Financial Performance - The total revenue for the year ended December 31, 2023, was HKD 5,529,050,000, representing a 31.9% increase from HKD 4,193,421,000 in the previous year[4] - Gross profit for the same period was HKD 2,472,735,000, up 9.3% from HKD 2,261,532,000 in 2022[4] - The net profit for the year was HKD 547,697,000, compared to HKD 170,294,000 in the previous year, indicating a significant increase of 221.5%[5] - Basic and diluted earnings per share improved to HKD 0.25 from a loss of HKD 7.61 in the previous year[5] - The company reported a net loss of HKD 804,808,000 in total comprehensive loss for the year, compared to a loss of HKD 1,239,071,000 in 2022[7] Revenue Segments - For the fiscal year ending December 31, 2023, total segment revenue reached HKD 5,529,050,000, a 31.9% increase from HKD 4,193,421,000 in 2022[21] - The industrial investment segment generated revenue of HKD 4,975,462,000, up 36.6% from HKD 3,644,436,000 in the previous year[21] - The standardized investment segment reported a loss of HKD 762,024,000, an improvement from a loss of HKD 941,582,000 in 2022[21] - The non-standard investment segment's loss increased to HKD 376,134,000 from HKD 133,568,000 in the prior year[21] - The license financial services segment also reported a loss of HKD 82,195,000, compared to a loss of HKD 571,344,000 in 2022[21] Assets and Liabilities - Non-current assets increased to HKD 45,537,804 thousand in 2023 from HKD 41,202,190 thousand in 2022, representing an increase of approximately 8.99%[9] - Current assets decreased to HKD 27,200,000 thousand in 2023 from HKD 27,755,419 thousand in 2022, a decline of about 2.00%[10] - Total liabilities decreased to HKD 53,845,486 thousand in 2023 from HKD 55,382,832 thousand in 2022, reflecting a reduction of approximately 2.77%[10] - Net asset value increased to HKD 18,892,318 thousand in 2023 from HKD 15,574,778 thousand in 2022, marking an increase of around 21.00%[10] - Cash and cash equivalents rose to HKD 5,718,596 thousand in 2023 from HKD 4,392,562 thousand in 2022, an increase of about 30.11%[9] Financial Costs and Income - The financial costs increased to HKD 2,068,058,000 from HKD 1,630,572,000, reflecting a rise of 27%[4] - Other income rose to HKD 190,588,000, up from HKD 125,962,000, marking a 51.3% increase[4] - The company recognized a net loss of HKD 543,062,000 from financial assets measured at fair value, an improvement from a loss of HKD 1,188,877,000 in the previous year[4] - The company recorded a net impairment loss of financial assets amounting to HKD 31,236 thousand in 2023, a decrease from HKD 168,173 thousand in 2022[29] Strategic Plans and Market Focus - The company plans to focus on market expansion and new product development in the upcoming year[4] - The company aims to enhance operational efficiency and reduce financing costs moving forward[4] - The group plans to increase its investment in emerging industries, focusing on new energy and new infrastructure[59] - The group is focusing on new energy, new infrastructure, and new technology sectors for future investment opportunities[70] Customer and Market Concentration - Over 90% of the group's revenue and assets are generated from and located in China, indicating a strong market concentration[24][25] - The group has no customers contributing more than 10% to total revenue, reflecting a diversified customer base[25] Employee and Governance - The group employed 2,226 staff as of December 31, 2023, an increase from 2,077 staff in the same period last year, reflecting a commitment to talent acquisition[95] - The company has adopted a competitive internal compensation policy to attract and retain talent, considering market levels and individual expertise[95] - The group provides a range of employee benefits, including social insurance and additional leave benefits, to enhance employee engagement and motivation[97] - The company has maintained compliance with corporate governance codes throughout the reporting period, with a clear separation of roles between the chairman and the CEO[104] Acquisitions and Investments - The group completed significant acquisitions, including the full equity interests in Qiu Ning Electric New Energy Co., Ltd. for RMB 143,567,600, and other companies for a total of RMB 55,928,800 and RMB 43,226,300 respectively[87] - The group signed a cooperation agreement to acquire all equity of Nanyang Qingdian for a total consideration of RMB 800,000,000[54] - The group established a joint venture with Shandong International Cooperation with a total investment of RMB 45,000,000[54] Compliance and Reporting - The audit committee reviewed the consolidated financial results for the year ended December 31, 2023, ensuring compliance with financial reporting procedures[105] - The annual report for the year ended December 31, 2023, will be published on the stock exchange and the company's website[109]

Economic Overview - In the first half of 2023, global economic growth slowed down, but a recession did not occur as expected, leading to considerable gains in mature equity markets[12]. - China's economic operation in the first half of 2023 showed a good start in Q1, but growth was weaker than expected in Q2, with a marginal improvement noted in June[13]. - The global economic recovery remains uncertain, with expectations of weakened growth in the second half of 2023 due to high core inflation and tightening monetary policies[41]. - The Group anticipates more policies to expand domestic demand and enhance high-quality economic development in the second half of 2023[50]. Group Strategy and Focus - The Group aims to build an outstanding industrial investment holding group, focusing on specialization, marketization, and institutionalization[16]. - The Group is focusing on new energy, new infrastructure, and other strategic emerging industries for investment opportunities, conducting in-depth research on sectors like semiconductors and energy storage technology[22]. - The Group is actively seeking strategic investment opportunities aligned with China's modernization industrial system and emerging industries[21]. - The Group plans to optimize its asset allocation structure, emphasizing industrial investment while maintaining sufficient short-term liquidity[45]. - The Group aims to capture quality investment opportunities in the new energy and new infrastructure sectors, leveraging its existing assets and strategic advantages[46]. Financial Performance - Revenue for the six months ended June 30, 2023, was HK$3,074,206, an increase of 153.5% compared to HK$1,216,778 in 2022[167]. - Gross profit for the same period was HK$1,662,430, up 144.4% from HK$680,917 in 2022[167]. - Profit before tax decreased to HK$176,507, down 23.7% from HK$231,451 in 2022[169]. - Profit for the period was HK$90,048, a significant decline of 70.1% compared to HK$300,921 in 2022[171]. - Total comprehensive loss for the period was HK$1,100,631, compared to a loss of HK$15,514 in 2022[172]. Risk Management - The Group has enhanced its comprehensive risk management system, focusing on macroeconomic and systemic risks while controlling investment risks from market fluctuations[17]. - The Group has implemented a specific risk mitigation plan for existing risks, including debt restructuring and the introduction of relief funds[17]. - The Group's risk management system focuses on macroeconomic and systemic risks, ensuring stable liquidity and investment risk control[20]. - The Group aims to mitigate existing risks through effective post-investment management and asset revitalization strategies[54][57]. Investment Performance - The industrial investment business segment recorded a profit of approximately HK$485,733,000 during the reporting period[30]. - The standard investment business incurred a loss of approximately HK$293,736,000 on a fair value basis, compared to a loss of approximately HK$401,942,000 in the corresponding period[32]. - The non-standard investment business recorded a profit of HK$57,221,000 for the Reporting Period, compared to a loss of approximately HK$788,189,000 for the Corresponding Period[37]. - The licensed financial services business achieved a profit of approximately HK$107,547,000, recovering from a loss of approximately HK$633,792,000 in the previous year[40]. Corporate Governance and Management - The CEO position was vacant until June 28, 2023, when Mr. Zhu Jianbiao was appointed[140]. - The Company has complied with the Model Code for Securities Transactions by Directors during the reporting period[139]. - The Company will continue to review and update its corporate governance practices[140]. - The Group has implemented a competitive remuneration policy to attract and retain talent, with performance reviews influencing annual remuneration adjustments[120]. Financial Position - As of June 30, 2023, the total cash and cash equivalents amounted to approximately HK$3,495,082,000, a decrease from HK$4,392,562,000 as of December 31, 2022[56][59]. - Total assets were approximately HK$66,820,836,000, down from HK$68,957,609,000 as of December 31, 2022[56][59]. - The Group's total deficit attributable to owners was approximately HK$942,280,000 as of June 30, 2023, compared to HK$36,053,000 as of December 31, 2022[61][63]. - The gearing ratio as of June 30, 2023, was approximately 66.82%, up from 63.50% as of December 31, 2022[66][68]. Employee and Human Resources - As of June 30, 2023, the Company had 2,185 employees, a decrease from 2,437 employees in the corresponding period[119]. - Employees are provided with a range of welfare policies, including bonuses for outstanding performance and various types of leave benefits[121]. - The Group continues to invest in human resources management to ensure a supportive and healthy workplace for employees[124]. Acquisitions and Investments - During the reporting period, the Group completed acquisitions of three new energy companies for a total consideration of RMB242,722,700, with the acquisitions finalized on January 1, 2023[76][79]. - The Group's acquisitions included Shangqiu Ningdian New Energy Co., Ltd., Lankao Gold Wind Power New Energy Co., Ltd., and Shenqiu Yingdian New Energy Co., Ltd.[76][79]. - The Group's acquisitions have resulted in the target companies becoming indirect wholly owned subsidiaries of SDHS New Energy[79][83]. Shareholder Information - Shandong Hi-Speed Group Co., Ltd. holds 2,614,912,087 shares, representing approximately 43.44% of the total shareholding[133]. - The total issued share capital of the Company as of June 30, 2023, is 6,019,431,109 shares[136]. - The Company did not purchase, sell, or redeem any of its listed securities during the reporting period[138].

[Company Information and Financial Performance Overview](index=1&type=section&id=I.%20Company%20Information%20and%20Financial%20Performance%20Overview) [Company Profile](index=6&type=section&id=1.1%20Company%20Profile) SDHG Group Limited is an exempted company incorporated in Bermuda, with its shares listed on the Hong Kong Stock Exchange and its principal place of business in Central, Hong Kong - The company is an exempted company incorporated in Bermuda, with its shares listed on the Hong Kong Stock Exchange[9](index=9&type=chunk) [Condensed Consolidated Statement of Profit or Loss](index=1&type=section&id=1.2%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) Revenue grew significantly, but profit for the period and attributable to owners turned to loss, mainly due to fair value losses on financial assets and higher finance costs Key Data from Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Metric | 2023 (HKD thousands) | 2022 (HKD thousands) | Change (%) | | :------------- | :-------------- | :-------------- | :--------- | | Revenue | 3,074,206 | 1,216,778 | 152.66 | | Gross Profit | 1,662,430 | 680,917 | 144.16 | | Other Income | 66,326 | 28,660 | 131.42 | | Other Gains and Losses, Net | (26,806) | 1,152,140 | -102.33 | | Impairment Losses on Financial Assets, Net | 271,048 | (355,828) | -176.17 | | Fair Value Losses on Financial Assets at FVTPL, Net | (203,120) | (686,844) | 70.47 | | Finance Costs | (991,226) | (386,274) | -156.62 | | Profit Before Tax | 176,507 | 231,451 | -23.74 | | Profit for the Period | 90,048 | 300,921 | -70.08 | | Profit/(Loss) for the Period Attributable to Owners of the Company | (294,432) | 75,863 | -488.18 | | Basic (Loss)/Earnings Per Share (HK cents) | (4.89) | 1.26 | -488.10 | [Condensed Consolidated Statement of Comprehensive Income](index=3&type=section&id=1.3%20Condensed%20Consolidated%20Statement%20of%20Comprehensive%20Income) The Group's total comprehensive loss for the period significantly increased, primarily due to fair value changes in financial assets at FVTOCI and exchange differences from overseas operations Key Data from Condensed Consolidated Statement of Comprehensive Income (For the six months ended June 30) | Metric | 2023 (HKD thousands) | 2022 (HKD thousands) | Change (%) | | :----------------- | :-------------- | :-------------- | :--------- | | Profit for the Period | 90,048 | 300,921 | -70.08 | | Total Other Comprehensive Loss | (1,190,679) | (316,435) | -276.29 | | Total Comprehensive Loss for the Period | (1,100,631) | (15,514) | -7000.00 | | Total Comprehensive Income/(Loss) for the Period Attributable to Owners of the Company | (910,819) | (240,471) | -278.85 | - Exchange differences from overseas operations led to a significant increase in total other comprehensive loss for the period, from **HKD (38,486) thousands** in 2022 to **HKD (974,207) thousands** in 2023[6](index=6&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=1.4%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2023, the Group's total assets and liabilities decreased, with net current assets and net assets also declining, reflecting challenges in asset structure and financial health Key Data from Condensed Consolidated Statement of Financial Position (As of June 30) | Metric | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | Change (%) | | :------------- | :-------------- | :---------------------- | :--------- | | Total Non-current Assets | 38,968,932 | 41,202,190 | -5.56 | | Total Current Assets | 27,851,904 | 27,755,419 | 0.35 | | Total Current Liabilities | 19,099,957 | 18,301,999 | 4.36 | | Net Current Assets | 8,751,947 | 9,453,420 | -7.42 | | Total Non-current Liabilities | 33,400,108 | 35,080,832 | -4.79 | | Net Assets | 14,320,771 | 15,574,778 | -8.05 | | Total Equity | 14,320,771 | 15,574,778 | -8.05 | - Equity attributable to owners of the Company significantly decreased from **HKD (36,053) thousands** as of December 31, 2022, to **HKD (942,280) thousands** as of June 30, 2023, indicating substantial shareholder losses[8](index=8&type=chunk) [Notes to the Financial Statements](index=6&type=section&id=II.%20Notes%20to%20the%20Financial%20Statements) [Basis of Preparation](index=6&type=section&id=2.1%20Basis%20of%20Preparation) These interim financial statements are prepared in accordance with the HKEX Listing Rules and HKAS 34, with the first-time adoption of several new and revised HKFRSs, notably HKAS 12 amendments impacting deferred tax asset and liability component disclosures - The interim financial statements are presented in **HKD** and prepared in accordance with Appendix 16 of the Listing Rules and HKAS 34[10](index=10&type=chunk) - First-time adoption of HKFRS 17 and amendments to HKAS 1, HKAS 8, and HKAS 12, with HKAS 12 amendments affecting deferred tax asset and liability component disclosures but not the overall deferred tax balance[11](index=11&type=chunk)[12](index=12&type=chunk) [Compliance Statement](index=6&type=section&id=2.1.1%20Compliance%20Statement) These interim financial statements comply with HKEX Listing Rules Appendix 16 disclosure requirements and HKAS 34 'Interim Financial Reporting', presented in HKD as functional currency - The interim financial statements are presented in **HKD** and prepared in accordance with Appendix 16 of the Listing Rules and HKAS 34[10](index=10&type=chunk) [Application of New and Revised HKFRSs](index=6&type=section&id=2.1.2%20Application%20of%20New%20and%20Revised%20HKFRSs) The Group first adopted several new and revised HKFRSs, with HKAS 12 (Amendments) 'Deferred Tax related to Assets and Liabilities arising from a Single Transaction' primarily affecting deferred tax asset and liability component disclosures, but not materially impacting the overall deferred tax balance - The Group first adopted HKFRS 17, and amendments to HKAS 1, HKAS 8, and HKAS 12[11](index=11&type=chunk)[12](index=12&type=chunk) - HKAS 12 (Amendments) narrowed the scope of deferred tax exemption, leading to separate determination of deferred tax related to right-of-use assets and lease liabilities, primarily affecting disclosure components but not the overall deferred tax balance in the condensed consolidated statement of financial position[13](index=13&type=chunk) [Judgements and Estimates](index=7&type=section&id=2.1.3%20Judgements%20and%20Estimates) Significant management judgements and estimates made in preparing these interim financial statements are consistent with those applied in the annual financial statements, though actual results may differ from estimates - Significant management judgements and estimation uncertainties in preparing the interim financial statements are consistent with those applied in the annual financial statements[14](index=14&type=chunk) [Operating Segment Information](index=7&type=section&id=2.2%20Operating%20Segment%20Information) The Group operates four reportable segments: Industrial Investment, Standardized Investment, Non-standardized Investment, and Licensed Financial Services. In H1 2023, Industrial Investment and Licensed Financial Services saw significant performance growth, Non-standardized Investment turned profitable, while Standardized Investment recorded a loss. Over **90%** of the Group's revenue and assets are located in China - The Group has four reportable operating segments: Industrial Investment, Standardized Investment, Non-standardized Investment, and Licensed Financial Services[15](index=15&type=chunk) - Segment performance is assessed by adjusted profit before tax, excluding unallocated income, finance costs, expenses, and share of results of joint ventures and associates[16](index=16&type=chunk) [Segment Overview](index=7&type=section&id=2.2.1%20Segment%20Overview) The Group's business is divided into four reportable operating segments—Industrial Investment, Standardized Investment, Non-standardized Investment, and Licensed Financial Services—based on reports reviewed by the chief operating decision maker, with segment performance assessed by adjusted profit before tax - The Group's chief operating decision maker (Executive Directors) classifies business into four reportable segments: Industrial Investment, Standardized Investment, Non-standardized Investment, and Licensed Financial Services, based on strategic decision reports[15](index=15&type=chunk) - Segment performance is assessed by reportable segment results (adjusted profit before tax), excluding unallocated income, finance costs, expenses, and share of results of joint ventures and associates[16](index=16&type=chunk) [Segment Results and Balance Sheet](index=8&type=section&id=2.2.2%20Segment%20Results%20and%20Balance%20Sheet) For the six months ended June 30, 2023, Industrial Investment segment revenue and performance grew significantly, Non-standardized Investment turned profitable, Licensed Financial Services improved substantially, while Standardized Investment recorded a loss. Total assets and liabilities both decreased Segment Revenue and Results (For the six months ended June 30) | Segment | 2023 Revenue (HKD thousands) | 2022 Revenue (HKD thousands) | 2023 Results (HKD thousands) | 2022 Results (HKD thousands) | | :------------- | :------------------ | :------------------ | :------------------ | :------------------ | | Industrial Investment | 2,769,414 | 938,622 | 485,733 | 1,946,652 | | Standardized Investment | 68,351 | 164,585 | (293,676) | (234,969) | | Non-standardized Investment | 133,688 | 41,064 | 57,221 | (788,189) | | Licensed Financial Services | 102,753 | 72,507 | 107,547 | (633,792) | | Total | 3,074,206 | 1,216,778 | 356,825 | 289,702 | Segment Assets and Liabilities (As of June 30) | Segment | 2023 Assets (HKD thousands) | 2022 Dec 31 Assets (HKD thousands) | 2023 Liabilities (HKD thousands) | 2022 Dec 31 Liabilities (HKD thousands) | | :------------- | :------------------ | :-------------------------- | :------------------ | :-------------------------- | | Industrial Investment | 50,364,266 | 52,197,838 | 39,224,062 | 40,691,075 | | Standardized Investment | 2,725,811 | 3,237,270 | 3,928,730 | 2,847,036 | | Non-standardized Investment | 6,524,852 | 6,902,973 | 6,186,576 | 7,130,612 | | Licensed Financial Services | 4,057,283 | 3,445,289 | 3,015,505 | 2,586,741 | | Total Assets | 66,820,836 | 68,957,609 | | | | Total Liabilities | | | 52,500,065 | 53,382,831 | [Geographical Information](index=10&type=section&id=2.2.3%20Geographical%20Information) For the six months ended June 30, 2023, over **90%** of the Group's revenue was generated in China, and over **90%** of its assets were located in China, thus no detailed geographical segment information is presented - For the six months ended June 30, 2023, over **90%** of the Group's revenue was generated in China[20](index=20&type=chunk) - As of June 30, 2023, and December 31, 2022, over **90%** of the Group's assets were located in China[21](index=21&type=chunk) [Revenue](index=11&type=section&id=2.3%20Revenue) The Group's total revenue significantly increased by **152.66%** to **HKD 3,074,206 thousands**, primarily driven by substantial growth in electricity sales and tariff subsidies, clean heating services, and entrusted operation services income Revenue from Contracts with Customers Classification (For the six months ended June 30) | Revenue Category | 2023 (HKD thousands) | 2022 (HKD thousands) | Change (%) | | :--------------- | :-------------- | :-------------- | :--------- | | Electricity Sales and Tariff Subsidies | 2,252,970 | 807,270 | 179.08 | | Construction Services | 53,001 | 79,404 | -33.26 | | Technical Consulting Services | 7,646 | 5,664 | 34.99 | | Entrusted Operation Services | 73,397 | 25,918 | 183.19 | | Provision of Clean Heating Services | 382,400 | 20,366 | 1772.60 | | Consultancy Services Income | 47,828 | 11,108 | 330.58 | | Brokerage Business Income | 11,119 | 10,801 | 2.94 | | Asset Management and Performance Income | 2,112 | 7,394 | -71.43 | | Total Revenue from Contracts with Customers | 2,830,473 | 970,359 | 191.70 | Revenue Reconciliation (For the six months ended June 30) | Revenue Source | 2023 (HKD thousands) | 2022 (HKD thousands) | Change (%) | | :--------------- | :-------------- | :-------------- | :--------- | | Revenue from Contracts with Customers | 2,830,473 | 970,359 | 191.70 | | Finance Lease Income | 1,944 | 8,452 | -77.00 | | Interest Income from Money Lending Business | 46,856 | 19,679 | 138.01 | | Interest Income from Debt Investments | 36,520 | 50,451 | -27.52 | | Dividend Income from Financial Assets at FVTPL | 5,065 | 19,858 | -74.40 | | Interest Income from Financial Assets at FVTPL | 56,676 | 75,146 | -24.58 | | Interest Income from Financial Assets at FVTOCI | 96,672 | 72,833 | 32.73 | | Total Revenue | 3,074,206 | 1,216,778 | 152.66 | [Revenue from Contracts with Customers Classification](index=11&type=section&id=2.3.1%20Revenue%20from%20Contracts%20with%20Customers%20Classification) The Group's revenue from contracts with customers significantly increased by **191.70%** to **HKD 2,830,473 thousands**, primarily benefiting from strong growth in electricity sales and tariff subsidies, clean heating services, and entrusted operation services Key Growth Drivers of Revenue from Contracts with Customers (For the six months ended June 30) | Revenue Category | 2023 (HKD thousands) | 2022 (HKD thousands) | Change (%) | | :--------------- | :-------------- | :-------------- | :--------- | | Electricity Sales and Tariff Subsidies | 2,252,970 | 807,270 | 179.08 | | Provision of Clean Heating Services | 382,400 | 20,366 | 1772.60 | | Entrusted Operation Services | 73,397 | 25,918 | 183.19 | - The vast majority of revenue from contracts with customers (**HKD 2,760,300 thousands**) is recognized at a point in time, with **HKD 70,173 thousands** recognized over time[22](index=22&type=chunk) [Revenue Reconciliation](index=12&type=section&id=2.3.2%20Revenue%20Reconciliation) The Group's total revenue comprises revenue from contracts with customers and various financial business incomes, with interest income from money lending and financial assets at FVTOCI increasing, while finance lease income and dividend/interest income from financial assets at FVTPL decreased Non-Customer Contract Revenue Reconciliation (For the six months ended June 30) | Revenue Source | 2023 (HKD thousands) | 2022 (HKD thousands) | Change (%) | | :--------------- | :-------------- | :-------------- | :--------- | | Finance Lease Income | 1,944 | 8,452 | -77.00 | | Interest Income from Money Lending Business | 46,856 | 19,679 | 138.01 | | Interest Income from Debt Investments | 36,520 | 50,451 | -27.52 | | Dividend Income from Financial Assets at FVTPL | 5,065 | 19,858 | -74.40 | | Interest Income from Financial Assets at FVTPL | 56,676 | 75,146 | -24.58 | | Interest Income from Financial Assets at FVTOCI | 96,672 | 72,833 | 32.73 | [Other Gains and Losses, Net](index=12&type=section&id=2.4%20Other%20Gains%20and%20Losses,%20Net) The Group's net other gains and losses significantly shifted from a gain of **HKD 1,152,140 thousands** in the prior period to a loss of **HKD 26,806 thousands**, mainly due to a substantial decrease in bargain purchase gains from subsidiary acquisitions and increased exchange losses Other Gains and Losses, Net (For the six months ended June 30) | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | Change (%) | | :--------------- | :-------------- | :-------------- | :--------- | | Bargain Purchase Gain on Acquisition of Subsidiaries | 44,556 | 1,601,839 | -97.22 | | Exchange Losses, Net | (38,794) | (28,630) | -35.57 | | Fair Value Gain on Investment Properties | 10,000 | – | N/A | | Total | (26,806) | 1,152,140 | -102.33 | - No impairment losses on goodwill and intangible assets were recorded in H1 2023, compared to **HKD (13,228) thousands** and **HKD (400,279) thousands** respectively in the prior period[24](index=24&type=chunk) [Impairment Losses on Financial Assets, Net](index=13&type=section&id=2.5%20Impairment%20Losses%20on%20Financial%20Assets,%20Net) The Group's net impairment losses on financial assets shifted from a recognized loss of **HKD 355,828 thousands** in the prior period to a reversal gain of **HKD 271,048 thousands**, primarily due to reversals of impairment losses on loans receivable, trade and other receivables Impairment Losses on Financial Assets, Net (For the six months ended June 30) | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | Change (%) | | :--------------- | :-------------- | :-------------- | :--------- | | Finance Lease Receivables | 18,159 | (105,269) | -117.25 | | Loans Receivable | 112,748 | (338,054) | -133.35 | | Trade and Other Receivables | 140,141 | 251,003 | -44.10 | | Contract Assets | – | 257 | -100.00 | | Debt Instruments at FVTOCI | – | (163,765) | -100.00 | | Total | 271,048 | (355,828) | -176.17 | [Finance Costs](index=13&type=section&id=2.6%20Finance%20Costs) The Group's finance costs significantly increased by **156.62%** to **HKD 991,226 thousands**, primarily due to substantial growth in interest on bank borrowings and lease liabilities Composition of Finance Costs (For the six months ended June 30) | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | Change (%) | | :------------- | :-------------- | :-------------- | :--------- | | Interest on Bank Borrowings | 881,109 | 238,320 | 269.72 | | Interest on Other Borrowings | 3,169 | 15,334 | -79.34 | | Interest on Bonds | 114,397 | 155,337 | -26.36 | | Interest on Lease Liabilities | 135,207 | 82,801 | 63.29 | | Less: Interest Capitalized | (11,263) | – | N/A | | Total | 991,226 | 386,274 | 156.62 | [Profit Before Tax](index=14&type=section&id=2.7%20Profit%20Before%20Tax) The Group's profit before tax decreased by **23.74%** to **HKD 176,507 thousands**, mainly due to increased fair value losses on financial assets at FVTPL, higher employee benefit expenses, and a significant increase in depreciation of property, plant and equipment Key Deductions from Profit Before Tax (For the six months ended June 30) | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | Change (%) | | :--------------- | :-------------- | :-------------- | :--------- | | Total Employee Benefit Expenses | 189,875 | 127,578 | 48.83 | | Fair Value Losses on Financial Assets at FVTPL, Net | 203,120 | 686,844 | -70.47 | | Cost of Electricity Sales and Entrusted Operation Services | 899,488 | 254,532 | 253.39 | | Cost of Clean Heating Services | 323,597 | 34,724 | 831.93 | | Depreciation of Property, Plant and Equipment | 557,860 | 97,350 | 472.99 | | Depreciation of Right-of-Use Assets | 130,884 | 45,931 | 184.96 | - Realized losses on financial assets at FVTPL amounted to **HKD 59,248 thousands**, while unrealized losses were **HKD 143,872 thousands**[27](index=27&type=chunk) [Income Tax Expense/(Credit)](index=15&type=section&id=2.8%20Income%20Tax%20Expense/(Credit)) The Group's income tax shifted from a credit of **HKD 69,470 thousands** in the prior period to an expense of **HKD 86,459 thousands**, mainly due to deferred tax turning from credit to expense and increased PRC corporate income tax Composition of Income Tax Expense/(Credit) (For the six months ended June 30) | Item | 2023 (HKD thousands) | 2022 (HKD thousands) | Change (%) | | :------------- | :-------------- | :-------------- | :--------- | | PRC Corporate Income Tax | 110,650 | 73,192 | 51.18 | | Singapore Corporate Income Tax | 2,270 | 2,309 | -1.69 | | Deferred Tax | (26,461) | (144,971) | 81.74 | | Total | 86,459 | (69,470) | -224.40 | - No provision for Hong Kong profits tax was made for the period as no assessable profits arose in Hong Kong[29](index=29&type=chunk) - Certain PRC subsidiaries enjoy income tax exemptions and reductions due to operating photovoltaic and wind power stations and meeting preferential corporate income tax rate conditions in specific regions[30](index=30&type=chunk) [Loss/Earnings Per Share Attributable to Owners of the Company](index=16&type=section&id=2.9%20Loss/Earnings%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) Basic and diluted earnings per share attributable to owners of the Company shifted from **1.26 HK cents** in the prior period to a loss of **4.89 HK cents** per share, primarily due to a significant increase in loss attributable to owners of the Company Loss/Earnings Per Share (For the six months ended June 30) | Metric | 2023 (HK cents) | 2022 (HK cents) | Change (%) | | :------------- | :------------ | :------------ | :--------- | | Basic (Loss)/Earnings Per Share | (4.89) | 1.26 | -488.10 | | Diluted (Loss)/Earnings Per Share | (4.89) | 1.26 | -488.10 | [Basic (Loss)/Earnings Per Share](index=16&type=section&id=2.9.1%20Basic%20(Loss)/Earnings%20Per%20Share) For the six months ended June 30, 2023, the loss attributable to owners of the Company was **HKD 294,432 thousands**, resulting in a basic loss of **4.89 HK cents** per share, compared to earnings of **1.26 HK cents** per share in the prior period Basic (Loss)/Earnings Per Share Calculation (For the six months ended June 30) | Metric | 2023 (HKD thousands) | 2022 (HKD thousands) | | :------------- | :-------------- | :-------------- | | Loss/Profit for the Period Attributable to Owners of the Company | (294,432) | 75,863 | | Weighted Average Number of Ordinary Shares (thousands) | 6,019,431 | 6,022,346 | | Basic (Loss)/Earnings Per Share (HK cents) | (4.89) | 1.26 | [Diluted (Loss)/Earnings Per Share](index=16&type=section&id=2.9.2%20Diluted%20(Loss)/Earnings%20Per%20Share) For the six months ended June 30, 2023, diluted loss per share was the same as basic loss per share at **4.89 HK cents**, as the assumed exercise of share options had an anti-dilutive effect on loss per share - For the six months ended June 30, 2023, diluted loss per share was not assumed to be exercised and was the same as basic loss per share, as the assumed exercise of share options had an anti-dilutive effect on loss per share[35](index=35&type=chunk) [Dividends](index=17&type=section&id=2.10%20Dividends) The Board decided not to declare any interim dividend for the period - The Board did not declare any interim dividend for the period (prior period: nil)[36](index=36&type=chunk) [Property, Plant and Equipment](index=17&type=section&id=2.11%20Property,%20Plant%20and%20Equipment) For the six months ended June 30, 2023, the Group added approximately **HKD 784,147 thousands** in property, plant and equipment, a significant increase from the prior period, excluding assets from business combinations and transfers from investment properties - For the six months ended June 30, 2023, the Group added approximately **HKD 784,147 thousands** in property, plant and equipment, a significant increase from **HKD 196,165 thousands** in the prior period[36](index=36&type=chunk) - Additions exclude property, plant and equipment with a gross carrying amount of approximately **HKD 1,017,948 thousands** acquired in business combinations and approximately **HKD 540,000 thousands** transferred from investment properties[36](index=36&type=chunk) [Interests in Associates](index=17&type=section&id=2.12%20Interests%20in%20Associates) As of June 30, 2023, the Group's total interests in associates amounted to **HKD 3,465,696 thousands**, a decrease from December 31, 2022, primarily due to exchange adjustments Interests in Associates (As of June 30) | Item | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | Change (%) | | :--------------- | :-------------- | :---------------------- | :--------- | | Cost of Investment | 3,517,963 | 3,498,158 | 0.57 | | Exchange Adjustments | (52,951) | (13,513) | -291.86 | | Total Interests | 3,465,696 | 3,558,337 | -2.60 | | Amounts Due from Associates | 335,417 | 357,553 | -6.20 | [Financial Assets at Fair Value Through Other Comprehensive Income (FVTOCI)](index=18&type=section&id=2.13%20Financial%20Assets%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income%20(FVTOCI)) As of June 30, 2023, the Group's total financial assets at FVTOCI amounted to **HKD 4,324,916 thousands**, a decrease from year-end 2022, mainly due to fair value changes in unlisted equity investments and listed bonds Financial Assets at FVTOCI (As of June 30) | Asset Class | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | Change (%) | | :--------------- | :-------------- | :---------------------- | :--------- | | Total Non-current Assets | 851,993 | 1,270,726 | -32.95 | | Total Current Assets | 3,472,923 | 3,248,546 | 6.91 | | Total | 4,324,916 | 4,519,272 | -4.30 | - The Group designated certain listed equity instruments to be measured at FVTOCI, as they are intended for long-term holding[39](index=39&type=chunk) Fair Value Changes of Financial Assets at FVTOCI (For the period ended June 30) | Nature of Investment | 2023 Fair Value Change (HKD thousands) | 2022 Fair Value Change (HKD thousands) | | :--------------- | :------------------------ | :------------------------ | | Unlisted Equity Investments | (172,400) | (31,000) | | Listed Equity Investments | 6,150 | (50,024) | | Listed Bonds | (7,145) | (102,283) | | Notes | – | (5,572) | | Unlisted Bonds | (8,747) | (38,300) | [Financial Assets at Fair Value Through Profit or Loss (FVTPL)](index=20&type=section&id=2.14%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss%20(FVTPL)) As of June 30, 2023, the Group's total financial assets at FVTPL amounted to **HKD 2,916,220 thousands**, a decrease from year-end 2022, mainly due to reductions in unlisted equity investments and offshore Hong Kong notes, with both unrealized and realized losses recorded during the period Financial Assets at FVTPL (As of June 30) | Asset Class | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | Change (%) | | :--------------- | :-------------- | :---------------------- | :--------- | | Total Current Assets | 2,916,220 | 3,370,194 | -13.50 | | Unlisted Equity Investments | 318,667 | 535,054 | -40.44 | | Offshore Hong Kong Notes | – | 531,117 | -100.00 | | Total | 2,916,220 | 3,374,382 | -13.58 | Unrealized (Losses)/Gains on Financial Assets at FVTPL, Net (For the six months ended June 30) | Nature of Investment | 2023 (HKD thousands) | 2022 (HKD thousands) | | :--------------- | :-------------- | :-------------- | | Listed Equity Investments – Hong Kong | (4,188) | (36,051) | | Unlisted Equity Investments – PRC | 12,067 | (187,188) | | Listed Equity Investments Held for Trading | (115,557) | 26,828 | | Investment Funds Held for Trading | (3,827) | (52,207) | | Notes | 17,374 | (96,840) | | Other Investment Funds | (47,285) | 1,745 | | Total | (143,872) | (352,625) | Realized (Losses)/Gains on Financial Assets at FVTPL (For the six months ended June 30) | Nature of Investment | 2023 (HKD thousands) | 2022 (HKD thousands) | | :--------------- | :-------------- | :-------------- | | Listed Equity Investments Held for Trading | (74,666) | (292,310) | | Other Investment Funds | 1,392 | (26,819) | | Notes | 14,026 | (23,945) | | Investment Funds Held for Trading | – | 11,695 | | Total | (59,248) | (334,219) | [Finance Lease Receivables](index=23&type=section&id=2.15%20Finance%20Lease%20Receivables) As of June 30, 2023, the Group's finance lease receivables decreased to **HKD 459,354 thousands**, with an increase in total overdue finance lease receivables, notably those overdue for over one year Carrying Amount of Finance Lease Receivables (As of June 30) | Item | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | Change (%) | | :------------- | :-------------- | :---------------------- | :--------- | | Within One Year | 459,354 | 481,834 | -4.67 | | After One Year but Within Two Years | – | 29,912 | -100.00 | | Total | 459,354 | 511,746 | -10.10 | Aging Analysis of Overdue Finance Lease Receivables (As of June 30) | Days Overdue | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | Change (%) | | :------------- | :-------------- | :---------------------- | :--------- | | Within 30 Days | – | 335,167 | -100.00 | | 91 to 180 Days | 101,768 | 66,287 | 53.54 | | 181 Days to 1 Year | 117,525 | 69,724 | 68.56 | | 1 to 2 Years | 181,923 | 725,640 | -74.93 | | 2 to 5 Years | 1,354,938 | 557,798 | 142.93 | | Total | 1,756,154 | 1,754,616 | 0.09 | [Loans Receivable](index=24&type=section&id=2.16%20Loans%20Receivable) As of June 30, 2023, the Group's total loans receivable (net of impairment) increased to **HKD 4,098,794 thousands**, with a higher proportion of short-term loans and an increase in total overdue loans receivable Carrying Amount of Loans Receivable (As of June 30) | Item | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | Change (%) | | :------------- | :-------------- | :---------------------- | :--------- | | Gross Loans Receivable | 4,429,451 | 3,869,964 | 14.47 | | Less: Provision for Impairment Losses | (330,657) | (451,210) | 26.71 | | Net Amount | 4,098,794 | 3,418,754 | 19.90 | | Non-current Assets | 799,502 | 1,009,547 | -20.81 | | Current Assets | 3,299,292 | 2,409,207 | 37.09 | Aging Analysis of Overdue Loans Receivable (As of June 30) | Days Overdue | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | Change (%) | | :------------- | :-------------- | :---------------------- | :--------- | | Within 30 Days | 381,467 | – | N/A | | 31 to 90 Days | – | 787,250 | -100.00 | | 181 Days to 1 Year | 872,284 | – | N/A | | 1 to 2 Years | 782,498 | 865,712 | -9.50 | | 2 to 5 Years | 424,174 | 434,488 | -2.37 | | Over 5 Years | 2,000 | 2,000 | 0.00 | | Total | 2,462,423 | 2,089,450 | 17.85 | [Contract Assets](index=25&type=section&id=2.17%20Contract%20Assets) As of June 30, 2023, the Group's total contract assets decreased significantly to **HKD 710,841 thousands** from year-end 2022, primarily due to reductions in construction contracts and retention monies Composition of Contract Assets (As of June 30) | Item | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | Change (%) | | :------------- | :-------------- | :---------------------- | :--------- | | Tariff Subsidies Receivable | 656,596 | 587,320 | 11.79 | | Construction Services | 48,425 | 448,286 | -89.19 | | Retention Monies | 5,820 | 51,140 | -88.62 | | Total | 710,841 | 1,086,746 | -34.59 | - Tariff subsidies receivable included in contract assets refer to central government renewable energy subsidies for photovoltaic and wind power station projects, which will be invoiced and settled upon inclusion in the national renewable energy generation subsidy list[52](index=52&type=chunk) - Revenue from construction and related services is initially recognized as contract assets, and amounts are reclassified to trade receivables upon completion of agreed milestones with customers and acceptance[53](index=53&type=chunk) [Trade and Other Receivables](index=26&type=section&id=2.18%20Trade%20and%20Other%20Receivables) As of June 30, 2023, the Group's total trade and other receivables slightly decreased to **HKD 14,560,163 thousands** from year-end 2022, with significant growth in tariff subsidies receivable offset by reductions in prepayments, deposits, and other receivables Composition of Trade and Other Receivables (As of June 30) | Item | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | Change (%) | | :--------------- | :-------------- | :---------------------- | :--------- | | Trade Receivables | 2,235,145 | 2,399,977 | -6.90 | | Tariff Subsidies Receivable | 6,759,787 | 5,938,240 | 13.84 | | Prepayments | 578,367 | 754,102 | -23.29 | | Deposits and Other Receivables | 3,764,920 | 4,929,951 | -23.63 | | Amounts Due from Joint Ventures | 554,489 | 293,643 | 88.83 | | Total | 14,560,163 | 14,822,208 | -1.77 | Aging Analysis of Trade Receivables and Bills Receivable (Excluding Tariff Subsidies) (As of June 30) | Aging | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | | :------------- | :-------------- | :---------------------- | | Within 90 Days | 631,106 | 903,681 | | 91 to 180 Days | 176,700 | 322,461 | | 181 Days to 1 Year | 748,357 | 260,807 | | 1 to 2 Years | 310,740 | 390,180 | | Over 2 Years | 396,022 | 558,960 | | Total | 2,262,925 | 2,436,089 | Aging Analysis of Tariff Subsidies Receivable (As of June 30) | Aging | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | | :------------- | :-------------- | :---------------------- | | Within 90 Days | 528,380 | 915,705 | | 91 to 180 Days | 549,239 | 544,856 | | 181 Days to 1 Year | 1,369,909 | 992,951 | | 1 to 2 Years | 2,186,819 | 1,275,165 | | Over 2 Years | 2,125,440 | 2,209,563 | | Total | 6,759,787 | 5,938,240 | [Trade and Bills Payables](index=28&type=section&id=2.19%20Trade%20and%20Bills%20Payables) As of June 30, 2023, the Group's total trade and bills payables decreased to **HKD 1,697,088 thousands** from year-end 2022, with a reduction in amounts overdue within 90 days - Trade payables are non-interest bearing and generally settled within **30** to **180** days[59](index=59&type=chunk) - Bills payable of approximately **HKD 21,067 thousands** are secured by pledged bank deposits[60](index=60&type=chunk) Aging Analysis of Trade and Bills Payables (As of June 30) | Aging | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | Change (%) | | :------------- | :-------------- | :---------------------- | :--------- | | Within 90 Days | 81,609 | 152,310 | -46.30 | | 91 to 180 Days | 160,646 | 145,828 | 10.16 | | 181 Days to 1 Year | 137,585 | 245,366 | -43.93 | | 1 to 2 Years | 280,661 | 285,510 | -1.70 | | Over 2 Years | 1,036,587 | 1,112,799 | -6.85 | | Total | 1,697,088 | 1,941,813 | -12.60 | [Borrowings](index=28&type=section&id=2.20%20Borrowings) As of June 30, 2023, the Group's total borrowings increased to **HKD 44,652,624 thousands**, with significant increases in bank borrowings and borrowings repayable within one year, and several borrowings guaranteed by Shandong Hi-Speed Group or secured by the Group's assets Composition of Borrowings (As of June 30) | Borrowing Type | 2023 (HKD thousands) | 2022 Dec 31 (HKD thousands) | Change (%) | | :------------- | :-------------- | :---------------------- | :--------- | | Bank Borrowings | 30,252,381 | 26,767,180 | 13.39 | | Bonds | 6,693,777 | 8,521,297 | -21.44 | | Other Borrowings | 7,706,466 | 8,498,785 | -9.21 | | Total | 44,652,624 | 43,787,262 | 1.98 | | Non-current Liabilities | 29,942,374 | 30,341,403 | -1.32 | | Current Liabilities | 14,710,250 | 13,445,859 | 9.40 | - Certain bank and other borrowings of the Group are guaranteed by Shandong Hi-Speed Group Co., Ltd., or secured by the Group's financial assets, finance lease receivables, trade receivables, contract assets, property, plant and equipment, investment properties, concession rights, and equity interests in subsidiaries and associates[63](index=63&type=chunk) [Comparative Amounts](index=29&type=section&id=2.21%20Comparative%20Amounts) Certain comparative amounts have been reclassified to conform with the current period's presentation - Certain comparative amounts have been reclassified to conform with the current period's presentation[64](index=64&type=chunk) [Management Discussion and Analysis](index=30&type=section&id=III.%20Management%20Discussion%20and%20Analysis) [Market Review](index=30&type=section&id=3.1%20Market%20Review) In H1 2023, global economic recovery was weak, with high interest rates and geopolitical conflicts slowing world economic growth, though no recession signs emerged. China's economy showed post-pandemic recovery but lacked endogenous momentum, while Hong Kong's GDP growth underperformed expectations, with the Hang Seng Index falling by approximately **4%** - In H1 2023, global economic recovery was weak, with high interest rates and geopolitical conflicts slowing world economic growth, though no signs of recession emerged[65](index=65&type=chunk) - Mainland China's economy experienced a wave-like recovery, with a strong start in Q1, but lacked endogenous momentum in Q2, showing marginal improvement after June[65](index=65&type=chunk) - Hong Kong's GDP growth underperformed expectations, with the Hang Seng Index falling by approximately **4%** in the first half[65](index=65&type=chunk) [Group Strategy and Operations](index=30&type=section&id=3.2%20Group%20Strategy%20and%20Operations) The Group adheres to a core philosophy of prudent compliance and steady development, focusing on a strategic transformation towards 'specialization, focus, marketization, and institutionalization' to build an excellent industrial investment holding group. During the period, the Group strengthened its risk management system, implemented multiple measures to resolve existing risks, ensured ample liquidity, enhanced investment and management empowerment for its controlled entity SDHG New Energy, and sought investment opportunities in strategic emerging industries like new energy and new infrastructure - The Group adheres to the philosophy of 'prudent compliance and steady development', following a strategic transformation towards 'specialization, focus, marketization, and institutionalization', aiming to build an excellent industrial investment holding group[66](index=66&type=chunk) - During the reporting period, the Group established a comprehensive risk management system, advanced the disposal of existing risks (e.g., debt restructuring, debt transfer), and diversified financing channels to ensure ample liquidity[67](index=67&type=chunk) - The Group strengthened investment and management empowerment for its controlled entity SDHG New Energy, leveraging Shandong Hi-Speed Group's resources to promote integrated development of energy and infrastructure networks[67](index=67&type=chunk) - The Group seeks investment opportunities in strategic emerging industries such as new energy and new infrastructure to acquire platforms necessary for its transformation[67](index=67&type=chunk) [Business Review](index=31&type=section&id=3.3%20Business%20Review) The Group's four business segments showed varied performance in H1 2023: Industrial Investment recorded a profit due to strategic synergies; Standardized Investment incurred losses due to market fluctuations; Non-standardized Investment turned profitable by revitalizing existing businesses and adding quality projects; and Licensed Financial Services also turned from loss to profit [Industrial Investment](index=31&type=section&id=3.3.1%20Industrial%20Investment) The Group's Industrial Investment business focuses on strategic emerging industries like new energy and new infrastructure, combining controlling and minority equity investments to explore sub-sectors such as semiconductors, big data, energy storage, and photovoltaic components. The Group enhanced investment and management empowerment for SDHG New Energy, promoting cooperation with leading enterprises like CGN Wind Power, and successfully secured several high-quality new energy projects. This segment recorded a profit of **HKD 485,733 thousands** during the reporting period - Industrial Investment focuses on strategic emerging industries like new energy and new infrastructure, combining controlling and minority equity investments to research sub-sectors such as semiconductors, big data, energy storage technology, and photovoltaic components[68](index=68&type=chunk) - The Group strengthened investment and management empowerment for SDHG New Energy, leveraging Shandong Hi-Speed Group's brand and resource advantages to promote business linkage and industrial synergy, establishing strategic partnerships with leading enterprises like CGN Wind Power[69](index=69&type=chunk) - SDHG New Energy's inclusion in the Hang Seng Composite Index and Stock Connect (Shanghai and Shenzhen) reflects capital market recognition of its development quality[69](index=69&type=chunk) - The Industrial Investment business segment recorded a profit of approximately **HKD 485,733 thousands**[69](index=69&type=chunk) [Standardized Investment Business](index=32&type=section&id=3.3.2%20Standardized%20Investment%20Business) The Group's Standardized Investment business conducts equity and fixed-income investments using its own funds. Amidst sluggish A-share and Hong Kong stock markets and increased bond market volatility, the Group adopted strategies of low-position operation, diversified investment, and reduced duration, primarily focusing on technology, consumer, and new energy sectors, as well as short-term cash management products like US Treasury bonds, to control risk. During the reporting period, this business recorded a fair value loss of **HKD 293,736 thousands** - Standardized equity investments, amidst sluggish A-share and Hong Kong stock markets, prioritize risk control, maintain low positions, and primarily focus on technology, consumer, and new energy sectors[70](index=70&type=chunk) - Fixed-income standardized investments, through diversified investment and reduced duration strategies, primarily focus on short-term cash management products like US Treasury bonds or bank certificates of deposit, to address real estate liquidity crises and bond market volatility[70](index=70&type=chunk) - The Standardized Investment business recorded a fair value loss of approximately **HKD 293,736 thousands**, compared to a loss of approximately **HKD 401,942 thousands** in the prior period[71](index=71&type=chunk) [Non-standardized Investment Business](index=33&type=section&id=3.3.3%20Non-standardized%20Investment%20Business) The Group's Non-standardized Investment business prioritizes resolving existing risks by reducing credit exposure through debt restructuring, debt transfer, and introducing relief funds, while moderately engaging in strong credit entity guarantees and high-quality asset-backed pledge businesses. This segment turned profitable, recording a profit of **HKD 57,221 thousands** - Non-standardized investment business prioritizes resolving existing risks by reducing credit exposure through debt restructuring, debt transfer, and introducing relief funds[72](index=72&type=chunk) - Prudently seize investment opportunities, moderately engage in strong credit entity guarantees and high-quality asset-backed pledge businesses, and strengthen synergy with industrial investment in real economy sectors such as new energy, new infrastructure, and new technology[72](index=72&type=chunk) - The Non-standardized Investment business recorded a profit of approximately **HKD 57,221 thousands**, compared to a loss of approximately **HKD 788,189 thousands** in the prior period, achieving a turnaround to profitability[72](index=72&type=chunk) [Licensed Financial Services](index=33&type=section&id=3.3.4%20Licensed%20Financial%20Services) The Group holds Hong Kong SFC Type 1, 4, 5, 6, and 9 licenses, a Hong Kong Money Lenders License, and PRC QFLP fund manager and finance lease licenses, providing comprehensive cross-border investment and financing financial services to clients. During the reporting period, the Licensed Financial Services business recorded a profit of **HKD 107,547 thousands**, achieving a turnaround to profitability - The Group holds Hong Kong SFC Type **1**, **4**, **5**, **6**, and **9** licenses, a Hong Kong Money Lenders License, and PRC QFLP fund manager and finance lease licenses[73](index=73&type=chunk) - The Licensed Financial Services business recorded a profit of approximately **HKD 107,547 thousands**, compared to a loss of approximately **HKD 633,792 thousands** in the prior period, achieving a turnaround to profitability[73](index=73&type=chunk) [Outlook](index=34&type=section&id=3.4%20Outlook) Looking ahead to H2, global economic growth is expected to weaken, while China's economy is in a critical period of recovery and industrial upgrading, with central policies set to boost economic recovery and industrial development. The Group will optimize its asset allocation, focusing on industrial investment, supplemented by standardized and non-standardized investments, targeting strategic emerging industries like new energy and new infrastructure, while continuously resolving existing risks and enhancing comprehensive service capabilities - Global economic growth is expected to weaken in H2, while China's economy is in a critical period of recovery and industrial upgrading, with Central Political Bureau meeting deployments set to boost economic recovery and industrial development, positively impacting the Group's profit and balance sheet repair[74](index=74&type=chunk) - The Group will optimize its asset allocation structure, focusing on industrial investment, supplemented by standardized and non-standardized investments, to achieve long-term asset appreciation and maintain ample short-term liquidity[74](index=74&type=chunk) [Industrial Investment Outlook](index=34&type=section&id=3.4.1%20Industrial%20Investment%20Outlook) The Group will continue to deepen its strategic transformation, focusing on new energy and new infrastructure, two strategic emerging industries, to expand industrial investment scale through an organic combination of strategic and controlling equity investments. Specifically, in new energy, it will enhance investment and M&A capabilities for wind and solar power station's vertical industry chain and horizontal peer assets; in new infrastructure, it will explore high-quality new infrastructure assets to create a 'power + computing' new business model - The Group will continue to steadily advance and deepen its strategic transformation, focusing on new energy and new infrastructure, two strategic emerging industries, selecting target companies with excellent business models and stable cash flows, and organically combining strategic and controlling equity investments[75](index=75&type=chunk) - In new energy, the Group will enhance investment and M&A capabilities for wind and solar power station's vertical industry chain and horizontal peer assets; in new infrastructure, it will explore high-quality new infrastructure assets to create a 'power + computing' new business model[76](index=76&type=chunk) - The Group will consolidate its **2022** industrial acquisition achievements, accelerate the enhancement of 'investment + investment management' momentum, and strengthen empowering post-investment management for invested targets such as SDHG New Energy and SDHG Huaneng[76](index=76&type=chunk) [Standardized Investment Business Outlook](index=35&type=section&id=3.4.2%20Standardized%20Investment%20Business%20Outlook) Looking ahead to H2, domestic liquidity is expected to be relatively loose, and the Fed's rate hike cycle may be nearing its end, benefiting global capital markets. The Group will prioritize technology sectors aligned with national strategy, contributing to manufacturing upgrades and increased informatization/intelligence, as well as consumer sectors related to expanding domestic demand, to strategically invest in quality companies at low points - In H2, domestic liquidity is expected to be generally loose, and the Fed's rate hike cycle may be nearing its end, benefiting global capital market liquidity[77](index=77&type=chunk) - In terms of industry selection, the Group will prioritize technology sectors aligned with national strategy and consumer sectors related to expanding domestic demand, also considering industries and companies with bottoming-out performance or sustained high prosperity, to strategically invest at low points[77](index=77&type=chunk) [Non-standardized Investment Business Outlook](index=35&type=section&id=3.4.3%20Non-standardized%20Investment%20Business%20Outlook) The Group will continue to prioritize resolving existing risks by reducing credit exposure through debt restructuring, debt transfer, and litigation collection. Concurrently, it will leverage the geographical advantages and professional capabilities of its Hong Kong, Mainland, and Singapore teams to focus on financing needs in new energy, new consumption, and high-tech sectors, providing capital support to high-quality leading enterprises - The Group will continue to prioritize resolving existing risks by reducing credit exposure within its portfolio through asset revitalization methods such as debt restructuring, debt transfer, and litigation collection[78](index=78&type=chunk) - Leverage the advantages of Hong Kong, Mainland, and Singapore teams to focus on financing needs in new energy, new consumption, and high-tech sectors, selecting high-quality leading enterprises to provide capital support aligned with industrial transformation directions[78](index=78&type=chunk) [Licensed Financial Services Outlook](index=36&type=section&id=3.4.4%20Licensed%20Financial%20Services%20Outlook) The Group will prudently conduct Hong Kong and Mainland licensed financial services, primarily focusing on securities brokerage and QFLP/finance lease businesses that have synergistic effects with the Group's strategic transformation direction, to enhance comprehensive service capabilities - The Group will prudently conduct Hong Kong and Mainland licensed financial services, primarily focusing on securities brokerage and QFLP/finance lease businesses that have synergistic effects with the Group's strategic transformation direction, to enhance comprehensive service capabilities[79](index=79&type=chunk) [Liquidity and Financial Resources](index=36&type=section&id=IV.%20Liquidity%20and%20Financial%20Resources) [Overall Liquidity and Financial Resources](index=36&type=section&id=4.1%20Overall%20Liquidity%20and%20Financial%20Resources) As of June 30, 2023, the Group's total cash and cash equivalents decreased to **HKD 3,495,082 thousands** from year-end 2022. Total assets and borrowings both

Industrial Investment and Strategic Transformation - The scale of industrial investment assets reached HK$52.2 billion by the end of 2022, marking a significant increase[11]. - The Group successfully completed its first merger and acquisition transaction for controlling shareholding during the year[11]. - The investment development strategy was transformed to an "investment + investment management" model within the last year[11]. - The Group emphasized the importance of resource allocation and value growth through the advantages of its controlling shareholder, Shandong Hi-Speed Group Co., Ltd.[11]. - All members of the Group collaborated to seize the strategic transformation window, contributing to rapid growth across all business lines[11]. - The Group's industrial investment asset scale increased significantly to HK$52.2 billion by the end of 2022, marking a successful transformation into an industrial investment holding group[12]. - The strategic transformation focuses on emerging industries such as new energy and new technology, aligning with national policy directions for high-quality development[15]. - The Group completed the acquisition of 43.45% shares of Beijing Enterprises Clean Energy Group Limited for HK$4.685 billion, becoming its new controlling shareholder[22]. - The Group's investment strategy combines minority equity investment with holding investments to capture opportunities in both asset-intensive and high-growth sectors[20]. - The transformation aims to achieve a virtuous cycle of self-development by increasing the proportion of industrial investment and strengthening net assets[18]. - The Group's strategic transformation policy emphasizes specialization, concentration, marketization, and institutionalization to enhance operational efficiency[18]. - The Group's shift from short-duration proprietary investment to professional industrial investment is a strategic choice for sustainable development[15]. - The completion of the acquisition allowed the Group to quickly secure a foothold in the new energy sector, leveraging the professional capabilities of the acquired company[24][26]. - The Group aims to achieve a win-win situation in commercial and social value through its strategic initiatives and operational capabilities in the green and low-carbon sectors[46]. - The Group's strategic transformation aims to establish the Group as a respected industrial investment holding group focusing on emerging industries over the next five years[45]. Financial Performance and Growth - The Group recorded revenue of approximately HK$4,193,421,000, an increase of approximately 293.50% year-over-year, and gross profit of approximately HK$2,261,532,000, representing an increase of approximately 206.18% year-over-year[48]. - Profit for the year amounted to approximately HK$170,294,000, reflecting an increase of approximately 1,440.00% year-over-year, while the basic loss per share attributable to owners was approximately HK$7.61 cents[48]. - By the end of 2022, the Group's total assets reached approximately HK$68.96 billion, with the new energy sector accounting for 75.70% of total assets, and net assets increased to approximately HK$15.57 billion[24][26]. - SDHS New Energy raised approximately HK$13.72 billion in new funds for the year, representing a 53.90% increase compared to the previous period, significantly improving its liquidity and reducing its debt ratio[27][29]. - SDHS New Energy's net profit for FY2022 was approximately HK$226 million, marking a significant increase from the previous year[32]. - The Group's industrial investment business recorded a profit of approximately HK$1.71 billion for the Reporting Period[71]. - The Group's total deficit attributable to the owners was approximately HK$36,053,000 as of December 31, 2022, compared to total equity of HK$1,408,651,000 in 2021[96]. Acquisitions and Investments - The Group completed a major acquisition of Beijing Enterprises Clean Energy Group, becoming the controlling shareholder with 43.45% of shares, and also holds a 23.07% equity interest in BECE Legend, enhancing its green and environmental protection industry ecosystem[58]. - The Group completed the subscription of 48,804,039,247 new ordinary shares of Shandong Hi-Speed New Energy Group Limited at a consideration of approximately HK$4.685 billion, becoming the controlling shareholder[68]. - The Group invested in several high-quality projects, including NewLink Group, which achieved rapid growth and successfully listed on NASDAQ[69]. - The Group aims to consolidate the results of industrial acquisitions made in 2022 and enhance post-investment management to improve the overall value of invested enterprises[90]. Credit Risk Management and Financial Health - The Group's credit risk management policies include comprehensive due diligence on lending business and a review mechanism to ensure regulatory compliance and risk management adequacy[176]. - The Group's internal control measures for credit risk management are designed to ensure commercial reasonableness and rational pricing[176]. - The management considers that the credit risk of the Group has been significantly reduced due to the established internal control measures[196]. - The Group's management considered foreign exchange exposure to be insignificant during the Reporting Period, leading to no financial instruments held for hedging purposes[97]. - The Group's outstanding bonds included amounts of approximately HK$1,563,788,000 at a coupon rate of 3.95% and HK$3,900,621,000 at a coupon rate of 4.10%[97]. Market Conditions and Future Outlook - The compound annual growth rate of China's GDP over the past three years has been 4.5%, higher than the world average, indicating a stable economic environment for the Group's operations[53]. - The Group anticipates that the reform of the capital market will further facilitate industrial investment channels, presenting significant future development potential[87]. - The Chinese government is expected to increase support for high-tech industries and green investments, which will benefit the Group's industrial investment strategy[87]. - In 2023, the Group plans to leverage opportunities from the green and low-carbon industry's development and digital transformation in China[46]. Governance and Compliance - The company optimized its corporate governance structure and established a market-oriented governance mechanism to improve operational standards[28]. - The Group established a Special Asset Management Department to lead risk resolution and supervise the implementation of approved action plans, reporting to management regularly[195]. - The Board considers the provision for impairment to be appropriate based on the independent professional valuation[147].

[Financial Performance](index=1&type=section&id=Financial%20Performance) [Comprehensive Statement of Comprehensive Income](index=1&type=section&id=%E7%B6%9C%E5%90%88%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) The company's revenue significantly increased, but fair value changes and higher financing costs led to a loss attributable to owners, despite overall profit growth Comprehensive Statement of Comprehensive Income Key Financial Data | Indicator | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Revenue | 4,193,421 | 1,065,661 | | Gross Profit | 2,261,532 | 738,631 | | Profit for the Year | 170,294 | 11,058 | | Loss Attributable to Owners of the Company for the Year | (458,067) | (314,660) | | Basic and Diluted Loss Per Share | (7.61) HK cents | (5.22) HK cents | - Net fair value loss on financial assets at fair value through profit or loss was **HKD 1,188,877 thousand**, compared to a gain of HKD 12,643 thousand in the prior year, significantly impacting profit[4](index=4&type=chunk) - Finance costs significantly increased to **HKD 1,630,572 thousand**, from HKD 269,611 thousand in the prior year[4](index=4&type=chunk) [Consolidated Statement of Financial Position](index=4&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) Total assets and liabilities grew substantially by year-end 2022, boosting net assets, yet equity attributable to owners shifted to a deficit Consolidated Statement of Financial Position Key Data | Indicator | 2022 (HKD thousands) | 2021 (HKD thousands) | | :--- | :--- | :--- | | Total Non-current Assets | 41,202,190 | 7,819,203 | | Total Current Assets | 27,755,419 | 15,131,248 | | Total Assets | 68,957,609 | 22,950,451 | | Total Current Liabilities | 18,301,999 | 10,600,265 | | Total Non-current Liabilities | 35,080,832 | 3,737,683 | | Total Liabilities | 53,382,831 | 14,337,948 | | Net Assets | 15,574,778 | 8,612,503 | | Equity Attributable to Owners of the Company | (36,053) | 1,408,651 | - Non-controlling interests significantly increased to **HKD 8,506,390 thousand** (2021: HKD 85,769 thousand), reflecting changes in equity structure due to acquisitions[8](index=8&type=chunk) [Notes to the Consolidated Financial Statements](index=6&type=section&id=%E7%B6%9C%E5%90%88%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) [Company Information](index=6&type=section&id=1.%20%E5%85%AC%E5%8F%B8%E8%B3%87%E6%96%99) Shandong Hi-Speed Holdings Group Limited completed its name change in July 2022 and diversified its financial services to include industrial, standardized, non-standardized, and licensed financial investments - The company's English name changed from “China Shandong Hi-Speed Financial Group Limited” to “Shandong Hi-Speed Holdings Group Limited”, and its Chinese name from “中国山东高速金融集团有限公司” to “山高控股集团有限公司”, effective July 15, 2022[9](index=9&type=chunk) - The Group primarily engages in industrial investment, standardized investment business, non-standardized investment business, and licensed financial services[9](index=9&type=chunk) [Application of Revised Hong Kong Financial Reporting Standards](index=6&type=section&id=2.%20%E6%87%89%E7%94%A8%E7%B6%93%E4%BF%AE%E8%A8%82%E9%A6%99%E6%B8%AF%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E6%BA%96%E5%89%87) The Group adopted several revised HKFRSs this year, with the Board anticipating no material impact on current or prior period financial statements - The Group first applied HKFRS 3 (Revised), HKAS 16 (Revised), HKAS 37 (Revised), and Annual Improvements to HKFRS 2018-2020 in the current year[10](index=10&type=chunk)[11](index=11&type=chunk) - The Directors expect that the application of all new and revised HKFRSs will not have a significant impact on the consolidated financial statements in the foreseeable future[12](index=12&type=chunk) [Basis of Preparation](index=7&type=section&id=3.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) Consolidated financial statements are prepared under HKFRS, HK GAAP, and Companies Ordinance disclosure requirements, primarily on a historical cost basis, with certain financial instruments measured at fair value - The consolidated financial statements are prepared in accordance with all applicable Hong Kong Financial Reporting Standards, Hong Kong Generally Accepted Accounting Principles, and disclosure requirements of the Companies Ordinance, and comply with the Listing Rules[13](index=13&type=chunk) - The consolidated financial statements have been prepared on a historical cost basis, except for investment properties, certain financial instruments, and financial guarantee contracts which are measured at fair value at the end of each reporting period[13](index=13&type=chunk) [Operating Segment Information](index=7&type=section&id=4.%20%E7%B6%93%E7%87%9F%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group strategically transformed from financial to industrial investment, restructuring its reportable segments to four, including a new "Industrial Investment" segment and discontinuing "Technology Finance" - The Group is steadily advancing its transformation from a financial investment group to an industrial investment group, with reportable operating segments restructured from five to four for the year ended December 31, 2022[14](index=14&type=chunk) - A new “Industrial Investment” segment was added, primarily engaged in industrial investment-related businesses, including the acquisition of a 43.45% equity interest in Shandong Hi-Speed New Energy[15](index=15&type=chunk) - The “Technology Finance” segment has ceased operations[15](index=15&type=chunk) [Segment Revenue and Results](index=9&type=section&id=%E5%88%86%E9%83%A8%E6%94%B6%E7%9B%8A%E5%8F%8A%E6%A5%AD%E7%B8%BE) Industrial Investment was the primary driver of revenue and profit, while standardized and non-standardized investments, along with licensed financial services, recorded losses 2022 Segment Revenue and Results | Segment | Revenue (HKD thousands) | Results (HKD thousands) | | :--- | :--- | :--- | | Industrial Investment | 3,644,438 | 1,713,054 | | Standardized Investment | 191,281 | (941,582) | | Non-standardized Investment | 212,851 | (133,568) | | Licensed Financial Services | 144,853 | (571,344) | | Technology Finance | - | (5,075) | | Unallocated | 14,391 | 66,560 | | Total | 4,193,420 | (1,556) (Loss before tax) | - The Industrial Investment segment showed **significant revenue and results**, becoming the Group's primary growth driver[18](index=18&type=chunk) [Geographical Information](index=10&type=section&id=%E5%9C%B0%E5%8D%80%E8%B3%87%E6%96%99) Over 90% of the Group's revenue and assets were generated or located in China as of year-end 2022, precluding detailed geographical segment disclosure - For the year ended December 31, 2022, given that over **90% of the Group's revenue was generated in China**, no geographical segment information regarding the location of the Group's revenue is presented[20](index=20&type=chunk) - As of December 31, 2022, given that over **90% of the Group's assets were located in China**, no geographical segment information regarding the location of the Group's assets is presented[21](index=21&type=chunk) [Classification of Revenue from Contracts with Customers](index=11&type=section&id=%E5%AE%A2%E6%88%B6%E5%90%88%E7%B4%84%E6%94%B6%E7%9B%8A%E5%88%86%E9%A1%9E) Customer contract revenue surged in 2022, primarily from new businesses like electricity sales, construction, and clean heating services Classification of Revenue from Contracts with Customers (HKD thousands) | Revenue Source | 2022 | 2021 | | :--- | :--- | :--- | | Electricity sales and entrusted operation services | 3,007,375 | – | | Construction and related services | 295,716 | – | | Provision of clean heating services | 294,659 | – | | Technical consulting services | 46,686 | – | | Consulting service income | 47,931 | 63,427 | | Brokerage business income | 19,777 | 35,798 | | Asset management and performance income | 14,929 | 6,375 | | Commission income | 2,447 | 35,415 | | Internet new media service income | – | 6,301 | | **Total** | **3,729,520** | **147,316** | - Total revenue from contracts with customers in 2022 was **HKD 3,729,520 thousand**, a significant increase from HKD 147,316 thousand in 2021[24](index=24&type=chunk) [Revenue](index=11&type=section&id=5.%20%E6%94%B6%E7%9B%8A) The Group's total revenue grew significantly, driven by a substantial increase in customer contract revenue and interest income from financial assets at fair value through other comprehensive income Revenue Composition (HKD thousands) | Revenue Source | 2022 | 2021 | | :--- | :--- | :--- | | Revenue from contracts with customers | 3,729,520 | 147,316 | | Finance lease income | 14,619 | 55,914 | | Interest income from money lending business | 37,017 | 52,146 | | Interest income from debt investments | 87,750 | 233,950 | | Interest income from financial assets at fair value through profit or loss | 53,331 | 186,133 | | Interest income from financial assets at fair value through other comprehensive income | 226,955 | 290,576 | | Dividend and distribution income from financial assets at fair value through profit or loss | 43,508 | 99,626 | | Dividend income from financial assets at fair value through other comprehensive income | 721 | – | | **Total Revenue** | **4,193,421** | **1,065,661** | [Other Income](index=12&type=section&id=6.%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) Other income saw a substantial increase, mainly from other interest income, government grants, and management income Other Income Composition (HKD thousands) | Income Source | 2022 | 2021 | | :--- | :--- | :--- | | Bank interest income | 18,115 | 15,363 | | Other interest income | 55,174 | – | | Government grants | 28,462 | – | | Management income | 19,317 | – | | Others | 4,894 | 9,692 | | **Total** | **125,962** | **25,055** | [Other Gains and Losses, Net](index=12&type=section&id=%E5%85%B6%20%E4%BB%96%20%E6%94%B6%20%E7%9B%8A%20%E5%8F%8A%20%E8%99%A7%20%E6%90%8D%EF%BC%8C%E6%B7%A8%20%E9%A1%8D) Net other gains and losses significantly increased in 2022, primarily due to bargain purchase gains from subsidiary acquisitions, despite various asset impairment losses Other Gains and Losses, Net Composition (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Impairment loss recognized on goodwill | (13,227) | – | | Impairment loss recognized on operating rights | (19,881) | – | | Impairment loss recognized on property, plant and equipment | (75,316) | – | | Write-off of intangible assets | (400,279) | – | | Exchange losses, net | (70,023) | (1,309) | | Gain on disposal of subsidiaries | – | 171,135 | | Bargain purchase gain on acquisition of subsidiaries | 1,431,330 | 131,380 | | **Total** | **918,859** | **246,636** | - A **bargain purchase gain of HKD 1,431,330 thousand** from the acquisition of subsidiaries was the primary reason for the significant increase in net other gains and losses this period[26](index=26&type=chunk) [Impairment Losses on Financial Assets Reversed/(Recognized), Net](index=12&type=section&id=%E5%B7%B2%20%E6%92%A5%20%E5%9B%9E%EF%BC%8F%EF%BC%88%E7%A2%BA%20%E8%AA%8D%EF%BC%89%E7%9A%84%20%E9%87%91%20%E8%9E%8D%20%E8%B3%87%20%E7%94%A2%20%E6%B8%9B%20%E5%80%BC%20%E虧%20%E6%90%8D%EF%BC%8C%E6%B7%A8%20%E9%A1%8D) In 2022, net impairment losses on financial assets shifted from recognition to reversal, mainly due to the reversal of impairment losses on trade and other receivables Net Impairment Losses on Financial Assets (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Finance lease receivables | 11,067 | (3,009) | | Loan receivables | (78,347) | (356,875) | | Trade and other receivables | 235,453 | (28,671) | | **Total** | **168,173** | **(388,555)** | [Finance Costs](index=13&type=section&id=9.%20%E8%9E%8D%E8%B3%87%E6%88%90%E6%9C%AC) Finance costs rose sharply, driven by increased interest expenses on bank borrowings, other borrowings, bonds, and lease liabilities Finance Costs Composition (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Interest on bank borrowings | 658,033 | 82,658 | | Interest on other borrowings | 554,288 | 44,754 | | Interest on bonds | 363,125 | 350,100 | | Interest on share option granted to non-controlling interests | 136,587 | – | | Interest on lease liabilities | 178,489 | 2,105 | | **Total** | **1,630,572** | **269,611** | [Loss Before Tax](index=13&type=section&id=10.%20%E9%99%A4%E7%A8%85%E5%89%8D%E虧%E6%90%8D) Loss before tax was primarily affected by fair value losses on financial assets, finance costs, and various depreciation and amortization expenses Major Components of Loss Before Tax (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Total employee benefit expenses | 269,610 | 196,140 | | Auditor's remuneration | 7,050 | 3,178 | | Fair value loss/(gain) on financial assets at fair value through profit or loss, net | 1,188,877 | (12,643) | | Depreciation of property, plant and equipment | 791,996 | 6,265 | | Depreciation of right-of-use assets | 165,714 | 14,320 | [Income Tax Credit](index=14&type=section&id=11.%20%E6%89%80%E5%BE%97%E7%A8%85%E6%8A%B5%E5%85%8D) The Group received significant income tax credits, largely from net deferred tax credits and tax exemptions for its new energy operations in mainland China Income Tax Credit (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Current tax - PRC Enterprise Income Tax | 196,885 | 2,739 | | Deferred tax credit, net | (368,602) | (14,942) | | **Income Tax Credit** | **(171,850)** | **(12,203)** | - Certain subsidiaries in mainland China engaged in photovoltaic and wind power station operations enjoyed **income tax exemptions and reductions**[33](index=33&type=chunk) [Dividends](index=15&type=section&id=12.%20%E8%82%A1%20%E6%81%AF) The Board does not recommend any dividend payment for the reporting period - No dividends were paid or proposed for the year ended December 31, 2022[35](index=35&type=chunk) [Loss Per Share](index=15&type=section&id=13.%20%E6%AF%8F%E8%82%A1%E虧%E6%90%8D) Basic and diluted loss per share for 2022 expanded to 7.61 HK cents, reflecting an increased loss attributable to owners Loss Per Share Calculation Data | Indicator | 2022 | 2021 (Restated) | | :--- | :--- | :--- | | Loss for the year attributable to owners of the company for calculating basic and diluted loss per share (HKD thousands) | (458,067) | (314,660) | | Weighted average number of ordinary shares (thousands) | 6,021,561 | 6,022,346 | | **Basic and Diluted Loss Per Share (HK cents)** | **(7.61)** | **(5.22)** | [Financial Assets at Fair Value Through Other Comprehensive Income](index=16&type=section&id=14.%20%E6%8C%89%E5%85%AC%E5%85%81%E5%80%BC%E8%A8%88%E5%85%A5%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E4%B9%8B%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) Total financial assets at fair value through other comprehensive income decreased by year-end 2022, mainly due to reductions in listed equity and bond investments Financial Assets at Fair Value Through Other Comprehensive Income (HKD thousands) | Asset Type | 2022 | 2021 | | :--- | :--- | :--- | | Total Non-current Assets | 1,270,726 | 2,356,830 | | Total Current Assets | 3,248,546 | 3,081,963 | | **Total** | **4,519,272** | **5,438,793** | - The Group designated certain listed equity instruments to be measured at fair value through other comprehensive income, as they are intended for long-term holding[38](index=38&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=17&type=section&id=15.%20%E6%8C%89%E5%85%AC%E5%85%81%E5%80%BC%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%E4%B9%8B%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) Total financial assets at fair value through profit or loss significantly decreased by year-end 2022, primarily due to a reduction in the scale of listed equity investments held for trading and investment funds Financial Assets at Fair Value Through Profit or Loss (HKD thousands) | Asset Type | 2022 | 2021 | | :--- | :--- | :--- | | Total Non-current Assets | 4,188 | 43,195 | | Total Current Assets | 3,370,194 | 6,188,427 | | **Total** | **3,374,382** | **6,231,622** | [Finance Lease Receivables](index=18&type=section&id=16.%20%E6%87%89%E6%94%B6%E8%9E%8D%E8%B3%87%E7%A7%9F%E8%B3%83) Total finance lease receivables significantly declined by year-end 2022, with decreases in both non-current and current portions Finance Lease Receivables (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Non-current assets | 29,912 | 366,996 | | Current assets | 481,834 | 501,751 | | **Total** | **511,746** | **868,747** | Ageing Analysis of Finance Lease Receivables (HKD thousands) | Maturity Period | 2022 | 2021 | | :--- | :--- | :--- | | Within one year | 481,834 | 501,751 | | Later than one year but not later than two years | 29,912 | 302,104 | | Later than two years but not later than three years | – | 64,892 | [Loan Receivables](index=18&type=section&id=17.%20%E6%87%89%E6%94%B6%E8%B2%B8%E6%AC%BE) Total loan receivables (net of impairment) slightly decreased by year-end 2022, although the non-current portion increased Loan Receivables (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Loan receivables | 3,869,964 | 4,089,503 | | Less: Provision for impairment losses | (451,210) | (397,770) | | **Net** | **3,418,754** | **3,691,733** | Ageing Analysis of Loan Receivables (HKD thousands) | Maturity Period | 2022 | 2021 | | :--- | :--- | :--- | | Within 90 days | 1,762,644 | 1,547,463 | | 91 days to 180 days | 646,563 | 621,643 | | 181 days to 1 year | – | 788,764 | | 1 year to 2 years | 1,009,547 | 733,863 | [Contract Assets](index=19&type=section&id=18.%20%E5%90%88%E7%B4%84%E8%B3%87%E7%94%A2) New contract assets emerged in 2022, primarily from electricity price subsidies, construction contracts, and retention money, indicating expansion in new energy businesses Contract Assets Composition (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Receivables for electricity price subsidies | 587,320 | – | | Construction contracts | 448,286 | – | | Retention money | 51,140 | – | | **Total** | **1,086,746** | **–** | - Receivables for electricity price subsidies refer to central government renewable energy subsidies that will be invoiced and settled for photovoltaic and wind power station projects after being included in the national renewable energy generation project list[46](index=46&type=chunk) [Trade and Other Receivables](index=20&type=section&id=19.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) Total trade and other receivables significantly increased, driven by renewable energy trade receivables, electricity price subsidies, prepayments, and other deposits Trade and Other Receivables (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Trade receivables (renewable energy) | 2,200,781 | – | | Receivables for electricity price subsidies | 5,938,240 | – | | Prepayments | 754,102 | 91,564 | | Deposits and other receivables | 4,929,951 | 852,788 | | **Total (net of impairment)** | **14,822,208** | **1,048,184** | - Ageing analysis of trade receivables and bills receivable (excluding electricity price subsidies) shows **HKD 903,681 thousand** due within 90 days[49](index=49&type=chunk) - Ageing analysis of electricity price subsidies shows **HKD 2,209,563 thousand** due over 2 years[50](index=50&type=chunk) [Trade and Bills Payables](index=22&type=section&id=20.%20%E8%B2%BF%E6%98%93%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E6%87%89%E4%BB%98%E7%A5%A8%E6%93%9A) Trade and bills payables substantially increased, with a majority aged over two years, reflecting business expansion Ageing Analysis of Trade and Bills Payables (HKD thousands) | Maturity Period | 2022 | 2021 | | :--- | :--- | :--- | | Within 90 days | 152,310 | – | | 91 days to 180 days | 145,828 | – | | 181 days to 1 year | 245,366 | – | | 1 year to 2 years | 285,510 | – | | Over 2 years | 1,112,799 | – | | **Total** | **1,941,813** | **–** | [Issued Share Capital](index=22&type=section&id=21.%20%E5%B7%B2%E7%99%BC%E8%A1%8C%E8%82%A1%E6%9C%AC) In 2022, the company executed a share consolidation and repurchased and cancelled some shares - In July 2022, the company implemented a share consolidation, merging every four shares of HKD 0.00025 par value into one consolidated share of HKD 0.001 par value[53](index=53&type=chunk) - The Group repurchased and cancelled **2,915,000 shares** of the Group's shares from August to October 2022, for a total consideration of approximately **HKD 9,701,000**[53](index=53&type=chunk) [Events After the Reporting Period](index=23&type=section&id=22.%20%E5%A0%B1%E5%91%8A%E6%9C%9F%E6%9C%AB%E5%BE%8C%E4%BA%8B%E9%A0%85) After the reporting period, the company acquired full equity interests in three target companies, further expanding its new energy investments - On December 20, 2022, the company's indirect non-wholly owned subsidiary buyer entered into equity transfer agreements with China Power Construction Henan Electric Power Co., Ltd. and others to acquire all equity interests in Shangqiu Ningdian New Energy Co., Ltd., Lankao Jinfeng Qingdian New Energy Co., Ltd., and Shenqiu Yingdian New Energy Co., Ltd[54](index=54&type=chunk) - Upon completion of the acquisitions on January 1, 2023, these target companies became indirect wholly-owned subsidiaries of the company[54](index=54&type=chunk) [Comparative Amounts](index=23&type=section&id=23.%20%E6%AF%94%E8%BC%83%E9%87%91%E9%A1%8D) Certain comparative amounts have been restated to align with the current period's presentation and disclosure - Certain comparative amounts are presented to conform to the presentation and disclosure for the current period[55](index=55&type=chunk) [Management Discussion and Analysis](index=24&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [Financial Performance Overview](index=24&type=section&id=%E8%B2%A1%E5%8B%99%E6%A5%AD%E7%B8%BE%E6%A6%82%E8%A6%BD) The Group achieved significant growth in revenue, gross profit, and profit for the year in 2022, but basic loss per share attributable to owners expanded due to external factors and strategic shifts 2022 Key Financial Indicators Overview | Indicator | 2022 (HKD) | 2021 (HKD) | | :--- | :--- | :--- | | Revenue | 4,193,421,000 | 1,065,661,000 | | Gross Profit | 2,261,532,000 | 738,631,000 | | Profit for the Year | 170,294,000 | 11,058,000 | | Basic Loss Per Share Attributable to Owners of the Company | 7.61 HK cents | 5.22 HK cents | - As of December 31, 2022, the Group's total assets were approximately **HKD 68,957,609,000**, total liabilities approximately **HKD 53,382,831,000**, and net assets approximately **HKD 15,574,778,000**[56](index=56&type=chunk) [Market Review](index=24&type=section&id=%E5%B8%82%E5%A0%B4%E5%9B%9E%E9%A1%A7) In 2022, global economic challenges led to market downturns, while China maintained stable growth through supportive policies despite domestic and external demand weaknesses - In 2022, the global economy was affected by the Russia-Ukraine conflict, high inflation, and interest rate hikes by overseas central banks, leading to a significant downturn in equity and bond markets[57](index=57&type=chunk) - China's economy experienced weakened domestic and external demand due to recurring epidemics and real estate controls, but the government maintained overall economic and social stability through moderately loose monetary and proactive fiscal policies[57](index=57&type=chunk) - In October 2022, the 20th National Congress of the Communist Party of China was held, outlining plans for Chinese modernization, a modern industrial system, and a modern financial system[57](index=57&type=chunk) [Group Strategy and Operations](index=25&type=section&id=%E9%9B%86%E5%9C%98%E6%88%B0%E7%95%A5%E5%92%8C%E7%B6%93%E7%87%9F) The Group pursued strategic transformation in 2022, shifting to industrial investment in new energy, technology, and infrastructure through major acquisitions, while adopting defensive risk management - The Group adopted “specialization, focus, marketization, and institutionalization” as its strategic transformation guidelines, focusing on strategic emerging industries such as new energy, new technology, and new infrastructure[58](index=58&type=chunk) - The significant acquisition of Shandong Hi-Speed New Energy in May 2022, by subscribing to a 43.45% stake and becoming its controlling shareholder, marked the initial transformation from a financial investment company to an industrial investment company[58](index=58&type=chunk) - The Group's total assets as of the end of December 2022 were approximately **HKD 68.96 billion**, an increase of about two times compared to the same period last year[58](index=58&type=chunk) - The Group adopted a defensive operating strategy, significantly reducing non-standard investment business, continuously decreasing the scale of standardized investment business, and strictly controlling investment risks[59](index=59&type=chunk) - In June 2022, the Group successfully issued its first **USD 500 million green bond**, receiving Fitch A and Moody's A3 ratings, and an ESG entity rating of “2” from Fitch Evergreen[59](index=59&type=chunk)[60](index=60&type=chunk) [Business Review](index=26&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7) The Group shifted its focus to industrial investment in green and new energy sectors, while standardized and non-standardized investments incurred losses due to market volatility, and licensed financial services losses expanded [Industrial Investment](index=26&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%E7%94%A2%E6%A5%AD%E6%8A%95%E8%B3%87) Industrial investment became the core asset allocation, with the Group becoming the controlling shareholder of Shandong Hi-Speed New Energy and a major shareholder in Shandong Hi-Speed Environmental Energy, generating HKD 1.71 billion in profit - Industrial investment has become the company's core asset allocation direction, with industrial assets accounting for approximately **HKD 52.2 billion** of total assets[61](index=61&type=chunk) - Completed an investment of approximately **HKD 4.685 billion** to subscribe for a 43.45% stake in Shandong Hi-Speed New Energy, becoming its controlling shareholder[61](index=61&type=chunk) - Indirectly holds a **23.07% stake in Shandong Hi-Speed Environmental Energy**, becoming its largest shareholder, effectively controlling two listed companies in the new energy and green environmental protection sub-sectors[61](index=61&type=chunk) - During the reporting period, the industrial investment business segment recorded a profit of approximately **HKD 1.71 billion**[62](index=62&type=chunk) [Standardized Investment](index=27&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%E6%A8%99%E6%BA%96%E5%8C%96%E6%8A%95%E8%B3%87) Standardized investment recorded a HKD 954 million loss due to global interest rate hikes and capital market volatility, prompting the team to adjust strategies - The Chinese and Hong Kong stock markets remained weak due to geopolitical conflicts, soaring energy prices, US Federal Reserve interest rate hikes, and China's economic slowdown, leading to investment losses[63](index=63&type=chunk) - During the reporting period, the standardized investment business recorded a fair value loss of approximately **HKD 954 million**, compared to a loss of approximately HKD 116 million in the prior year[63](index=63&type=chunk) [Non-standardized Investment](index=28&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%E9%9D%9E%E6%A8%99%E6%BA%96%E6%8A%95%E8%B3%87) Prioritizing risk control, the Group significantly reduced non-standardized investment and credit exposures, resulting in a HKD 134 million loss - The Group prioritized risk prevention, significantly reducing non-standardized investment business, and providing financing services in real economy sectors such as new energy, new infrastructure, and new technology, aligned with the Group's strategic transformation direction[64](index=64&type=chunk) - During the reporting period, the non-standardized investment business recorded a loss of approximately **HKD 134 million**, compared to a profit of approximately HKD 253 million in the prior year, mainly due to a decrease in the fair value of financial assets and a proactive reduction in business scale[64](index=64&type=chunk) [Licensed Financial Services](index=28&type=section&id=%EF%BC%88%E5%9B%9B%EF%BC%89%E7%89%8C%E7%85%A7%E9%87%91%E8%9E%8D%E6%9C%8D%E5%8B%99) Licensed financial services recorded a HKD 571 million loss, primarily due to the write-off of licenses related to the Asia Lease Exchange asset trading platform - The licensed financial services business recorded a loss of approximately **HKD 571 million**, compared to a loss of approximately HKD 306 million in the prior year[65](index=65&type=chunk) - The expanded loss was mainly due to the **write-off of the book value of licenses** related to the Asia Lease Exchange asset trading platform[65](index=65&type=chunk) [Outlook](index=29&type=section&id=%E5%89%8D%E6%99%AF%E5%B1%95%E6%9C%9B) Global economic growth is expected to slow in 2023, but China's market and green/industrial investments show potential, with the Group deepening its strategic focus on industrial investment - Global economic growth is expected to weaken in 2023, with continued risk aversion in capital markets, but the Chinese market is expected to regain momentum, with steady economic growth[66](index=66&type=chunk) - China will increase support for industrial optimization and upgrading, high-tech industries, and fundamental research in key areas, with green investment expected to continue rapid growth[66](index=66&type=chunk) - The Group will focus on industrial investment, supplemented by standardized and non-standardized investments, utilizing diversified capital operation models to achieve short, medium, and long-term investment allocation in key industrial quality assets[66](index=66&type=chunk) [Industrial Investment Outlook](index=29&type=section&id=%EF%BC%88%E4%B8%80%EF%BC%89%E7%94%A2%E6%A5%AD%E6%8A%95%E8%B3%87) The Group will deepen its strategic transformation, focusing on high-growth new energy, new infrastructure, and new technology sectors, combining strategic and controlling equity investments to enhance enterprise value - The Group will focus on growth-oriented, high-prosperity industries aligned with national strategic direction and key policy support, especially emerging industries such as new energy, new infrastructure, and new technology[67](index=67&type=chunk) - Will organically combine strategic equity investments and controlling equity investments to expand the scale of industrial investment[67](index=67&type=chunk) - For invested targets such as Shandong Hi-Speed New Energy and Shandong Hi-Speed Environmental Energy, post-investment management will be strengthened to promote a comprehensive enhancement of enterprise value[68](index=68&type=chunk) [Standardized Investment Outlook](index=30&type=section&id=%EF%BC%88%E4%BA%8C%EF%BC%89%E6%A8%99%E6%BA%96%E5%8C%96%E6%8A%95%E8%B3%87) Standardized investment aims to boost absolute returns and identify quality targets for industrial investment, focusing on new energy, high-end manufacturing, and recovering consumption sectors - The standardized investment business will focus on enhancing absolute returns and identifying quality investment targets for industrial investment, achieving “primary and secondary market” linkage[69](index=69&type=chunk) - Key focus areas include the new energy industry, high-end manufacturing, large consumption sectors with strong long-term certainty, and industries where prosperity is bottoming out and recovering[69](index=69&type=chunk) - Standardized bond investment business will maintain a prudent investment strategy, actively managing portfolio duration and various risks to achieve stable returns[69](index=69&type=chunk) [Non-standardized Investment Outlook](index=30&type=section&id=%EF%BC%88%E4%B8%89%EF%BC%89%E9%9D%9E%E6%A8%99%E6%BA%96%E6%8A%95%E8%B3%87) The Group will maintain a prudent investment strategy, focusing on quality collateralized assets and industrial transformation synergy, while reducing credit exposures and supporting leading enterprises in key sectors - The Group will continue its prudent investment strategy, focusing on “securing quality collateralized assets” and “synergy with the Group's industrial transformation” as two main lines for investment[70](index=70&type=chunk) - Closely monitor financing needs in new energy, new consumption, and high-tech industries, providing capital support for quality leading enterprises[70](index=70&type=chunk) [Licensed Financial Services Outlook](index=31&type=section&id=%EF%BC%88%E5%9B%9B%EF%BC%89%E7%89%8C%E7%85%A7%E9%87%91%E8%9E%8D%E6%9C%8D%E5%8B%99) The Group will prudently conduct licensed financial services, concentrating on securities brokerage, QFLP, and finance leasing that align with its strategic transformation to enhance comprehensive service capabilities - The Group will prudently conduct licensed financial services in Hong Kong and mainland China, primarily focusing on securities brokerage and QFLP and finance leasing businesses that have synergistic effects with the Group's strategic transformation direction[71](index=71&type=chunk) [Liquidity and Financial Resources and Capital Structure](index=31&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E6%94%BF%E8%B3%87%E6%BA%90%E4%BB%A5%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) By year-end 2022, the Group maintained ample liquidity with increased cash, assets, and borrowings, and a slightly higher gearing ratio Liquidity and Capital Structure Overview (HKD thousands) | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Total Cash and Cash Equivalents | 4,392,562 | 1,334,300 | | Total Assets | 68,957,609 | 22,950,451 | | Total Borrowings | 43,787,262 | 13,947,223 | - The Board closely monitors the Group's liquidity position to ensure that the liquidity structure of assets, liabilities, and other commitments meets funding requirements[72](index=72&type=chunk) [Bank Loans and Other Borrowings](index=31&type=section&id=%E9%8A%80%E8%A1%8C%E8%B2%B8%E6%AC%BE%E5%8F%8A%E5%85%B6%E4%BB%96%E5%80%9F%E8%B2%B8) Total outstanding borrowings significantly increased, with a higher proportion of long-term liabilities and a broader range of effective interest rates Outstanding Borrowings Composition (HKD thousands) | Borrowing Type | 2022 | 2021 | | :--- | :--- | :--- | | Bank borrowings | 26,767,180 | 4,375,155 | | Bonds | 8,521,297 | 7,898,646 | | Other borrowings | 8,498,785 | 1,673,422 | | **Total** | **43,787,262** | **13,947,223** | - Approximately **69.3%** of the total outstanding borrowings were long-term liabilities (2021: 25.5%)[73](index=73&type=chunk) - The effective interest rate for bank borrowings ranged from **2.60% to 7.05%** (2021: 1.02% to 6.11%), and for other borrowings from **0.40% to 8.01%** (2021: 0.30% to 3.74%)[73](index=73&type=chunk) [Gearing Ratio](index=32&type=section&id=%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) The Group's gearing ratio slightly increased to 63.50% by year-end 2022 Gearing Ratio | Indicator | 2022 | 2021 | | :--- | :--- | :--- | | Gearing Ratio | 63.50% | 60.77% | [Foreign Exchange Risk Management](index=32&type=section&id=%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group primarily faces Renminbi foreign exchange risk, which management deems insignificant, thus no hedging instruments were used - The Group's monetary assets, liabilities, and transactions are primarily denominated in Renminbi, Hong Kong Dollars, and US Dollars, mainly facing **Renminbi foreign exchange risk**[75](index=75&type=chunk) - During the reporting period, management considered the foreign exchange risk impact insignificant and therefore did not use any financial instruments for hedging purposes[75](index=75&type=chunk) [Pledged Assets](index=32&type=section&id=%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of year-end 2022, various assets, including financial assets, receivables, properties, and subsidiary equity, collateralized certain Group borrowings and bills payable - Certain of the Group's borrowings and bills payable were pledged by financial assets at fair value through other comprehensive income, financial assets at fair value through profit or loss, finance lease receivables, trade receivables and contract assets, property, plant and equipment, investment properties, franchise rights, and equity interests in subsidiaries[75](index=75&type=chunk) [Contingent Liabilities and Capital Commitments](index=33&type=section&id=%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) The Group had no significant contingent liabilities but committed capital for clean energy project development and joint venture investments during the reporting period - The Group had no significant contingent liabilities during the reporting period[76](index=76&type=chunk) Capital Commitments (HKD thousands) | Item | 2022 | 2021 | | :--- | :--- | :--- | | Construction, material and equipment costs for developing clean energy projects | 354,361 | – | | Capital injection into joint ventures | 320,883 | – | [Major Investments and Acquisitions and Disposals](index=33&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E6%94%B6%E8%B3%BC%E5%87%BA%E5%94%AE) The Group completed a significant acquisition of Shandong Hi-Speed New Energy, becoming its controlling shareholder, aligning with its industrial investment strategy [Major Investments](index=33&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) As of year-end 2022, the Group held no individual investments with a fair value exceeding 5% of its total assets - As of December 31, 2022, the Group did not hold any individual investments with a fair value representing **5% or more of its total assets**[77](index=77&type=chunk) [Future Plans for Major Investments and Capital Assets](index=33&type=section&id=%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E5%8F%8A%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) As of year-end 2022, the Group had no future plans for major investments or capital assets - As of December 31, 2022, the Group had no future plans for major investments or capital assets[77](index=77&type=chunk) [Major Acquisitions and Disposals](index=33&type=section&id=%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) The Group acquired a 43.45% stake in Shandong Hi-Speed New Energy, making it a subsidiary and focusing on the new energy industry - On May 19, 2022, the Group completed the subscription for **48,804,039,247 new allotment ordinary shares** of Shandong Hi-Speed New Energy, indirectly owning approximately **43.45%** of its enlarged issued share capital and becoming its controlling shareholder[77](index=77&type=chunk) - Shandong Hi-Speed New Energy and its subsidiaries primarily engage in the investment, development, construction, operation, and management of photovoltaic power generation, wind power generation, and clean heating businesses in China[77](index=77&type=chunk) [Issuance of Debt Securities](index=34&type=section&id=%E7%99%BC%E8%A1%8C%E5%82%B5%E6%AC%8A%E8%AD%89) In 2022, the Group successfully issued multiple US Dollar and Renminbi secured bonds, including a USD 500 million green bond, for refinancing and general corporate purposes - On January 26, 2022, Coastal Emerald issued floating rate secured bonds with a total principal amount of **USD 220 million** due in 2023[79](index=79&type=chunk) - On June 15, 2022, Coastal Emerald issued **4.10% secured bonds (green bonds)** with a total principal amount of **USD 500 million** due in 2025[80](index=80&type=chunk) - On December 20, 2022, Shandong Hi-Speed New Energy issued corporate bonds with a total principal amount of **RMB 465 million**, with interest rates ranging from **4.20% to 4.90%**[80](index=80&type=chunk) [Employees and Remuneration Policy](index=35&type=section&id=%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E6%94%BF%E7%AD%96) Employee count significantly increased to 2,077 by year-end 2022, primarily due to the Shandong Hi-Speed New Energy acquisition, with the Group focusing on competitive compensation and development Employee Count | Year | Employee Count | | :--- | :--- | | December 31, 2022 | 2,077 | | December 31, 2021 | 163 | - The increase in employee count was mainly due to the completion of the acquisition of Shandong Hi-Speed New Energy on May 19, 2022[81](index=81&type=chunk) - The Group provides competitive remuneration packages, welfare policies (such as social insurance, housing provident fund, paid annual leave, etc.), and share option schemes, and is committed to providing diversified training and development opportunities[81](index=81&type=chunk)[82](index=82&type=chunk) [Events After Reporting Period](index=35&type=section&id=%E5%A0%B1%E5%91%8A%E6%9C%9F%E6%9C%AB%E5%BE%8C%E4%BA%8B%E9%A0%85) Other than the acquisition disclosed in Note 22 to the financial statements, there were no other significant events for the Group after the reporting period and up to the date of this announcement - Other than those disclosed in Note 22 to the financial statements in this announcement, there were no other significant events for the Group after the reporting period and up to the date of this announcement[83](index=83&type=chunk) [Other Information](index=36&type=section&id=%E5%85%B6%E4%BB%96%E4%BF%A1%E6%81%AF) [Dividends](index=36&type=section&id=%E8%82%A1%20%E6%81%AF) The Board does not recommend any dividend payment for the reporting period - The Board does not recommend the payment of any dividends for the reporting period[84](index=84&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=36&type=section&id=%E8%B3%BC%20%E8%B2%B7%EF%BC%8C%E5%87%BA%20%E5%94%AE%20%E6%88%96%20%E8%B4%96%20%E5%9B%9E%20%E6%9C%AC%20%E5%85%AC%20%E5%8F%B8%20%E4%B9%8B%20%E4%B8%8A%20%E5%B8%82%20%E8%AD%89%20%E5%88%B8) The company repurchased and cancelled 2,915,000 shares for approximately HKD 9.7 million, demonstrating confidence in its business outlook - During the reporting period, the company repurchased a total of **2,915,000 shares** on the Stock Exchange for a total consideration of approximately **HKD 9,701,000**, which have been cancelled[84](index=84&type=chunk) - The Board believes that the share repurchases demonstrate the company's confidence in its own business outlook and prospects, and will benefit the company and create value for shareholders in the long run[84](index=84&type=chunk) Share Repurchase Details (2022) | Month | Number of Shares Repurchased (thousands) | Repurchase Price Per Share (HKD) (Highest) | Repurchase Price Per Share (HKD) (Lowest) | Total Consideration (HKD thousands) (Approx.) | | :--- | :--- | :--- | :--- | :--- | | August | 1,000 | 3.28 | 3.28 | 3,280 | | September | 1,513 | 3.44 | 3.09 | 4,988 | | October | 402 | 3.58 | 3.55 | 1,433 | [Corporate Governance](index=36&type=section&id=%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB) The company complied with all Corporate Governance Code provisions during the reporting period, except for the vacant CEO position, with other executive directors managing daily operations - During the reporting period, the company complied with all code provisions of the Corporate Governance Code as set out in Appendix 14 to the Listing Rules, except for the vacant position of Chief Executive Officer[86](index=86&type=chunk)[87](index=87&type=chunk) - Mr. Wang Xiaodong serves as the Chairman of the Board, and the company is identifying suitable candidates to fill the vacancy of Chief Executive Officer[87](index=87&type=chunk) [Audit Committee](index=37&type=section&id=%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee, composed of two non-executive and three independent non-executive directors, reviewed the Group's consolidated results for the year ended December 31, 2022 - The Audit Committee comprises two non-executive directors and three independent non-executive directors[88](index=88&type=chunk) - The Audit Committee has reviewed the Group's consolidated results for the year ended December 31, 2022[88](index=88&type=chunk) [Review of Preliminary Announcement](index=37&type=section&id=%E5%AF%A9%E9%96%B1%E5%88%9D%E6%AD%A5%E5%85%AC%E5%91%8A) The company's auditor reconciled the preliminary announcement figures with the consolidated financial statements but provided no assurance on the announcement itself - The company's auditor, Crowe (HK) CPA Limited, has reconciled the relevant figures in the Group's preliminary announcement for the year ended December 31, 2022, with the amounts contained in the Group's consolidated financial statements for that year[89](index=89&type=chunk) - The auditor does not express any assurance on the preliminary announcement[89](index=89&type=chunk) [Compliance with the Model Code for Securities Transactions by Directors](index=37&type=section&id=%E9%81%B5%E5%AE%88%E8%91%A3%E4%BA%8B%E9%80%B2%E8%A1%8C%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93%E4%B9%8B%E6%A8%99%E6%BA%96%E5%AE%88%E5%89%87) Directors confirmed compliance with the Model Code for Securities Transactions throughout the reporting period - The Directors confirmed that they have complied with the required standards set out in the Model Code throughout the reporting period[90](index=90&type=chunk) [Publication of Annual Results and Annual Report](index=38&type=section&id=%E5%85%AC%E4%BD%88%E5%85%A8%E5%B9%B4%E6%A5%AD%E7%B8%BE%E5%8F%8A%E5%B9%B4%E5%A0%B1) This announcement and the annual report will be published on the Stock Exchange and company websites, and dispatched to shareholders - This announcement is published on the Stock Exchange website (www.hkexnews.hk) and the company's website (www.sdhg.com.hk)[91](index=91&type=chunk) - The annual report for the year ended December 31, 2022, will be published on the Stock Exchange website and the company's website, and will also be dispatched to the company's shareholders in due course[91](index=91&type=chunk)

Financial Performance - The Group recorded revenue of approximately HK$1,216,778,000, representing an increase of approximately 125.16% year-over-year compared to HK$540,396,000 for the Corresponding Period[10] - Gross profit was approximately HK$680,917,000, an increase of approximately 99.18% year-over-year from approximately HK$341,859,000 for the Corresponding Period[10] - Profit for the period amounted to approximately HK$300,921,000, reflecting an increase of approximately 16.41% year-over-year compared to approximately HK$258,493,000 for the Corresponding Period[10] - Basic earnings per share attributable to owners of the Company was approximately HK$1.26 cents, a decrease of approximately 34.03% year-over-year from the restated basic earnings per share of approximately HK$1.92 cents for the Corresponding Period[10] - Profit before tax for the period was HK$231,451,000, slightly down from HK$262,200,000 in the prior year, reflecting a decrease of 12%[90] - Profit for the period attributable to owners of the Company was HK$75,863,000, down from HK$115,388,000, representing a decline of 34%[92] - Total comprehensive loss for the period amounted to HK$15,514,000, a significant decrease from a comprehensive income of HK$244,952,000 in the same period last year[96] Assets and Liabilities - As of June 30, 2022, total assets were approximately HK$77,646,002,000, significantly up from HK$22,950,451,000 as of December 31, 2021[11] - Total liabilities were approximately HK$60,425,574,000, up from HK$14,337,948,000 as of December 31, 2021[11] - Net assets amounted to approximately HK$17,220,428,000, compared to HK$8,612,503,000 as of December 31, 2021[11] - The Group's total borrowings amounted to approximately HK$46,877,458,000 as of June 30, 2022, up from HK$13,947,223,000 at the end of 2021[44] - Outstanding bank borrowings were approximately HK$24,253,508,000 as of June 30, 2022, compared to HK$4,375,155,000 on December 31, 2021[45] - The Group's gearing ratio was approximately 60.37%, a slight decrease from 60.77% as of December 31, 2021[48] Strategic Initiatives - The Group completed a major acquisition of SDHS New Energy, becoming its controlling shareholder with a 43.45% equity interest, marking a significant step in its strategic transformation[16] - The Group aims to enhance its long-term investment value by shifting its business focus from financial investment to industrial investment[15] - The Group's strategic transformation focuses on increasing industrial investment and exploring opportunities in new energy, new technology, and new consumption[15] - The Group will continue to follow the overall strategy of expanding and strengthening the industrial asset side while improving the debt asset side and focusing on mezzanine assets[34] - The Group plans to explore investment opportunities in strategic emerging industries such as new energy, new infrastructure, and new technology[37] Investment Performance - The new industrial investment business segment recorded a profit of approximately HK$1,946,652,000 during the reporting period[26] - The standard investment business recorded a loss of approximately HK$234,969,000, compared to a profit of approximately HK$188,171,000 in the corresponding period[28] - The non-standard investment business recorded a loss of approximately HK$788,189,000, compared to a profit of approximately HK$91,559,000 in the corresponding period[31] - The Group invested in high-quality projects such as NewLink Group and Horizon Robotics, which achieved rapid growth in the first half of the year[26] - The Group's investment strategy included a combination of minority equity investment, holding investment, and light and heavy asset investments[23] Financial Management - The Group has adopted more prudent financial and risk management measures to ensure steady growth and healthy development[21] - The international credit rating of the Group was upgraded from BBB+ to A-, reflecting its increasing credit capability[21] - The Group will continue to suppress credit exposure within its portfolio while tracking existing investment projects[41] - The Group aims to opportunistically invest in high-quality assets when prices are low, while strictly controlling investment risks[34] Employee and Corporate Governance - As of June 30, 2022, the Group had 2,437 employees, a significant increase from 174 employees in the corresponding period, primarily due to the acquisition of SDHS New Energy[64] - The Group actively attracts talent and has implemented a competitive internal remuneration policy to retain and motivate employees[65] - The Group's human resources management system is continuously optimized to ensure a friendly and healthy workplace for employees[66] - The Company has adopted the Model Code for Securities Transactions by Directors and confirmed compliance during the Reporting Period[80] - The Company complied with all applicable provisions under the Corporate Governance Code except for the separation of roles between the Chairman and the CEO, which remains vacant[81] Market Conditions - The macro economy in China achieved a GDP growth of 0.4% in the second quarter of 2022, indicating a shift from decline to gradual recovery[15] - The Hang Seng Index fell 6.6% in the first half of the year, while the A-share CSI 300 index dropped 9.2%[15] - The Chinese economy is expected to rebound on a quarterly basis in the second half of the year, driven by improved market expectations and confidence[34] Legal and Compliance Issues - The Group's foreign exchange risk is primarily related to Renminbi fluctuations, which may impact performance, but management considers the exposure to be insignificant[48] - The Group did not have any significant contingent liabilities during the reporting period[51] - The Group is currently negotiating repayment schedules and additional security for outstanding sums due to CSCHK and Safe Castle[58] - Legal actions will continue to recover the remaining outstanding amounts due from Okay Airways under Settlement Agreement – 2[62] Revenue Recognition and Accounting Policies - The Group recognizes revenue from electricity sales, clean heat supply services, and trading income at the point when control of the asset is transferred to the customer, typically upon delivery[128] - Revenue from construction services, including photovoltaic power plants, is recognized over time based on the proportion of actual costs incurred relative to estimated total costs[133] - The adoption of revised HKFRSs has had no significant financial effect on the Interim Financial Statements[143] - Management makes judgments and estimates that affect the application of accounting policies and reported amounts of assets and liabilities[144]

Market Performance and Economic Context - In 2021, the Hong Kong stock market rose from 27,000 points to over 31,000 points, reflecting a recovery in consumer demand and corporate profits[12]. - The capital market faced challenges due to rising US bond yields and inflation concerns, impacting Chinese high-yield US dollar bonds[12]. - During the reporting period, China's economy grew by 8.1% year-on-year, exceeding the government's target of over 6%[54]. - Global inflation rates reached multi-year highs, with the U.S. consumer prices rising 6.8% year-on-year in November 2021, the highest in 39 years[52]. - The U.S. Federal Reserve announced plans to reduce bond purchases and may enter into interest rate hikes, adding uncertainty to global economic recovery[52]. - The People's Bank of China lowered the reserve requirement ratio for bank deposits by 0.5% in July and December 2021 to support economic growth[54]. - China's economy is facing "shrinking demand, supply shock, and weakening expectations," necessitating a focus on stabilizing growth and relaxing monetary and fiscal policies in 2022[79]. Company Strategy and Transformation - The company is transitioning from a financial investment group to an industrial investment group to maximize long-term investment value[12]. - The Group aims for strategic transformation into an excellent industrial investment group, focusing on specialization, concentration, marketization, and institutionalization[21]. - The Group's strategic transformation goal is to become an excellent industrial investment company, focusing on "professionalization, specialization, marketization, and institutionalization" over the next five years[90]. - The Group established a Strategic Development Committee to pursue the goal of becoming an excellent industrial investment company, with a strategic roadmap for the next five years[88]. - The Group aims to strengthen the differentiated competitive advantages of each subsidiary and enhance overall efficiency through cross-border linkages and integrated services[89]. - The Group will deepen internal synergy with Shandong Hi-Speed Group to utilize resource advantages for broader market development[93]. Financial Performance - The Group recorded revenue of approximately HK$1,065,661,000, a decrease of approximately 16.24% year-over-year from HK$1,272,354,000[44]. - Gross profit was approximately HK$738,631,000, representing a decrease of approximately 8.61% year-over-year from HK$808,181,000[44]. - Profit for the period amounted to approximately HK$11,058,000, a turnaround from a loss of approximately HK$18,307,000 in the previous period[44]. - As of December 31, 2021, total assets were approximately HK$22,950,451,000, down from HK$24,966,194,000 in 2020[45]. - Total liabilities were approximately HK$14,337,948,000, a decrease from HK$15,309,446,000 in 2020[45]. - Net assets stood at approximately HK$8,612,503,000, down from HK$9,656,748,000 in 2020[45]. Investment and Business Segments - The company established three business divisions: fixed income, standardized equity, and industrial investment to enhance professional investment capabilities[17]. - The fixed income business contributes stable profits, while industrial investment increases net assets and generates sustained cash flows[21]. - The Group targets industries such as new energy, new technology, new consumption, and big health, selecting high-quality assets with high growth potential[22]. - The standard investment business recorded a loss before tax of approximately HK$146.8 million, compared to a profit of approximately HK$923.9 million in the previous period[61]. - The non-standard investment business generated a profit before tax of HK$253.6 million, down from HK$495.2 million in the previous year[58]. - The license business segment reported a profit before tax of HK$17.1 million, recovering from a loss of HK$84.1 million in the previous year[58]. - The financial leasing segment recorded a loss before tax of HK$323.2 million, an improvement from a loss of HK$985.8 million in the previous year[58]. - The financial technology segment reported a loss before tax of HK$5.1 million, compared to a loss of HK$224.1 million in the previous year[58]. Risk Management and Governance - The Group established an internal audit department to enhance its comprehensive risk management and internal control system[30]. - The Group implemented rigorous investment decision-making procedures to ensure controllable risks for investment targets[31]. - The Group's risk management system includes a scientific risk control and early warning mechanism to minimize potential risks[30]. - The governance structure has been continuously optimized, focusing on two-way communication with shareholders and director diversity[16]. - The Group's credit risk management policies include comprehensive due diligence on lending business and a review mechanism to ensure regulatory compliance and commercial reasonableness[155]. Human Resources and Employee Management - As of December 31, 2021, the group had 163 employees, a decrease from 512 employees in the corresponding period of 2020, primarily due to the disposal of Coastal Silk Limited[194]. - Employee costs, including directors' remuneration, were approximately HK$196,140,000, representing an increase of 4.88% compared to the previous period[196]. - The group has implemented an internal remuneration policy to attract and retain outstanding talents, with competitive remuneration packages based on market levels and individual merits[195]. - The group emphasizes a people-oriented approach to talent management, continuously investing resources to attract and retain talents[199]. Asset Management and Financial Services - The Group provides integrated financial services related to cross-border investment and financing needs, leveraging its licenses in both Mainland China and Hong Kong[68]. - The structured financing business focuses on short-term, collateralized, and low-risk commercial loans to utilize funds more effectively[70]. - The Group plans to launch a new IPO margin financing business to attract new customers and increase interest margin income[100]. - The Group will leverage its QFLP license to attract overseas funds and promote foreign investment in state-encouraged industries, meeting diverse investment needs[98].

Financial Performance - Revenue for the six months ended June 30, 2021, was HK$540.4 million, a decrease from HK$621.5 million in the same period in 2020[8] - Gross profit increased to HK$341.9 million in 2021 from HK$284.3 million in 2020[8] - Net profit attributable to the company's owners was HK$115.4 million in 2021, compared to a loss of HK$65.6 million in 2020[8] - Basic earnings per share were 0.48 HK cents in 2021, compared to a loss of 0.27 HK cents in 2020[8] - Total comprehensive income for the period was HK$244.95 million in 2021, compared to a loss of HK$383.81 million in 2020[10] - The company reported a net loss of 65,645 thousand HKD for the period[14] - Other comprehensive losses for the period amounted to 399,008 thousand HKD[14] - Total comprehensive income for the period was HKD 115,388 thousand, with a total comprehensive income attributable to equity holders of HKD 258,493 thousand[15] - Revenue for the six months ended June 30, 2021, was approximately HK$540.4 million, a decrease of 13.05% compared to HK$621.5 million in the same period last year[148] - Gross profit increased by 20.23% to HK$341.9 million, compared to HK$284.3 million in the previous year[148] - Net profit for the period surged by 337.32% to HK$258.5 million, up from HK$59.1 million in the same period last year[148] - The company's attributable profit turned around to HK$115.4 million, compared to a loss of HK$65.6 million in the previous year[148] - Revenue for the six months ended June 30, 2021, was HK$540.4 million, a decrease from HK$621.5 million in the same period in 2020[198] - Gross profit increased to HK$341.9 million in 2021 from HK$284.3 million in 2020[198] - Net profit attributable to the company's owners was HK$115.4 million in 2021, compared to a loss of HK$65.6 million in 2020[198] - Basic earnings per share were 0.48 HK cents in 2021, compared to a loss of 0.27 HK cents in 2020[198] - Other comprehensive loss for the period was HK$13.5 million in 2021, significantly lower than HK$442.9 million in 2020[200] - Total comprehensive income attributable to the company's owners was HK$97.5 million in 2021, compared to a loss of HK$507.4 million in 2020[200] Financial Assets and Investments - The company's financial assets at fair value through profit or loss recorded a net gain of HK$151.98 million in 2021, up from HK$24.87 million in 2020[8] - The fair value loss included in other comprehensive income that will not be reclassified to profit or loss was HKD 239,065 thousand, and the fair value loss that may be reclassified to profit or loss was HKD 108,072 thousand[19] - The total fair value of financial assets at fair value through other comprehensive income (FVOCI) was HK$5,198.986 million as of June 30, 2021, compared to HK$4,884.539 million as of December 31, 2020[57] - The Group realized a net gain of approximately HK$12.713 million from the sale of the Belt and Road Stable Growth Fund during the six months ended June 30, 2021[61] - The fair value of the sold portion of the Belt and Road Stable Growth Fund at the time of sale was approximately HK$120.487 million[61] - Non-listed equity investments in other regions decreased to HK$257.397 million as of June 30, 2021, from HK$262.961 million as of December 31, 2020[57] - Listed equity investments in Hong Kong decreased to HK$111.684 million as of June 30, 2021, from HK$140.321 million as of December 31, 2020[57] - The Group's investment in the Belt and Road Stable Growth Fund was HK$83.913 million as of June 30, 2021, down from HK$175.930 million as of December 31, 2020[57] - The fair value of financial assets measured at fair value through other comprehensive income increased from HKD 4,884,539 thousand as of December 31, 2020, to HKD 5,198,986 thousand as of June 30, 2021[131] - The fair value of financial assets measured at fair value through profit or loss increased from HKD 5,914,185 thousand as of December 31, 2020, to HKD 6,751,356 thousand as of June 30, 2021[131] - Non-listed equity investments in other regions were valued at HKD 257,397 thousand as of June 30, 2021, compared to HKD 262,961 thousand as of December 31, 2020, with a discount for lack of marketability of 20.0%[133] - Listed equity investments in Hong Kong were valued at HKD 111,684 thousand as of June 30, 2021, compared to HKD 140,321 thousand as of December 31, 2020, using Level 1 inputs[133] - Notes in other regions were valued at HKD 776,278 thousand as of June 30, 2021, compared to HKD 237,476 thousand as of December 31, 2020, using Level 2 inputs[133] - Non-listed bonds in other regions were valued at HKD 779,469 thousand as of June 30, 2021, compared to HKD 899,501 thousand as of December 31, 2020, using Level 3 inputs with a discount rate of 6.63%[133] - Listed bonds in Hong Kong, China, and other regions were valued at HKD 287,715 thousand, HKD 68,180 thousand, and HKD 1,243,147 thousand respectively as of June 30, 2021, using Level 2 inputs[133] - Investment funds in other regions were valued at HKD 83,913 thousand as of June 30, 2021, compared to HKD 175,930 thousand as of December 31, 2020, using Level 2 inputs[133] - The fair value of Haitong Anxin Preferred Tiered Bond Fund decreased to HKD 358,019,000 as of June 30, 2021, from HKD 368,694,000 as of December 31, 2020[68] - SCCS Investment Fund LP's fair value increased to HKD 266,574,000 as of June 30, 2021, from HKD 256,840,000 as of December 31, 2020[68] - Amber Hill ES Fund SPC's fair value slightly increased to HKD 165,655,000 as of June 30, 2021, from HKD 165,435,000 as of December 31, 2020[69] - ABCI China Rising Private Equity 3 SP and CEL Odyssey Project Fund LP's fair value increased to HKD 601,069,000 as of June 30, 2021, from HKD 540,171,000 as of December 31, 2020[70] - The fair value of non-listed equity investments in a Cayman Islands entity engaged in AI development in China increased to HKD 167,172,000 as of June 30, 2021, from HKD 151,530,000 as of December 31, 2020[71] - The fair value of non-listed equity investments in a Chinese limited partnership focused on automotive design and manufacturing increased to HKD 399,682,000 as of June 30, 2021, from HKD 370,159,000 as of December 31, 2020[71] - The unrealized loss on listed equity investments in Hong Kong was HKD 94,884,000 for the six months ended June 30, 2021, compared to a loss of HKD 56,890,000 for the same period in 2020[73] - The realized gain on listed equity investments in Hong Kong was HKD 225,797,000 for the six months ended June 30, 2021, compared to a loss of HKD 21,106,000 for the same period in 2020[75] - The realized gain on other investment funds in other regions was HKD 14,636,000 for the six months ended June 30, 2021, compared to no gain or loss for the same period in 2020[75] - The realized gain on listed bonds in other regions was HKD 16,525,000 for the six months ended June 30, 2021, compared to HKD 6,312,000 for the same period in 2020[75] - The fair value of a financial asset at amortized cost as of June 30, 2021, was approximately HKD 155,256,000, which was used as collateral for other borrowings[76] Segment Performance - The company reclassified its reportable operating segments, splitting the securities investment segment into standard investment and non-standard investment segments, and renaming the lending segment to licensed business segment[27] - The company's reportable segments include standard investment, non-standard investment, licensed business, financial leasing, and fintech, with unallocated segments consolidated under "unallocated"[28] - The company's standard investment segment focuses on investing in listed securities and bonds for interest income, dividend income, and capital appreciation[28] - The company's non-standard investment segment engages in direct investment activities, including debt instruments, unlisted bonds, notes, unlisted equity investments, and investment funds[28] - The company's licensed business segment provides lending services, securities brokerage, asset management, advisory services, and asset trading platforms[28] - The company's financial leasing segment is involved in direct financial leasing and advisory services[28] - The company's fintech segment focuses on online investment, technology-driven lending services, and internet new media services[28] - The company's segment performance is evaluated based on adjusted profit before tax, excluding unallocated income, financing costs, expenses, and share of associates' performance[28] - The company allocated all assets and liabilities to reportable segments, except for corporate assets, deferred tax liabilities, certain borrowings, and other payables and accruals[28] - Standard investment business achieved a pre-tax profit of HKD 188,171,000, an increase of 84.71% compared to the same period last year[153] - Non-standard investment business generated revenue and pre-tax profit of HKD 225,622,000 and HKD 91,559,000 respectively[154] - Licensed business revenue decreased by 71.13% to HKD 43.64 million compared to HKD 151.15 million in the same period last year[155] - Financial leasing business revenue increased by 53.72% to HKD 94.12 million, with pre-tax loss decreasing by 38.75% to HKD 115.65 million[156] - Tech finance business revenue was HKD 18.67 million, down from HKD 63.46 million last year, and the company sold Coastal Silk Limited for HKD 171.14 million, exiting the tech finance business[157] Assets and Liabilities - Total non-current assets decreased from 6,471,950 thousand HKD to 5,875,709 thousand HKD, a decline of 9.2%[12] - Total current assets decreased from 18,494,244 thousand HKD to 16,801,720 thousand HKD, a decline of 9.1%[12] - Total current liabilities decreased from 7,758,594 thousand HKD to 4,032,683 thousand HKD, a significant decline of 48%[12] - Net current assets increased from 10,735,650 thousand HKD to 12,769,037 thousand HKD, an increase of 19%[13] - Total assets minus current liabilities increased from 17,207,600 thousand HKD to 18,644,746 thousand HKD, an increase of 8.3%[13] - Total non-current liabilities increased from 7,550,852 thousand HKD to 8,973,432 thousand HKD, an increase of 18.8%[13] - Equity attributable to owners of the company increased slightly from 2,393,777 thousand HKD to 2,491,312 thousand HKD, an increase of 4.1%[13] - Total equity remained relatively stable, increasing from 9,656,748 thousand HKD to 9,671,314 thousand HKD, a marginal increase of 0.15%[13] - Total assets as of June 30, 2021, were HK$22.68 billion, a decrease from HK$24.97 billion as of December 31, 2020[149] - Net assets increased slightly to HK$9.67 billion, compared to HK$9.66 billion at the end of 2020[149] - Cash and cash equivalents decreased significantly to HK$2.01 billion from HK$5.05 billion at the end of 2020[149] - Total borrowings decreased to HK$12.66 billion from HK$14.83 billion at the end of 2020[149] - Total assets as of June 30, 2021, were approximately HK$22.68 billion, with a net asset value of HK$9.67 billion[166] - The company's debt-to-asset ratio decreased to 55.84% as of June 30, 2021, from 59.40% at the end of 2020[166] - Cash and cash equivalents totaled HK$2.01 billion as of June 30, 2021, representing 8.88% of total assets[167] - Outstanding borrowings included bank loans of HK$3.49 billion, bonds of HK$7.47 billion, and other borrowings of HK$1.70 billion as of June 30, 2021[168] - The company's issued share capital increased by 4.07% to HK$2.49 billion as of June 30, 2021[170] Expenses and Costs - Administrative expenses increased to HK$225.1 million in 2021 from HK$196.3 million in 2020[8] - Finance costs significantly increased to HK$128.19 million in 2021 from HK$1.13 million in 2020[8] - Unallocated expenses increased significantly, with employee benefits rising to HKD 68,897,000 from HKD 38,080,000 year-over-year, while lease payments decreased to HKD 1,188,000 from HKD 6,683,000[30] - Total employee benefit expenses increased to 118,677 thousand HKD from 92,507 thousand HKD in the previous period[42] - Employee costs, including director remuneration, amounted to HK$118.68 million for the reporting period[173] Borrowings and Financing - Total borrowings as of June 30, 2021, were HKD 12,662,127,000, a decrease from HKD 14,829,314,000 as of December 31, 2020[106] - Bank borrowings increased to HKD 3,492,948,000 as of June 30, 2021, from HKD 2,931,344,000 as of December 31, 2020[107] - Unsecured loans guaranteed by Shandong Hi-Speed Group amounted to HKD 2,446,131,000 as of June 30, 2021, up from HKD 2,044,256,000 as of December 31, 2020[107] - The company had two secured loans as of June 30, 2021: (i) a loan guaranteed by the company with a book value of approximately HKD 23,306,000 (secured by financing lease receivables of approximately HKD 19,032,000), and (ii) a loan guaranteed by a subsidiary with a book value of approximately HKD 126,281,000 (secured by financing lease receivables of approximately HKD 180,345,000)[108] - As of June 30, 2021, the company's bonds included: (i) a 3.80% bond maturing in 2021 with a value of HKD 1,168,616,000, (ii) a 3.95% bond maturing in 2022 with a value of HKD 3,944,398,000, (iii) a 3.95% bond maturing in 2024 with a value of HKD 1,558,774,000, and (iv) a 4.30% bond maturing in 2029 with a value of HKD 789,996,000[109] - The total bond value as of June 30, 2021, was HKD 7,472,284,000, compared to HKD 11,348,620,000 as of December 31, 2020, reflecting a decrease due to repayments and interest payments[110] - Coastal Emerald Limited issued a 3.80% guaranteed bond (3.80% Guaranteed Bond-I) with a principal amount of USD 800,000,000, which matured on June 1, 2021, and was fully repaid during the six months ended June 30, 2021[111] - Coastal Emerald issued a 3.95% guaranteed bond (3.95% Guaranteed Bond-II) with a principal amount of USD 200,000,000 on May 24, 2021, maturing on May 24, 2024, and guaranteed by the company[112] - As of June 30, 2021, the group had six outstanding other borrowings, including a USD 15,000,000 loan secured by financial assets at fair value through other comprehensive income (FVOCI) of approximately USD 30,000,000, with an annual interest rate of 3.50% and due for repayment by June 28, 2022[113] - The company had three outstanding other borrowings totaling approximately $70.86 million (equivalent to approximately HK$549.35 million) as of December 31

Financial Performance - For the year ended December 31, 2020, the group recorded revenue of approximately HKD 1,272,354,000, representing a year-on-year increase of approximately 42.30%[42]. - The net loss for the year was approximately HKD 18,307,000, significantly improved by about 99.07% compared to a loss of HKD 1,961,815,000 in the previous year[42]. - Total assets as of December 31, 2020, were approximately HKD 24,966,194,000, up from HKD 23,198,805,000 in 2019, while total liabilities increased to approximately HKD 15,309,446,000 from HKD 12,947,348,000[42]. - The financing lease business recorded a loss of approximately HKD 990,345,000, an increase of 155.38% compared to the previous year, primarily due to impairment losses on receivables[45]. - The lending business recorded a profit of approximately HKD 72,120,000, an increase of 55.70% compared to HKD 46,319,000 in the same period last year[47]. - The fintech segment reported a loss of approximately HKD 194,013,000, compared to a profit of HKD 171,864,000 in the same period last year, primarily due to increased impairment losses on receivables, goodwill, and software[48]. - The group realized a non-recurring other income of approximately HKD 188,794,000 from the repurchase of shares from a subsidiary[46]. - The investment portfolio recorded unrealized gains of approximately HKD 276,931,000 and realized gains of approximately HKD 525,444,000, a significant improvement from the previous year's losses[46]. Risk Management - The company will maintain a proactive approach to risk management as a core value and priority in its development strategy[50]. - The company has established a comprehensive risk management system, which is regularly reviewed to ensure effectiveness[187]. - The board of directors is responsible for the overall risk management framework, with the executive committee and audit committee overseeing specific functions[188]. - The risk management function is primarily carried out by the company's risk management department, responsible for identifying, assessing, preventing, and monitoring market, credit, and liquidity risks[191]. - Each business department and subsidiary serves as the first line of defense in risk management, ensuring compliance with internal procedures and authorized limits[193]. - The company conducts regular internal audits of subsidiaries to evaluate the reasonableness of business operations, asset security, and the effectiveness of internal controls[200]. Corporate Governance - The company has complied with the corporate governance code as of December 31, 2020[153]. - The board consists of 5 executive directors, 3 non-executive directors, and 4 independent non-executive directors[158]. - The company has adopted a board diversity policy to ensure a balanced composition based on various factors, including gender, age, and professional qualifications[160]. - Independent non-executive directors are crucial for the board's operation, providing independent judgment to ensure shareholders' interests are prioritized[159]. - The company has established procedures for directors to seek independent professional advice at the company's expense[159]. - The company encourages all directors to participate in ongoing professional training to stay updated on relevant laws and regulations[169]. Strategic Initiatives - The company aims to deepen its "investment + investment banking" strategy and expand its market layout with the support of Shandong Hi-Speed Group[40]. - The company plans to continue seeking potential acquisition targets that can create synergies and enhance profitability[51]. - The company will strengthen its overall investment research and project development capabilities to discover more quality projects and investment opportunities[50]. - The company aims to optimize and integrate internal and external resources to enhance the coordination of various business lines while exploring new development opportunities[50]. Employee Management - The employee costs for the company amounted to approximately HKD 187,018,000, representing a 15.51% increase compared to the previous year[79]. - The company has 512 employees as of December 31, 2020, down from 562 in the previous year[79]. - The company has implemented a series of employee benefits to enhance employee engagement and motivation[82]. - The company has a policy to provide competitive compensation and benefits to attract and retain talent[80]. Environmental Commitment - The company emphasizes its commitment to sustainable development by implementing green office policies and encouraging low-carbon commuting among employees[83]. - The company has installed energy-efficient LED lights in its offices, replacing traditional fluorescent tubes, to reduce carbon emissions[83]. - The company encourages employees to minimize electricity usage by utilizing natural light and turning off appliances during non-working hours[83]. - The company has implemented measures to reduce energy consumption related to air conditioning by adjusting temperatures to reasonable levels[83]. Legal and Compliance - The company has not reported any significant violations of applicable laws and regulations during the reporting period, ensuring no major adverse impact on its business operations[84]. - The company has purchased appropriate liability insurance for its directors and senior officers[141]. - The company has confirmed that all independent non-executive directors remain independent as of the report date[123]. Shareholder Information - The company did not recommend any dividend distribution for the reporting period, consistent with the previous year[97]. - The total number of issued shares as of December 31, 2020, is 24,089,384,437[147]. - The company has no provisions for preferential rights for existing shareholders regarding new share offerings[116]. - The company has maintained sufficient public float as per the listing rules[149].

Financial Performance - Revenue for the six months ended June 30, 2020, was HKD 621,480,000, a 88% increase from HKD 329,973,000 in the same period of 2019[11] - Gross profit for the same period was HKD 284,328,000, compared to HKD 186,119,000 in 2019, reflecting a 53% increase[11] - The company reported a net profit of HKD 59,109,000 for the six months ended June 30, 2020, a significant recovery from a loss of HKD 1,609,642,000 in 2019[11] - Operating cash flow for the six months ended June 30, 2020, was HKD 702,906,000, a significant increase from HKD 49,867,000 in the same period of 2019[26] - The company reported a pre-tax loss attributable to owners of HKD 65,646,000, compared to a loss of HKD 1,617,719,000 in the previous year[55] - The company’s basic and diluted loss per share improved to HKD (0.27) from HKD (6.62) in the previous year[11] Assets and Liabilities - The total assets as of June 30, 2020, amounted to HKD 25,313,919,000, up from HKD 23,198,805,000 as of December 31, 2019[15] - Current assets rose to HKD 18,489,287,000, compared to HKD 16,483,653,000 at the end of 2019, showing a 12% growth[15] - The company’s liabilities increased to HKD 8,254,656,000 from HKD 5,662,346,000, reflecting a 46% rise in current liabilities[15] - Total liabilities increased to HKD 15,595,665,000 from HKD 12,947,348,000, representing a rise of 20.4%[39] - The total equity attributable to owners of the company decreased to HKD 2,452,297 from HKD 2,959,705, reflecting a decline of approximately 17.1%[16] Financial Assets - The fair value of financial assets measured at fair value through profit or loss decreased to HKD 58,607,000 from HKD 656,697,000[15] - The fair value of financial assets measured at fair value through other comprehensive income totaled HKD 4,809,153,000 as of June 30, 2020[150] - The fair value of financial assets classified as fair value through profit or loss was HKD 6,409,238,000 as of June 30, 2020, compared to HKD 2,857,429,000 as of December 31, 2019[150] Cash Flow and Financing Activities - Cash and cash equivalents decreased by HKD 4,640,337,000, down from HKD 273,487,000 in the prior year[26] - The company issued bonds generating proceeds of HKD 6,200,251,000, while repaying bonds amounting to HKD (4,678,937,000)[26] - The financing activities generated a net cash inflow of HKD 2,178,483,000, compared to an outflow of HKD (26,619,000) in the previous year[26] - As of June 30, 2020, total borrowings amounted to HKD 15,019,020,000, an increase of 19.5% from HKD 12,564,641,000 as of December 31, 2019[121] Segment Performance - The company has four reportable operating segments: securities investment, lending, finance leasing, and technology finance[33] - Advisory service revenue reached HKD 106,175,000, up from HKD 38,042,000 in 2019, marking an increase of 179.5%[43] - The lending business reported a profit of approximately HKD 28,153,000, an increase of 154.66% compared to approximately HKD 11,055,000 in the same period last year[168] - The technology finance segment recorded a profit of approximately HKD 30,371,000, a 70.62% increase from approximately HKD 17,800,000 in the same period last year, driven by business expansion[169] Impairment and Losses - The company recognized a financial asset impairment loss of HKD 252,572,000, an increase from HKD 166,698,000 in the previous year[47] - The group recognized an impairment loss of approximately HKD 126,119,000 related to receivables from financing lease arrangements for the six months ended June 30, 2020[159] - The financing leasing business recorded a loss of approximately HKD 188,818,000, an increase of 35.42% compared to the same period last year, primarily due to decreased market demand and increased impairment losses[166] Corporate Governance and Compliance - The company has adhered to the corporate governance code as per the Hong Kong Stock Exchange rules for the six months ending June 30, 2020[191] - The audit committee, consisting of three independent non-executive directors and two non-executive directors, reviewed the unaudited interim consolidated financial statements for the six months ending June 30, 2020[193] - The company has maintained compliance with applicable laws and regulations without any significant violations impacting operations[181] Market Outlook and Strategy - The group is actively adjusting investment strategies in response to market opportunities, leading to significant growth in business revenue during the first half of 2020[165] - The company plans to strengthen its management foundation and clarify its development strategy to seize new market opportunities in the second half of the year[171] - The company aims to enhance its asset management brand in the market while optimizing its existing asset portfolio to improve asset quality and overall returns[172]