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]

Financial Performance - In 2019, Xingfa Aluminium achieved a revenue of approximately RMB 11,280.8 million, a 13.7% increase from RMB 9,924.5 million in 2018[19]. - The sales volume rose by approximately 18.2% to 612,223 tonnes in 2019, compared to 517,982 tonnes in 2018[19]. - Net profit attributable to shareholders increased by 22.4% to approximately RMB 606.1 million in 2019, up from RMB 495.2 million in 2018[19]. - The gross profit for the year increased by 10.3% year-on-year to approximately RMB 1,489.8 million, with a gross profit margin of 13.2%[53]. - The Group's revenue increased by 13.7% year-on-year to approximately RMB 11,280.8 million, with sales volume rising by 18.2% to 612,223 tonnes[55]. - The profit attributable to shareholders increased by 22.4% year-on-year to approximately RMB 606.1 million in 2019, up from RMB 495.2 million in 2018[86]. - Distribution costs increased by 5.1% to approximately RMB 293.1 million, accounting for 2.6% of revenue in 2019[83]. - Administrative expenses rose by 19.4% to approximately RMB 430.3 million, representing 3.8% of revenue in 2019[84]. - Other income increased significantly by 92.9% to approximately RMB 106.0 million, mainly due to higher interest income on accounts receivables[80]. Market Expansion - Xingfa expanded its sales into three new overseas markets: Egypt, Chile, and Japan in 2019, following previous successes in several other countries[23]. - The Group expanded its overseas sales, successfully entering three new markets: Egypt, Chile, and Japan in 2019[26]. - The Group aims to expand its market presence in Southeast Asia, recognizing the region's population of 600 million and strong economic growth[66]. Strategic Focus and Development - The company aims to optimize its product mix and broaden its sales network while enhancing operational efficiency and financial management[25]. - Xingfa plans to achieve breakthroughs in industrial aluminum profiles development and extend its industrial chain[25]. - The Group's strategic focus includes optimizing product mix, expanding sales networks, and enhancing management efficiency[26]. - The Group's strategic focus includes promoting lightweight transportation aluminium profiles in response to market demand and environmental concerns[44][46]. - The Group plans to raise the proportion of revenue from industrial aluminium profiles and deep-processing products to 40% of total revenue within the next three to five years[65]. Operational Efficiency - The Group has implemented IT top-level design and digital factory projects in collaboration with Siemens to enhance production and management efficiency[26]. - The current ratio improved slightly to 1.19 in 2019, compared to 1.13 in 2018, due to increased cash balances[95]. - The gearing ratio decreased to 21.9% in 2019 from 26.0% in 2018, indicating improved financial stability[95]. - Inventory turnover days decreased from 51 days in 2018 to 42 days in 2019, indicating improved production efficiency and reduced inventory backlog[100][101]. - Debtors' turnover days remained stable at 88 days in 2019, compared to 85 days in 2018, reflecting consistent collection practices[105][107]. - Creditors' turnover days increased from 63 days in 2018 to 75 days in 2019, attributed to longer credit periods granted by suppliers due to improved negotiation power[112][113]. Environmental Initiatives - The Group invested over RMB 5 million in environmental protection initiatives, focusing on facility upgrades and hazardous waste treatment[52]. - Guangdong Xingfa Group has a strong focus on environmental protection and safety in its operations, led by Mr. Chen Wensi[175]. Management and Governance - The management team includes experienced executives, such as Mr. Liu Libin as Chairman and Mr. Liao Yuqing as CEO, overseeing sales and marketing strategies[138][140]. - The company has a strong management team with diverse backgrounds in finance, accounting, and business management, enhancing its operational capabilities[152]. - The board of directors includes members with extensive experience in various sectors, ensuring comprehensive oversight and strategic direction[153]. - The management team has a diverse background in engineering, finance, and international trade, contributing to the company's strategic direction[172][173][176]. Employee and Remuneration - As of December 31, 2019, the Group employed approximately 7,650 full-time employees, with total employee remuneration expenses amounting to approximately RMB 837.6 million, representing about 7.4% of the Group's revenue[134][137]. - The Group's emolument policies are based on individual performance and are reviewed annually, with additional benefits including discretionary bonuses and employee share options[134][137]. - The Group has a focus on training programs for employees, both in-house and external, to enhance skills and performance[134][137]. Dividend and Donations - The Group recommended a final dividend of HKD 0.28 per ordinary share for the year ended December 31, 2019, compared to HKD 0.20 in 2018[19]. - The Group made donations totaling RMB 380,000 during the year, down from RMB 590,000 in 2018[199].

[Company Information](index=3&type=section&id=Company%20Information) The report provides detailed basic information about Xingfa Aluminium Holdings Limited, including board members, committee structures, company secretary, registered office, principal place of business, principal bankers, legal advisors, auditor (KPMG), and share registrar - The report provides detailed basic information about Xingfa Aluminium Holdings Limited, including board members, committee structures, company secretary, registered office, principal place of business, principal bankers, legal advisors, auditor (KPMG), and share registrar[5](index=5&type=chunk)[6](index=6&type=chunk)[7](index=7&type=chunk) [Unaudited Consolidated Financial Statements](index=6&type=section&id=Unaudited%20Consolidated%20Financial%20Statements) This section presents the unaudited consolidated financial statements, including the income statement, statement of financial position, and cash flow statement, along with detailed notes on accounting policies and segment information [Consolidated Income Statement](index=6&type=section&id=Consolidated%20Income%20Statement) For the six months ended June 30, 2019, turnover increased by **22.5%** to **RMB 4.95 billion**, gross profit rose by **22.9%** to **RMB 629 million**, and profit for the period grew by **31.6%** to **RMB 234 million** Consolidated Income Statement Summary (For the six months ended June 30) | Indicator | H1 2019 (RMB thousand) | H1 2018 (RMB thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Turnover | 4,954,876 | 4,043,760 | +22.5% | | Gross Profit | 628,624 | 511,442 | +22.9% | | Operating Profit | 342,851 | 286,614 | +19.6% | | Profit Before Tax | 273,600 | 206,110 | +32.7% | | Profit for the Period | 234,468 | 178,112 | +31.6% | | Profit Attributable to Equity Holders of the Company | 236,686 | 178,112 | +32.9% | | Basic Earnings Per Share (RMB) | 0.57 | 0.43 | +32.6% | [Consolidated Statement of Financial Position](index=8&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2019, total assets reached **RMB 7.52 billion**, total liabilities were **RMB 4.85 billion**, and net assets increased by **6.6%** to **RMB 2.67 billion** Consolidated Statement of Financial Position Summary | Indicator | June 30, 2019 (RMB thousand) | December 31, 2018 (RMB thousand) | Period Change | | :--- | :--- | :--- | :--- | | Non-current Assets | 2,482,102 | 2,376,862 | +4.4% | | Current Assets | 5,036,206 | 4,731,621 | +6.4% | | **Total Assets** | **7,518,308** | **7,108,483** | **+5.8%** | | Current Liabilities | 4,304,523 | 4,190,051 | +2.7% | | Non-current Liabilities | 545,676 | 414,574 | +31.6% | | **Total Liabilities** | **4,850,199** | **4,604,625** | **+5.3%** | | **Net Assets** | **2,668,109** | **2,503,858** | **+6.6%** | - The company first adopted IFRS 16 Leases on January 1, 2019, leading to the recognition of right-of-use assets (**RMB 369 million**) and lease liabilities (totaling **RMB 8.76 million** for current and non-current portions), and derecognition of prepaid lease payments, with comparative figures not restated[12](index=12&type=chunk)[13](index=13&type=chunk)[15](index=15&type=chunk) [Condensed Consolidated Cash Flow Statement](index=11&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) Net cash inflow from operating activities significantly increased by **75.7%** to **RMB 375 million**, while net cash outflow from investing activities rose to **RMB 262 million** Condensed Consolidated Cash Flow Statement Summary (For the six months ended June 30) | Indicator | H1 2019 (RMB thousand) | H1 2018 (RMB thousand) | Year-on-year Change | | :--- | :--- | :--- | :--- | | Net Cash from Operating Activities | 374,733 | 213,285 | +75.7% | | Net Cash Used in Investing Activities | (262,384) | (202,086) | +29.8% | | Net Cash (Used in)/from Financing Activities | (17,003) | 26,689 | N/A | | Net Increase in Cash and Cash Equivalents | 95,346 | 37,888 | +151.7% | | Cash and Cash Equivalents at End of Period | 544,240 | 617,994 | -12.0% | [Notes to the Unaudited Interim Financial Report](index=12&type=section&id=Notes%20to%20the%20Unaudited%20Interim%20Financial%20Report) These notes detail changes in accounting policies, revenue composition, taxation, asset and liability breakdowns, and related party transactions, with a significant focus on the adoption of IFRS 16 - Effective January 1, 2019, the Group adopted IFRS 16 Leases using a modified retrospective approach without restating comparative figures, resulting in the recognition of right-of-use assets and lease liabilities on the statement of financial position and a change in the recognition of lease expenses in the income statement (from rental expenses to depreciation and interest expenses)[22](index=22&type=chunk)[24](index=24&type=chunk)[32](index=32&type=chunk) H1 2019 Segment Revenue (RMB thousand) | Segment | H1 2019 | H1 2018 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Industrial Aluminium Profiles | 1,070,592 | 1,072,838 | -0.2% | | Architectural Aluminium Profiles | 3,781,875 | 2,905,557 | +30.2% | | Property Development | 16,778 | – | N/A | | Other Products and Services | 85,631 | 65,365 | +31.0% | | **Total** | **4,954,876** | **4,043,760** | **+22.5%** | - The Board did not recommend the payment of an interim dividend for the six months ended June 30, 2019, though a final dividend of **HKD 0.2** per share, totaling **RMB 73.465 million**, for the previous financial year was approved and paid during the period[67](index=67&type=chunk)[68](index=68&type=chunk) [Independent Review Report](index=41&type=section&id=Independent%20Review%20Report) KPMG conducted an independent review of the interim financial report, concluding it was prepared in all material respects according to IAS 34 [Conclusion of Independent Review Report](index=42&type=section&id=Conclusion%20of%20Independent%20Review%20Report) KPMG, the auditor, concluded that the interim financial report was prepared in all material respects in accordance with International Accounting Standard 34 - KPMG issued a standard, unqualified review conclusion on the interim financial report for the six months ended June 30, 2019[81](index=81&type=chunk) [Management Discussion and Analysis (MD&A)](index=43&type=section&id=Management%20Discussion%20and%20Analysis) This section provides an overview of the industry, business performance, and financial results, along with the company's future outlook and strategic initiatives [Industry and Business Review](index=43&type=section&id=Industry%20and%20Business%20Review) The company benefited from China's urbanization, real estate market consolidation, and stricter environmental policies, driving a dual-engine development strategy for architectural and industrial aluminum profiles - The market environment is favorable to the company, benefiting from China's urbanization, the concentration of the real estate market towards leading developers, and industry consolidation driven by stricter environmental policies[83](index=83&type=chunk)[84](index=84&type=chunk) - The company's strategic core is the 'dual-engine' development of architectural and industrial aluminum profiles, with a new industrial aluminum profile manufacturing base already under construction[86](index=86&type=chunk) - The company continues to strengthen overseas sales, successfully expanding into new markets such as South Africa, Southeast Asia, and South America, building on its existing presence in Vietnam and Australia[86](index=86&type=chunk) [Financial Review](index=46&type=section&id=Financial%20Review) In H1 2019, the company achieved strong financial performance with **22.5%** revenue growth and **32.9%** increase in profit attributable to shareholders, driven by architectural aluminum profiles H1 2019 Key Performance Indicators | Indicator | H1 2019 | H1 2018 | Year-on-year Change | | :--- | :--- | :--- | :--- | | Turnover (RMB million) | 4,954.9 | 4,043.8 | +22.5% | | Sales Volume (tonnes) | 277,654 | 219,500 | +26.5% | | Gross Profit (RMB million) | 628.6 | 511.4 | +22.9% | | Gross Profit Margin | 12.7% | 12.6% | +0.1pp | | Profit Attributable to Shareholders (RMB million) | 236.7 | 178.1 | +32.9% | | Net Profit Margin | 4.8% | 4.4% | +0.4pp | - The architectural aluminum profile business was the primary growth driver, with its turnover increasing by **30.2%** and sales volume by **35.1%** year-on-year[88](index=88&type=chunk)[92](index=92&type=chunk) - The gross profit margin for industrial aluminum profiles decreased from **12.7%** to **10.0%**, mainly due to price adjustments from intense market competition and increased production costs from outsourcing some orders[95](index=95&type=chunk) Operating Efficiency Indicators (Days) | Indicator | H1 2019 | H1 2018 | | :--- | :--- | :--- | | Inventory Turnover Period | 51 | 71 | | Accounts Receivable Turnover Period | 96 | 96 | | Accounts Payable Turnover Period | 85 | 63 | [Outlook](index=47&type=section&id=Outlook) The company plans to enhance operational efficiency, increase R&D investment in industrial aluminum profiles, expand overseas markets, and explore M&A opportunities to boost profitability and capacity - Future strategy will continue to be driven by architectural and industrial aluminum profiles as dual engines, with a focus on increasing investment in industrial aluminum profiles due to their higher technical barriers and profit margins[90](index=90&type=chunk) - A new industrial aluminum profile manufacturing base in Guangdong, focusing on lightweight transportation and high-end electronic communication equipment, is planned to commence production next year with an estimated annual output of **100,000 tonnes**[90](index=90&type=chunk) - The company will explore the feasibility of establishing overseas production bases to better serve international clients and seek M&A opportunities within the industry to expand production capacity[90](index=90&type=chunk) [Other Information](index=57&type=section&id=Other%20Information) This section covers dividend policies, share options, major shareholders, and the company's corporate governance practices [Dividends, Share Options, and Shareholder Equity](index=57&type=section&id=Dividends%2C%20Share%20Options%2C%20and%20Shareholder%20Equity) The board recommended no interim dividend for 2019, with 4.18 million unexercised share options outstanding, and Hong Kong Guangxin Aluminium holding the largest stake - The Board decided not to declare an interim dividend for 2019[113](index=113&type=chunk) - As of June 30, 2019, there were **4,180,000** unexercised share options with an exercise price of **HKD 5.46** per share[114](index=114&type=chunk)[115](index=115&type=chunk) Major Shareholder Holdings (As of June 30, 2019) | Shareholder Name | Shareholding Percentage | | :--- | :--- | | Hong Kong Guangxin Aluminium Co., Ltd. | 30.96% | | Leading Group Holdings Limited | 26.28% | | Li Shun Limited (related to Mr. Liao Yuqing) | 11.53% | [Corporate Governance](index=62&type=section&id=Corporate%20Governance) The company generally complied with the Corporate Governance Code, with one deviation regarding board meeting frequency, and the audit committee reviewed the interim results - The company complied with the Corporate Governance Code during the reporting period, with one deviation regarding the frequency of board meetings (only one meeting held, while the code recommends at least four annually)[125](index=125&type=chunk) - The Audit Committee, comprising three independent non-executive directors and one non-executive director, reviewed the interim results report[127](index=127&type=chunk)