Financial Performance - Revenue increased by 6.7% to approximately RMB 8,349.8 million (H1 2023: RMB 7,826.7 million) [2] - Profit attributable to owners increased by 45.2% to approximately RMB 378.4 million (H1 2023: RMB 260.6 million) [2] - Earnings per share was RMB 0.90 (H1 2023: RMB 0.62) [2] - Total comprehensive income for the period was RMB 379.0 million (H1 2023: RMB 261.1 million) [5] - The reported profit from external customers for the six months ended June 30, 2024, was RMB 749,735,000, a decrease of 13.5% from RMB 866,854,000 in the same period of 2023 [20] - The pre-tax consolidated profit for the six months ended June 30, 2024, was RMB 409,728,000, up 52.4% from RMB 268,692,000 in the previous year [20] - The company's attributable profit increased by 45.2% to approximately RMB 378.4 million, with a net profit margin of 4.5% [53] Sales and Revenue Breakdown - Sales volume rose by 3.1% to approximately 362,049 tons (H1 2023: 351,101 tons) [2] - Revenue from aluminum sales reached RMB 8,083,355 thousand, up from RMB 7,642,596 thousand, representing an increase of approximately 5.8% [16] - In the first half of 2024, sales revenue from construction aluminum profiles reached RMB 6,694.9 million, a year-on-year increase of 4.7% compared to RMB 6,396.9 million in the same period of 2023 [39] - Sales revenue from industrial aluminum profiles was RMB 1,388.5 million in the first half of 2024, representing an 11.5% year-on-year growth from RMB 1,245.7 million in the first half of 2023 [40] - The construction aluminum profiles accounted for 80.2% of total revenue, while industrial aluminum profiles made up 16.6% [41] Cash Flow and Liquidity - For the six months ended June 30, 2024, the operating cash flow before changes in working capital was RMB 724,016 thousand, compared to RMB 758,040 thousand for the same period in 2023, reflecting a decrease of approximately 4.5% [10] - The net cash generated from operating activities for the six months ended June 30, 2024, was RMB 680,595 thousand, significantly up from RMB 196,692 thousand in the previous year, indicating an increase of approximately 246.5% [10] - Cash and cash equivalents as of June 30, 2024, amounted to RMB 2,875,829 thousand, compared to RMB 2,793,247 thousand at the end of June 30, 2023, showing an increase of approximately 2.9% [10] - The current ratio improved to 1.59 from 1.28, while the quick ratio increased to 1.80 from 1.52 [54] - The debt ratio slightly decreased to 23.3% from 24.5%, attributed to a combination of increased bank borrowings and higher current asset amounts [55] Assets and Liabilities - Non-current assets amounted to RMB 4,393.4 million as of June 30, 2024 [7] - Current assets totaled RMB 9,838.0 million as of June 30, 2024 [7] - Current liabilities were RMB 6,185.5 million as of June 30, 2024 [9] - Total equity attributable to owners was RMB 5,453.1 million as of June 30, 2024 [8] - The company's financial liabilities measured at amortized cost amounted to RMB 4,817,529,000 as of June 30, 2024, compared to RMB 3,784,158,000 as of December 31, 2023 [34] Operational Efficiency - The gross profit for the total operations was RMB 749,735 thousand for the six months ended June 30, 2024, down from RMB 866,854 thousand in the previous year, reflecting a decrease of about 13.5% [19] - Distribution costs rose by 17.2% to approximately RMB 179.0 million, accounting for 2.1% of revenue [51] - Inventory turnover period improved to 39 days from 42 days, indicating better inventory management [57] - Accounts receivable collection period decreased to 91 days from 99 days, reflecting improved efficiency in receivables management [57] Research and Development - Research and development costs for the six months ended June 30, 2024, amounted to RMB 395,236,000, an increase from RMB 371,676,000 in the same period of 2023 [26] - The company expects to benefit from additional tax deductions related to R&D expenses, which reduced income tax by RMB 32,799,000 for the six months ended June 30, 2024 [24] Market Strategy and Outlook - The company continues to focus on expanding its market presence in the Asia-Pacific region, with revenue from this area increasing to RMB 233,665 thousand from RMB 64,745 thousand in the previous year, marking a substantial growth [16] - The company is actively expanding its retail business and enhancing its home window and door product line to increase market penetration and brand influence [39] - The outlook for the aluminum profile industry remains cautiously optimistic, with expected stable growth driven by the recovery of the global economy and increasing demand in sectors like renewable energy and aerospace [44] Corporate Governance - The board did not recommend any interim dividend for H1 2024 (H1 2023: none) [2] - The group did not recommend an interim dividend for the first half of 2024, compared to no dividend in the first half of 2023 [66] - The company has actively adjusted its business strategy to deepen cooperation with financially stable real estate developers to mitigate market risks [36]

Financial Performance - Revenue increased by 2.5% year-on-year to approximately RMB17,352.6 million (2022: RMB16,933.1 million)[15] - Sales volume increased by 6.6% year-on-year to 757,480 tonnes (2022: 710,534 tonnes)[15] - Gross profit increased by 12.1% year-on-year to approximately RMB1,990.2 million (2022: RMB1,774.7 million)[15] - Profit attributable to shareholders increased by 75.7% year-on-year to RMB804.2 million (2022: RMB457.8 million)[15] - Revenue increased by 2.5% year-on-year to approximately RMB 17,352,600,000, with sales volume growing by 6.6% to 757,480 tons, both reaching historical highs[16] - Gross profit rose by 12.1% to approximately RMB 1,990,200,000, and net profit attributable to shareholders surged by 75.7% to RMB 804,200,000[16] - Revenue increased by 2.5% to RMB 17,352.6 million, and sales volume increased by 6.6% to 757,480 tonnes in 2023[30] - Gross profit rose by 12.1% to RMB 1,990.2 million, with gross profit margin improving to 11.5% from 10.5% in 2022[30] - Profit attributable to owners surged by 75.7% to RMB 804.2 million in 2023[30] - Revenue increased by 2.5% year-on-year to RMB 17,352.6 million, with sales volume up 6.6% to 757,480 tonnes[40][41] - Gross profit rose 12.1% to RMB 1,990.2 million, with gross profit margin increasing by 1 percentage point to 11.5%[43][44] - Profit attributable to shareholders surged 75.7% to RMB 804.2 million, driven by reduced impairment losses and increased sales orders[55] Product and Revenue Breakdown - Construction aluminium profiles accounted for 81.4% of revenue, while industrial aluminium profiles accounted for 15.2%[15] - Construction aluminum profiles accounted for 81.4% of revenue, while industrial aluminum profiles contributed 15.2%[16] - Construction aluminium profiles revenue grew by 2.9% to RMB 14,121.8 million, with sales volume up 9.2% to 622,678 tonnes[31] - Industrial aluminium profiles revenue decreased by 2.9% to RMB 2,642.8 million, with sales volume down 5.1% to 126,171 tonnes[32] - Construction aluminium profiles sales volume grew 9.2% to 622,678 tonnes, while industrial aluminium profiles sales volume decreased 5.1% to 126,171 tonnes[40][41] - Construction aluminium profiles gross profit margin improved to 11.5%, while industrial aluminium profiles gross profit margin declined to 5.7%[45][46] Dividend and Shareholder Returns - The Board recommended a final dividend of HK$0.64 per share, with a distribution ratio of 30.3%[15] - The company proposed a final dividend of HKD 0.64 per share, with a payout ratio of 30.3%[16] - Final dividend recommended at HKD0.64 per ordinary share for the year ended 31 December 2023, compared to HKD0.37 in 2022[119] - The company has adopted a dividend policy, with a minimum final dividend of 30% of audited consolidated profit attributable to shareholders[158] Market and Industry Challenges - The Group faced challenges in winning new orders, maintaining profit margins, and collecting receivables due to the evolving real estate industry in the PRC[11] - The Group adopted a more prudent approach to overseas business expansion due to global trade frictions and export pressures[11] - China's GDP grew by 5.2% in 2023, but the real estate market faced challenges with a 8.5% decline in commercial housing sales area and a 6.5% drop in sales amount[22][24] Strategic Initiatives and Expansion - The Group received orders from industries such as photovoltaic and electric vehicles, diversifying its revenue streams[12] - The Group participated in landmark projects, including Xiamen New Airport and Shenzhen Tencent Global Headquarters, enhancing its market reputation[14] - The company's second-generation digital factory project in Zhejiang has entered the trial production stage, incorporating cloud computing, big data, and smart logistics[18] - Plants in Vietnam and Australia are expected to commence operations within the next two years, enhancing the company's strategic presence in Asia[18] - The Group plans to expand production capacity with the Zhejiang smart manufacturing plant expected to commence production in 2024[28] - The Australian joint venture project plant is completed, with trial production expected to start in 2024[28] - The Group aims to strengthen its presence in the photovoltaic and new energy vehicle sectors[37] - The ASEAN production base is under construction, further enhancing the company's production network[38] - The company plans to expand production capacity with new smart manufacturing facilities in Zhejiang, Australia, and ASEAN regions[39] - The company aims to strengthen its position in the photovoltaic and new energy vehicle sectors by developing high-toughness, lightweight aluminium products[39] Financial Ratios and Liquidity - Current ratio increased to 1.80 in 2023 from 1.56 in 2022, primarily due to a decrease in current liabilities[57][58] - Quick ratio improved to 1.52 in 2023 from 1.29 in 2022, driven by reduced trade and other payables[57][58] - Gearing ratio rose to 24.5% in 2023 from 20.7% in 2022, mainly due to increased loans and borrowings[60] - Inventory turnover days remained stable at 34 days in 2023 compared to 35 days in 2022, reflecting improved production planning[63] - Debtors' turnover days decreased to 90 days in 2023 from 98 days in 2022, as the company tightened credit terms[65] - Creditors' turnover days reduced to 79 days in 2023 from 92 days in 2022, due to strategic supplier negotiations[67] - Loans and borrowings increased to RMB 3,147.5 million in 2023 from RMB 2,499.0 million in 2022, with fixed-rate borrowings rising to RMB 1,146.6 million[67] - Banking facilities expanded to RMB 14,176.2 million in 2023 from RMB 12,004.0 million in 2022, with utilization at RMB 4,509.0 million[67] - Capital expenditure increased to RMB 980.9 million in 2023 from RMB 975.1 million in 2022, primarily for equipment and land use rights[68][69] - Net cash generated from operating activities in 2023 was RMB 1,466,607 thousand, a significant increase from RMB 790,767 thousand in 2022[72] - Cash and cash equivalents as of 31 December 2023 amounted to RMB 2,840.4 million, with 2.4% held in US dollars, 4.7% in HK dollars, and the remainder in RMB[73] - The group's liquidity is primarily funded through internally generated cash flows and bank borrowings, with additional equity financing or bank borrowings as needed[72] - The group maintains a policy of monitoring liquidity requirements and compliance with lending covenants to ensure sufficient cash reserves[70] - The group's treasury policies include managing currency risks due to transactions denominated in US dollars and HK dollars[70] Environmental and Social Responsibility - The company formulated the Xingfa Aluminium Protection System to govern production emissions and reduce environmental pollution[159] - The company strictly complied with relevant environmental laws and regulations in China and Hong Kong during the year ended 31 December 2023[161][162][163] - The company's environmental policy focuses on reducing pollution through technological advancements and clean production[161] - The Group made a donation of RMB100,000 for charitable or other purposes during the year, down from RMB102,000 in 2022[127] Corporate Governance and Leadership - Mr. Wang Li, aged 45, has been an executive Director and Chairman since 14 April 2022, with over 19 years of experience in investment banking, mergers and acquisitions, and operation management[82][83] - Mr. Liao Yuqing, aged 55, is the CEO and responsible for the Group's sales and marketing activities, with a background in military service and banking[84] - Mr. Law Yung Koon, aged 66, has been an executive Director since 28 April 2009, focusing on overseas market sales and marketing, with prior experience as the general manager of Hang Fat Aluminium Profiles Company Limited[84] - Mr. Wang Lei, aged 54, has been an executive Director since 4 August 2021, with extensive business management experience and a background in mechanical engineering and business administration[85][86] - Mr. Wang Zhihua, aged 53, has been an executive Director since 1 March 2008, with a background in statistics and experience in Guanglian Industrial Co., Ltd. and Huaxia Securities Co., Ltd.[86] - Mr. Luo Jianfeng has 31 years of experience in accounting and finance and is an executive director of China Lesso Group Holdings Limited (stock code: 2128)[88][89] - Mr. Zuo Manlun has 24 years of experience in the plastic pipe industry and is the CEO of China Lesso Group[90][92] - Ms. Xie Jingyun has extensive experience in strategic investment and capital operation and is currently the senior director and general manager of the capital investment center of Guangxin Holdings[91][92] - Mr. Chen Mo has been a practicing lawyer in China since 1993 and holds multiple legal qualifications, including the Certificate of Engaging in Securities Law Business[93] - Junius K.Y. Ho was admitted as a solicitor in Hong Kong in 1988 and later in Singapore, England, and Wales in 1995 and 1997 respectively[96] - Junius K.Y. Ho was appointed as a China-Appointed Attesting Officer in 2003 and admitted as a lawyer in the Guangdong-Hong Kong-Macao Greater Bay Area in 2022[96] - Junius K.Y. Ho serves as a Member of the 14th National Committee of the Chinese People's Political Consultative Conference since 2023[96] - Junius K.Y. Ho has been a Member of the Legislative Council of HKSAR since 2016[96] - Junius K.Y. Ho is a Representative of the non-governmental organization (IPLSA) granted Special Consultative Status by the United Nations Economic and Social Council since 2022[96] - Junius K.Y. Ho was awarded the Bronze Bauhinia Star from the Government of the Hong Kong Special Administrative Region in 2023[96] - Junius K.Y. Ho has been a Justice of the Peace of the Hong Kong Special Administrative Region since 2016[96] - Junius K.Y. Ho is an Accredited Speaker on National Security Education and Chairman of the Examination Board of the National Security Education since 2022[96] - Junius K.Y. Ho is the Founder and Chairman of International Probono Legal Services Association Limited (IPLSA) since 2018[97] - Junius K.Y. Ho serves as an Arbitrator of the China International Economic and Trade Arbitration Commission Hong Kong Arbitration Centre from 2021 to 2026[97] - Mr. Lam, Ying Hung Andy, aged 59, has over 30 years of experience in accounting, banking, and finance sectors and currently serves as the managing consultant of Lontreprise Consulting Limited[99] - Mr. Lam holds a master's degree in professional accounting from The Hong Kong Polytechnic University and is a fellow member of The Association of Chartered Certified Accountants and the Hong Kong Institute of Certified Public Accountants[99] - Mr. Lam is currently an independent non-executive director of Litu Holdings Limited (stock code: 1008), Synertone Communication Corporation (stock code: 1613), and Weiye Holdings Limited (stock code: 1570)[99] - Mr. Wen Xianjun, aged 61, has approximately 37 years of experience in the non-ferrous metals industry and holds a master's degree in metallic materials from Beijing Non-Ferrous Research Institute[101] - Mr. Wen served as the chairman of China Non-ferrous Metals Processing Industry Association from 2010 to 2017 and is currently an independent non-executive director of China Hongqiao Group Limited (stock code: 1378)[101] - Ms. Zheng Jianhua, aged 50, has been the chief financial officer of the Company since 30 September 2022 and holds a bachelor's degree in economics (majoring in accounting) from Sun Yat-Sen University[103] - Ms. Zheng has extensive experience in accounting, finance, and business management, having served in various roles within Guangxin Holdings, including as the general manager of the information management department since February 2020[103] - Ms. Zheng also served as a director in various companies invested by Guangxin Holdings, including Guangdong Foreign Trade Imp. & Exp. Co., Ltd. from June 2020 to June 2022[104] - Ms. Zheng Jianhua, aged 50, appointed as CFO of the company since September 30, 2022, with extensive experience in accounting, finance, and business management[105] - Mr. Lin Yan, aged 55, serves as deputy general manager of Guangdong Xingfa Group, with over 20 years of experience in international trade[106] - Mr. Liu Yuntang, aged 55, appointed as deputy general manager of Guangdong Xingfa Group, with a background in engineering and extensive experience in aluminum production[107][108] - Mr. Chen Wensi, aged 53, serves as deputy general manager of Guangdong Xingfa Group, with expertise in mechanical engineering and participation in national and provincial research projects[109][111] - Mr. Guan Dubiao, aged 53, serves as deputy general manager of Guangdong Xingfa Group, with a strong background in finance and accounting[110][111] - Mr. Wu Xi Kun, aged 52, appointed as deputy general manager of Guangdong Xingfa Group since May 12, 2020, with over 20 years of experience in aluminum production and quality control[112][113] Shareholder and Ownership Structure - The company had 420,649,134 ordinary shares issued as of 31 December 2023, with no new shares issued during the year[70] - GuangXin (Hong Kong) Investment Limited holds 132,382,000 ordinary shares, representing 31.47% of the company's total shares[177] - Lesso Group Holdings Limited holds 109,842,900 ordinary shares, representing 26.11% of the company's total shares[177] - Sure Keen Limited holds 48,200,100 ordinary shares, representing 11.46% of the company's total shares[178] - China Lesso Group Holdings Limited, a substantial shareholder, holds approximately 26.11% of the company's issued shares[180] - Guangdong Guangxin Holding Group Co., Ltd., the controlling shareholder, indirectly holds approximately 31.47% of the company's total issued shares[180] - The company's Chairman, Mr. WANG Li, and CEO, Mr. LIAO Yuqing, hold significant shares in the company, with Mr. LIAO Yuqing owning 48,200,100 shares, representing 11.46% of the company's total shares[171] - Mr. LAW Yung Koon, a Director, holds 19,432,000 shares, representing 4.62% of the company's total shares, with an additional 1,719,000 shares held by his spouse[171] - Mr. WANG Zhihua, a Director, holds 128,000 shares, representing 0.03% of the company's total shares[171] Connected Transactions and Agreements - Guangdong Xingfa Aluminium Co., Ltd. entered into a master supply agreement with Xingfa Curtain Wall for the supply of aluminium profiles from 1 January 2021 to 31 December 2023[182] - The annual cap for the Xingfa Curtain Wall Agreement transactions in 2023 was RMB 165.0 million, with actual sales transactions amounting to approximately RMB 63.7 million[185][188] - The annual cap for the 2023 Lesso Master Supply Agreement transactions was RMB 300.0 million, with actual purchase and sales transactions totaling approximately RMB 202.7 million[193][195] - The annual cap for the 2023 Guangdong Foreign Trading Group Master Supply Agreement from October 16 to December 31, 2023, was RMB 30.0 million, with actual sales transactions amounting to approximately RMB 8.7 million[200] - The company monitors the average price of aluminum ingots daily from the Guangdong Nanhai Nonferrous Metals Market and/or Shanghai Nonferrous Metals Market to ensure fair pricing in transactions[186][189][196][197] - The company compares the prices and terms of aluminum profiles supplied to Xingfa Curtain Wall and China Lesso Group with those offered to independent customers to ensure no preferential treatment[187][196][197] - Monthly financial reports detailing all connected transactions, including those under the Xingfa Curtain Wall Agreement and the 2023 Lesso Master Supply Agreement, are submitted to the Board[190][196][197] Operational and Financial Details - The company's second-generation digital factory project in Zhejiang has entered the trial production stage, incorporating cloud computing, big data, and smart logistics[18] - Plants in Vietnam and Australia are expected to commence operations within the next two years, enhancing the company's strategic presence in Asia[18] - The Group plans to expand production capacity with the Zhejiang smart manufacturing plant expected to commence production in 2024[28] - The Australian joint venture project plant is completed, with trial production expected to start in 2024[28] - The Group aims to strengthen its presence in the photovoltaic and new energy vehicle sectors[37] - The ASEAN production base is under construction, further enhancing the company's production network[38] - The company plans to expand production capacity with new smart manufacturing facilities in Zhejiang, Australia, and ASEAN regions[39] - The company aims to strengthen its position in the photovoltaic and new energy vehicle sectors by developing high-toughness, lightweight aluminium products[39] - The company's reserves available for distribution amounted to RMB639,723,000 as of 31 December 2023, an increase from RMB585,605,000 in 2022[144] - Sales to the Group's five largest customers accounted for 12.4% of the Group's revenue, with the largest customer contributing 5.6% of the revenue for the year ended

Financial Performance - Revenue increased by 2.5% to approximately RMB 17,352,600,000 compared to RMB 16,933,100,000 in the previous year[2] - Sales volume rose by 6.6% to 757,480 tons from 710,534 tons in the previous year[2] - Gross profit increased by 12.1% to approximately RMB 1,990,200,000 compared to RMB 1,774,700,000 in the previous year[2] - Profit attributable to shareholders increased by 75.7% to approximately RMB 804,200,000 from RMB 457,800,000 in the previous year[2] - Earnings per share were RMB 1.91, up from RMB 1.09 in the previous year[2] - Operating profit rose to RMB 1,056,298,000 from RMB 655,774,000 in the previous year[4] - Total comprehensive income for the year was RMB 811,414,000, compared to RMB 394,216,000 in the previous year[6] - The gross profit for the year was RMB 1,990,200,000, representing a year-on-year increase of 12.1%, with the gross profit margin rising to 11.5% from 10.5%[59] - The profit before tax for the year was RMB 916,323,000, compared to RMB 511,884,000 in the previous year, showing a substantial increase of approximately 79%[22] Dividends and Shareholder Returns - The board proposed a final dividend of HKD 0.64 per share, compared to HKD 0.37 per share in the previous year[2] - The proposed final dividend per ordinary share for 2023 is HKD 0.64, up from HKD 0.37 in 2022, totaling RMB 243,968,000[37] - The company paid dividends of RMB 141,047 thousand in 2023, compared to RMB 285,419 thousand in 2022, showing a reduction in dividend payouts[10] Cash Flow and Liquidity - Operating cash flow for 2023 was RMB 1,466,607 thousand, a significant increase from RMB 790,767 thousand in 2022, representing an 85.3% growth[10] - The total cash and cash equivalents at the end of 2023 reached RMB 2,840,415 thousand, up from RMB 1,849,773 thousand at the end of 2022, marking a 53.7% increase[10] - The current ratio improved to 1.80 from 1.56, and the quick ratio increased to 1.52 from 1.29, indicating better liquidity[75] Assets and Liabilities - Non-current assets increased to RMB 4,239,211,000 from RMB 3,640,771,000 in the previous year[8] - Net assets attributable to equity shareholders increased to RMB 5,318,308,000 from RMB 4,651,871,000 in the previous year[9] - The total liabilities measured at amortized cost decreased to RMB 3,784,158,000 in 2023 from RMB 4,375,022,000 in 2022, a reduction of 13.5%[50] - The company reported a decrease in the value of notes payable to RMB 1,853,247,000 in 2023 from RMB 2,638,202,000 in 2022, a decline of 29.7%[50] Revenue Breakdown - The revenue from aluminum profiles sales was RMB 16,764,600 thousand, compared to RMB 16,450,403 thousand in the previous year, indicating a growth of about 1.9%[17] - The revenue from aluminum plates, alloys, molds, and components increased to RMB 585,582 thousand from RMB 472,824 thousand, reflecting a significant growth of approximately 23.8%[17] - Sales of building aluminum profiles increased by 2.9% to approximately RMB 14,121,800,000, with sales volume up by 9.2% to about 622,678 tons[60] - Industrial aluminum profile revenue decreased by 2.9% to approximately RMB 2,642,800,000, with sales volume down by 5.1% to about 126,171 tons[61] Cost and Expenses - Employee costs totaled RMB 1,097,199 thousand in 2023, a marginal increase from RMB 1,092,542 thousand in 2022[26] - Distribution costs rose by 29.7% to approximately RMB 374,100,000, accounting for 2.2% of revenue, up from 1.7%[70] - Administrative expenses increased by 7.0% to approximately RMB 439,300,000, representing 2.5% of revenue, compared to 2.4% in the previous year[71] Market and Strategic Outlook - The company is focused on expanding its market presence in the aluminum manufacturing and sales sector, which is its primary business[15] - The group plans to enhance production capacity and expand overseas, with a digital and automated production base in Zhejiang Province expected to start production in 2024[57] - The group aims to strengthen cooperation with state-owned enterprises and real estate companies with healthy cash flows, while exploring public construction project opportunities[63] - The group is focusing on the photovoltaic sector and new energy vehicles, aiming to develop high-strength, lightweight aluminum products to capture market opportunities[63] - The group anticipates a cautious yet optimistic outlook for the aluminum profile industry in 2024, despite challenges in the real estate sector[62] Compliance and Governance - The audit committee has reviewed the consolidated financial statements for the year ended December 31, 2023, ensuring compliance with financial reporting procedures[99] - The group's auditor, KPMG, confirmed that the financial data disclosed in the preliminary announcement is consistent with the audited financial statements[100] - The company has adhered to all corporate governance codes as of December 31, 2023[95]

Financial Performance - For the six months ended June 30, 2023, the company reported revenue of RMB 7,826,701 thousand, a decrease of 0.36% compared to RMB 7,854,963 thousand for the same period in 2022[15]. - Gross profit for the same period was RMB 866,854 thousand, representing an increase of 10.95% from RMB 781,286 thousand in the previous year[15]. - Operating profit decreased to RMB 335,938 thousand, down 18.0% from RMB 409,410 thousand in the prior year[15]. - Profit for the period was RMB 260,911 thousand, a decline of 15.4% compared to RMB 308,490 thousand in the same period last year[15]. - Basic and diluted earnings per share were both RMB 0.62, down from RMB 0.73 in the previous year[16]. - Total comprehensive income for the period was RMB 261,065 thousand, compared to RMB 281,236 thousand in the prior year, reflecting a decrease of 7.2%[19]. - The company reported a pre-tax profit of RMB 268,692,000 for the six months ending June 30, 2023, down from RMB 340,235,000 in 2022, representing a decline of 21.05%[43]. - Profit attributable to shareholders decreased by 15.3% to approximately RMB 260.6 million, with a net profit margin of 3.3%, down from 3.9% in H1 2022[123]. Assets and Liabilities - Non-current assets as of June 30, 2023, amounted to RMB 3,984,852 thousand, a decrease from RMB 4,170,195 thousand at the end of 2022[20]. - Current assets decreased to RMB 3,640,771 thousand from RMB 4,420,769 thousand at the end of 2022[20]. - Total assets less current liabilities were RMB 7,421,082 thousand, compared to RMB 6,672,921 thousand at the end of 2022, indicating an increase of 11.2%[20]. - The total non-current liabilities decreased from RMB 2,645,600,000 as of December 31, 2022, to RMB 2,017,457,000 as of June 30, 2023, reflecting a reduction of approximately 23.7%[23]. - The total equity attributable to equity shareholders increased from RMB 4,651,871,000 as of December 31, 2022, to RMB 4,771,564,000 as of June 30, 2023, representing a growth of about 2.6%[24]. - The total assets increased from RMB 4,655,464,000 as of December 31, 2022, to RMB 4,775,482,000 as of June 30, 2023, an increase of approximately 2.6%[24]. - The company’s total liabilities increased to RMB 4,170,195,000 as of June 30, 2023, compared to RMB 4,420,769,000 as of December 31, 2022[75]. Cash Flow - For the six months ended June 30, 2023, the net cash generated from operating activities was RMB 196,692,000, a decrease of 17.7% compared to RMB 239,134,000 for the same period in 2022[27]. - The net increase in cash and cash equivalents for the six months ended June 30, 2023, was RMB 939,936,000, compared to RMB 286,690,000 for the same period in 2022, indicating a significant increase of 227.5%[30]. - Cash and cash equivalents increased to RMB 2,793,247,000 as of June 30, 2023, compared to RMB 1,849,773,000 as of December 31, 2022, representing a growth of 50.9%[74]. - The company’s cash and cash equivalents located in mainland China amounted to RMB 2,649,692,000 as of June 30, 2023, up from RMB 1,808,209,000 as of December 31, 2022[74]. - The company’s financing activities generated a net cash inflow of RMB 2,309,421,000 for the six months ended June 30, 2023, compared to RMB 1,403,620,000 for the same period in 2022, indicating an increase of 64.3%[29]. Revenue Breakdown - Revenue from industrial aluminum profiles was RMB 7,642,596,000, while revenue from aluminum plates, aluminum alloys, molds, and components was RMB 183,795,000[35]. - Revenue from completed properties was RMB 5,235,000, contributing to the overall revenue mix[39]. - The company reported revenue from processing service contracts amounting to RMB 310,000[39]. - Revenue from mainland China (excluding Hong Kong) was RMB 7,712,591,000, indicating the primary market for the company[39]. - The company is focused on manufacturing and selling aluminum products, with a significant portion of revenue derived from industrial and construction aluminum profiles[37]. - The company’s revenue for the first half of 2023 decreased by 0.4% to approximately RMB 7,826.7 million, while sales volume increased by 10.5% to approximately 351,101 tons compared to the same period in 2022[111][115]. - Sales of construction aluminum profiles increased by 3.3% year-on-year to approximately RMB 6,396.9 million, with sales volume rising by 16.4% to approximately 284,850 tons[112][116]. - Industrial aluminum profiles revenue decreased by 14.8% year-on-year to approximately RMB 1,245.7 million, with sales volume declining by 4.3% to approximately 62,650 tons[113][116]. Expenses and Costs - Research and development costs for the six months ending June 30, 2023, amounted to RMB 371,676,000, compared to RMB 371,676,000 in the same period of 2022, indicating a stable investment in innovation[48]. - The administrative expenses for the six months ending June 30, 2023, were RMB 210,383,000, up from RMB 189,834,000 in 2022, which is an increase of 10.43%[43]. - Employee costs for the six months ending June 30, 2023, totaled RMB 532,985,000, compared to RMB 505,642,000 in the same period of 2022, reflecting an increase of 5.38%[46]. - Distribution costs increased by 26.2% to approximately RMB 152.8 million, accounting for 2.0% of revenue in H1 2023, compared to 1.5% in H1 2022[121]. - Administrative expenses rose by 10.9% to RMB 210.4 million, representing 2.7% of revenue in H1 2023, up from 2.4% in H1 2022[122]. Corporate Governance - The company has adopted the corporate governance code as per the listing rules and has complied with all provisions during the first half of 2023[154]. - The audit committee consists of three independent non-executive directors and one non-executive director, ensuring oversight of the financial reporting process[156]. - The company confirmed compliance with the securities trading standards set out in the listing rules during the first half of 2023[155]. - The company has established a robust internal control system to monitor financial reporting and compliance[156]. - The audit committee has held meetings with management and external auditors to review the group's performance for the first half of 2023[156]. Market Strategy and Future Outlook - The company continues to explore market expansion opportunities and new product development strategies to enhance future growth[13]. - The company plans to continue its market expansion and product development strategies to enhance its competitive position in the industry[44]. - The company is actively exploring opportunities in various segments, including mechanical devices, solar photovoltaic, and new energy vehicles, to enhance its industrial aluminum profile[109]. - The company aims to strengthen its market share in the construction aluminum profile sector while enhancing profitability amid uncertain industry conditions[109]. - The company has introduced several home-related door and window products to expand its retail market presence[109]. - The company remains optimistic about the medium to long-term development of the aluminum profile industry, despite short-term pressures, and aims to increase market share[114].

Revenue and Profitability - Revenue decreased by 0.4% to approximately RMB 7,826.7 million compared to RMB 7,855.0 million in the first half of 2022[2] - Profit attributable to shareholders decreased by 15.3% to approximately RMB 260.6 million, down from RMB 307.6 million in the first half of 2022[2] - Earnings per share were RMB 0.62, compared to RMB 0.73 in the first half of 2022[2] - Total comprehensive income for the period was RMB 261.1 million, compared to RMB 281.2 million in the previous year[6] - The group reported a gross profit of RMB 866,854 thousand for the six months ended June 30, 2023, compared to RMB 781,286 thousand in 2022, marking an increase of about 10.95%[23] - The pre-tax profit for the six months ended June 30, 2023, was RMB 268,692 thousand, down from RMB 340,235 thousand in the same period of 2022, representing a decrease of approximately 21.05%[24] - Profit attributable to shareholders decreased by 15.3% to approximately RMB 260.6 million, with a net profit margin of 3.3%, down from 3.9% in the first half of 2022[66] Sales and Volume - Sales volume increased by 10.5% to approximately 351,101 tons, up from 317,780 tons in the first half of 2022[2] - Revenue from the construction aluminum section increased to RMB 6,396,885 thousand from RMB 6,193,091 thousand, reflecting a growth of approximately 3.28%[22] - Revenue from industrial aluminum profiles decreased by 14.8% to approximately RMB 1,245.7 million, with sales volume declining by 4.3% to approximately 62,650 tons[56] - The revenue from building aluminum profiles increased by 3.3% to approximately RMB 6,396.9 million, with sales volume rising by 16.4% to approximately 284,850 tons[55] Cash Flow and Investments - Operating cash flow for the six months ended June 30, 2023, was RMB 196,692 thousand, a decrease of 17.7% from RMB 239,134 thousand in the same period of 2022[11] - Net cash used in investing activities was RMB (478,998) thousand, compared to RMB (592,802) thousand in the prior year, indicating a 19.2% improvement[11] - Net cash generated from financing activities increased significantly to RMB 1,222,242 thousand, up 91% from RMB 640,358 thousand in the previous year[11] - The net increase in cash and cash equivalents for the period was RMB 939,936 thousand, compared to RMB 286,690 thousand in the same period last year, reflecting a substantial growth[11] - Cash and cash equivalents at the beginning of the year were RMB 1,849,773 thousand, rising to RMB 2,793,247 thousand by June 30, 2023[11] Assets and Liabilities - Non-current assets increased to RMB 3,288.1 million from RMB 3,044.9 million year-on-year[8] - Total equity attributable to shareholders increased to RMB 4,771.6 million from RMB 4,651.9 million year-on-year[10] - Trade receivables, net of impairment, amounted to RMB 3,931,166,000 as of June 30, 2023, down from RMB 4,591,932,000 at the end of 2022, representing a decline of about 14.4%[42] - The impairment provision for trade receivables increased to RMB 986,050,000 as of June 30, 2023, compared to RMB 776,561,000 at the end of 2022, indicating a rise of approximately 26.9%[43] - The total value of trade payables and other payables as of June 30, 2023, is yet to be disclosed in the provided content, but it is essential for assessing liquidity[46] Expenses and Costs - Total employee compensation expenses for the six months ended June 30, 2023, amounted to RMB 481,695,000, an increase from RMB 458,181,000 in the same period of 2022, representing a growth of approximately 5.3%[25] - Research and development costs for the six months ended June 30, 2023, were RMB 371,676,000, slightly down from RMB 379,610,000 in the same period of 2022, indicating a decrease of about 2.5%[26] - Distribution costs rose by 26.2% to approximately RMB 152.8 million in the first half of 2023, accounting for 2.0% of revenue compared to 1.5% in the same period of 2022[64] - Administrative expenses increased by 10.9% to RMB 210.4 million, representing 2.7% of revenue, up from 2.4% in the previous year[65] Dividends and Shareholder Returns - The board of directors did not recommend any interim dividend for the first half of 2023, consistent with the first half of 2022[2] - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2023, compared to a dividend of RMB 0.80 per share in the same period of 2022[32] Accounting and Compliance - The company did not adopt any new standards or interpretations that would significantly impact the financial reporting for the current or prior periods[14] - The company expects to reflect changes in accounting policies in the annual financial statements for the year ending December 31, 2023[12] - The group has begun implementing changes to its accounting policies in accordance with new guidelines from the Hong Kong Institute of Certified Public Accountants, with a retrospective application expected in the annual financial statements for the year ending December 31, 2023[16] Market and Strategic Developments - The company aims to enhance its market share in the construction aluminum materials sector while actively exploring opportunities in large-scale public construction projects[51] - The company is focusing on developing industrial aluminum materials, including applications in photovoltaic fields and new energy vehicles[52] - The group remains optimistic about the medium to long-term development of the aluminum profile industry despite short-term pressures[58] - The group is actively expanding its sales and production network both domestically and overseas to enhance operational flexibility[57] Other Income and Financial Metrics - Other income decreased by 37.4% year-on-year to approximately RMB 40.4 million in the first half of 2023, primarily due to increased losses from the sale of properties and a decline in interest income[63] - The income tax expense for the six months ended June 30, 2023, was RMB 40,329,000, a decrease from RMB 43,530,000 in the same period of 2022, indicating a reduction of approximately 9.1%[28] - The company benefited from a tax reduction of RMB 46,284,000 due to approved additional deductions for research and development expenses for the six months ended June 30, 2023[31]

Financial Performance - In 2022, Xingfa Aluminium achieved record revenue and sales volume despite a challenging external environment, including geopolitical tensions and fluctuations in raw material prices[9]. - In 2022, the revenue of Xingfa Aluminium increased by 9.7% year-on-year to approximately RMB 16,933,100,000, setting a record high[12]. - The sales volume rose by approximately 3.7% year-on-year to a record high of 710,534 tonnes, with construction aluminium profiles and industrial aluminium profiles accounting for 81.1% and 16.1% of the revenue, respectively[12]. - Gross profit for the year was approximately RMB 1,774,700,000, reflecting a year-on-year decrease of 2.0% due to pandemic impacts and increased market competition[12]. - Profit attributable to owners of the Company was approximately RMB 457.8 million, a decrease of 48.4% year-on-year[27]. - The Group's gross profit for the year was approximately RMB 1,774.7 million, representing a decrease of 2.0% year-on-year, with a gross profit margin of 10.5%[27]. - The impairment loss on trade and other receivables increased significantly by RMB472.6 million to RMB552.1 million, primarily due to credit-impaired trade receivables[43][45]. - Finance costs rose by 37.4% to approximately RMB138.9 million, attributed to an increase in loans and borrowings during the year[46]. Market Conditions - The real estate industry remained sluggish, impacting market demand for aluminium profiles, yet the company responded with innovation and stable production orders[9]. - The construction aluminium profile market was negatively impacted by the downturn in the real estate sector, leading to a downward trend in processing fees[19]. - In 2022, the sales area of commercial housing in China was 1.36 billion square meters, a decrease of 24.3% year-on-year, with sales amounting to RMB 13.3 trillion, down 26.7% compared to the previous year[19]. - The Group remains cautiously optimistic about the aluminium profile processing industry, anticipating a recovery in the real estate sector which will drive demand for aluminium profile products[30]. Strategic Initiatives - Xingfa Aluminium is focusing on dual-engine development with construction and industrial profiles to establish a healthier revenue portfolio[15]. - Future strategies include promoting intelligent manufacturing and digital transformation to enhance production efficiency and reduce costs[13]. - The company aims to leverage recent favorable policies for the real estate sector to support its recovery and growth[17]. - The Group plans to establish a new production base in an ASEAN member state to enhance operational efficiency and business synergy with the Australian joint venture project expected to commence production in 2023[32]. - The Group is actively expanding its overseas presence to better understand customer needs and improve delivery speed, aiming to become an international aluminium profile manufacturer and distributor[32]. Operational Developments - The Foshan Sanshui Precision Manufacturing Base was fully operational in 2022, significantly improving production efficiency and receiving a subsidy of RMB 15 million[24]. - A new factory project in Huzhou City, Zhejiang Province, has commenced, aiming to enhance digitalization and automation, expected to start production in 2023[24]. - The Group is expanding its retail market presence by supplying aluminium profiles to door and window manufacturers and decoration companies, enhancing brand influence[22]. - The Group's operational challenges included disruptions in the supply chain and production efficiency due to pandemic-related restrictions and high summer temperatures[19]. Human Resources and Management - Employee remuneration expenses for the group totaled approximately RMB 1,092.5 million, representing about 6.5% of the group's revenue[73]. - The group employed approximately 9,366 full-time employees in the PRC and Hong Kong as of December 31, 2022[73]. - The management team collectively holds advanced degrees, including EMBA and engineering qualifications, enhancing their strategic decision-making capabilities[107][109]. - The company emphasizes the importance of innovation and strategic management, with Ms. Zheng previously leading the innovation and strategic management department[105]. Corporate Governance - The company has a diverse board with members experienced in law, investment, and business management, enhancing its strategic decision-making capabilities[89]. - All independent non-executive directors have confirmed their independence as per the listing rules[158]. - The company has maintained compliance with the relevant regulations regarding substantial shareholders and their interests[167]. Shareholder Information - As of December 31, 2022, Liao Yuqing holds 48,200,100 shares, representing an 11.46% interest in the company[163]. - GuangXin (Hong Kong) Investment Limited is a substantial shareholder with 132,382,000 shares, accounting for 31.47% of the company[168]. - The Group's final dividend for the year ended December 31, 2022, is recommended at HKD0.37 per ordinary share, down from HKD0.80 in 2021[115]. Environmental and Compliance - The Group is committed to environmental protection and has developed the Xingfa Aluminium Protection System to govern production emissions and reduce pollution[151]. - The Group has complied with relevant environmental laws and regulations in both the PRC and Hong Kong[151]. - The Group recognizes the importance of compliance with regulatory requirements to avoid adverse impacts on business operations and financial position[153].

香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈之內 容 概 不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示 概 不 就因本公佈全部或任何部分內容而產生或因倚賴該等內容而引致之任 何 損 失 承 擔 任 何 責 任。 XINGFA ALUMINIUM HOLDINGS LIMITED 興發鋁業控股有限公司 （於 開 曼 群 島 註 冊 成 立 之 有 限 公 司） （股 份 代 號：98） 截至二零二二年十二月三十一日止年度 末期業績公佈 | --- | --- | --- | |-------|-----------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------| | | | | | | 財務摘要 | | | 1. | 營業額增加 9.7% 至約人民 ...

Revenue and Profitability - Revenue for the six months ended June 30, 2022, was RMB 7,854,963 thousand, an increase of 18.1% compared to RMB 6,645,617 thousand for the same period in 2021[9] - Total revenue for the group was RMB 7,854,963,000, reflecting a year-over-year increase of 18.1% from RMB 6,645,617,000[30] - The company reported a net profit attributable to shareholders decreased by 20.8% to approximately RMB 307.6 million, with a net profit margin dropping to 3.9% from 5.8% in the previous year[98] - Profit for the period was RMB 308,490 thousand, a decrease of 20.4% from RMB 387,397 thousand in the previous year[10] - Basic and diluted earnings per share for the period were RMB 0.73, down from RMB 0.93 in the previous year[9] Gross Profit and Margins - Gross profit for the same period was RMB 781,286 thousand, up 3.2% from RMB 756,659 thousand year-on-year[9] - The overall gross profit for the first half of 2022 increased by 3.3% to approximately RMB 781.3 million, with a gross margin decreasing to 9.9% from 11.4% in the previous year[94] - Gross profit for the construction aluminum profiles segment was RMB 651,023,000, up from RMB 574,020,000, indicating a growth of 13.4%[33] Assets and Liabilities - Non-current assets amounted to RMB 3,416,823 thousand as of June 30, 2022, compared to RMB 3,126,054 thousand at the end of 2021[12] - Total liabilities increased to RMB 1,719,422 thousand from RMB 492,617 thousand year-over-year, representing a significant rise of 248%[15] - The company reported a net asset value of RMB 4,478,224 thousand, slightly down from RMB 4,479,400 thousand year-over-year, indicating a marginal decrease of 0.03%[16] - The company’s total assets less current liabilities stood at RMB 5,566,675 thousand, down from RMB 5,799,103 thousand, a decrease of 4%[15] Cash Flow and Financing - Net cash generated from operating activities decreased to RMB 239,134 thousand compared to RMB 503,795 thousand in the previous year, a decline of 52.7%[20] - Financing activities generated a net cash inflow of RMB 640,358 thousand, up from RMB 489,310 thousand, marking an increase of 30.8%[22] - Cash used in investment activities amounted to RMB (592,802) thousand, compared to RMB (297,945) thousand in the previous year, reflecting an increase of 99%[19] - The company’s cash flow from operating activities was impacted by income tax payments of RMB 88,089 thousand, compared to RMB 70,899 thousand last year, an increase of 24%[20] Inventory and Receivables - The company reported a significant increase in inventory and other contract costs, reaching RMB 1,748,695 thousand, up from RMB 1,481,803 thousand[14] - The total inventory as of June 30, 2022, was RMB 7,073,677,000, compared to RMB 5,888,958,000 as of June 30, 2021, marking an increase of 20.2%[53] - The impairment provision for trade receivables increased to RMB 348,158,000 as of June 30, 2022, from RMB 223,611,000 as of December 31, 2021, representing a significant rise of 55.7%[56] Employee and R&D Expenses - Employee costs rose to RMB 505,642,000, up from RMB 449,858,000, driven by increased salaries and benefits[37] - Research and development expenses amounted to RMB 379,610,000, compared to RMB 272,876,000 in the previous year, highlighting a focus on innovation[39] Market and Product Development - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency and product offerings[7] - The company plans to start construction of a new manufacturing base in Zhejiang in the second half of 2022, aiming for full production in 2023[86] - The company is investing $10 million in R&D for new technologies aimed at improving production efficiency[131] Customer and Sales Performance - The customer base is diversified, with no individual customer accounting for more than 10% of total revenue for the six months ended June 30, 2022[31] - Sales volume reached 317,780 tons, a slight increase of 0.8% from 315,357 tons in the first half of 2021[86] - The company achieved overseas sales of RMB 895 million, accounting for approximately 1.1% of total sales[87] Corporate Governance and Compliance - The board confirmed compliance with the corporate governance code throughout the first half of 2022[128] - The audit committee, consisting of three independent non-executive directors, reviewed the group's financial results for the first half of 2022[130] Future Outlook - The company provided a future outlook with a revenue guidance of $600 million for Q3 2023, representing a 20% increase compared to Q2 2023[131] - New product launches are expected to contribute an additional $50 million in revenue by the end of the fiscal year[131] - Market expansion plans include entering two new countries, projected to increase market share by 5%[131]

Financial Performance - In 2021, the Group's revenue increased by 29.8% to approximately RMB 15,432,900,000 compared to RMB 11,886,900,000 in 2020[16] - Net profit attributable to shareholders increased by 16.0% to approximately RMB 887,800,000 compared to RMB 765,400,000 in 2020[16] - Gross profit reached RMB 1,811,800,000, representing a year-on-year increase of 11.2% with a gross profit margin of 11.7%[16] - The sales of construction aluminum profiles and industrial aluminum profiles accounted for 78.4% and 18.6% of the revenue, respectively[16] - Revenue from construction aluminium profiles rose by 30.6% to approximately RMB12,093.5 million, with sales volume increasing by 6.2% to 534,309 tonnes[50] - Revenue from industrial aluminium profiles increased by 23.7% to approximately RMB2,869.9 million, while sales volume remained stable at approximately 144,096 tonnes[53] - The Group's gross profit for the year was RMB1,811.8 million, reflecting an 11.2% increase, although the gross profit margin decreased to 11.7% from 13.7% due to rising raw material costs[49] - The Group's net profit attributable to shareholders increased by 16.0% year-on-year to RMB887.8 million[49] Dividends and Shareholder Returns - The Directors recommended a final dividend of HKD 0.80 per ordinary share for the year ended 31 December 2021, up from HKD 0.36 in 2020[16] - The final dividend proposed for the year ended December 31, 2021, is HKD 0.80 per ordinary share, an increase from HKD 0.36 in 2020[192] Market Position and Strategy - The Group continued to supply high-end aluminum profiles for major landmark projects, reinforcing its market position[15] - The Group's leading position as a premier brand of construction aluminum profiles in the PRC was further strengthened[15] - Despite challenges in the real estate sector, there remains significant demand for construction aluminum profiles in the PRC market[35] - The Group aims to double the annual consumption of aluminium for photovoltaic use by 2025, capitalizing on the growing demand in this sub-sector[37] - The Group plans to strengthen its domestic business while preparing for full expansion into overseas markets post-pandemic[45] - The Group's strategic focus includes enhancing sales outlets in under-developed regions, showing positive results in regional sales data[38] Operational Efficiency and Investments - The company plans to invest in new production bases to meet the growing demand for construction and industrial aluminum profiles[24] - Xingfa Aluminium aims to enhance operational efficiency through upgrades in intelligent production and digital management[25] - The production capacity for industrial aluminium profiles was enhanced with the official commencement of the precision manufacturing base in Foshan, Guangdong Province, which has nine production lines[43] - A new manufacturing base in Zhejiang is under construction, expected to begin trial production in the second half of 2023, with an anticipated annual output of 200,000 tonnes[58] - The Group plans to establish its first overseas manufacturing base in Australia, aiming to enhance its overseas business expansion[58] Employee and Management - As of December 31, 2021, the Group employed approximately 8,854 full-time employees in China and Hong Kong, with total employee remuneration expenses of approximately RMB 1,019.1 million, representing about 6.6% of the Group's revenue[125][127] - The Group's emolument policies are based on individual performance and are reviewed annually, including discretionary bonuses and employee share options[125][127] - The Group provides both in-house and external training programs as needed to enhance employee skills[125][127] - The Group's management team includes experienced professionals with extensive backgrounds in finance, marketing, and engineering[134][136] Financial Health and Ratios - Current ratio improved to 1.48 in 2021 from 1.30 in 2020, indicating better liquidity[83] - Gearing ratio increased to 15.4% in 2021 from 13.4% in 2020, primarily due to higher loans and borrowings[84] - Distribution costs decreased by 12.6% to approximately RMB 314.6 million, accounting for 2.0% of revenue in 2021[73] - Administrative expenses increased by 1.3% to approximately RMB 401.1 million, representing 2.6% of revenue[74] - Net cash generated from operating activities was RMB1,333.3 million in 2021, up from RMB973.4 million in 2020[121] Innovation and Technology - The company is committed to exploring new technologies and business models to enhance its value chain and corporate development[28] - The management team emphasizes the importance of technological advancements and innovation in product development to maintain competitive advantage[162] Challenges and Market Outlook - The Group's performance was positively impacted despite challenges in the real estate industry due to the COVID-19 pandemic[14] - The Group is optimistic about the recovery of the construction aluminium profile market post-adjustment, supported by the healthy development of the real estate industry in China[54]

Financial Performance - For the six months ended June 30, 2021, the company reported revenue of RMB 6,645,617 thousand, an increase of 47.0% compared to RMB 4,526,551 thousand for the same period in 2020[14] - The gross profit for the same period was RMB 756,659 thousand, representing a gross margin of approximately 11.4%, compared to RMB 576,257 thousand in 2020[14] - Operating profit increased to RMB 476,818 thousand, up 51.2% from RMB 315,296 thousand in the previous year[14] - The net profit attributable to equity shareholders for the period was RMB 388,520 thousand, a significant increase of 53.6% compared to RMB 252,761 thousand in 2020[15] - The total comprehensive income for the period was RMB 404,965 thousand, compared to RMB 305,532 thousand in the same period last year, reflecting a growth of 32.5%[16] - The profit before tax for the six months ended June 30, 2021, was RMB 443,198,000, an increase of 66% from RMB 267,058,000 in the same period of the previous year[37] - Basic earnings per share for the six months ended June 30, 2021, were RMB 0.928, compared to RMB 0.603 for the same period in 2020, representing a 54% increase[48] - Diluted earnings per share for the six months ended June 30, 2021, were RMB 0.925, up from RMB 0.603 in the same period of 2020, indicating a 53.5% increase[50] Revenue Breakdown - The revenue from industrial aluminum profiles was RMB 1,469,472,000, up 52% from RMB 968,494,000 in the previous year[32] - The revenue from architectural aluminum profiles reached RMB 4,949,735,000, representing a 43% increase from RMB 3,457,194,000 in the prior year[32] - Revenue from construction aluminum profiles increased by 43.2% to approximately RMB 4,949,700,000, with sales volume rising by 20.0% to about 234,348 tons[96] - Industrial aluminum profiles revenue surged by 51.7% to approximately RMB 1,469,500,000, with sales volume increasing by 26.2% to about 78,164 tons[98] Cash Flow and Liquidity - The net cash generated from operating activities for the six months ended June 30, 2021, was RMB 503,795,000, compared to RMB 208,082,000 for the same period in 2020, representing an increase of approximately 142.5%[27] - The total net cash increase for cash and cash equivalents for the six months ended June 30, 2021, was RMB 693,203,000, significantly up from RMB 15,725,000 in the same period of 2020[28] - The company reported cash and cash equivalents of RMB 1,197,399 thousand, up from RMB 509,639 thousand in the previous year[18] - The current ratio improved to 1.40 from 1.30, reflecting an increase in cash and cash equivalents due to more bank financing[111] - The group's cash and cash equivalents as of June 30, 2021, were approximately RMB 1,197,400,000, up from RMB 509,600,000 as of December 31, 2020[120] Assets and Liabilities - Current assets as of June 30, 2021, totaled RMB 6,950,561 thousand, an increase from RMB 5,692,350 thousand at the end of 2020[18] - Total liabilities increased to RMB 4,978,428 thousand, compared to RMB 4,387,097 thousand in 2020, indicating a rise in financial obligations[20] - The company's total non-current liabilities as of June 30, 2021, amounted to RMB 776,708,000, compared to RMB 318,868,000 as of December 31, 2020, indicating a substantial increase[21] - The company's total liabilities as of June 30, 2021, were RMB 1,206,000,000, which is a significant increase from the previous reporting period[21] - Total borrowings increased to RMB 3,437,927,000 as of June 30, 2021, from RMB 1,130,292,000 at the end of 2020, reflecting a substantial rise in leverage[67] Operational Efficiency and Costs - Employee costs for the six months ended June 30, 2021, amounted to RMB 449,858,000, an increase of 30.1% from RMB 345,860,000 for the same period in 2020[40] - Research and development costs for the six months ended June 30, 2021, were RMB 272,876,000, up 35.8% from RMB 200,898,000 in the prior year[41] - The cost of inventory for the six months ended June 30, 2021, was RMB 5,888,958,000, compared to RMB 3,950,294,000 for the same period in 2020, reflecting a 49.2% increase[41] - The distribution costs increased by 3.7% to approximately RMB 148,600,000, accounting for 2.2% of revenue, down from 3.2%[108] Strategic Plans and Future Outlook - The company plans to continue expanding its market presence and investing in new technologies to enhance operational efficiency[11] - Future guidance indicates a focus on increasing production capacity and exploring potential mergers and acquisitions to drive growth[11] - The company anticipates continued growth in revenue driven by increased demand in both industrial and architectural aluminum sectors[38] - The company plans to strategically reduce orders from smaller developers while focusing on long-term partnerships with leading real estate developers to mitigate operational risks[99] - The company is committed to enhancing production efficiency and risk resilience through digital upgrades in production management and aims to expand capacity[99] Corporate Governance and Compliance - The board held only one full board meeting in the first half of 2021, deviating from the corporate governance code which recommends at least four meetings annually[140] - The audit committee consists of three independent non-executive directors and one non-executive director, ensuring compliance with listing rules[142] - The audit committee is chaired by a member with professional qualifications in financial matters, enhancing oversight of financial reporting[142] - The company confirmed compliance with the standards of the code of conduct for securities transactions by directors during the first half of 2021[141] Dividends and Shareholder Returns - The company did not declare an interim dividend for the six months ended June 30, 2021, consistent with the previous year[71] - For the six months ended June 30, 2021, the company declared a dividend of HKD 0.36 per share, compared to HKD 0.28 per share for the same period in 2020, representing a 28.57% increase[72]