Financial Performance - For the six months ended June 30, 2022, the company achieved operating revenue of HKD 10,645,900,000, a decrease of 22% year-on-year[13]. - The net profit attributable to shareholders for the same period was HKD 694,000,000, representing a 71% decrease compared to the previous year[13]. - The company's profit attributable to shareholders decreased by 71% to HKD 694 million, primarily due to a 22% decline in revenue from water environment governance projects, totaling HKD 10,645.9 million[23]. - The company reported a total revenue of HKD 10,645.9 million, with a gross profit of HKD 3,808.7 million, resulting in a gross margin of approximately 36%[25]. - The company reported a total revenue of 4,105,500,000 HKD for the six months ended June 30, 2022, compared to 4,887,425,000 HKD for the same period in the previous year, representing a decrease of approximately 15.9%[96]. - The net loss attributable to shareholders for the period was 1,232,569,000 HKD, compared to a net profit of 670,580,000 HKD in the prior year, indicating a significant decline in profitability[96]. - The company’s total liabilities increased to 22,996,420,000 HKD as of June 30, 2022, compared to 21,868,213,000 HKD at the end of the previous year, indicating a rise of about 5.1%[96]. Dividends and Earnings - The company declared an interim cash dividend of HKD 0.07 per share to reward shareholders for their continued support[13]. - Basic earnings per share decreased to HKD 6.64 from HKD 24.01, while diluted earnings per share fell to HKD 6.61 from HKD 23.83[86]. - The interim cash dividend declared was HKD 0.07 per share, totaling approximately HKD 709,508,000, compared to HKD 0.09 per share and HKD 908,982,000 in the previous year[148]. Revenue Breakdown - Revenue from wastewater and reclaimed water treatment services in China was HKD 4,704 million, contributing 44% to total revenue, with a gross margin of 60%[24]. - The construction of integrated governance projects generated revenue of HKD 819.3 million, accounting for 8% of total revenue, with a gross margin of 17%[25]. - The revenue from water environment governance technology services and equipment sales was HKD 1,089.8 million, with a gross margin of 40%[27]. - Revenue from integrated governance project construction services decreased from HKD 1,494,900,000 to HKD 819,300,000, a drop of HKD 675,600,000[54]. Capacity and Projects - The total design capacity increased by 496,516 tons per day, bringing the total design capacity to 45,382,478 tons per day[13]. - New signed water treatment projects during the period included a wastewater treatment project in Baise City with a new signed water volume of 1,467,480 tons per day[13]. - The total design capacity of wastewater treatment facilities in mainland China is 17,997,460 tons per day, an increase from 16,831,055 tons per day last year, representing a growth of approximately 7%[41]. - The total designed capacity of new projects during the period was 1,467,480 tons per day, including BOT projects with a capacity of 815,000 tons per day[36]. Operational Efficiency and Strategy - The company is focusing on digital strategies and has successfully launched the "BEAOA" technology, the first of its kind for large-scale engineering applications in China[18]. - The company is committed to enhancing operational efficiency and customer satisfaction by implementing a customer-centric organizational structure[15]. - The company is actively exploring new businesses such as sludge disposal and industrial water treatment, in line with the national "3060" dual carbon goals[20]. - The company aims to enhance its digital transformation and operational management capabilities to improve service quality and strengthen its brand image[20]. Financial Management - The company has improved cash flow management and successfully issued its first medium-term note of the year at a record low interest rate[18]. - The company reported a significant increase in user engagement metrics, with a notable rise in active users compared to the previous reporting period[97]. - The company is investing in new technologies to improve operational capabilities and customer experience, with a focus on sustainability initiatives[97]. Assets and Liabilities - The total assets as of June 30, 2022, amounted to HKD 190,076,907, an increase from HKD 183,623,186 at the end of 2021[94]. - The total liabilities increased to HKD 127,085,987 from HKD 120,074,432, reflecting a rise in both current and non-current liabilities[94]. - The total receivables from contract customers, service concession arrangements, and accounts receivable amounted to HKD 121.1 billion, an increase from HKD 119.6 billion at the end of the previous year[71]. Employee and Management - The total number of employees as of June 30, 2022, was 71,246, including 50,436 from the merged subsidiary[82]. - Total compensation paid to key management personnel amounted to HKD 13,220,000 for the six months ended June 30, 2022, a slight decrease from HKD 13,467,000 in the same period of 2021[198]. Strategic Acquisitions - The group completed the acquisition of 70% equity in a wastewater treatment company in China for a total cash consideration of HKD 333,048[173]. - The group is expanding its business through strategic acquisitions aimed at enhancing its operational capabilities in relevant sectors[173]. Market Outlook - The company plans to focus on market expansion and new product development to drive future growth[87]. - The company has set a performance guidance for the next quarter, aiming for a revenue growth of approximately 10% year-over-year[97].

Financial Performance - The company recorded a revenue of HKD 27,880,100,000 for the year, representing a year-on-year increase of 9.9%[9]. - The net profit attributable to shareholders was HKD 4,195,900,000, reflecting a slight increase of 0.3% compared to the previous year[9]. - The basic earnings per share for the year were HKD 0.4142[9]. - The company's revenue increased by 10% to HKD 27,880,100,000, driven by growth in water treatment services[16]. - The profit attributable to shareholders rose to HKD 4,195,900,000, reflecting a strong performance in the water treatment segment[16]. - The gross profit margin for water treatment services was reported at 40%, with a significant contribution from both domestic and overseas operations[17]. - The total operating income from wastewater and reclaimed water treatment services in China reached HKD 7,674.1 million, a 30% increase compared to the previous year[26]. - The gross profit margin for wastewater treatment services was reported at 58%, while the gross profit margin for water supply services was 48%[26]. - The company's total revenue for the year was HKD 11,214.2 million, with a net profit attributable to shareholders of HKD 4,778.2 million, reflecting a significant increase in operational performance[34]. - The company reported a significant increase in interest income, which rose to HKD 1,096,965 from HKD 697,401, a growth of 57.43%[173]. - The company's management expenses increased to HKD 3,158,430 from HKD 2,526,199, reflecting a rise of 24.94%[173]. - The total comprehensive income for the year was HKD 6,743,419, down from HKD 9,718,763 in 2020, showing a decrease of 30.49%[174]. Capacity and Operations - The company added a net design capacity of 2,761,226 tons/day, bringing the total design capacity to 44,885,962 tons/day[10]. - The new signed water volume for the year was 3,960,221 tons/day, indicating strong operational delivery capabilities[10]. - The company achieved an additional recycled water capacity of 761,000 tons/day, promoting ecological utilization of wastewater[10]. - The average daily treatment volume was 14,652,604 tons, with an average daily treatment rate of 83%[35]. - The group operates 1,370 water plants and sewage treatment facilities across 20 provinces, 5 autonomous regions, and 4 municipalities in mainland China[29]. - The company operates 121 water supply plants in mainland China with a total design capacity of 9,372,836 tons per day, processing 2,002,000,000 tons and achieving an average contract price of approximately RMB 2.10 per ton[42]. Business Development and Strategy - The company is actively exploring new business growth points in water supply, pipeline networks, and wastewater resource utilization[10]. - The company is expanding its clean energy business, focusing on solar power, wind power, and clean heating services[11]. - The company plans to expand its market presence and invest in new technologies to enhance service offerings[21]. - The group plans to expand into new business areas such as sludge management and urban water services, focusing on customer experience and satisfaction[14]. - The company aims to enhance operational efficiency and achieve sustainable development by leveraging technology and innovative business models[14]. - The company is committed to sustainability and environmental protection, aligning its business strategies with global ecological standards[97]. Financial Position and Investments - The company successfully issued various bonds at historically low interest rates, showcasing its strong financial position in the market[12]. - The company's total equity increased to HKD 63,548,800,000, up from HKD 57,124,000,000 in 2020, indicating a growth of approximately 11.3%[61]. - The debt-to-equity ratio rose to 1.03 from 1.01 in 2020, primarily due to increased bank borrowings[61]. - The group has significant receivables from service concession arrangements, accounts receivable, and other receivables totaling approximately HKD 128.2 billion, representing 69.8% of total assets as of December 31, 2021[166]. - The expected credit loss provision for these receivables amounted to approximately HKD 1.56 billion[166]. - The company has a financial risk management policy detailed in the financial statements, addressing potential risks and uncertainties faced by the group[106]. Corporate Governance - The company has established three committees under the Board of Directors: the Audit Committee, the Nomination Committee, and the Remuneration Committee, to enhance corporate governance practices[76]. - The Audit Committee is responsible for reviewing the company's financial statements and ensuring compliance with corporate governance codes and environmental, social, and governance reporting guidelines[78]. - The board of directors consists of 9 members, including 5 executive directors and 4 independent non-executive directors[64]. - The company has implemented a share award scheme, granting 12,471,409 shares on November 1, 2021, with 140,920 shares unvested as of December 31, 2021[62]. - The company has a structured process for shareholders to propose items at the annual general meeting, requiring a signed notice to be submitted at least 7 days before the meeting[90]. - The company has adhered to all corporate governance code provisions, except for the absence of the chairman at the annual general meeting due to travel restrictions related to COVID-19[91]. Risk Management - The company has established a risk management framework consisting of "three lines of defense" to identify, assess, and monitor risks[84]. - The audit committee reported no significant internal control deficiencies as of December 31, 2021, and believes the risk management system is effective and adequate[86]. - The company has implemented a whistleblowing policy to allow employees and partners to report misconduct confidentially[86]. - The group has adopted revised Hong Kong Financial Reporting Standards for the first time in the current financial year, including HKFRS 9 and HKAS 39[198]. Shareholder Engagement - The company maintained effective communication with shareholders through online meetings and social media, ensuring transparency during the COVID-19 pandemic[91]. - The board believes that effective investor relations play a crucial role in creating shareholder value and enhancing market confidence[91]. - The company allows shareholders to convene a special general meeting upon request if they hold at least 10% of the paid-up capital[89]. Future Outlook - Future outlook indicates a focus on expanding market share and enhancing operational efficiency through new technologies and products[97]. - The company is actively pursuing mergers and acquisitions to strengthen its market position and diversify its service offerings[98]. - The company aims to leverage its strong financial position to explore new business opportunities in emerging markets[97].

[Company and Financial Overview](index=4&type=section&id=Company%20and%20Financial%20Overview) This section provides fundamental company information and the Chairman's review of financial performance and strategic initiatives [Company Information](index=4&type=section&id=Company%20Information) This section provides fundamental company information, including board members, registered office, principal bankers, and auditor - The company's principal bankers include major banks in Hong Kong and mainland China, such as Agricultural Bank of China, Bank of China, and Bank of Communications, indicating diverse financing channels[9](index=9&type=chunk) - The company's auditor is Ernst & Young[9](index=9&type=chunk) [Chairman's Report](index=6&type=section&id=Chairman%27s%20Report) The Chairman's report reviews H1 2021 performance, emphasizing steady growth, improved cash flow, and optimized profit structure Summary of H1 2021 Performance | Metric | Value | | :--- | :--- | | Operating Revenue | HKD 13.669 billion (+10% YoY) | | Profit Attributable to Shareholders | HKD 2.421 billion (+7% YoY) | | Basic Earnings Per Share | HKD 0.2401 | | Interim Cash Dividend | HKD 0.09 per share | | Net New Designed Capacity | 1,306,595 tons/day | | Total Designed Capacity | 43,431,331 tons/day | - The Group's asset-light transformation strategy has yielded significant results, with notable improvements in cash flow and enhanced capital management, supported by optimized accounts receivable management and successful issuance of low-interest Panda MTNs[13](index=13&type=chunk)[17](index=17&type=chunk) - The Group continues to deepen cooperation with China Three Gorges Corporation under an asset-light model, participating in Yangtze River protection projects with a cumulative total investment of **RMB 28.1 billion**[15](index=15&type=chunk) - The company actively responds to the national '3060 Dual Carbon Goals', with its Luoyang Chandong Wastewater Treatment Plant selected as one of the first low-carbon urban wastewater treatment operation cases, demonstrating industry recognition for its low-carbon practices[18](index=18&type=chunk) [Management Discussion and Analysis](index=11&type=section&id=Management%20Discussion%20and%20Analysis) This section analyzes the Group's H1 2021 financial and operational performance, driven by water treatment services, with detailed reviews of revenue, costs, and balance sheet items [Financial Summary](index=11&type=section&id=1.%20Financial%20Summary) This section presents H1 2021 financial performance by business segment and region, highlighting water treatment services as the primary profit driver H1 2021 Financial Performance by Business Segment | Business Segment | Operating Revenue (HKD million) | % of Total Revenue | Profit Attributable to Shareholders (HKD million) | % of Total Profit | | :--- | :--- | :--- | :--- | :--- | | **Water Treatment Services** | **5,202.2** | **38%** | **2,328.1** | **58%** | | - Wastewater and Reclaimed Water | 3,739.3 | 27% | 1,811.7 | 45% | | - Water Supply Services | 1,462.9 | 11% | 516.4 | 13% | | **Water Environment Governance Construction Services** | **6,917.5** | **51%** | **1,229.4** | **31%** | | - Integrated Governance Projects | 1,494.9 | 11% | 494.7 | 12% | | - Construction of BOT Water Projects | 5,422.6 | 40% | 734.7 | 19% | | **Water Environment Governance Technical Services and Equipment Sales** | **1,549.5** | **11%** | **445.0** | **11%** | | **Total** | **13,669.2** | **100%** | **4,002.5 (Business Performance)** | **100%** | H1 2021 vs H1 2020 Performance Comparison | Metric | H1 2021 (HKD million) | H1 2020 (HKD million) | Growth Rate | | :--- | :--- | :--- | :--- | | Total Operating Revenue | 13,669.2 | 12,453.8 | +10% | | Profit Attributable to Shareholders | 2,420.8 | 2,268.4 | +7% | [Business Review](index=17&type=section&id=2.%20Business%20Review) As of June 30, 2021, the Group operated 1,317 water plants and rural wastewater treatment facilities with a total designed capacity of 43,431,331 tons/day, covering various regions in mainland China and overseas - As of June 30, 2021, the Group owned 1,317 water plants and rural wastewater treatment facilities, with a total designed capacity of **43,431,331 tons/day**[34](index=34&type=chunk)[35](index=35&type=chunk) - During the period, the Group's total new project designed capacity was 2,055,200 tons/day, while exited projects had a designed capacity of 748,605 tons/day, resulting in a net increase of **1,306,595 tons/day**[34](index=34&type=chunk) [Water Treatment Services](index=17&type=section&id=2.1%20Water%20Treatment%20Services) Water treatment services, including wastewater, reclaimed water, and water supply, are the Group's core business and primary profit driver, with mainland China as the main market Performance of Operating Water Treatment Services Segment (H1 2021) | Service Type | Region | Number of Plants | Designed Capacity (tons/day) | Operating Revenue (HKD million) | Profit Attributable to Shareholders (HKD million) | | :--- | :--- | :--- | :--- | :--- | :--- | | **Wastewater and Reclaimed Water** | **Mainland China** | 802 | 16,730,995 | 3,522.1 | 1,779.7 | | | **Overseas** | 52 | 496,708 | 217.2 | 32.0 | | **Water Supply Services** | **Mainland China** | 114 | 9,291,665 | 1,186.3 | 441.0 | | | **Overseas** | 37 | 1,373,864 | 276.6 | 75.4 | | **Total** | | **1,005** | **27,893,232** | **5,202.2** | **2,328.1** | - The average contract price for wastewater and reclaimed water treatment services in mainland China was approximately **RMB 1.36 per ton**, an increase from RMB 1.28 at the end of 2020[38](index=38&type=chunk) [Water Environment Governance Construction Services](index=22&type=section&id=2.2%20Water%20Environment%20Governance%20Construction%20Services) This segment includes integrated governance and BOT water project construction, with integrated project revenue declining due to conservative investment, while BOT project profit decreased due to lower gross margin - In line with the Group's asset-light strategy, the investment approach for integrated governance projects became more conservative, leading to a decrease in construction operating revenue from HKD 1.68 billion to **HKD 1.49 billion** during the period[46](index=46&type=chunk) - Profit attributable to shareholders from construction of BOT water projects decreased by **30% year-on-year**, primarily due to a decline in gross margin for new BOT water projects during the period[48](index=48&type=chunk) [Water Environment Governance Technical Services and Equipment Sales](index=23&type=section&id=2.3%20Water%20Environment%20Technical%20Services%20and%20Equipment%20Sales) As a comprehensive water system solutions provider, the Group's technical services and equipment sales business continued to grow, with revenue reaching HKD 1.55 billion Technical Services and Equipment Sales Performance | Metric | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Operating Revenue | HKD 1,549.5 million | HKD 1,280.0 million | | Profit Attributable to Shareholders | HKD 445.0 million | HKD 404.1 million | [Financial Analysis](index=24&type=section&id=3.%20Financial%20Analysis) This section analyzes the Group's financial position, noting a slight decrease in overall gross margin due to construction services, increased administrative expenses, and a lower gearing ratio - The Group's overall gross margin slightly decreased from **38%** in the prior period to **37%**, primarily due to a decline in gross margin for integrated governance project construction services from 27% to **18%** and for construction of BOT water projects from 25% to **19%**[54](index=54&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) Key Receivables Movement (June 30, 2021 vs December 31, 2020) | Item | June 30, 2021 (HKD million) | December 31, 2020 (HKD million) | | :--- | :--- | :--- | | Amounts due from contract customers | 48,795.4 | 45,405.9 | | Service concession arrangement receivables | 48,179.4 | 45,829.7 | | Trade receivables | 20,973.4 | 21,232.2 | | **Total** | **117,948.2** | **112,467.8** | - As of June 30, 2021, the Group's gearing ratio (net debt/total equity) was **0.98**, a decrease from 1.01 at the end of 2020, mainly due to an increase in total equity from capital injection into a subsidiary during the period[69](index=69&type=chunk) - Total capital expenditure during the period was **HKD 6.09 billion**, primarily for the construction and acquisition of water plants (**HKD 5.26 billion**)[70](index=70&type=chunk) [Condensed Consolidated Financial Statements](index=33&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the six months ended June 30, 2021, including the income statement, statement of comprehensive income, statement of financial position, statement of changes in equity, and cash flow statement [Condensed Consolidated Income Statement](index=33&type=section&id=Condensed%20Consolidated%20Income%20Statement) For the six months ended June 30, 2021, the Group reported operating revenue of HKD 13.67 billion, gross profit of HKD 5.04 billion, and profit for the period of HKD 3.09 billion H1 2021 Condensed Consolidated Income Statement Summary | Metric (HKD million) | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Operating Revenue | 13,669.2 | 12,453.8 | | Gross Profit | 5,042.6 | 4,775.1 | | Profit from Operations | 4,696.8 | 4,244.7 | | Profit Before Tax | 3,762.7 | 3,481.3 | | Profit for the Period | 3,086.4 | 2,771.7 | | Profit Attributable to Equity Holders of the Company | 2,420.8 | 2,268.4 | [Condensed Consolidated Statement of Financial Position](index=35&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2021, the Group's total assets were HKD 182.55 billion, total liabilities were HKD 120.60 billion, and total equity was HKD 61.95 billion, with non-current assets forming the largest portion June 30, 2021 Condensed Consolidated Statement of Financial Position Summary | Metric (HKD million) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | **Total Assets** | **182,553.7** | **174,401.1** | | - Non-current Assets | 140,042.5 | 132,953.7 | | - Current Assets | 42,511.2 | 41,447.4 | | **Total Equity** | **61,949.5** | **57,124.0** | | - Equity Attributable to Owners of the Company | 38,850.9 | 37,343.8 | | **Total Liabilities** | **120,604.3** | **117,277.1** | | - Non-current Liabilities | 72,658.1 | 65,355.1 | | - Current Liabilities | 47,946.2 | 51,922.0 | [Condensed Consolidated Cash Flow Statement](index=39&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statement) For the six months ended June 30, 2021, the Group's net cash used in operating activities was HKD 1.33 billion, net cash used in investing activities was HKD 1.13 billion, and net cash from financing activities was HKD 2.85 billion H1 2021 Condensed Consolidated Cash Flow Statement Summary | Metric (HKD million) | H1 2021 | H1 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | (1,329.9) | (4,201.7) | | Net cash used in investing activities | (1,125.4) | (1,151.0) | | Net cash from financing activities | 2,845.8 | 4,323.8 | | Net increase/(decrease) in cash and cash equivalents | 390.5 | (1,028.8) | | Cash and cash equivalents at end of period | 14,941.1 | 10,804.2 | [Notes to the Condensed Consolidated Financial Information](index=41&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Information) This section provides detailed notes to the interim financial statements, covering basis of preparation, accounting policy changes, segment information, revenue recognition, asset and liability composition, related party transactions, contingent liabilities, and capital commitments [Operating Segment Information](index=43&type=section&id=2.%20Operating%20Segment%20Information) This note details revenue, performance, and assets by business segment and geographical region, with mainland China being the Group's primary revenue source - By geographical region, operating revenue from mainland China was **HKD 12.96 billion**, accounting for **94.8%** of total revenue, with other regions contributing HKD 0.70 billion[101](index=101&type=chunk) [Trade Receivables](index=53&type=section&id=11.%20Trade%20Receivables) As of June 30, 2021, the Group's total trade receivables were HKD 20.97 billion, slightly lower than HKD 21.23 billion at the end of 2020, with the majority settled within three months - Trade receivables primarily arise from integrated governance project construction services, technical and consulting services, among others, with most non-interest bearing except for certain integrated governance project receivables[117](index=117&type=chunk) [Contingent Liabilities](index=56&type=section&id=16.%20Contingent%20Liabilities) As of June 30, 2021, the Group had contingent liabilities, mainly comprising bank guarantees for project bidding and performance, and corporate guarantees for credit facilities to associates, joint ventures, and third parties - The Group provided bank guarantees of **HKD 925 million** for project bidding and performance, and corporate guarantees of **HKD 3.817 billion** for associated companies and third parties[126](index=126&type=chunk) [Capital Commitments](index=57&type=section&id=18.%20Capital%20Commitments) As of June 30, 2021, the Group's total contracted but unprovided capital commitments were HKD 19.16 billion, primarily for new service concession arrangements and contributions to joint ventures Capital Commitments Summary | Item (HKD million) | June 30, 2021 | December 31, 2020 | | :--- | :--- | :--- | | Transfer-Operate-Transfer (TOT) | 320.5 | 681.8 | | Build-Operate-Transfer (BOT) | 7,448.2 | 9,044.5 | | Contributions to joint ventures | 11,376.3 | 11,306.1 | | **Total** | **19,158.4** | **21,070.9** | [Related Party Disclosures](index=58&type=section&id=19.%20Related%20Party%20Disclosures) This note discloses significant related party transactions and balances, including deposits, loans, finance leases, guarantees, and service transactions with Beijing Enterprises Holdings and its subsidiaries, joint ventures, associates, and ABC Group - The Group maintains ongoing deposit and loan relationships with Beijing Enterprises Group Finance Co Ltd As of June 30, 2021, deposits with the company amounted to **HKD 1.46 billion**, and borrowings from the company were **HKD 4.34 billion**[133](index=133&type=chunk)[134](index=134&type=chunk) - Following ABC Financial's capital injection into the Group's subsidiary BEWG Guangxi, ABC Group became a related party, engaging in deposit, finance lease, and loan financing transactions with the Group[135](index=135&type=chunk)[136](index=136&type=chunk)[137](index=137&type=chunk) [Disclosable Information](index=66&type=section&id=Disclosable%20Information) This section covers information required for disclosure under the Listing Rules, including directors' and major shareholders' interests, share option schemes, share award schemes, board changes, controlling shareholder's specific performance obligations, interim dividend distribution, and share transfer registration suspension [Interests of Major Shareholders in Shares and Underlying Shares](index=68&type=section&id=Major%20Shareholders%20Interests%20in%20Shares%20and%20Underlying%20Shares) This section discloses major shareholders holding 5% or more of the company's shares as of June 30, 2021, with Beijing Enterprises Holdings Limited as the controlling shareholder and China Three Gorges Corporation as a significant shareholder Major Shareholder Holdings (June 30, 2021) | Shareholder Name | Number of Shares Held | Percentage of Issued Share Capital | | :--- | :--- | :--- | | Beijing Enterprises Holdings Limited (and parties acting in concert) | 4,121,607,070 | 41.12% | | China Three Gorges Corporation (and parties acting in concert) | 1,588,495,436 | 15.85% | [Share Option Scheme](index=70&type=section&id=Share%20Option%20Scheme) The company's share option scheme adopted on June 28, 2011, expired on June 27, 2021, with no new options granted thereafter, and 254,526,000 unexercised options remaining as of June 30, 2021 - The share option scheme expired on June 27, 2021 During the period, **2,200,000** share options were exercised[155](index=155&type=chunk)[157](index=157&type=chunk) [Specific Performance Obligations of Controlling Shareholder](index=74&type=section&id=Specific%20Performance%20Obligations%20of%20Controlling%20Shareholder) This section discloses specific performance covenants in various loan and note agreements, requiring the controlling shareholder, Beijing Enterprises Holdings Limited, to maintain a minimum shareholding and management control in the company - Several loan and note agreements totaling billions of Hong Kong Dollars equivalent contain specific performance covenants requiring the controlling shareholder, Beijing Enterprises Holdings, to maintain a minimum shareholding (e.g., **35% or 40%**) and control over the company[162](index=162&type=chunk)[163](index=163&type=chunk) [Interim Dividend](index=76&type=section&id=Interim%20Dividend) The Board resolved to declare an interim cash dividend of HKD 0.09 per ordinary share for the six months ended June 30, 2021 - The company announced an interim cash dividend of **HKD 0.09 per share**, higher than HKD 0.084 per share in the prior period[164](index=164&type=chunk)[109](index=109&type=chunk) [Corporate Governance](index=77&type=section&id=Corporate%20Governance) This section outlines the company's corporate governance practices, confirming compliance with the Corporate Governance Code, with one deviation, and effective risk management and internal control systems [Corporate Governance Compliance](index=77&type=section&id=Corporate%20Governance%20Compliance) The company complied with the Listing Rules' Corporate Governance Code during the reporting period, with one deviation due to the Chairman's inability to attend the AGM in person - The company complied with the Corporate Governance Code, with the sole deviation being the Chairman's inability to attend the AGM on June 9, 2021, due to global travel restrictions[167](index=167&type=chunk) [Audit Committee](index=77&type=section&id=Audit%20Committee) The Audit Committee, composed of three independent non-executive directors, oversees financial reporting, risk management, and internal controls, and has reviewed and approved the interim results - The Audit Committee, comprising three independent non-executive directors and chaired by Mr She Junle, has reviewed and approved the unaudited interim results for the six months ended June 30, 2021[169](index=169&type=chunk) [Risk Management and Internal Control](index=78&type=section&id=Risk%20Management%20and%20Internal%20Control) The Board is ultimately responsible for the Group's risk management and internal control systems, which were deemed effective and adequate for the period ended June 30, 2021 - The Board believes the Group's risk management and internal control systems were effective and adequate during the reporting period, with no significant issues found that could affect financial, operational, and compliance controls[170](index=170&type=chunk)

年報 2020 （於百慕達註冊成立之有限公司） （股份代號：371） 北控水務集團有限公司 2020 年報 （股份代號：371） （於百慕達註冊成立之有限公司） 目錄 | 公司資料 | 02 | | --- | --- | | 集團架構 | 03 | | 主席報告 | 04 | | 管理層討論及分析 | 09 | | 企業管治報告 | 33 | | 董事及高級管理人員 | 50 | | 董事會報告 | 55 | | 獨立核數師報告 | 90 | | 綜合損益表 | 97 | | 綜合全面收益表 | 98 | | 綜合財務狀況表 | 99 | | 綜合權益變動表 | 101 | | 綜合現金流量表 | 103 | | 財務報表附註 | 107 | | 五年財務概要 | 259 | 北控水務集團有限公司 2020年年報 01 目錄 公司資料 董事會 執行董事 李永成先生 （主席） 姜新浩先生 周 敏先生 （行政總裁） 李海楓先生 張鐵夫先生 柯 儉先生 沙 寧女士 董渙樟先生 李 力先生 非執行董事 趙 峰先生 獨立非執行董事 佘俊樂先生 張高波先生 郭 銳先生 王凱軍先生 李文俊博士 審核委員會 佘俊樂先生 （ ...

Financial Performance - The company recorded a revenue of HKD 28,192,500,000 for the year ended December 31, 2019, representing a 15% year-on-year growth[8]. - The net profit attributable to shareholders reached HKD 4,925,700,000, marking a 10% increase compared to the previous year[8]. - The basic earnings per share for the year were HKD 0.4977[8]. - The company's net profit attributable to shareholders increased by 10% to HKD 4,925.7 million, driven by a 15% rise in operating revenue to HKD 28,192.5 million from water treatment and environmental services[14]. - The company's total revenue for 2019 was HKD 28,192.5 million, representing a 15% increase from HKD 24,596.9 million in 2018[26]. - The net profit attributable to shareholders for 2019 was HKD 4,925.7 million, up 10% from HKD 4,471.3 million in 2018[26]. - The gross profit margin for water treatment services was 25% in 2019, consistent with the previous year[26]. - The company achieved a gross profit margin of 36% for the year, consistent with the previous year[47]. - The company reported a pre-tax profit of HKD 7,556,092, which is a 11.4% increase from HKD 6,778,910 in the previous year[188]. - Total comprehensive income for the year was HKD 4,933,804, significantly higher than HKD 2,434,095 in 2018[192]. Operational Capacity and Expansion - The company added a net processing capacity of 2,564,249 tons per day, bringing the total design capacity to 39,388,882 tons per day as of December 31, 2019[8]. - The company operates a total of 1,252 water plants, including 1,058 sewage treatment plants, with a net increase in daily design capacity of 2,564,249 tons in 2019[28]. - The total design capacity of the company's water treatment projects reached 39,388,882 tons by the end of 2019[28]. - The total design capacity of wastewater treatment plants in mainland China reached 13,352,487 tons per day, an increase from 12,031,550 tons per day in the previous year, representing a growth of approximately 10.9%[33]. - The company operates 499 wastewater treatment plants and 15 recycled water treatment plants in mainland China[33]. - The company expanded its coverage to 20 provinces, 5 autonomous regions, and 3 municipalities in mainland China[27]. Business Strategy and Development - The company actively expanded its emerging business in hazardous waste treatment and environmental sanitation operations, with overseas business extending to Botswana and Angola[9]. - The company plans to implement a dual-platform strategy focusing on asset management and operational management to support its light asset transformation[9]. - The company plans to focus on high-quality development and expand into municipal pipeline, water supply, and smart city construction sectors[12]. - The company is committed to building demonstration projects in rural sewage treatment, leveraging government policies to support rural revitalization[9]. - The company is responding to intensified market competition and regulatory pressures by innovating its business model and enhancing operational capabilities[9]. - The company emphasizes the importance of employee, customer, and partner relationships for sustainable development[11]. Financial Management and Investments - The company aims to enhance cash flow management by improving the efficiency of fund utilization and strengthening accounts receivable management[11]. - The company will continue to invest in high-yield, low-risk projects in advantageous regions to drive growth[11]. - The company reported a financial expense of HKD 2,104.6 million, impacting overall profitability[24]. - The company incurred financial expenses of HKD 2,432,792, an increase from HKD 2,104,563 in 2018[188]. - The company has outstanding bonds totaling RMB 2,200,000,000 due in July 2023, with an interest rate of 3.33%[126]. - The company has issued perpetual notes with an outstanding principal of RMB 2,800,000,000 at a fixed annual interest rate of 3.70%[127]. Corporate Governance and Compliance - The company has established a unified data warehouse and standardized management mechanisms to enhance operational efficiency and performance management[10]. - The company has established three board committees: Audit Committee, Nomination Committee, and Remuneration Committee to enhance governance practices[89]. - The company has a corporate governance policy that is regularly reviewed and updated to ensure compliance with legal and regulatory requirements[93]. - The board believes it has complied with all provisions of the Corporate Governance Code, except for the absence of the chairman at the annual general meeting held on May 31, 2019[108]. - The company has arranged appropriate liability insurance for its directors and senior officers, covering costs, losses, and liabilities incurred during the performance of their duties[85]. Risk Management - The group identified three major risks during the year: policy and regulatory risk, market competition risk, and reputation risk[99]. - The group has established a whistleblowing policy to allow employees and stakeholders to report misconduct confidentially[100]. - The audit committee is responsible for overseeing the integrity of the company's financial statements and the effectiveness of risk management and internal control systems[95]. - The risk management function has engaged in activities such as monitoring key risk indicators and workshops to discuss the importance of risk management and internal control systems[99]. Shareholder Relations and Dividends - The company declared a final cash dividend of HKD 0.078 per share to reward shareholders for their continued support[8]. - The group reported a profit for the year ending December 31, 2019, with a proposed final dividend of HKD 0.078 per share, following an interim dividend of HKD 0.107 per share paid on October 21, 2019[119]. - The company actively maintains communication with institutional shareholders and potential investors through various channels, including meetings, calls, and emails[107]. Future Outlook - The company is focused on expanding its market presence and enhancing its technological capabilities in water management and environmental protection[115]. - The strategic focus includes potential mergers and acquisitions to bolster growth and market share in the water services sector[115].

Financial Performance - For the first half of 2019, the company recorded revenue of HKD 12,829,100,000, representing a year-on-year growth of 28%[14] - The net profit attributable to shareholders reached HKD 2,769,900,000, an increase of 17% compared to the previous year[14] - The company's profit attributable to shareholders increased by 17% to HKD 2,769,900,000[20] - Revenue from water treatment services and water environment governance construction services rose by 28% to HKD 12,829,100,000[20] - The total revenue for the first half of 2019 was HKD 12,829.1 million, representing a 28% increase compared to HKD 10,008.8 million in the same period of 2018[33] - The company reported a significant increase in profit attributable to shareholders, with a rise of 31% in the first half of 2019 compared to the same period in 2018[35] - Gross profit for the same period was HKD 4,772,182, representing a 24.5% increase from HKD 3,833,501 in 2018[81] - The company reported a pre-tax profit of HKD 4,064,653, which is a 20.2% increase from HKD 3,379,442 in 2018[81] Dividends and Shareholder Returns - The company declared an interim cash dividend of HKD 0.107 per share to reward shareholders for their support[14] - The interim cash dividend declared on August 28, 2019, was HKD 0.107 per share, totaling approximately HKD 1,071,888,000, up from HKD 894,196,000 in the previous year[120] - Basic earnings per share for the six months ended June 30, 2019, were HKD 0.286, compared to HKD 0.256 for the same period in 2018, reflecting a 11.8% increase[124] Operational Capacity and Projects - The company added a net treatment capacity of 936,925 tons/day, bringing the total design capacity to 37,761,558 tons/day as of June 30, 2019[14] - The company operates a total of 1,047 water plants, including 875 sewage treatment plants and 140 water supply plants[36] - The total operating capacity of wastewater treatment plants in mainland China increased to 12,455,750 tons per day, up from 12,031,550 tons, representing a growth of approximately 3.5%[41] - The actual total treatment volume for wastewater during the period was 1,989,000,000 tons, with a total revenue of HKD 2,331,400,000 and a net profit attributable to shareholders of HKD 1,198,800,000[41] - The company plans to continue expanding its project portfolio through new BOT and PPP projects, enhancing its operational capacity[36] Revenue Breakdown - The revenue breakdown includes: wastewater and reclaimed water treatment services at HKD 2,513,214, construction services at HKD 7,939,690, water supply services at HKD 1,173,320, and technical and consulting services plus equipment sales at HKD 1,202,891[115] - The total revenue from water environment governance construction services was HKD 7,939,700,000, contributing to 62% of total revenue[23] - The revenue from BOT water projects amounted to HKD 4,718,500,000, compared to HKD 3,288,700,000 for the same period last year, with attributable profit to shareholders of HKD 861,900,000, up from HKD 593,400,000[52] Cost and Expenses - The cost of sales increased to HKD 8,056,900,000 from HKD 6,175,300,000, mainly due to increased operational costs of water plants and construction service costs[55] - Management expenses rose to HKD 957,600,000 from HKD 883,900,000, primarily due to increased employee-related expenses from business expansion[57] - Financial expenses increased to HKD 1,286,400,000, up from HKD 906,900,000, attributed to higher interest from bank loans and bonds[57] Assets and Liabilities - Total assets as of June 30, 2019, amounted to HKD 139,049,264, an increase from HKD 126,380,708 at the end of 2018[85] - Total liabilities amounted to HKD 95,357,072,000, up from HKD 88,568,571,000, indicating an increase of about 9.1%[86] - The total debt ratio as of June 30, 2019, was 1.10, up from 1.14 as of December 31, 2018, due to increases in bonds and bank borrowings[74] Cash Flow and Financing - Cash and cash equivalents decreased by HKD 2,933,800,000, primarily due to payments for the acquisition and construction of multiple water projects in China[70] - The company reported a net cash outflow from operating activities of HKD (5,403,196) thousand for the six months ended June 30, 2019, compared to HKD (1,606,466) thousand for the same period in 2018, indicating a significant increase in cash usage[89] - The company has a total of HKD 3,000 million in term loan financing due in November 2020, indicating ongoing financial commitments[179] Strategic Focus and Future Outlook - The company is focusing on high-yield, low-consumption, low-risk projects in advantageous regions for future investments[17] - The company plans to focus on high-quality development and continuous innovation in its core businesses[19] - The company anticipates a sustained growth cycle in the environmental protection industry due to government support and market reforms[19] - The company plans to strengthen its capital base and financial position through the capital raising activities, facilitating future business development and expansion, including potential acquisitions[184] Governance and Risk Management - The audit committee, consisting of three independent non-executive directors, has reviewed and approved the unaudited interim results for the six months ended June 30, 2019[190] - The board is responsible for assessing the nature and extent of risks faced by the group and has established a robust risk management and internal control system[191] - The optimization of the risk management and internal control system has been deemed effective and adequate for the six months ended June 30, 2019[191]

Financial Performance - The company reported a revenue of HKD 24,596,900,000 for the year ended December 31, 2018, representing a year-on-year growth of 16%[9]. - The net profit attributable to shareholders reached HKD 4,471,300,000, marking a 20% increase compared to the previous year[9]. - The basic earnings per share for the year were HKD 0.4791[9]. - The company's total revenue for 2018 was HKD 24,596.9 million, an increase of 16% compared to HKD 21,192.4 million in 2017[27]. - The net profit attributable to shareholders for 2018 was HKD 6,774.3 million, representing a 32% increase from HKD 5,132.5 million in 2017[27]. - The gross profit margin improved from 31% to 36% year-on-year[44]. - The gross profit margin for comprehensive governance construction services rose from 14% to 24% due to higher average margins on major projects[46]. - The company reported a significant foreign exchange loss of HKD 2,531,013 related to the translation of foreign operations[185]. - Total comprehensive income for the year was HKD 2,434,095, down from HKD 6,744,391 in 2017, primarily due to foreign exchange losses[185]. - The company reported a pre-tax profit of HKD 6,778,910,000 for the year ended December 31, 2018, compared to HKD 5,315,316,000 in 2017, representing an increase of approximately 27.5%[192]. Operational Highlights - The company added a net processing capacity of 5,436,813 tons/day, bringing the total design capacity to 36,824,633 tons/day[9]. - The company successfully acquired the Qinhuangdao sewage sludge treatment PPP project, which is the largest PPP investment project in China's existing drainage facilities[9]. - The company expanded its clean energy business by merging wind and photovoltaic projects, with steady growth in installed capacity[10]. - The company operates a total of 937 water plants, including 771 sewage treatment plants, 139 water supply plants, and 25 reclaimed water treatment plants[28]. - The company has expanded its coverage to 21 provinces, 5 autonomous regions, and 2 municipalities in mainland China[28]. - The company operates 436 water treatment plants with a total design capacity of 21,666,198 tons per day, achieving a total revenue of HKD 6,986.4 million and a net profit attributable to shareholders of HKD 2,948.3 million[30]. - The company has a significant presence in the water treatment sector, with services including sewage and reclaimed water treatment, and seawater desalination across various countries[111]. Strategic Initiatives - The company is transitioning towards a light asset model to better respond to industry challenges and enhance operational efficiency[10]. - The company is focusing on asset management and operational management platforms to facilitate its transformation into a light asset enterprise[10]. - The company aims to transition from high-speed development to high-quality development, focusing on asset management and operational management platforms[13]. - The company is exploring new business models such as asset securitization and real estate trust investment funds to expand financing options[12]. - The company plans to continue expanding its market presence and enhancing its operational capabilities in both domestic and international markets[40]. - The company is committed to expanding its market presence through strategic initiatives and partnerships in the clean energy and environmental sectors[109]. Financial Management - The company plans to enhance cash flow management by improving capital efficiency and implementing strict budget execution[12]. - The company reported a fair value gain from derivative financial instruments of HKD 39.6 million, compared to a loss of HKD 1,454.9 million in the previous year[27]. - The total bank and other borrowings increased by HKD 5,940,500,000, primarily used for the acquisition and construction of multiple water projects in China[63]. - The company has ongoing related party transactions with Beijing Enterprises Group, which holds at least 30% equity in Beijing Enterprises Group Financial Company[152]. - The company’s financial risk management objectives and policies are detailed in the financial statements, indicating a structured approach to managing financial uncertainties[115]. Governance and Compliance - The company has a board diversity policy in place since September 1, 2013, focusing on a balanced mix of skills, experience, and perspectives among board members[77]. - The current board consists of 15 members with diverse professional backgrounds, ensuring a mix of long-term knowledge and new perspectives[77]. - The company has arranged appropriate directors' and officers' liability insurance to cover costs and liabilities incurred during the performance of their duties[79]. - The company has implemented strict guidelines for monitoring investments to mitigate risks and ensure alignment with corporate objectives[92]. - The company has complied with all corporate governance codes except for one specific provision during the year, ensuring transparency and protection of shareholder rights[166]. Shareholder Engagement - The company adopted a dividend policy aimed at providing stable and sustainable returns to shareholders, subject to the board's discretion and approval[97]. - Shareholders can request a special general meeting if they hold at least 10% of the paid-up capital, and the board must convene the meeting within 21 days of the request[98]. - The company maintained regular communication with institutional shareholders and potential investors through various channels, including meetings, calls, and emails[100]. - The company has arranged site visits for investors and research analysts to its engineering projects, ensuring transparency and engagement[100]. Acquisitions and Investments - The company acquired 80% equity interest in Yanji Jingcheng Environmental Industry Co., Ltd. for RMB 54,140,000 (approximately HKD 65,049,000) to enhance collaboration with the Yanji municipal government[149]. - The company issued 169,491,525 new ordinary shares to its controlling shareholder at a subscription price of HKD 5.90 per share, raising approximately HKD 1,000,000,000[150]. - The net proceeds from the share subscription were approximately HKD 999,500,000, with HKD 743,000,000 allocated for loan repayment and HKD 68,500,000 for constructing water plants in China[150]. Risk Management - The company has established a risk management framework consisting of "three levels + three lines of defense" to identify, assess, and monitor risks[91]. - The audit committee is authorized to oversee the company's risk management and internal control systems[89]. - The risk control center identified three significant risks faced by the group: policy and regulatory risk, group control risk, and reputation risk[93]. - The company has established a whistleblowing policy and comprehensive procedures to allow employees and partners to report misconduct confidentially[94].