Gowin New Energy Grp - Half-year Report
RNS Number : 3835C
Gowin New Energy Group Limited
28 September 2018
 

28 September 2018

 

 

Gowin New Energy Group Limited ("GNE" or the "Group")

(NEX: GOWIN)

 

Interim Results for the Six Months Ended 30 June 2018

 

London: Thursday, 27th September 2018Gowin New Energy Group Limited, engaged in the research and development, outsourcing and sales of LED lighting products, and the tea trading business, today announces its unaudited financial results for the six months ended 30 June 2018.

 

Chairman's Statement

 

Business Overview 

 

The principal activity of Gowin New Energy Group Limited ("the Group'' or "Gowin")) has historically been research and development, and sales of LED lighting products. As described in the Group's 2017 Annual Report, more recently the Group has begun to develop a Tea business as a promising new business source of Group earnings. Various preparation steps have been undertaken. On 9 May 2018, the Group announced various share dealings related to the proposed Tea business. On 1 June 2018, the Group announced it had acquired short term capital to prepare for the Tea business through shareholder loans from three shareholders of the Group.

 

Tea business transactions (Pu'er tea at this time) will be conducted by the Group's wholly owned subsidiary Rosin Trading Limited ("Rosin").  Revenues derived by Rosin will accordingly be consolidated into the Group's financial accounts.

 

As previously disclosed, the Group's focus on LED and Back Light Module products is achieved through its investment in Taiwan Thick-Film Industries Corp. ("TTFI"), listed on the Taipei Stock Exchange. TTFI has announced it intends to pay a dividend in scrip; valued at 40 shares per 1000 shares owned by investors. Gowin and Rosin expect to be distributed a total of 40,000 shares - 25,800 to Gowin and 14,200 to Rosin. TTFI will have a Board meeting shortly to confirm the distribution and release date. TTFI continues to have a good business outlook for the rest of 2018.

 

The Group has conducted one General Meeting to date in 2018. An Annual General Meeting was held in Taiwan on 9 March 2018, with all resolutions unanimously passed.

 

Financial Position

 

The Group will increasingly generate its earnings through developing its TEA business as well as from associated investment returns in selected other businesses. During this period of new business development CEO Mr. Chen Chih-Lung has signed a pledge letter continuing his commitment to support the Group's working capital needs as necessary, such that the Group does not anticipate any working capital or going concern issues in the foreseeable future. Additionally, the Group announced on 3 April 2018 that Mr. Chen had converted a Convertible Note to ordinary shares, thereby reducing the debt burden on the Group.

 

Business Outlook and Conclusion

 

The Board will continue to examine opportunities to grow in the Tea industry in 2018 and other new business areas. The Board will keep the market informed of each step of Tea business development as it occurs. The Directors look forward to the rest of this year with confidence.

 

 

Garry Willinge

Non-Executive Chairman

 

27th September 2018

 

 

 

The directors of Gowin New Energy Group Limited accept responsibility for this announcement.

For further information please visit http://www.gowingrp.com/gowingrp_en/index.php/ or contact the following:

Garry Willinge                            Gowin New Energy Group Limited           +852 9100 9972

David Scott / James Dewhurst     Alexander David Securities Limited          +44 20 7448 9820

 

Gowin New Energy Group Limited

Condensed consolidated statement of comprehensive income

For the six months ended 30 June 2018

 

 

 

 

 

 

Six months

 

 

Six months

 

 

 

 

ended

 

ended

 

 

 

 

30 June 2018

 

30 June 2017

 

 

 

 

RMB'000

 

RMB'000

 

Continuing Operations

Note

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

Revenue

7

 

4

 

                22

 

Cost of sales

 

 

         - 

 

                 - 

 

Gross profit

 

 

    4

 

         22 

 

 

 

 

 

 

 

 

Administrative expenses

10

 

           (2,079)

 

           (2,743)

 

Investment loss

 

 

              (405)

 

                322

 

Operating loss

 

 

         (2,480) 

 

           (2,399) 

 

 

 

 

 

 

 

 

Finance costs

9

 

  (47)

 

  (29)

 

 

 

 

 

 

 

 

Loss before tax

 

 

     (2,527)

 

           (2,428) 

 

 

 

 

 

 

 

 

Tax

11

 

-

 

-

 

 

 

 

 

 

 

 

Loss from continuing operations

 

 

           (2,527)

 

          (2,428) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

-

 

-

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive loss for the period attributable to owners of the parent

 

 

(2,527)

 

(2,428)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share attributable to owners of the parent during the period expressed in RMB per share

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share

12

 

(0.009)

 

(0.010)

 

 

 

 

 

 

 

 

 

 

Gowin New Energy Group Limited

Condensed consolidated statement of financial position

As at 30 June 2018

 

 

 

 

As at

 

As at

 

As at

 

 

Note

 

30 June

 2018

 

30 June

2017

 

31 December 2017

 

 

 

 

RMB'000

 

RMB'000

 

RMB'000

 

 

 

 

(Unaudited)

 

(Unaudited)

 

(Audited)

 

Assets

 

 

 

 

 

 

 

 

Non-Current Assets

 

 

 

 

 

 

 

 

Long-term Investments

14

 

                   4,135

 

6,143

 

             4,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Trade and other receivables

15

 

603

 

762

 

                581

 

Cash in bank

16

 

                      235

 

599

 

               381

 

 

 

 

                  4,974

 

1,361

 

            5,502

 

 

 

 

 

 

 

 

 

 

Total assets

 

 

                   4,974

 

7,504

 

             5,502

 

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade and other payables

 

              (12,408)

 

(13,567

)

         (14,409)

 

 

 

             (12,408)            

 

(13,567

)

         (14,409)

 

Total liabilities

 

              (12,408)

 

(13,567

)

         (14,409)

 

 

 

 

 

 

 

 

 

Net assets

 

              (7,434)

 

(6,063)

 

           (8,907)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity attributable to owners of the Company

 

 

 

 

 

 

 

 

Share capital

18

 

                 29,000

 

77,071

 

           25,000

 

Retained loss

 

 

           (36,434)

 

(83,134

)

         (33,907)

 

Total equity

 

 

              (7,434)

 

(6,063)

 

           (8,907)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gowin New Energy Group Limited

Condensed consolidated statement of changes in equity

For the six months ended 30 June 2018

 

 

Attributable to owners of the Company

 

 

Share capital

Share premium

Retained losses

Total

 

 

RMB'000

RMB'000

RMB'000

RMB'000

 

 

For the six months ended 30 June 2017 (Unaudited)

 

Balance as at 1 January 2017 (Audited)

77,071

19,988

(80,706)

(16,353)

 

Loss for the period

-

-

(2,428)

(2,428)

 

Other comprehensive income for the period

-

-

-

-

 

Total comprehensive income for the period

-

 

-

 

(2,428)

 

(2,428)

 

 

Total transactions with owners, recognized directly in equity

 

Settlement of unpaid share capital

-

(19,988)

-

(19,988)

 

Balance as at 30 June 2017

77,071

-

(83,134)

(6,063)

 

 

 

For the six months ended 30 June 2018 (Unaudited)

 

Balance as at 1 January 2018 (Audited)

25,000

-

  (33,907)

(8,907)

 

Loss for the period

-

-

        (2,527)

(2,527)

 

Other comprehensive income for the period

-

-

-

-

 

Total comprehensive income    for the period

-

-

(2,527)

(2,527)

 

Total transactions with owners, recognized directly in equity

 

 

 

 

 

Issue of shares

4,000

-

-

4,000

 

Balance as at 30 June 2018

29,000

-

(36,434)

(7,434)

 

               
 

Gowin New Energy Group Limited

Condensed consolidated statement of cash flows

For the six months ended 30 June 2018

 

 

 

 

 

Six months

 

 

Six months

 

 

ended

 

ended

 

 

30 June 2018

 

30 June

2017

 

 

RMB'000

 

RMB'000

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

Cash Flows used in Operating Activities

 

 

 

 

Loss before tax

(2,527

)

(2,428

)

Finance income

-

 

(322

)

Finance cost

        47

 

                   29

 

Decrease/(Increase) in trade and other receivables

               (22)

 

(38)

 

(Decrease)/Increase in trade and other payables

(2,215)

 

23

 

 

 

 

 

 

Net cash used in operating activities

 (4,717)

 

(2,736

)

 

 

 

 

 

 

 

 

 

 

Cash Flows generated from Investing Activities

 

 

 

 

Disposal of liabilities

 

                 322

 

 

 

 

 

 

Net cash generated from Investing activities

 

                 322

 

 

 

 

 

 

 

 

 

 

 

Cash Flows generated from Financing Activities

 

 

 

 

Shareholders' loans

3,831

 

963

 

Issue of shares

4,000

 

-

 

Repayment of loans

(3,213)

 

-

 

Finance cost

               (47)

 

(29)

 

 

 

 

 

 

Net cash generated from financing activities

     4,571 

 

934

 

 

 

 

 

 

 

 

 

 

 

Net increase in cash and cash equivalents

          (146)

 

(1,480)

 

 

Cash and cash equivalents at beginning of period

 

              381

 

 

2,079

 

 

 

 

 

 

Cash and cash equivalents at end of period

              235

 

599

 

 

 

 

 

 

 

 

 

 

 

 

 

Gowin New Energy Group Limited

Notes to the condensed consolidated interim financial information

For the six months ended 30 June 2018

 

1.       General information

 

Gowin New Energy Group Limited ("Gowin") was incorporated in the Cayman Islands. The registered office of the Company is located at Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands and the main business office is located at 19F, No. 1086, Zhongzheng Road, Taoyuan District, Taoyuan City 330, Taiwan.

 

The principal activity of Gowin New Energy Group Limited and its subsidiaries ("the Group'') has historically been the research and development, outsourcing and sales of LED lighting products. The Group is continuing with its corporate restructuring including investing in businesses in related fields. During this period of corporate restructuring, the CEO, Mr. Chen Chih Lung, has supported the Group financially by way of loans and guarantees.

 

The Company's shares are listed on the NEX Exchange (NEX) Growth Market.

 

The condensed consolidated interim financial information is presented in Renminbi ("RMB"), which is the presentational and functional currency of the Group, and all values are rounded to the nearest thousand except where indicated otherwise.

 

2.       Basis of Preparation

 

The condensed consolidated interim financial information has been prepared using accounting policies consistent with International Financial Reporting Standards and in accordance with International Accounting Standard 34 Interim Financial Reporting. The condensed consolidated interim financial information should be read in conjunction with the annual financial statements for the year ended 31 December 2016, which have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union.

 

The condensed consolidated interim financial information set out above does not constitute statutory accounts. They have been prepared on a going concern basis in accordance with the recognition and measurement criteria of International Financial Reporting Standards (IFRS). Statutory financial statements for the year ended 31 December 2017 were approved by the Board of Directors on 31 May 2018. The report of the auditors on those financial statements was unmodified.

 

The condensed consolidated interim financial information of the Company has not been audited.

 

3.       Going Concern

 

The principal activity of Gowin New Energy Group Limited ("the Group'') has historically been research and development, and sales of LED lighting products. During the period, the Group has made progress in the new tea trading business. The CEO Mr. Chen continues to support the Group's working capital requirements on demand by way of loans and guarantees. 

 

The Group also anticipates further fundraising through ordinary shares placements in the near future, on the back of encouraging investor interest in the new tea trading business. Consequently, the Group is confident it will have sufficient working capital to continue its operation.

 

4.       Risks and uncertainties

 

The additional activities planned for the Group will add new challenges, risks and uncertainties. The Board is activity reviewing the impact of its plans but does not immediately see any variations in the key financial risks other than the valuation of investments. 

 

5.       Critical accounting estimates and judgements

 

The preparation of condensed consolidated interim financial information requires Management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the end of the reporting period. Significant items subject to such estimates are set out in Note 5 of the Group's 2017 Annual Report and Financial Statements. The nature and amounts of such estimates have not changed significantly during the interim period except for the valuation of the carrying amount of long term investments as disclosed in note 8.

 

6.       Significant accounting policies

 

The condensed consolidated interim financial information has been prepared under the historical cost convention as modified by the revaluation of financial assets and financial liabilities at fair value through profit or loss.

 

The accounting policies and methods of computation used in the preparation of these condensed consolidated interim financial information are consistent with those used in the Group's 2017 Annual Report and Financial Statement, except for the adoption of the amendments and interpretations issued by the International Accounting Standards Board that are mandatory for accounting periods beginning 1 January 2018.

 

The effect of the adoption of these amendments and interpretations was not material to the Group's results or financial position.

 

7.       Revenue and segment information

 

Revenue represents the invoiced value of goods sold and is net of value-added tax and sales return. There is no seasonality or cyclicality of the Group's operations. For the periods presented, the Group as a whole is an operating segment since the Group is only engaged in optoelectronic products and related business. No Group's geographical information has been disclosed as the majority of the Group's operating activities are carried out in the PRC and Taiwan (for the purpose of preparing the financial statements, the PRC refers to the Mainland China and Hong Kong) and the Group's assets are all located in the PRC and Taiwan. The revenue generated during the period relates to the LED trading business only.

 

8.       Financial assets

 

All financial assets are recognised and de-recognised on a trade date basis where the purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value plus transaction costs, except for those financial assets classified as at fair value through profit or loss which are initially measured at fair value.

 

Financial assets are classified into the following specified categories: financial assets "at fair value through profit or loss", "held-to-maturity investments", "available-for-sale" financial assets and "loans and receivables". The classification depends on the nature and purpose of financial assets and is determined at the time of initial recognition.

 

The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset, or a group of financial assets, is impaired. For equity investments, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If any such evidence exists the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit or loss - is removed from equity and recognised in profit or loss. Impairment losses recognised in the consolidated income statement on equity instruments are not reversed through the consolidated income statement. 

 

 

 

 

9.

Finance cost

 

Six months

 

 

Six months

 

 

 

 

 

ended

 

ended

 

 

 

 

 

30 June 2018

 

30 June 2017

 

 

 

 

 

RMB'000

 

RMB'000

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Interest cost

47

 

29

 

 

 

 

Total finance cost

47

 

29

 

 

 

 

 

 

 

 

 

 

 

 

10.

Expense by nature

 

Six months

 

 

Six months

 

 

 

 

 

 

ended

 

ended

 

 

 

 

 

 

30 June 2018

 

30 June 2017

 

 

 

 

 

 

RMB'000

 

RMB'000

 

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Staff costs

576

 

898

 

 

 

 

 

Directors' remuneration

747

 

900

 

 

 

 

 

Professional fee

404

 

571

 

 

 

 

 

Consultancy fee

Foreign Exchange loss

                              -

153

 

                  100

59

 

 

 

 

 

Other operating expenses

199

 

215

 

 

 

 

 

Total administrative expenses

2,079

 

2,743

 

 

 

 

 

 

 

 

 

 

 

 

 

11.

Income tax

 

Six months

 

 

Six months

 

 

 

 

 

ended

 

ended

 

 

 

 

 

30 June 2018

 

30 June 2017

 

 

 

 

 

RMB'000

 

RMB'000

 

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

Current income tax for the period

-

 

-

 

 

 

 

 

-

 

-

 

 

 

 

 

 

 

 

 

 

                                             

                       

The Group is not subject to taxation in the Cayman Islands, British Virgin Islands or Samoa Islands.

 

No provision for Hong Kong or Chinese taxation has been made as the Group has not generated any profit in Hong Kong or China.

 

 

12.     Loss per share

 

Loss per share for the period ended 30 June 2018 is calculated by dividing RMB 2,527,000 loss for the period attributable to the equity holders of the Company by the average number of shares, of 269,448,047 (30 June 2017: 250,000,533).

 

 

 

Six months

 

 

Six months

 

 

 

 

ended

 

ended

 

 

 

 

30 June 2018

 

30 June 2017

 

 

 

 

RMB

 

RMB

 

 

 

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Basic and diluted loss per share (RMB)

(0.009)

 

(0.010)

 

 

 

No diluted loss per share are presented as there are no potential ordinary shares outstanding for the six months ended 30 June 2018 and 2017.

 

 

13.     Dividend

 

No dividends were proposed during the reporting period and the Directors do not recommend the payment of an interim dividend for the six months ended 30 June 2018.

 

14.     Long term investments

 

Quoted equity securities

 

 

 

 

RMB'000

As at 1 January 2018

Impairment

 

 

 

 

4,540

(405)

As at 30 June 2018

 

 

 

 

4,135

 

The Company holds 1,000,000 shares in Taiwan Thick-Film Industries Corp., a company listed on Taipei Stock Exchange.

 

15.

 Trade and other receivables

As at

 

As at

 

 

 

30 June

 2018

 

31 December 2017

 

 

 

RMB'000

 

RMB'000

 

 

 

(Unaudited)

 

(Audited)

 

 

 

 

 

 

 

 

Trade receivables

24

 

36

 

 

Prepayment

37

 

18

 

 

Amounts due from related party

15

 

-

 

 

Loans to related party

527

 

527

 

 

 

603

 

581

 

 

The amounts due from related party and the loans to related party were unsecured, interest-free and repayable on demand. The related party is controlled by a director of the Group.

 

The ageing analysis of the Group's trade receivables after impairment based on delivery date is as follows:

 

 

 

As at

 

As at

 

 

 

30 June

2018

 

31 December 2017

 

 

 

RMB'000

 

RMB'000

 

 

 

(Unaudited)

 

(Audited)

 

 

 

 

 

 

 

 

Current trade receivables

 

 

 

 

 

0 - 30 days

-

 

-

 

 

31 - 60 days

-

 

-

 

 

61 - 365 days

24

 

                        36

 

 

 

24

 

36

 

 

 

16.

Cash and cash equivalents

As at

 

As at

 

 

 

 

30 June

2018

 

31 December 2017

 

 

 

 

RMB'000

 

RMB'000

 

 

 

 

(Unaudited)

 

(Audited)

 

 

 

 

 

 

 

 

 

Cash on hand

Cash at bank and in hand

14

221

 

 

14

367

 

235

381

                     

 

 

,

17.

T Trade and other payables

As at

 

As at

 

 

 

30 June

 2018

 

31 December 2017

 

 

 

RMB'000

 

RMB'000

 

 

 

(Unaudited)

 

(Audited)

 

 

 

 

 

 

 

 

Trade payables

                   27

 

                      27

 

 

Accruals and other payables

4,920

 

                 4,237

 

 

Loans from equity holders

7,035

 

               10,145

 

 

Receipt in advance

426

 

                     -

 

 

 

12,408

 

                14,409

 

 

The amounts due to equity holders were unsecured, interest-free and repayable on demand.

 

The loans from equity holders bear interest rate of 2% and are repayable in 2019.

 

An ageing analysis of the Group's trade payables based on the invoice date is as follows:

 

 

 

As at

 

As at

 

 

 

30 June

2018

 

31 December 2017

 

 

 

RMB'000

 

RMB'000

 

 

 

(Unaudited)

 

(Audited)

 

 

 

 

 

 

 

 

Current trade payables

 

 

 

 

 

31 to 60 days

61 to 365 days

-

27

 

-

27

 

 

 

27

 

                  27

 

 

18.     Share capital

 

 

 

 

No. of 1p

ordinary

           shares

 

RMB'000

As at 1 January 2018

Issue of shares

 

 

          250,000,533 40,000,000

 

25,000

4,000

As at 30 June 2018

 

 

290,000,533

 

29,000

 

On 3 April 2018, the CEO Mr Chen Chih Lung has agreed to convert the whole of the principal amount outstanding under the convertible loan note of £400,000 (RMB 3,855k) into new ordinary shares of £0.01 each at the conversion rate of £0.01 per share. 40,000,000 shares have been issued to Mr Chen Chih Lung. After the placing, Mr Chen Chih Lung holds 62,706,320 shares of the Company, being 21.62%.  

 

19.     Related party transactions

 

The ultimate controlling party of the Group is the CEO Mr Chen Chih Lung.

 

20.     Approval of interim financial information

 

The condensed consolidated interim financial information was approved by the Board of Directors on 28 September 2018.

 

21.     Events after reporting date

 

1.   On 21 August 2018, the Group announced that one of its trading subsidiary Rosin Trading Ltd purchased 2 types of tea from the CEO Mr. Chen Chih Lung, being 5 pieces of "Ta Tong Great Harmony" tea and 1841 pieces of "Yunnan 1889" tea for a total consideration of £75,000 (RMB 663,750).

 

Rosin intends to either execute the tea trading business directly or to entrust ("Mo Xing Zhai") to execute the tea trading business. ("Mo Xing Zhai") is responsible for reporting the breakdown of tea transactions monthly to Rosin.

 

2.   Rosin has generated revenue of RMB 423,683 from the tea trading business in August 2018, which demonstrates that the new tea trading business has made a promising start.

 

The Group has obtained loans from the CEO Mr. Chen Chih Lung of £30,000 on 2 July 2018 and £50,000 on 30 August 2018. These loans demonstrate his continuous commitment to support the working capital needs of the Group as when required.


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