Financial Performance - The company reported a net loss of approximately RMB 419,265,000 for the year ending December 31, 2023, compared to a net loss of RMB 634,418,000 in 2022, indicating an improvement in performance[3][22]. - The group reported a total comprehensive loss of RMB 426,847,000 for the year ended December 31, 2023, compared to a loss of RMB 564,535,000 in 2022[35]. - The company reported a net loss of approximately RMB 4.192 billion for the year, a reduction of RMB 2.14 billion or 34.2% from a loss of RMB 6.251 billion in the previous year[94]. - The company reported a pre-tax loss of RMB 411,006 thousand for the year ended December 31, 2023, compared to a pre-tax loss of RMB 624,783 thousand in 2022, indicating a significant improvement[198]. Revenue and Growth - Total revenue from external customers reached RMB 5,473,234,000 in 2023, a significant increase from RMB 4,476,104,000 in 2022, representing a growth of approximately 22.3%[9]. - The company's revenue for the year was approximately RMB 5.473 billion, an increase of RMB 997 million or 22.3% from RMB 4.476 billion in the previous year[72]. - Revenue from land drilling rigs significantly increased to RMB 2,354,279,000 in 2023, up 216.3% from RMB 743,183,000 in 2022[170]. - Revenue from the drilling engineering services segment was RMB 3,409,556,000 in 2023, compared to RMB 3,002,218,000 in 2022, showing an increase of approximately 13.5%[7]. - Revenue from mainland China for the year was approximately RMB 2.21 billion, accounting for 40.4% of total revenue, a decrease of RMB 346 million year-over-year; export revenue was approximately RMB 3.26 billion, accounting for 59.6%, an increase of RMB 1.34 billion year-over-year[42]. Cash Flow and Liquidity - The company's cash inflow from operating activities was approximately RMB 62,044,000 for the year, reflecting a positive cash flow situation despite the net loss[3]. - The company expects to have sufficient liquidity to fund its operations for the next twelve months, supporting the going concern assumption[3]. - The group’s cash and cash equivalents as of December 31, 2023, were RMB 777,660,000, compared to RMB 601,001,000 in 2022[37]. - The group has unused borrowing facilities of RMB 8,842,340,000 due within one year, compared to RMB 2,096,306,000 in 2022[34]. Assets and Liabilities - Current assets exceeded current liabilities by RMB 1,304,121,000 as of December 31, 2023, indicating a strong liquidity position[3]. - As of December 31, 2023, total liabilities amounted to RMB 8,937,777,000, compared to RMB 9,128,492,000 in 2022[43]. - The group’s total assets as of December 31, 2023, were RMB 12,519,539,000, compared to RMB 12,322,487,000 in 2022[37]. - The total liabilities of the group as of December 31, 2023, were approximately RMB 8.94 billion, with current liabilities of approximately RMB 6.76 billion, a decrease of RMB 1.62 billion compared to the previous year[134]. Shareholder Information - The average number of ordinary shares issued was 7,041,777,000, leading to a basic and diluted loss per share of RMB (5.54) for 2023, an improvement from RMB (11.98) in 2022[22]. - The equity attributable to the owners of the company as of December 31, 2023, was approximately RMB 3.38 billion, an increase of RMB 420 million compared to December 31, 2022[135]. - The group incurred a basic loss per share of approximately RMB 0.0554 for the year[135]. Operational Highlights - The company achieved total sales of drilling rigs amounting to approximately RMB 2.354 billion, a significant increase of 216.8% compared to RMB 743 million in the same period last year[61]. - The company implemented a more prudent sales strategy, resulting in a 50.4% decrease in sales revenue from equipment and engineering services, totaling approximately RMB 525 million compared to RMB 1.059 billion last year[63]. - The company successfully launched a new intelligent manufacturing production line for solar thermal products, achieving a monthly production target of 2,000 sets[96]. - The company has developed a globally innovative all-electric fracturing pump system, promoting the transition of fracturing equipment towards electrification, automation, and digitization[97]. Research and Development - Research and development expenses for the year were approximately RMB 112 million, a decrease of 9.7% from RMB 124 million in the previous year, while total R&D investment increased by 28.0% to RMB 227 million[107]. - Research and development costs were approximately RMB 60,739,000 in 2023, a decrease from RMB 70,524,000 in 2022[177]. Future Outlook - The company plans to maintain a focus on deep earth, deep sea, and unconventional resources for oil and gas exploration in 2024, aiming to stabilize crude oil production at 200 million tons[99]. - The company is enhancing its internal management to improve profitability and operational quality, focusing on cost management and resource allocation[100].

Cash Flow and Financial Activities - Operating cash flow for the six months ended June 30, 2023, was RMB 80.745 million, compared to a negative RMB 446.501 million in the same period last year[4] - Net cash used in investing activities for the six months ended June 30, 2023, was RMB 80.723 million, compared to a positive RMB 40.897 million in the same period last year[4] - Net cash generated from financing activities for the six months ended June 30, 2023, was RMB 177.213 million, compared to RMB 43.166 million in the same period last year[4] - The company recorded a net loss of approximately RMB 168,120,000 for the six months ended June 30, 2023, with cash inflows from operating activities of approximately RMB 80,745,000[95] - The company completed a share subscription with Oriental Investment, raising approximately HKD 890,911,000 (RMB 814,613,000) in cash inflow[140] Revenue and Profitability - The company's total revenue from China (residence country) for the six months ended June 30, 2023, was RMB 2,780.897 million, down from RMB 2,949.692 million in the same period last year[14] - The company's total revenue from the Middle East and Africa region for the six months ended June 30, 2023, was RMB 450.106 million, up from RMB 389.420 million in the same period last year[14] - The company's total revenue from the Americas for the six months ended June 30, 2023, was RMB 1.306 million, slightly up from RMB 1.301 million in the same period last year[14] - Revenue for the first half of 2023 reached RMB 2.494 billion, a 65.3% increase compared to RMB 1.509 billion in the same period last year[154][160] - Gross profit for the first half of 2023 was RMB 152 million, a significant improvement from a loss of RMB 71 million in the same period last year[160] - The company's loss attributable to shareholders was RMB 154.192 million, a reduction from RMB 523.382 million in the same period last year[154] - The group's pre-tax loss for the first half of 2023 was RMB 167.149 million, compared to RMB 563.538 million in the same period of 2022[44] - The group's loss attributable to owners of the company was RMB 154.192 million in the first half of 2023, compared to RMB 523.382 million in the same period of 2022[53] - The group's basic and diluted loss per share was RMB 0.0291 in the first half of 2023, compared to RMB 0.0988 in the same period of 2022[53] Assets and Liabilities - As of June 30, 2023, the company's current assets exceeded current liabilities by RMB 1,053,046,000[95] - The company's trade payables increased to RMB 2,328,231,000 as of June 30, 2023, compared to RMB 1,667,336,000 as of December 31, 2022[93] - The company's trade receivables from joint ventures and other related parties amounted to RMB 532,532,000 and RMB 146,854,000, respectively, as of June 30, 2023[110] - The company's non-trade receivables from associates and other related parties were RMB 94,360,000 and RMB 500,000, respectively, as of June 30, 2023[110] - The company's trade payables to associates and other related parties were RMB 287,008,000 and RMB 105,379,000, respectively, as of June 30, 2023[111] - The company's non-trade payables to associates and other related parties were RMB 2,021,000 and RMB 113,000, respectively, as of June 30, 2023[111] - The company's investment in non-listed companies increased to RMB 109,423,000 as of June 30, 2023, from RMB 109,312,000 as of December 31, 2022[121] - The company's bank acceptance bills increased to RMB 68,302,000 as of June 30, 2023, from RMB 3,525,000 as of December 31, 2022[121] - Accounts receivable decreased to RMB 3,081,498 thousand as of June 30, 2023, compared to RMB 3,628,254 thousand as of December 31, 2022[124] - Trade-related receivables from related parties increased to RMB 683,227 thousand as of June 30, 2023, from RMB 338,272 thousand as of December 31, 2022[124] - Non-trade-related receivables from related parties decreased to RMB 97,303 thousand as of June 30, 2023, from RMB 283,938 thousand as of December 31, 2022[124] - Prepayments increased to RMB 1,073,328 thousand as of June 30, 2023, compared to RMB 684,456 thousand as of December 31, 2022[124] - Total current assets as of June 30, 2023, were RMB 4,641,147 thousand, slightly down from RMB 4,656,550 thousand as of December 31, 2022[124] - Total non-current assets as of June 30, 2023, were RMB 718,950 thousand, up from RMB 712,801 thousand as of December 31, 2022[124] - The company's total assets as of June 30, 2023, were RMB 5,360,097 thousand, nearly unchanged from RMB 5,369,351 thousand as of December 31, 2022[124] - Total assets increased by 6.8% to RMB 13.16 billion, while total liabilities rose by 10.9% to RMB 10.128 billion[154] Provisions and Write-downs - Inventory write-downs decreased to RMB 44.582 million in the first half of 2023 from RMB 115.322 million in the same period of 2022[47] - The group's provision for financial assets decreased to RMB 16.010 million in the first half of 2023 from RMB 82.485 million in the same period of 2022[47] - The group's provision for property, plant, and equipment, lease prepayments, and other intangible assets increased to RMB 36.197 million in the first half of 2023 from RMB 17.646 million in the same period of 2022[47] - The company's credit risk provision for other receivables from related parties decreased to RMB 6,284,000 as of June 30, 2023, from RMB 9,195,000 as of December 31, 2022[78] Sales and Market Performance - Sales of products and upgrade services to Honghua (Shenzhen) totaled RMB 11.947 million in the first half of 2023, a significant decrease from RMB 126.235 million in the same period of 2022[41] - Sales of drilling rigs surged by 571.5% to RMB 1.155 billion, and parts sales grew by 26.9% to RMB 882 million[165] - The company achieved a breakthrough in the wind power sector, with revenue from wind power business increasing by 1,311.8% to RMB 240 million[183] - The company's parts and other sales revenue increased by 26.9% to RMB 882 million in the first half of 2023, compared to RMB 695 million in the same period last year[199] Research and Development - The company's R&D in high-pressure fracturing equipment for unconventional oil and gas achieved a breakthrough, with the development of the enhanced 6000 series electric fracturing pump[185] - The company completed 48 new patent applications and obtained 37 new patents in the first half of 2023, with a total of 506 valid patents, including 214 invention patents[190] Operational Highlights - The company successfully implemented a green, low-carbon shale gas development model, achieving large-scale application of gas-electric fracturing services in Sichuan and Chongqing[167] - The company has 6 drilling teams operating in Iraq, with HH029 team achieving multiple new records in the Zubair oilfield, including early drilling by 5 days[188] - The company's total workforce increased by 10.2% to 2,677 employees as of June 30, 2023[190] Market and Industry Trends - Global upstream oil and gas investment is expected to grow at an annual rate of 8% in 2023, reaching approximately $470 billion, recovering from the cyclical low of $370 billion in 2020[192] - The global oil and gas contractor market is projected to peak at $1 trillion by 2025 and remain at high levels in subsequent years[192] - The company has established a comprehensive global market layout and brand image in the oil and gas equipment and services sector over 20 years[193] - The company will focus on new energy sectors such as wind power, solar, hydrogen, and geothermal energy, leveraging synergies with its parent company's industrial layout[195] - The company's international revenue has significantly increased due to the recovery of global oil and gas exploration activities[196] - The company's revenue distribution shows 2% from South Asia and Southeast Asia, and 2% from the Americas[197] Leasing and Borrowings - The company's new right-of-use assets for the six months ended June 30, 2023, were RMB 1.399 million, down from RMB 2.256 million in the same period last year[26] - The company's subsidiary, Honghua (China) Investment Co., Ltd., signed a loan agreement with Dongfang Electric Group Finance Co., Ltd. for a credit line of RMB 1.35 billion, of which RMB 445 million was drawn as of June 30, 2023[32] - The group's fixed-rate bank borrowings and bill facilities due within one year increased to RMB 2.218 billion as of June 30, 2023, from RMB 2.096 billion as of December 31, 2022[63] - The group's lease expenses for Honghua (Shenzhen) decreased to RMB 56.574 million in the first half of 2023 from RMB 79.996 million in the same period of 2022[74] Tax and Share Performance - The company's income tax expense for the six months ended June 30, 2023, was RMB 971,000, compared to a negative RMB 14.856 million in the same period last year[16] - The company's basic loss per share for the six months ended June 30, 2023, was RMB 0.029, based on a loss attributable to owners of the company of RMB 154.192 million and a weighted average number of shares of 5,294.906 million[21] Liquidity and Ratios - The company's liquidity improved, with the current ratio increasing to 1.14 and the quick ratio to 0.88[174] Market Share and Orders - The company's market share in the wind power sector reached 18.18%, securing 20 out of 110 new orders for wind turbine foundations[183]

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告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任。 Honghua Group Limited 宏 華 集 團 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：0196） 截至二零二三年六月三十日止六個月 中期業績公告 財務摘要 截至六月三十日止六個月 二零二三年 二零二二年 變動 （未經審核） （未經審核） 收入（人民幣千元） 2,494,437 1,509,177 65.3% 毛利（人民幣千元） 152,202 (71,172) – 毛利率(%) 6.1% (4.7%) 增加10.8個 百分點 經營虧損（人民幣千元） (22,563) (416,369) – ...

Greenhouse Gas Emissions and Environmental Goals - Total greenhouse gas emissions in 2022 were 10,851.7 tons of CO2 equivalent, with purchased electricity accounting for 73.29% (7,953 tons) of total emissions[2][4] - The company aims to reduce CO2 emissions per 10,000 yuan of output value by 18% within 5 years compared to 2020 levels[4] Waste Management - Total hazardous waste generated in 2022 was 297.52 tons, with paint residue being the largest component at 65% (193.38 tons)[5][6] - Non-hazardous waste generated in 2022 totaled 3,272.49 tons, with scrap steel accounting for 59.34% (1,942.05 tons)[9][10] - The company targets a 10% reduction in non-hazardous waste generation within 10 years compared to 2021 levels[9] Energy Consumption and Efficiency - Total energy consumption in 2022 was 25,728,538 kWh, with a goal to reduce energy consumption per 10,000 yuan of output value by 15% within 5 years compared to 2020 levels[18] - Total energy consumption reached 25,728,538 kWh, with natural gas accounting for 10,850,668 kWh, gasoline for 649,376 kWh, diesel for 283,109 kWh, and electricity for 13,945,385 kWh[19] - The company implemented measures to optimize energy efficiency, including using energy-saving lighting, high-efficiency vehicles, and setting air conditioning temperatures between 23-25°C[23] Water Management - Freshwater consumption was 313,976.04 cubic meters, with a water consumption density of 70.15 cubic meters per million RMB of revenue[21] - Wastewater generated during the reporting period totaled 214,400 cubic meters, treated to meet China's standards before discharge[22] - Water efficiency measures included recycling treated production water and using timed water supply systems in restrooms[24] VOC Treatment and Waste Management Technologies - The company's VOC treatment efficiency reaches 98% or higher through advanced technologies like zeolite rotor + catalytic combustion[13] - The company implemented a hazardous waste IoT project to monitor the entire process from generation to disposal[14] Employee Health and Safety - The company has arranged health check-ups for over 2,000 employees and built new sports facilities, including a basketball court, at its Guanghan base[41] - The company has provided epidemic-related support to over 600 employees during closed-loop production, distributing health-promoting equipment such as skipping ropes and chess sets[42] - The company maintained a zero fatality rate in workplace accidents for 2022, with only 1 incident resulting in more than 3 days of lost work time[67] - The company implemented strict COVID-19 prevention measures, including daily disinfection, mask mandates, and social distancing protocols[69] - The company conducted regular fire drills and provided personal protective equipment (PPE) to all employees[64] Employee Training and Development - The company provided training to 2,235 employees for a total of 88,867 hours, with an average of 39 hours per employee[74] - The company's training participation rate reached 98% for senior management, 100% for middle management, and 102% for frontline employees[73] - The company implemented innovative training methods, such as virtual reality (VR) and simulation, to improve safety education and training for employees[48] Employee Benefits and Turnover - The company has provided comprehensive employee benefits, including social insurance, housing provident fund contributions, and various allowances and bonuses[37] - The employee turnover rate was 27.61% for frontline and other employees, while senior management had a turnover rate of 0.30%[62] - The company's workforce composition was 87% male and 13% female[60] Product and Service Innovation - The company has developed China's first "one-click linkage" automated machine tool system and electric coiled tubing equipment, which have gained widespread market recognition and solidified its leading position in the drilling and fracturing market[33] - The company has established a comprehensive product and service system in the field of electric shale gas extraction, leveraging its patented high-power electric fracturing pumps and professional service teams[35] - The company has expanded its local power grid coverage to major shale gas extraction areas, effectively reducing extraction costs and addressing traditional challenges of high costs and low efficiency[35] Financial Performance - Company revenue in 2022 reached RMB 4.476 billion, a 52.4% increase compared to RMB 2.937 billion in the previous year[106] - Gross profit in 2022 was RMB 460 million, a 26.7% increase compared to RMB 363 million in the previous year[106] - The company's gross profit and net loss attributable to shareholders were approximately RMB 460 million and RMB 634 million, with gross profit margin and net loss margin of 10.3% and 14.2%, respectively[127] - The company's revenue for 2022 was approximately RMB 4.476 billion, an increase of RMB 1.539 billion or 52.4% compared to the previous year, driven by significant growth in land drilling rig and component sales, especially overseas orders[170] Sales and Orders - The company sold a total of 12 drilling rigs in 2022, with a total value of RMB 743 million, an increase of RMB 755 million compared to the previous year[111] - Parts sales in 2022 totaled RMB 2.255 billion, a 33.2% increase compared to RMB 1.693 billion in the previous year[111] - New overseas drilling equipment orders in 2022 amounted to RMB 2.485 billion, a 53.77% increase compared to 2021[111] - New product sales in 2022 reached RMB 215 million[111] - As of January 31, 2023, the company had drilling rig and related product orders totaling RMB 2.2 billion, with RMB 1.558 billion for complete land drilling rigs[112] Research and Development - The company applied for 84 new patents during the reporting period, including 53 invention patents, 29 utility model patents, and 2 design patents[91] - The company currently holds 790 intellectual property patents, including 275 invention patents, 497 utility model patents, and 18 design patents[91] - The company's total number of employees decreased by 15.1% to 2,410, while the number of R&D personnel increased by 8.17% to 596[120] Corporate Social Responsibility - The company invested over RMB 360,000 in purchasing agricultural products from national poverty-stricken counties as part of poverty alleviation efforts[143] - The company organized employee blood donation activities, totaling 16,000 milliliters, and raised over RMB 150,000 for earthquake relief in Ganzi[143] Supply Chain and Supplier Management - The company has 1,846 qualified suppliers, with over 90% sourced from China[81] - Suppliers are required to use environmentally friendly packaging materials and possess valid emission permits to pass the company's supplier evaluation[85] - Suppliers must sign safety, fire protection, and environmental protection agreements to qualify for collaboration with the company[85] Information Security and Data Protection - The company has implemented comprehensive information security management policies to protect internal information and data assets[91] - The company implemented strict information security measures, including access control, USB port usage restrictions, and encryption of core data[134] - No confirmed complaints were received regarding violations of customer privacy or data breaches during the reporting period[138] Corporate Governance and Shareholding - Zhang Mi, a director, holds 323,408,548 shares, representing 6.03% of the company's issued share capital[197] - Ren Jie, a former director, holds 124,530,240 shares, representing 2.32% of the company's issued share capital[197] - The company's board of directors recommended not to distribute an annual dividend for the year ended December 31, 2022[188] Financial Health and Cash Flow - The company's total reserves as of December 31, 2022, amounted to approximately RMB 2.476 billion[152] - The company's total borrowings as of December 31, 2022, were approximately RMB 4.948 billion, a decrease of RMB 198 million from the previous year[189] - Cash and cash equivalents as of December 31, 2022, were approximately RMB 601 million, a decrease of RMB 102 million from the previous year[190] - Net cash outflow from operating activities was approximately RMB 226 million, while net cash inflow from investing activities was RMB 71 million and net cash inflow from financing activities was RMB 25 million[192] Future Plans and Strategic Goals - The company plans to focus on digital transformation and low-carbon transformation, promoting electrification, automation, informatization, and digitalization of key components[127] - The company aims to expand its international drilling market and optimize its international marketing system and business layout[125] - The company will strengthen the market expansion of new products and technical marketing, further increasing the market share of automated tools and new five-cylinder pumps[125] - The company plans to optimize its organizational structure, enhance supply chain efficiency, and improve technological innovation capabilities to drive future growth[166]

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告的內容概不負責，對其準確性 或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部分內容而產生或因倚 賴該等內容而引致的任何損失承擔任何責任 Honghua Group Limited 宏 華 集 團 有 限 公 司 （於開曼群島註冊成立的有限公司） （股份代號：0196） 截至二零二二年十二月三十一日止年度全年業績公告 財務摘要 截至十二月三十一日止年度 二零二二年 二零二一年 變動 收入（人民幣千元） 4,476,104 2,936,604 52.4% 毛利（人民幣千元） 459,893 363,004 26.7% (2.1)個 毛利率(%) 10.3% 12.4% 百分點 經營虧損（人民幣千元） (433,203) (610,213) 29.0% 本公司股東應佔虧損（人民幣千元） (634,418) (717,191) (11.6)% 每股虧損－基本（人民幣分） (11.98) (13.54) (11.5)% ...

Financial Performance - For the first half of 2022, Honghua Group reported revenue of RMB 1,509.18 million, a decrease of 2.7% compared to RMB 1,551.54 million in the same period last year[9]. - The company experienced an operating loss of RMB 416.37 million, a significant increase of 2,718.1% from an operating loss of RMB 14.78 million in the previous year[9]. - The pre-tax loss reached RMB 563.54 million, up 686.3% from RMB 71.67 million in the prior year[9]. - Shareholders' loss attributable to the company was RMB 523.38 million, a 617.3% increase from RMB 72.97 million in the same period last year[9]. - The gross profit margin fell to -4.7%, a decline of 25.2 percentage points from 20.5% in the previous year[13]. - The net profit margin was -34.6%, down 29.9 percentage points from -4.7% in the previous year[13]. - The average return on equity dropped to -15.9%, a decrease of 14.2 percentage points from -1.7% in the previous year[13]. - The gross loss for the period was approximately RMB -0.071 billion, with a gross margin of -4.7%, a decline of 25.2 percentage points from 20.5% in the same period last year[48]. - The group's net loss attributable to shareholders was approximately RMB 0.523 billion, resulting in a net loss rate of 34.7%, compared to 4.7% in the same period last year[52]. - The company reported a total comprehensive loss of RMB 558,967 thousand for the first half of 2022, compared to a total comprehensive loss of RMB 63,979 thousand in the same period of 2021[106]. Assets and Liabilities - Total non-current assets decreased by 4.2% to RMB 4,787.33 million from RMB 4,998.48 million at the end of 2021[9]. - Total current assets also fell by 4.2% to RMB 6,462.93 million from RMB 6,749.43 million at the end of 2021[9]. - The total liabilities increased slightly by 0.8% to RMB 8,062.72 million from RMB 8,001.51 million at the end of 2021[9]. - The total assets of the group as of June 30, 2022, were approximately RMB 11.25 billion, with current assets at approximately RMB 6.46 billion, accounting for about 57.4% of total assets, a decrease of RMB 286 million from December 31, 2021[57]. - The total liabilities of the group as of June 30, 2022, were approximately RMB 8.06 billion, with current liabilities at approximately RMB 7.92 billion, representing about 98.2% of total liabilities, an increase of RMB 127 million from December 31, 2021[58]. - The company's equity attributable to owners decreased to RMB 3,187,541 thousand from RMB 3,746,396 thousand, a decline of approximately 15%[110]. - The asset-liability ratio of the group as of June 30, 2022, was 71.7%, an increase of 3.6 percentage points from December 31, 2021[58]. Sales and Revenue Streams - In the first half of 2022, the company sold a total of 5 drilling rigs, generating approximately RMB 172 million in sales, a 207.1% increase compared to RMB 56 million in the same period last year[23]. - The company achieved a total sales revenue of approximately RMB 443 million from equipment and engineering services in the first half of 2022, a decrease of 11.4% from RMB 500 million in the same period last year[25]. - The company’s offshore wind power business revenue decreased by 96.2% to RMB 17 million due to insufficient new orders following a policy vacuum after a rush to install projects in the second half of 2021[24]. - The special power business achieved revenue of RMB 69 million, representing a year-on-year growth of 64.3%[26]. - The drilling services generated sales revenue of approximately RMB 199 million, an increase of 46.3% compared to RMB 136 million in the same period last year[28]. - Revenue from external customers in China was RMB 946,650,000, down from RMB 1,250,586,000 in the previous year, indicating a decline of approximately 24.3%[135]. Operational Developments - The company produced 10.288 million tons of crude oil in the first half of 2022, representing a year-on-year growth of 4.0%[18]. - The company produced 109.6 billion cubic meters of natural gas in the first half of 2022, reflecting a year-on-year increase of 4.9%[18]. - The company has actively adjusted its market layout, increasing investment in traditional markets, particularly in the Americas, and has secured continuous drilling rig orders from new customers in Oman[23]. - The company plans to enhance oil and gas exploration capabilities in response to rising global oil prices, with increased upstream capital expenditure expected in the second half of 2022[34]. - The company aims to expand new product sales and explore overseas markets while maintaining a focus on quality and cost control[35]. - The company has successfully completed the longest horizontal section fracturing operation in China, measuring 3,601 meters[26]. Research and Development - The company applied for 36 patents in the first half of 2022, including 21 domestic invention patents and 6 international patents[31]. - The company successfully developed the first domestic dual-screw high-efficiency electric sand delivery device, achieving a maximum sand storage capacity of 120m³ and a maximum sand delivery efficiency of 160m³/h[25]. - The company is advancing the development of smart drilling rigs and intelligent electric fracturing systems, with some projects nearing completion[30]. Employee and Corporate Structure - The total number of employees decreased by 25.6% to 2,430 as of June 30, 2022, as part of a strategic adjustment[32]. - The company has a total of 318,202,548 shares held by Wealth Afflux Limited, representing 5.94% of the issued share capital[77]. - The major shareholder, Dongfang Electric Group International Investment Co., Ltd., holds 1,606,000,000 shares, accounting for 29.98% of the issued share capital[77]. - The company did not recommend the distribution of an interim dividend for the six months ended June 30, 2022, consistent with the previous year[153]. Cash Flow and Financing - The company reported a net cash outflow from operating activities of RMB 446,501 thousand, compared to RMB 823,490 thousand for the same period in 2021, representing a 45.7% improvement[120]. - The net cash outflow from financing activities was RMB 1,769,268 thousand for the first half of 2022, compared to RMB 1,400,551 thousand in the same period of 2021, reflecting a 26.3% increase in cash used for financing[120]. - The company has returned USD 200 million of senior notes with a coupon rate of 6.375% through low-cost loans, laying a solid foundation for better development amid industry recovery[21]. - The total borrowings of the group as of June 30, 2022, were approximately RMB 5.032 billion, a decrease of RMB 0.114 billion or 2.2% from December 31, 2021[55]. - The group had unused loan facilities amounting to RMB 3,241,312 as of June 30, 2022, compared to RMB 3,381,860 as of December 31, 2021, showing a decrease of 4.2%[171].

Financial Performance - Revenue for the year ended December 31, 2021, was RMB 2,936,604 thousand, a decrease of 25.3% from RMB 3,931,492 thousand in 2020[12] - The company reported an operating loss of RMB (610,213) thousand, compared to an operating profit of RMB 227,416 thousand in the previous year, representing a decline of 368.3%[12] - The net loss attributable to shareholders was RMB (717,191) thousand, a significant drop from a profit of RMB 49,660 thousand in 2020, marking a decrease of 1,544.2%[12] - Basic loss per share was RMB (13.54), down from earnings of RMB 0.94 per share in 2020, reflecting a decline of 1,540.4%[12] - Gross profit for 2021 was approximately RMB 363 million, down 69.2% from RMB 1.180 billion year-on-year[28] - Shareholders recorded a loss of approximately RMB 717 million for the year[28] - The gross profit margin fell to 12.4%, down 17.6 percentage points from 30.0% in 2020[15] - The EBITDA for the year was approximately RMB -432 million, compared to RMB 408 million in the previous year, resulting in an EBITDA margin of -14.7%[75] Assets and Liabilities - Total non-current assets increased by 17.9% to RMB 4,998,483 thousand from RMB 4,240,975 thousand in 2020[12] - Current liabilities rose by 50.7% to RMB 7,793,243 thousand, compared to RMB 5,170,292 thousand in the previous year[12] - Total liabilities increased by 6.4% to RMB 8,001,514 thousand from RMB 7,517,750 thousand in 2020[12] - Total equity decreased by 16.6% to RMB 3,746,396 thousand from RMB 4,494,627 thousand in the previous year[12] - The total assets as of December 31, 2021, were approximately RMB 11.748 billion, with current assets accounting for about 57.5% of total assets, a decrease of RMB 1.021 billion compared to the previous year[81] - The total liabilities amounted to approximately RMB 8.002 billion, with current liabilities making up about 97.4% of total liabilities, an increase of RMB 2.623 billion from the previous year[82] - The equity total was approximately RMB 3.746 billion, a decrease of RMB 749 million compared to December 31, 2020, with a basic and diluted loss per share of RMB 0.1354[83] - As of December 31, 2021, the total borrowings and USD bonds amounted to approximately RMB 5.146 billion, an increase of RMB 661 million from December 31, 2020[77] Operational Highlights - In 2022, the company signed new overseas drilling equipment orders totaling RMB 1.626 billion, an increase of 122% compared to 2020[17] - The electric fracturing service business secured new orders worth RMB 800 million, with a year-on-year increase in operational volume of 24%[17] - The offshore wind power segment achieved revenue of RMB 600 million, successfully delivering the largest and heaviest Qingzhou III booster station in Asia[17] - The company completed over 5,400 fracturing operations during the period, a 24% increase year-on-year, with 4,700 operations related to shale gas[40] - The company achieved sales of RMB 1.019 billion from equipment and engineering services in the fracturing segment, a decrease of 24% compared to the previous year[40] - The company has an order backlog of approximately RMB 1.675 billion for drilling and related products as of February 28, 2022[37] - The company has an order backlog of approximately RMB 290 million for fracturing equipment and services as of February 28, 2022[42] Workforce and Management - The company reduced its workforce to 2,838 employees, a decrease of 25.8% from the beginning of the year, while increasing the proportion of professional technical personnel by 4%[22] - The company appointed Jiang Fuhua as President starting January 1, 2022, who has extensive experience in project and research management[102] Corporate Governance - The company reported a commitment to high levels of corporate governance to enhance shareholder value and accountability[108] - The company has adopted the principles and code provisions of the Corporate Governance Code as the basis for its governance practices[110] - The board emphasizes the importance of good corporate governance practices in maintaining and enhancing shareholder value and investor confidence[109] - The company has a diverse board with independent non-executive directors bringing extensive experience from various sectors, including finance and management[98][99][100] - The company is focused on maintaining effective internal controls and shareholder accountability as part of its governance framework[108] - The company has a strong emphasis on risk management and compliance within its corporate governance practices[105] - The board includes members with advanced degrees in finance and economics, enhancing its strategic decision-making capabilities[99][102] - The company has a dedicated legal and compliance team to oversee governance and regulatory matters[105] Risk Management - The company has established a risk management framework based on a "three lines of defense" model to enhance internal controls and risk management effectiveness[178] - The risk management and internal control systems have been reviewed and deemed effective and adequate by the board and audit committee as of December 31, 2021[186] - The company has made significant improvements in risk management, including the establishment of a risk management evaluation mechanism[182] - The internal audit department conducts regular oversight and special inspections on significant projects to ensure compliance and effective management[188] - The company has implemented a whistleblowing channel for employees to report fraudulent activities directly to the audit department[190] Shareholder Rights - Shareholders' rights are protected by presenting independent resolutions for significant matters at the shareholders' meeting[195] - Special shareholders' meetings can be convened upon request by shareholders holding at least 10% of the paid-up capital[196] - New proposals at the shareholders' meeting must be submitted in writing according to the company's procedures[198] - Shareholders must submit inquiries to the board in written form[199] - The company generally does not handle verbal or anonymous inquiries[200]

Financial Performance - For the first half of 2021, the company's revenue was RMB 1,551.54 million, a decrease of 14.1% compared to RMB 1,807.06 million in the same period last year [11]. - The gross profit for the first half of 2021 was approximately RMB 318 million, down 47.6% from RMB 608 million year-on-year [19]. - The company reported a loss attributable to shareholders of approximately RMB 729.66 million, compared to a profit of RMB 311.61 million in the same period last year, representing a decline of 334.2% [11]. - The company's gross margin decreased to 20.5% from 33.6% year-on-year, a decline of 13.1% [15]. - The net loss attributable to shareholders was approximately RMB 73 million, with a net loss margin of 4.7%, compared to a profit of RMB 31 million and a net profit margin of 1.7% in the same period last year [60]. - EBITDA for the period was approximately RMB 82 million, down from RMB 255 million in the previous year, resulting in an EBITDA margin of 5.3%, down from 14.1% [61]. - The company reported a loss before tax of RMB 71,674,000 for the first half of 2021, compared to a profit of RMB 52,042,000 in the same period of 2020 [148]. - The total comprehensive loss for the first half of 2021 was RMB 63,979 thousand, compared to a total comprehensive income of RMB 45,496 thousand in 2020 [122]. Assets and Liabilities - Total non-current assets as of June 30, 2021, were RMB 4,172.98 million, a decrease of 1.6% from RMB 4,240.98 million at the end of 2020 [11]. - Current assets increased by 9.2% to RMB 8,487.47 million from RMB 7,771.40 million at the end of 2020 [11]. - Total liabilities rose by 9.5% to RMB 8,229.48 million from RMB 7,517.75 million at the end of 2020 [11]. - Total assets as of June 30, 2021, were approximately RMB 12.660 billion, with current assets accounting for about 67.0% of total assets, an increase of RMB 716 million from December 31, 2020 [66]. - The total liabilities of the group as of June 30, 2021, were approximately RMB 8.229 billion, with current liabilities making up about 70.6% of total liabilities, an increase of RMB 640 million from December 31, 2020 [67]. - The debt-to-asset ratio of the group as of June 30, 2021, was 65.0%, an increase of 2.4 percentage points from December 31, 2020 [67]. Market and Production Insights - The average price of West Texas Intermediate (WTI) crude oil was $62.20 per barrel in the first half of 2021, an increase of 70.0% year-on-year [20]. - The average price of Brent crude oil was $65.00 per barrel, reflecting a year-on-year increase of 62.7% [20]. - In the first half of 2021, domestic crude oil production reached 99.32 million tons, an increase of 2.4% year-on-year, while natural gas production was 104.5 billion cubic meters, up 10.9% year-on-year [22]. - The company anticipates a rebound in global natural gas demand by 3.6% in 2021, with expectations to reach nearly 4.3 trillion cubic meters by 2024, a 7% increase compared to pre-pandemic levels [21]. Sales and Orders - The company achieved sales of 3 drilling rigs totaling approximately RMB 56 million, a decrease of 91.0% compared to RMB 619 million in the same period last year; however, sales of spare parts increased by 83.0% to RMB 860 million [26]. - The company signed new orders for offshore wind power projects totaling approximately RMB 110 million in the first half of 2021 [27]. - The company’s backlog of orders for drilling rigs and related products amounted to approximately RMB 1.17 billion as of June 30, 2021 [28]. - Revenue from external customers in China was RMB 1,250,586,000, representing an increase of 24.8% from RMB 1,001,667,000 in 2020 [151]. Technological Developments - The company launched the first nationwide "one-click linkage" automation equipment system, significantly improving drilling efficiency [27]. - The company upgraded its digital drilling system to UNISON 2.0, integrating complex mechanical controls into a unified platform for real-time data access [26]. - The company established a digital fracturing simulation laboratory to provide a testing environment for fracturing software products, enhancing the development of digital and intelligent fracturing equipment [31]. - The company’s electric fracturing service received widespread market recognition, with new orders for fracturing engineering services increasing by 41% year-on-year [31]. Workforce and Operations - Huahua's workforce as of June 30, 2021, totaled 3,282, a decrease of 12.7% compared to the same period last year [42]. - In the first half of 2021, Huahua's drilling teams completed a total footage of approximately 13,739 meters, a decrease of 75.6% compared to the same period last year, with total sales revenue of approximately RMB 136 million, down 25.3% year-on-year [35]. Cash Flow and Financing - The net cash outflow from operating activities during the period was approximately RMB 823 million, while financing activities generated a net inflow of approximately RMB 380 million [64]. - The company reported a basic and diluted loss per share of RMB (1.38) for the first half of 2021, compared to earnings of RMB 0.59 per share in 2020 [120]. - The company incurred a loss of RMB (1,400,551) thousand in loan repayments during the first half of 2021, compared to RMB (997,478) thousand in the same period of 2020 [137]. Shareholder Information - The company has a total of 318,202,548 shares held by Wealth Afflux Limited, representing 5.94% of the issued share capital [85]. - The total number of shares held by Kewah Technology Limited is 1,606,000,000, which accounts for 29.98% of the issued share capital [85]. - The company has not recommended the distribution of interim dividends for the six months ended June 30, 2021, similar to the previous year [168].

Financial Performance - Revenue for 2020 was RMB 3,931,492 thousand, a decrease of 11.2% from RMB 4,425,686 thousand in 2019[8] - Operating profit fell to RMB 227,416 thousand, down 39.9% from RMB 378,391 thousand in the previous year[8] - Profit attributable to shareholders decreased by 53.8% to RMB 49,660 thousand from RMB 107,472 thousand in 2019[8] - Gross profit was approximately RMB 1.180 billion, down 10.3% from RMB 1.316 billion year-on-year[22] - Net profit margin decreased to 1.3%, down 1.1 percentage points from 2.4% in 2019[11] - The group's revenue for the year was approximately RMB 3.93 billion, a decrease of RMB 495 million or 11.2% compared to RMB 4.43 billion in the previous year[58] - Gross profit was approximately RMB 1.18 billion, with a gross margin of 30.0%, up from 29.7% in the previous year[72] - Net profit attributable to shareholders was approximately RMB 50 million, resulting in a net profit margin of 1.3%, down from 2.4% in the previous year[77] Assets and Liabilities - The total non-current assets decreased by 20.0% to RMB 4,240,975 thousand from RMB 5,298,467 thousand in 2019[8] - Current assets increased by 20.4% to RMB 7,771,402 thousand from RMB 6,455,861 thousand in 2019[8] - Total liabilities rose by 3.4% to RMB 7,517,750 thousand from RMB 7,273,951 thousand in 2019[8] - The total assets as of December 31, 2020, were approximately RMB 12.012 billion, with current assets accounting for about 64.7% of total assets, an increase of RMB 1.315 billion from the previous year[84] - The total liabilities as of December 31, 2020, were approximately RMB 7.518 billion, with a debt-to-asset ratio of 62.6%, an increase of 0.7 percentage points from the previous year[86] - The total equity as of December 31, 2020, was approximately RMB 4.495 billion, with basic and diluted earnings per share both at RMB 0.94[87] Market and Business Development - The company entered the offshore wind power industry, securing over RMB 1 billion in new orders during 2020[13] - The company achieved a 29.5% revenue growth in the domestic market, reaching a business structure proportion of 73.9%, the highest level since its listing[27] - The electric fracturing pump service segment saw explosive growth, with the number of pump services increasing by 48.5% compared to the same period last year[14] - The company plans to strengthen its overseas drilling rig business and expand its continuous pipe completion equipment and service capabilities[18] - The company aims to build competitiveness in the offshore wind power industry through manufacturing process improvements and delivery optimization[18] Research and Development - The company is investing heavily in R&D, allocating 8% of its revenue to develop new technologies and products, aiming to enhance competitive advantage[102] - The company is focusing on enhancing the automation of drilling rigs and plans to upgrade its intelligent drilling products[53] - The company has successfully launched electric-driven continuous oil pipe equipment and completed industrial trials, marking a significant development in electric fracturing equipment[46] Corporate Governance - The company has adopted a corporate governance code that emphasizes high standards of accountability and shareholder value enhancement[120] - The board of directors consists of 11 members, including 6 independent non-executive directors, ensuring strong independent oversight and governance[133] - The company has maintained compliance with the corporate governance code throughout the fiscal year, with regular reviews to ensure adherence to legal and professional standards[123] - The company has established a risk management and internal control system aimed at managing risks associated with achieving business objectives, providing reasonable assurance against significant misstatements or losses[175] Risk Management - The group faced various financial risks, including market risk, credit risk, and liquidity risk, influenced by geopolitical uncertainties and the COVID-19 pandemic[90] - The risk management framework follows a "three lines of defense" model, with operational management as the first line, risk control department as the second line, and the audit committee as the third line[181] - The company reported that its risk management and internal control systems were deemed adequate and effective as of December 31, 2020, covering financial, operational, and compliance controls[189] Training and Development - The company implemented 849 training programs with a total of 47,540 training participants, averaging 41 hours of training per person[50] - The proportion of professional technical personnel increased by 2.5 percentage points compared to the same period last year, reflecting an optimization in human resource structure[49] Future Outlook - Future outlook remains positive, with the company projecting a revenue growth of 10-12% for the next fiscal year, driven by new product launches and market expansion[102] - The company is exploring strategic acquisitions to bolster its market position, with a target of completing at least one acquisition by the end of the fiscal year[102]

Financial Performance - The company's revenue for the first half of 2020 was RMB 1,807.06 million, a decrease of 11.8% compared to RMB 2,048.48 million in the same period last year[9]. - Operating profit increased by 17.5% to RMB 173.49 million from RMB 147.70 million year-on-year[9]. - Profit attributable to owners of the company was RMB 31.61 million, down 48.8% from RMB 60.81 million in the previous year[9]. - Basic and diluted earnings per share were both RMB 0.59, a decrease of 48.7% compared to RMB 1.15 in the same period last year[9]. - The group achieved a gross profit of approximately RMB 608 million and a net profit attributable to shareholders of approximately RMB 31 million, with gross margin and net profit margin at approximately 33.6% and 1.7%, respectively[46]. - The group's revenue for the period was approximately RMB 1.807 billion, a decrease of RMB 241 million or 11.8% compared to RMB 2.048 billion in the same period last year[47]. - The total comprehensive income for the period was RMB 45,496 thousand, a decrease of 39.8% compared to RMB 75,629 thousand in 2019[126]. - Net profit for the period was approximately RMB 0.39 billion, down from RMB 0.71 billion, resulting in a net profit margin of 1.7%, down from 3.0%[65]. - The group reported a pre-tax profit of approximately RMB 0.52 billion, a decrease of RMB 0.53 billion (50.6%) compared to the previous year[63]. Assets and Liabilities - Total non-current assets increased by 5.0% to RMB 5,564.42 million from RMB 5,298.47 million[10]. - Total current assets rose by 3.7% to RMB 6,695.08 million from RMB 6,455.86 million[10]. - As of June 30, 2020, the group's total assets amounted to approximately RMB 122.59 billion, an increase of RMB 5.05 billion (4.3%) from the end of 2019[70]. - The total liabilities of the group amounted to approximately RMB 7.734 billion, an increase of RMB 460 million compared to December 31, 2019[71]. - The total equity as of June 30, 2020, was approximately RMB 4.526 billion, reflecting an increase of RMB 46 million from December 31, 2019[72]. - The group’s debt-to-asset ratio was 63.1% as of June 30, 2020, an increase of 1.9 percentage points from December 31, 2019[71]. Market and Operational Highlights - In the first half of 2020, domestic crude oil production reached 96.5 million tons, an increase of 1.5% year-on-year, while natural gas production surged to 94.96 billion cubic meters, up 9.9% year-on-year[19]. - The company sold a total of 11 drilling rigs in the first half of 2020, generating revenue of approximately RMB 619 million, a decline of 25.3% compared to RMB 829 million in the same period last year[22]. - The company secured new contracts for complete land drilling rigs worth RMB 280 million in the domestic market, significantly increasing order volume compared to the previous year[25]. - The company provided 2,009 stages of pumping services during the first half of 2020, achieving sales revenue of approximately RMB 537 million from equipment and engineering services[27]. - The company launched its first electric fracturing pump and electric mixing unit, marking a significant step in the development of unconventional oil and gas extraction technologies[27]. - The number of electric fracturing stages provided in the domestic market increased by 70.4% year-on-year, reflecting a rapid growth in demand for unconventional fracturing services[28]. - The company signed contracts worth approximately RMB 580 million for offshore wind power projects, leveraging national policy support for renewable energy[26]. Research and Development - During the first half of 2020, the group applied for 69 new patents, with 26 patents granted, including 1 invention patent[39]. - The group plans to enhance its core product development and sales in drilling and completion equipment, aiming for sustainable high-quality development in the second half of 2020[45]. - The group is focusing on technological innovation, with ongoing projects in automated drilling rigs and unconventional oil and gas development equipment[38]. Shareholder Information - Major shareholders hold significant stakes, with Kewah Technology Limited owning 1,606,000,000 shares, representing 29.98% of the issued share capital[88]. - Wealth Afflux Limited, through Tricor Equity Trustee Limited, holds a total of 1,021,504,049 shares, accounting for 19.07% of the company's issued share capital[88]. - The total number of shares held by the top shareholders exceeds 2 billion, indicating strong institutional support[89]. - The company has a diverse shareholder base, with significant family trust involvement, indicating a stable ownership structure[90]. Compliance and Governance - The board of directors maintained compliance with the requirement that at least one-third of its members be independent non-executive directors[80]. - The audit committee, composed entirely of independent non-executive directors, is responsible for reviewing the financial reporting system and internal controls[80]. - The company has adopted a set of securities trading rules for directors, ensuring compliance with the relevant regulations[77]. - The company has not noted any incidents of employees failing to comply with the written guidelines for trading securities[78]. Cash Flow and Financing - The net cash used in operating activities for the first half of 2020 was RMB (582,060,000), compared to RMB (563,372,000) in the same period of 2019, indicating a slight increase in cash outflow[156]. - The company reported a net cash inflow from financing activities of RMB 676,304,000 in the first half of 2020, up from RMB 528,547,000 in the same period of 2019[156]. - The company incurred a loss of RMB (556,506,000) in cash used for operating activities during the first half of 2020, which is a slight increase from RMB (547,914,000) in the previous year[156]. - The company’s cash and cash equivalents increased to RMB 933,433,000 as of June 30, 2020, compared to RMB 627,060,000 at the end of the previous year[156].