Qinshang Shares achieved a net profit of 86.729 million yuan in the first half of 2023

On July 28, Qinshang Shares released its 2023 semi-annual report. The financial report shows that in the first half of this year, the company achieved operating income of 187 million yuan, a year-on-year decrease of 56.87%; and a net profit of 86.729 million yuan, a year-on-year decrease of 7.29%.

Qinshang shares explained in its semi-annual report that the sharp decline in operating income was mainly due to the company's off-campus education and training business being completely divested in 2022, and the company's semiconductor lighting business orders decreasing in the first half of 2023. At present, Qinshang Co., Ltd. is mainly engaged in the research, production and sales of outdoor lighting, landscape lighting and outdoor garden supplies.

In the first half of the year, all of Qinshang’s revenue came from the semiconductor lighting business, which dropped by nearly 40% year-on-year.

Broken down into various products, Qinshang's outdoor lighting, outdoor garden supplies, landscape lighting, indoor lighting, display screens and others, and education and training achieved revenue of 49.4679 million yuan, 117 million yuan, and 1 respectively in the first half of the year. 1.1898 million yuan, 6.632 million yuan, 9.395 million yuan and 0 yuan; the revenue proportions were 26.42%, 62.58%, 5.98%, 0.00%, 5.02% and 0.00% respectively.

Among them, outdoor lighting, display screens and other products achieved year-on-year growth, with increases of 162.54% and 80.39% respectively; outdoor garden supplies, landscape lighting, indoor lighting and education and training decreased year-on-year, with decreases of 54.87%, 59.04%, 99.74% and 100.00% respectively.

Composition of operating income of Qinshang Shares

It is worth mentioning that Qinshang Shares was listed on the main board of the Shenzhen Stock Exchange in 2011. At the time of listing, Qinshang Shares’ main products were LED lighting products. Since 2016, Qinshang Shares has been pursuing the development of the dual main businesses of "semiconductor lighting + education and training", and has successively acquired/participated in Guangzhou Longwen, Yinglun Education, Aobu Education, Siqi Education, Yipole Sports, Liuzhou Little Red Riding Hood, etc. through the issuance of shares, payment of cash, capital increase, etc.

Unexpectedly, the off-campus training industry was later affected by the "double reduction" policy, and the education and training business dragged down the performance of Qinshang Shares. Among them, Guangzhou Longwen was in the red from 2019 to 2021, and Qinshang Shares began to suffer losses in 2018. In order to adjust the business structure, Qinshang Shares announced in March 2022 that it would transfer part of its education and training business for a consideration of 1 yuan.

Recently, Qinshang Shares disclosed in an inquiry letter that during the reporting period, the company had completed the disposal of 100% of the equity of Guangzhou Longwen and 99% of the equity of Beijing Longwenyun, and completely divested the off-campus education and training business affected by policy changes. In addition, the wholly-owned subsidiary Shanghai Aozhan is preparing to build a new school in Fengxian District, Shanghai. It will apply for a school license after completion and acceptance. The future direction of schooling will be vocational education or other directions that comply with relevant laws and regulations and the "double reduction policy".

It should be noted that Qinshang’s net profit in the first half of the year was mainly supported by performance compensation. The financial report shows that Qinshang's profit and loss due to the receipt of performance compensation in the first half of the year amounted to 153 million yuan, which was mainly caused by the company's repurchase of the shares of Guangzhou Longwen shareholders, and the difference between the price paid and the market value on the repurchase date.

Qinshang Shares also stated in its semi-annual financial report that in recent years, the company has gradually focused on the field of smart lighting and outdoor courtyard products, conducted in-depth research on the smart lighting sector, increased investment in R&D technology and product development, and accelerated the layout of the smart lighting market, with a view to building Qinshang Shares into an industry-leading supply of smart street lighting products and application solutions. At present, the revenue from two major categories of outdoor lighting and outdoor garden supplies accounts for 89% of Qinshang’s total revenue.