Gowin New Energy Grp - Half-year Report

 

                                                                                                                        29 September 2017

 

Gowin New Energy Group Limited

("GNE" or the "Group")

(NEX: GWIN)

 

Interim Results for the Six Months Ended 30 June 2017

 

Gowin New Energy Group Limited, the China-based group engaged in the research and development, outsourcing and sales of LED lighting products, today announces its unaudited financial results for the six months ended 30 June 2017.

 

Chairman's Statement

 

Business Overview

 

The principal activity of Gowin New Energy Group Limited ("the Group'') has historically been research and development, and sales of LED lighting products. The group has continued its corporate restructuring including investing in business in related fields. In the first half of the year 2017, in the light of stagnation in the LED business, the Group including its subsidiaries continued its restructuring efforts. Since the Variable Interest Equity ("VIE") contracts were terminated with Yichia Optoelectronics Technology Co., Ltd ("Yichia Opto") in 2015, the subsidiary Gowin New Energy Holdings Limited ("Holdings") serves no purpose. Consequently, the winding-up process of Holdings, as approved by the Board in 2016, will begin on 1, October 2017. The business continues to operate its LED R&D and sales of LED products in Taiwan.

 

The Group's Annual General Meeting was held in Taiwan on 7 February 2017. The meeting approved the Group using its share premium account to pay up the balance of 325 million partly paid shares. Additionally, subject to the Grand Court of the Cayman Islands approval and registration processes, the Group approved the Capital Reduction of the Company, whereby 67.5624 shares in every 100 shares would be cancelled.

 

With the continuing poor performance of the LED business, the Board has continued reviewing its investment opportunity options, for the benefit of the long term. As previously announced, one of the opportunities that is being evaluated is a relationship with TAIWAN THICK-FILM INDUSTRIES CORP. ("TTFI"). TTFI's principal activity is production and sales of LED and Back Light Module products, a similar business to the Group. TTFI is listed on the Taipei Stock Exchange and is profitable. The board will update investors on the developments of the TTFI deal in due course.

 

Financial Position

 

The Group will concentrate on achieving returns through its LED business subsidiaries and from associated investment returns. The Group intends to attract capital and make cash investments in other businesses. During this period of corporate restricting the CEO, Mr. Chen, has supported the finance of the Group by way of loans and guarantees. CEO Mr. Chen Chih-Lung has signed a pledge letter promising 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.         

 

Business Outlook and Conclusion

 

The Board will continue to examine opportunities to grow in the LED industry in 2017 and in other new business areas. The Directors look forward to the rest of this year with confidence.

 

Events After Reporting Date

 

On 24 August 2017, following approval from the Cayman Island Court and filing of the Court Order, the Capital Reduction came into effect. With the cancellation of 67.5624 shares in every 100 shares, the Group aims to create distributable reserves to facilitate payment of dividends in the future, hence making the Group's ordinary shares more attractive to new investors.

 

On 30 August 2017, the Group released a Circular to shareholders, regarding a proposed investment in a new Tea Business, an issue of preference shares, adoption of amended and restated Memorandum of Association and Articles of Association and a Notice of an Extraordinary General Meeting to be conducted on 18 September 2017. In anticipation for this new business source of Group earnings, the Group announced the appointment of a new executive director Mr. Hsu I-Hsan on 22 August 2017.

 

On 18 September 2017, following the year end results, an Extraordinary General Meeting was conducted in Taiwan, whereby unanimous approval was received to reclassify £20,000,000 authorised share capital into Ordinary Shares and Preference Shares and to authorize the directors to allot new Preference Shares in the Company for the intention of establishing a new Tea Business.

 

Future Prospects

 

The Board has identified the tea industry as a potentially attractive opportunity for diversification and intends to establish and obtain a stake of 15% in a new company incorporated in the Cayman Island to operate a new tea business. Gowin has entered into a co-operation agreement for the operation of the new company with the Chinese Pu-erh Tea Exchange Association, a non-profit organization located in New Taipei City, Taiwan and Grange Culture Creative Limited, a Taiwanese incorporated unlisted company with extensive experience and expertise in the Chinese tea industry and relevant connections with various tea related corporations. The Board anticipates that this agreement with reputable and recognized organizations in the Chinese tea industry will be an important element of the newly established company's Tea Business. The Board looks forward to its business developing in the next financial year.

 

Appreciation

 

The Board highly appreciates all the support from our shareholders. The last six months was another period of incremental progress as the Group worked hard on its organization restructuring and new business establishment. The Board looks forward to the next productive phase of the Group. As always, on the behalf of the Board, I wish to sincerely thank our hard-working employees for their efforts and results.

 

Garry Willinge

Non-Executive Chairman

 

28 September 2017

 

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

 

For further information, please visit www.gowinyichia.com or contact the following:

 

COMPANY CONTACT DETAILS:

Garry Willinge   

Gowin New Energy Group Limited

19F,No.1086,

Zhongzheng Rd.,

Taoyuan Dist.,

Taoyuan City,

Taiwan  

Telephone: +86 769 388 00399

http://en.gowinyichia.com./

 

NEX EXCHANGE CORPORATE ADVISER:

Alexander David Securities Limited

David Scott - Corporate Finance

James Dewhurst - Corporate Broking

Telephone: +44 (0) 20 7448 9820

http://www.ad-securities.com

49 Queen Victoria Street, London EC4N 4SA

 

 

Gowin New Energy Group Limited

Condensed consolidated statement of comprehensive income

For the six months ended 30 June 2017

 

 

			Six months		Six months
			ended		ended
			30 June 2017		30 June 2016
			RMB'000		RMB'000
Continuing Operations	Note		(Unaudited)		(Unaudited)
Revenue	7		22		24
Cost of sales			-		(23)
Gross profit			22		1
Administrative expenses	9		(2,743)		(3,410	)
Gain on disposal of sub			322		-
Operating loss			(2,399)		(3,409	)
Finance income	8		-		349
Finance costs			(29)
Loss before tax			(2,428)		(3,060	)
Tax	10		-		-
Loss from continuing operations			(2,428)		(3,060	)
Discontinued operations
Loss from discontinued operations			-		-
Loss for the period			(2,428)		(3,060	)
Other comprehensive income			-		-
Total comprehensive loss for the period attributable to owners of the parent			(2,428)		(3,060	)
Loss per share attributable to owners of the parent during the period expressed in RMB per share
Basic and diluted loss per share	11		(0.010)		(0.004	)

 

 

Gowin New Energy Group Limited

Condensed consolidated statement of financial position

As at 30 June 2017

 

 

			As at		As at		As at
	Note		30 June  2017		30 June 2016		31 December 2016
			RMB'000		RMB'000		RMB'000
			(Unaudited)		(Unaudited)		(Audited)
Assets
Non-Current Assets
Long-term Investments	13		6,143		-		-
Current assets
Trade and other receivables	14		762		27,168		33,096
Cash in bank			599		9,204		2,079
			1,361		36,372		35,175
Assets directly associated with the discontinued operations			-		-		-
Total assets			7,504		36,372		35,175
Current liabilities
Trade and other payables	16		(13,567)		(16,144	)	(18,821)
			(13,567)		(16,144	)	(18,821)
Liabilities directly associated with the discontinued operations			-		-		-
Total  liabilities			(13,567)		(16,144	)	(18,821)
Net assets			(6,063)		20,228		16,354
Equity attributable to owners of the Company
Share capital	17		77,071		77,071		77,071
Share premium			-		19,988		19,989
Retained loss			(83,134)		(76,831	)	(80,706)
Total equity			(6,063)		20,228		16,354

 

 

 

 

 

 

Gowin New Energy Group Limited

Condensed consolidated statement of changes in equity

For the six months ended 30 June 2017

 

	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 2016 (Unaudited)   Balance as at 1 January 2016 (Audited)	44,571	19,988	(73,771)	(9,212)
Loss for the period	-	-	(3,060)	(3,060)
Other comprehensive income for the period	-	-	-	-
Total comprehensive income    for the period	-	-	(3,060)	(3,060)
Total transactions with owners, recognized directly in equity
Issue of shares	32,500	-	-	32,500
Reallocation	-	-	-	-
Balance as at 30 June 2016	77,071	19,988	(76,831)	20,228
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
Issue of shares	-	-	-	-
Settlement of unpaid share capital	-	(19,988)	-	(19,988)
Balance as at 30 June 2017	77,071	-	(83,134)	(6,063)

 

 

 

 

 

 

Gowin New Energy Group Limited

Condensed consolidated statement of cash flows

For the six months ended 30 June 2017

 

	Six months		Six months
	ended		ended
	30 June 2017		30 June 2016
	RMB'000		RMB'000
	(Unaudited)		(Unaudited)
Cash Flows used in Operating Activities
Loss before tax	(2,428)		(3,060	)
Finance income	(322)		(349	)
Finance cost	29		-
Decrease/(Increase) in trade and other receivables	(38)		620
(Decrease)/Increase in trade and other payables	23		1,553
Net cash used in operating activities by discontinued operations	-		-
Net cash used in operating activities	(2,736)		(1,236	)
Cash Flows generated from Investing Activities
Finance income	322		-
Net cash generated from Investing activities	322		-
Cash Flows generated from Financing Activities
Shareholders' loans	963		-
Issue of shares	-		3,810
Repayment of loan made to related party	-		5,321
Finance cost	(29)		-
Net cash used by discontinued operations	-		-
Net cash generated from financing activities	934		9,131
Net increase in cash and cash equivalents	(1,480)		7,895
Cash and cash equivalents at beginning of period	2,079		1,309
Cash and cash equivalents at end of period	599		9,204