income' is renamed as a 'statement of profit or loss and other comprehensive income'. The amendments to HKAS 1 retain the option to present profit or loss and other comprehensive income in either a single statement or in two separate but consecutive statements. However, the amendments to HKAS
1 require items of other comprehensive income to be grouped into two categories: (a) items that will not be reclassified subsequently to profit or loss; and (b) items that may be reclassified subsequently to profit or loss when specific conditions are met. Income tax on items of other comprehensive income is required to be allocated on the same basis - the amendments do not change the option to present items of other comprehensive income either before tax or net of tax. Accordingly, the Group has renamed the consolidated statement of comprehensive income to consolidated statement of profit or loss and other comprehensive income.

4. TURNOVER AND SEGMENT INFORMATION

Information reported to the Board of the Company, being the chief operating decision maker, for the purposes of resource allocation and assessment of segment performance focuses on types of goods delivered or services rendered. Specifically, the Group's reportable segments under HKFRS 8 are as follows:
LED decorative lighting - manufacture and distribution of LED decorative lighting products
LED general illumination lighting - manufacture and distribution of LED general illumination lighting products
Incandescent decorative lighting - manufacture and distribution of incandescent decorative lighting products
Entertainment lighting - manufacture and distribution of entertainment lighting products
All others - distribution of lighting product accessories
Turnover represents the fair value of the consideration received and receivable for goods sold by the Group to external customers during the period.

7

Segment Information

Business segment

Six months ended 1.4.2013 to 30.9.2013

1.4.2012 to 30.9.2012

HK$'000 HK$'000

(unaudited) (unaudited) Business segment

LED Decorative Lighting 289,613 303,362
LED General Illumination Lighting 151,186 153,045
Incandescent Decorative Lighting 62,005 51,819
Entertainment Lighting 28,883 20,195
All Others 8,905 3,097

540,592 531,518


Gross (Loss) Profit

LED Decorative Lighting (49,223) 72,807
LED General Illumination Lighting (31,362) 41,432
Incandescent Decorative Lighting (13,925) 9,559
Entertainment Lighting (2,939) 3,797
All Others (368) 384

(97,817) 127,979


Results (Loss)/Profit from operations

LED Decorative Lighting (99,214) 28,017
LED General Illumination Lighting (57,459) 15,943
Incandescent Decorative Lighting (24,628) 3,678
Entertainment Lighting (7,925) 1,461
All Others (1,904) 148

(191,130) 49,247



Unallocated other income 5,063 2,650
Unallocated other gains, losses and expenses 63,595 10,274
Unallocated expenses (22,048) (53,583) Finance costs (7,760) (5,372) Share of profit of a jointly controlled entity and an associate 1,998 2,788

(Loss)/profit before taxation (150,282) 6,004

Taxation (203) (543) (Loss)/profit for the period (150,485) 5,461

8

Geographical segment

Six months ended 1.4.2013 to 30.9.2013

1.4.2012 to 30.9.2012

HK$'000 HK$'000

(unaudited) (unaudited)

Turnover

America

264,303

232,468

Europe

93,581

102,618

PRC

70,300

96,989

Russia

46,110

19,329

Asia Pacific and Middle East (excluding PRC)

66,298

78,820

Others

-

1,294

Results



(Loss)Profit from operations


540,592 531,518



(97,817) 127,979

- America

(100,353)

12,625

- Europe

(22,969)

13,023

- PRC

(31,950)

9,383

- Asia Pacific and Middle East (excluding PRC)

(35,858)

14,041

- Other countries

-

175

(191,130)

49,247

Unallocated other income

5,063

2,650

Unallocated other gains, losses and expenses

63,595

10,274

Unallocated expenses

(22,048)

(53,583)

Finance costs

(7,760)

(5,372)

Share of profit of a jointly controlled entity and an associate

1,998

2,788

(Loss)/profit before taxation

(150,282)

6,004

Taxation

(203)

(543)



(Loss)/profit for the period (150,485) 5,461

9

5. OTHER GAINS, LOSSES AND EXPENSES Six months ended 1.4.2013 to 30.9.2013

1.4.2012 to 30.9.2012

HK$'000 HK$'000

(unaudited) (unaudited)

Gain on disposal of property, plant and equipment 110,739 578 (Net allowance) net written back for bad and doubtful debts (26,748) 12,496
Research and development expenses (8,663) (8,993) (Decrease) increase in fair value of investments held-for-trading (612) 5,771
Government grants - 31
Net exchange (loss) gain (11,122) 391

63,594 10,274


6. PROFIT BEFORE TAXATION Six months ended 1.4.2013 to 30.9.2013

1.4.2012 to 30.9.2012

HK$'000 HK$'000

(unaudited) (unaudited)

Profit before taxation has been arrived at after charging:
Depreciation of property, plant and equipment included in
administrative expenses 31,454 88,672
Less: Depreciation included in research and development costs (725) (954)

30,729 87,718



Amortisation of intangible assets 388 1,059
Other research and developments expenses 3,348 1,263
Operating lease rentals in respect of
- prepaid lease payments 855 1,101
- rented premises 2,202 187 and after crediting:
Interest income 3,404 1,503
Property rental income before deduction of negligible outgoings 1,402 603

7. TAXATION Six months ended 1.4.2013 to 30.9.2013

1.4.2012 to 30.9.2012

HK$'000 HK$'000

(unaudited) (unaudited)

The tax charge comprises:
PRC Enterprise Income Tax ("EIT") (203) (543)

The PRC Enterprise Income Tax and overseas taxation are calculated at the rates prevailing in the respective jurisdictions while Hong Kong Profits Tax is calculated at 16.5% (2012: 16.5%) on the estimated assessable profit for the year.

10

8. DIVIDEND

No interim dividend will be paid for the six months ended 30th September, 2013 (2012: Nil).

9. (LOSS)/EARNINGS PER SHARE

The calculation of basic and diluted (loss)/earnings per share attributable to the equity holders of the Company is based on the following data:

Six months ended 1.4.2013 to 30.9.2013

1.4.2012 to 30.9.2012

HK$'000 HK$'000

(unaudited) (unaudited) (Loss)/Earnings

(Loss)/profit attributable to equity holders of the Company (149,556) 4,231

Weighted average number of ordinary shares in issue
for basic earnings per share 939,319,694 939,319,694
Basic (loss)/earnings per share HK$(0.159) HK$0.005

Weighted average number of ordinary shares for diluted earnings per share 939,319,694 939,319,694

Diluted (loss)/earnings per share HK$(0.159) HK$0.005

10. MOVEMENTS IN PROPERTY, PLANT AND EQUIPMENT

During the period, the Group incurred HK$8,400,000 (30th September, 2012: HK$17,200,000) on additions to property, plant and equipment to expand and upgrade its manufacturing capabilities, of which buildings nil (30th September, 2012: nil), leasehold improvement HK$1,500,000 (30th September, 2012: HK$4,700,000), furniture, fixture and equipment HK$1,200,000 (30th September, 2012: HK$400,000), motor vehicles HK$300,000 (30th September, 2012: nil), plant and machinery HK$3,500,000 (30th September, 2012: HK$4,500,000), mould HK$600,000 (30th September, 2012: HK$2,200,000), construction in progress nil (30th September, 2012: HK$5,400,000), land use right HK$1,300,000 (30th September, 2012: nil).

11.

TRADE AND OTHER RECEIVABLES

30.9.2013

31.3.2013

HK$'000

(unaudited)

HK$'000

(audited)

Trade receivables

329,922

190,645

Bills receivables

32,306

9,631

Less: Allowance for bad and doubtful debts

(87,498)

(72,131)

274,730

128,145

Deposits paid to suppliers

48,225

34,699

Value added tax refundable on export sales

60,717

60,073

Value added tax recoverable

21,641

12,383

Other receivables

34,764

32,175



440,077 267,475


11

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Sales 2019 841 M 130 M 130 M
Net income 2019 -22,9 M -3,54 M -3,54 M
Net Debt 2019 92,7 M 14,3 M 14,3 M
P/E ratio 2019 -54,0x
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Free-Float 26,7%
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